Blackhawk Network Holdings, Inc. (NASDAQ:HAWK) (the "Company" or
"Blackhawk") today announced financial results for the fourth
quarter and full year ended December 30, 2017.
Merger Agreement – On January 15, 2018, Silver
Lake and P2 Capital Partners agreed to acquire Blackhawk in an
all-cash transaction for a total consideration of approximately
$3.5 billion, which includes Blackhawk’s debt. Under the terms of
the merger agreement, Blackhawk stockholders will receive $45.25
per share in cash upon closing of the transaction. Blackhawk
currently expects the transaction, which is subject to stockholder
and regulatory approvals, and other customary closing conditions,
to close mid-2018. For further information on the transaction and
related merger agreement, please refer to Blackhawk’s Current
Report on Form 8-K filed with the U.S. Securities and Exchange
Commission (the “SEC”) on January 16, 2018, and Blackhawk’s
preliminary proxy statement filed with the SEC on February 16,
2018.
Non-cash charges related to the Company's income tax provision
as well as goodwill impairment contributed to the net loss for
2017.
|
|
|
|
|
|
GAAP
Results |
Q4'17 |
Q4'16 |
|
FY'17 |
FY'16 |
$ in millions
except per share amounts |
|
|
|
|
|
Operating Revenues |
$942.0 |
$780.6 |
|
$2,231.6 |
$1,899.8 |
Net Income (Loss) |
($128.2) |
$24.7 |
|
($155.8) |
$4.7 |
Diluted Earnings (Loss)
per Share |
($2.28) |
$0.43 |
|
($2.77) |
$0.08 |
|
During the fourth quarter of 2017, adjusted operating revenues
grew 20% and adjusted EBITDA and adjusted net income each grew
34%.
|
|
|
|
|
|
Non-GAAP
Results |
Q4'17 |
Q4'16 |
|
FY'17 |
FY'16 |
$ in millions
except per share amounts |
|
|
|
|
|
Adjusted Operating
Revenues |
$423.2 |
$352.0 |
|
$1,079.7 |
$889.3 |
Adjusted EBITDA |
$143.9 |
$107.3 |
|
$224.9 |
$189.2 |
Adjusted Net
Income |
$76.5 |
$57.1 |
|
$94.9 |
$82.0 |
Adjusted Diluted
Earnings per Share |
$1.32 |
$1.00 |
|
$1.64 |
$1.43 |
|
GAAP and Non-GAAP results in the tables above include Cardpool
and Grass Roots Meetings and Events businesses which were both
assets held for sale in 2017. In December 2017 the Grass
Roots Meetings and Events business was sold for a total
consideration of $45.2 million. Cardpool remains an asset
held for sale which the Company intends to divest in 2018.
Grass Roots Meetings & Events Results
For Q4 2017, Grass Roots Meetings & Events contributed $12.0
million of operating revenues, $2.3 million of pre-tax income and
$2.4 million of adjusted EBITDA. For fiscal 2017, Grass Roots
Meetings & Events contributed $54.9 million of operating
revenues, $3.5 million of pre-tax income and $3.9 million of
adjusted EBITDA.
Cardpool Results
For Q4 2017, Cardpool contributed $15.3 million of operating
revenues, $25.1 million of pre-tax loss and a $2.6 million adjusted
EBITDA loss. For fiscal 2017, Cardpool contributed $59.3 million of
operating revenues, $39.9 million of pre-tax loss, including a
$31.5 million non-cash goodwill impairment charge, and a $7.4
million adjusted EBITDA loss.
GAAP financial results for the fourth quarter of 2017
compared to the fourth quarter of 2016
- Operating revenues totaled $942.0 million, an increase of
$161.4 million from $780.6 million for the quarter ended
December 31, 2016. This increase was due to a 23%
increase in operating revenues from the U.S. Retail segment driven
by the addition of Target as a distribution partner and the
acquisition of CashStar; a 17% increase in operating revenues from
the international segment which includes the acquisition of Grass
Roots in late 2016; and an 18% increase in operating revenues from
the incentives and rewards segment primarily due to growth in
Achievers and the loyalty business.
- Net loss totaled $128.2 million compared to net income of $24.7
million for the quarter ended December 31, 2016. The
decline was driven primarily by a $125.1 million non-cash
write-down of the Company's deferred tax asset resulting from tax
reform and a $68.5 million non-cash goodwill impairment charge
related to the Incentives and Cardpool businesses, partially offset
by top line growth in each of the Company's three operating
segments.
- Loss per diluted share was $2.28 compared to earnings per
diluted share of $0.43 for the quarter ended December 31,
2016. Diluted shares outstanding decreased 1.5% to 56.1
million following the Company's 1.2 million share repurchase in
October 2017.
Non-GAAP financial results for the fourth quarter of
2017 compared to the fourth quarter of 2016 (see Table 2 for
Reconciliation of Non-GAAP Measures)
- Adjusted operating revenues totaled $423.2 million, an increase
of 20% from $352.0 million for the quarter ended December 31,
2016. The increase was driven by growth in all three of the
Company's operating segments as described in the GAAP financial
results section above.
- Adjusted EBITDA totaled $143.9 million, an increase of 34% from
$107.3 million for the quarter ended December 31, 2016.
- Adjusted net income totaled $76.5 million, an increase of 34%
from $57.1 million for the quarter ended December 31,
2016.
- Adjusted diluted EPS was $1.32, an increase of 32% from $1.00
for the quarter ended December 31, 2016.
Deferred Tax Asset Write-down
As a result of the U.S. Tax Cuts and Jobs Act, Blackhawk
remeasured its net deferred tax assets in the fourth quarter which
resulted in a $125.1 million income tax expense. There should
be no immediate impact on cash taxes paid as a result of the
reduction in rate due to the continued utilization of the asset,
but at a lower tax rate. The long term benefits of the rate
reduction are expected to benefit the company due to the
significant domestic earnings stream.
Goodwill Impairment Charge
During the fourth quarter of 2017, Cardpool’s results were less
than forecasted, and the Company performed a full assessment of
goodwill impairment. The assessment determined that the carrying
value of the net assets of the Cardpool gift card exchange business
to be sold was higher than the expected selling price less the
costs to sell the business. Accordingly, the Company recorded an
additional impairment charge of $22.5 million in the fourth quarter
of 2017. For the Blackhawk Engagement Solutions U.S. (“BES”)
reporting unit, included within the Incentives and Rewards segment,
the Company performed a full assessment of goodwill impairment and
determined that BES had an elevated risk of goodwill impairment due
to lower expectations of sales volume, operating income and cash
flows. As a result of the lower valuation, the Company recorded an
impairment charge of $46.0 million in the fourth quarter of
2017.
Conference Call
As a result of the proposed merger, the Company will not host an
earnings conference call, provide earnings guidance or publish
supplemental earnings presentation slides.
About Blackhawk Network
Blackhawk Network Holdings, Inc. (NASDAQ: HAWK) is a global
financial technology company and a leader in connecting brands and
people through branded value solutions. Blackhawk platforms and
solutions enable the management of stored value products,
promotions and incentive programs in retail, ecommerce, financial
services and mobile wallets. Blackhawk's Hawk Commerce division
offers technology solutions to businesses and direct to consumers.
The Hawk Incentives division offers enterprise, SMB and reseller
partners an array of platforms and branded value products to incent
and reward consumers, employees and sales channels. Headquartered
in Pleasanton, Calif., Blackhawk operates in the United States and
26 other countries. For more information, please visit
blackhawknetwork.com, hawkcommerce.com, hawkincentives.com or our
product websites giftcards.com, giftcardmall.com, cardpool.com,
giftcardlab.com, omnicard.com and CashStar.com.
Non-GAAP Financial Measures
Blackhawk regards the non-GAAP financial measures provided in
this press release as useful measures of the operational and
financial performance of its business. Adjusted EBITDA, Adjusted
net income and Adjusted diluted earnings per share measures are
prepared and presented to eliminate the effect of items from
EBITDA, Net income and Diluted earnings per share that the Company
does not consider indicative of its core operating performance
within the period presented. Adjusted operating revenues are
prepared and presented to offset the distribution commissions paid
and other compensation to distribution partners and business
clients. Adjusted EBITDA margin represents Adjusted EBITDA as a
percentage of Adjusted operating revenues. Adjusted operating
revenues, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net
income and Adjusted diluted earnings per share may not be
comparable to similarly titled measures of other organizations
because other organizations may not calculate these measures in the
same manner as Blackhawk. Investors are encouraged to evaluate our
adjustments and the reasons we consider them appropriate.
The Company believes Adjusted operating revenues, EBITDA,
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income,
Adjusted diluted earnings per share and Reduction in income taxes
payable are useful to evaluate the Company's operating performance
for the following reasons:
- Adjusting operating revenues for distribution commissions paid
and other compensation to retail distribution partners and business
clients is useful to understanding the Company's operating
margin;
- Adjusting operating revenues for marketing revenue and other
pass-through revenues, which has offsetting expense, is useful for
understanding the Company's operating margin;
- EBITDA and Adjusted EBITDA are widely used by investors and
securities analysts to measure a company’s operating performance
without regard to items that can vary substantially from company to
company and from period to period depending upon their financing,
accounting and tax methods, the book value of their assets, their
capital structures and the method by which their assets were
acquired;
- Adjusted EBITDA margin provides a measure of operating
efficiency based on Adjusted operating revenues and without regard
to items that can vary substantially from company to company and
from period to period depending upon their financing, accounting
and tax methods, the book value of their assets, their capital
structures and the method by which their assets were acquired;
- in a business combination, a company records an adjustment to
reduce the carrying values of deferred revenue and deferred
expenses to their fair values and reduces the company’s revenues
and expenses from what it would have recorded otherwise, and as
such the Company does not believe is indicative of its core
operating performance;
- non-cash equity grants made to employees and distribution
partners at a certain price and point in time do not necessarily
reflect how the Company's business is performing at any particular
time and the related expenses are not key measures of the Company's
core operating performance;
- the net gain on the transaction to transition our
program-managed GPR business to another program manager, the gain
on the sale of our member interest in Visa Europe, legal and
accounting costs incurred in conjunction with the sale of Grass
Roots Meetings and Events and other non-recurring gains / (losses)
related to our acquisitions is not reflective of our core operating
performance;
- asset impairment charges related to the write-down of
technology assets as part of our post-acquisition integration
efforts are not key measures of the Company's core operating
performance;
- non-cash goodwill impairment charges related to our Cardpool
and BES businesses is not an indicator of the Company's core
operating performance;
- intangible asset amortization expenses can vary substantially
from company to company and from period to period depending upon
the applicable financing and accounting methods, the fair value and
average expected life of the acquired intangible assets, the
capital structure and the method by which the intangible assets
were acquired and, as such, the Company does not believe that these
adjustments are reflective of its core operating performance;
- non-cash fair value adjustments to contingent business
acquisition liability do not directly reflect how the Company is
performing at any particular time and the related expense
adjustment amounts are not key measures of the Company's core
operating performance;
- reduction in income taxes payable from the step-up in tax basis
of our assets resulting from the Section 336(e) election due to our
Spin-Off and the Safeway Merger and reduction in income taxes
payable from amortization of goodwill and other intangibles or
utilization of net operating loss carryforwards from business
acquisitions represent significant tax savings that are useful for
understanding the Company's overall operating results; and
- reduction in income taxes payable resulting from the tax
deductibility of stock-based compensation is useful for
understanding the Company's overall operating results. The Company
generally realizes these tax deductions when restricted stock vest,
an option is exercised, and, in the case of warrants, after the
warrant is exercised but amortized over remaining service period,
and such timing differs from the GAAP treatment of expense
recognition
Additional Information and Where to Find It
In connection with the proposed merger, the Company filed a
preliminary proxy statement on Schedule 14A with the SEC on
February 16, 2018. When completed, a definitive proxy statement and
a form of proxy will be filed with the SEC and mailed to the
Company’s stockholders. The Company also plans to file other
relevant materials with the SEC regarding the proposed merger. This
communication is not a substitute for the definitive proxy
statement or any other document that the Company may file with the
SEC or send to its stockholders in connection with the proposed
merger. BEFORE MAKING ANY VOTING DECISION, STOCKHOLDERS OF THE
COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE
SEC, INCLUDING THE DEFINITIVE PROXY STATEMENT, WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION. Investors and security holders will be able
to obtain the documents (when available) free of charge at the
SEC’s website, http://www.sec.gov, and the Company’s website,
www.blackhawknetwork.com. In addition, the documents (when
available) may be obtained free of charge by directing a request to
Patrick Cronin by email at patrick.cronin@bhnetwork.com or by
calling (925) 226-9939.
Cautionary Statements Regarding Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of
1934. Forward-looking statements are indicated by words or
phrases such as “guidance,” “believes,” “expects,” “intends,”
“forecasts,” “can,” “could,” “may,” “anticipates,” “estimates,”
“plans,” “projects,” “seeks,” “should,” “targets,” “will,”
“would,” “outlook,” “continuing,” “ongoing,” and similar words or
phrases and the negative of such words and phrases. Forward-looking
statements are based on our current plans and expectations and
involve risks and uncertainties which are, in many instances,
beyond our control, and which could cause actual results to differ
materially from those included in or contemplated or implied by the
forward-looking statements. Such risks and uncertainties include
the following: the occurrence of any event, change or other
circumstance that could give rise to the termination of the merger
agreement; the failure to obtain the Company’s stockholders’
approval of the transaction; the failure to obtain certain required
regulatory approvals to the completion of the transaction or the
failure to satisfy any of the other conditions to the completion of
the transaction; the effect of the announcement of the transaction
on our ability to retain and hire key personnel and maintain
relationships with our partners, clients, customers, providers,
advertisers, and others with whom we do business, or on our
operating results and businesses generally; risks associated with
the disruption of management’s attention from ongoing business
operations due to the transaction; our ability to meet expectations
regarding the timing and completion of the merger; our ability to
grow adjusted operating revenues and adjusted net income as
anticipated; our ability to grow at historic rates or at all; the
consequences should we lose one or more of our top distribution
partners, fail to maintain or renew existing relationships with our
distribution partners on the same or similar economic terms or fail
to attract new distribution partners to our network or if the
financial performance of our distribution partners’ businesses
decline; our reliance on our content providers; the demand for
their products and our exclusivity arrangements with them; our
reliance on relationships with card issuing banks; the consequences
to our future growth if our distribution partners fail to actively
and effectively promote our products and services; changes in
consumer behavior away from our distribution partners or our
products resulting from limits or controls implemented by our
distribution partners during their transition to EMV compliance;
our ability to successfully integrate our acquisitions; our ability
to generate adequate taxable income to enable us to fully utilize
the tax benefits referred to in this release; changes in applicable
tax law that preclude us from fully utilizing the tax benefits
referred to in this release; the requirement that we comply with
applicable laws and regulations, including increasingly stringent
anti-money laundering rules and regulations; and other risks and
uncertainties described in our reports and filings with the
SEC. These risks, as well as other risks associated with the
proposed merger, are more fully discussed in Item 1A under the
heading Risk Factors in our Annual Report on Form 10-K for the year
ended December 30, 2017 which is expected to be filed on
February 28, 2018 and other periodic reports we file with the SEC,
which are available at www.sec.gov and the Company’s website at
www.blackhawknetwork.com. We undertake no obligation to
update forward-looking statements to reflect developments or
information obtained after the date hereof and disclaim any
obligation to do so other than as may be required by law. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof.
|
INVESTORS/ANALYSTS: |
Patrick
Cronin |
(925)
226-9939 |
patrick.cronin@bhnetwork.com |
|
|
BLACKHAWK NETWORK HOLDINGS, INC. |
CONSOLIDATED STATEMENTS OF
INCOME |
(In thousands, except per share
amounts) |
(Unaudited) |
|
|
16 Weeks Ended |
|
16 Weeks Ended |
|
52 Weeks Ended |
|
52 Weeks Ended |
|
December 30, 2017 |
|
December 31, 2016 |
|
December 30, 2017 |
|
December 31, 2016 |
OPERATING
REVENUES: |
|
|
|
|
|
|
|
Commissions and fees |
$ |
661,291 |
|
|
$ |
565,062 |
|
|
$ |
1,468,867 |
|
|
$ |
1,315,755 |
|
Program
and other fees |
173,468 |
|
|
128,599 |
|
|
477,884 |
|
|
336,317 |
|
Marketing |
49,387 |
|
|
42,200 |
|
|
102,841 |
|
|
94,298 |
|
Product
sales |
57,819 |
|
|
44,689 |
|
|
182,014 |
|
|
153,408 |
|
Total
operating revenues |
941,965 |
|
|
780,550 |
|
|
2,231,606 |
|
|
1,899,778 |
|
OPERATING
EXPENSES: |
|
|
|
|
|
|
|
Partner
distribution expense |
462,672 |
|
|
391,393 |
|
|
1,040,306 |
|
|
933,142 |
|
Processing and services |
144,828 |
|
|
128,634 |
|
|
448,657 |
|
|
355,268 |
|
Sales and
marketing |
130,765 |
|
|
108,623 |
|
|
329,983 |
|
|
274,799 |
|
Costs of
products sold |
52,611 |
|
|
40,104 |
|
|
170,493 |
|
|
143,267 |
|
General
and administrative |
34,911 |
|
|
31,601 |
|
|
113,621 |
|
|
99,428 |
|
Transition and acquisition |
5,776 |
|
|
7,305 |
|
|
7,797 |
|
|
11,465 |
|
Amortization of acquisition intangibles |
22,217 |
|
|
21,527 |
|
|
62,794 |
|
|
57,060 |
|
Change in
fair value of contingent consideration |
(9,840 |
) |
|
— |
|
|
(14,937 |
) |
|
2,100 |
|
Goodwill
impairment |
68,500 |
|
|
— |
|
|
77,500 |
|
|
— |
|
Total
operating expenses |
912,440 |
|
|
729,187 |
|
|
2,236,214 |
|
|
1,876,529 |
|
OPERATING INCOME
(LOSS) |
29,525 |
|
|
51,363 |
|
|
(4,608 |
) |
|
23,249 |
|
OTHER INCOME
(EXPENSE): |
|
|
|
|
|
|
|
Interest
income and other income (expense), net |
(2,524 |
) |
|
(3,707 |
) |
|
(390 |
) |
|
(449 |
) |
Interest
expense |
(10,724 |
) |
|
(7,996 |
) |
|
(32,092 |
) |
|
(21,864 |
) |
INCOME (LOSS) BEFORE
INCOME TAX EXPENSE (BENEFIT) |
16,277 |
|
|
39,660 |
|
|
(37,090 |
) |
|
936 |
|
INCOME TAX EXPENSE
(BENEFIT) |
144,024 |
|
|
14,782 |
|
|
117,800 |
|
|
(4,102 |
) |
NET INCOME (LOSS)
BEFORE ALLOCATION TO NON-CONTROLLING INTERESTS |
(127,747 |
) |
|
24,878 |
|
|
(154,890 |
) |
|
5,038 |
|
Income
attributable to non-controlling interests, net of tax |
(418 |
) |
|
(228 |
) |
|
(878 |
) |
|
(380 |
) |
NET INCOME (LOSS)
ATTRIBUTABLE TO BLACKHAWK NETWORK HOLDINGS, INC. |
$ |
(128,165 |
) |
|
$ |
24,650 |
|
|
$ |
(155,768 |
) |
|
$ |
4,658 |
|
EARNINGS (LOSS) PER
SHARE: |
|
|
|
|
|
|
|
Basic |
$ |
(2.28 |
) |
|
$ |
0.44 |
|
|
$ |
(2.77 |
) |
|
$ |
0.08 |
|
Diluted |
$ |
(2.28 |
) |
|
$ |
0.43 |
|
|
$ |
(2.77 |
) |
|
$ |
0.08 |
|
Weighted
average shares outstanding—basic |
56,126 |
|
|
55,474 |
|
|
56,287 |
|
|
55,734 |
|
Weighted
average shares outstanding—diluted |
56,126 |
|
|
56,966 |
|
|
56,287 |
|
|
57,260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BLACKHAWK NETWORK HOLDINGS, INC. |
CONSOLIDATED BALANCE SHEETS |
(In thousands) |
(Unaudited) |
|
|
Year-end 2017 |
|
Year-end 2016 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
1,096,195 |
|
|
$ |
1,008,125 |
|
Restricted cash |
135,345 |
|
|
10,793 |
|
Settlement receivables, net |
1,038,347 |
|
|
641,691 |
|
Accounts
receivable, net |
184,994 |
|
|
262,672 |
|
Other
current assets |
165,374 |
|
|
131,375 |
|
Total
current assets |
2,620,255 |
|
|
2,054,656 |
|
Property, equipment and
technology, net |
172,607 |
|
|
172,381 |
|
Intangible assets,
net |
431,681 |
|
|
350,185 |
|
Goodwill |
563,405 |
|
|
570,398 |
|
Deferred income
taxes |
236,496 |
|
|
362,302 |
|
Other assets |
115,236 |
|
|
85,856 |
|
TOTAL ASSETS |
$ |
4,139,680 |
|
|
$ |
3,595,778 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Settlement payables |
$ |
2,074,673 |
|
|
$ |
1,626,827 |
|
Consumer
and customer deposits |
252,822 |
|
|
173,344 |
|
Accounts
payable and accrued operating expenses |
156,182 |
|
|
153,885 |
|
Deferred
revenue |
179,684 |
|
|
150,582 |
|
Note
payable, current portion |
10,662 |
|
|
9,856 |
|
Notes
payable to Safeway |
3,941 |
|
|
3,163 |
|
Other
current liabilities |
102,823 |
|
|
51,176 |
|
Total
current liabilities |
2,780,787 |
|
|
2,168,833 |
|
Deferred income
taxes |
28,083 |
|
|
27,887 |
|
Note payable |
202,441 |
|
|
137,984 |
|
Convertible notes
payable |
441,655 |
|
|
429,026 |
|
Other liabilities |
16,747 |
|
|
39,653 |
|
Total
liabilities |
3,469,713 |
|
|
2,803,383 |
|
Stockholders’
equity: |
|
|
|
Preferred
stock |
— |
|
|
— |
|
Common
stock |
56 |
|
|
56 |
|
Additional paid-in capital |
649,546 |
|
|
608,568 |
|
Treasury
stock |
(40,023 |
) |
|
— |
|
Accumulated other comprehensive loss |
(16,049 |
) |
|
(48,877 |
) |
Retained
earnings |
72,571 |
|
|
228,451 |
|
Total
Blackhawk Network Holdings, Inc. equity |
666,101 |
|
|
788,198 |
|
Non-controlling interests |
3,866 |
|
|
4,197 |
|
Total
stockholders’ equity |
669,967 |
|
|
792,395 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
$ |
4,139,680 |
|
|
$ |
3,595,778 |
|
|
|
|
|
|
|
|
|
|
BLACKHAWK NETWORK HOLDINGS, INC. |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(In thousands) |
(Unaudited) |
|
|
52 Weeks Ended |
|
52 Weeks Ended |
|
December 30, 2017 |
|
December 31, 2016 |
OPERATING
ACTIVITIES: |
|
|
|
Net
income (loss) before allocation to non-controlling interests |
$ |
(154,890 |
) |
|
$ |
5,038 |
|
Adjustments to reconcile net income (loss) to net cash used in
operating activities: |
|
|
|
Depreciation and amortization of property, equipment and
technology |
55,419 |
|
|
48,379 |
|
Goodwill
impairment |
77,500 |
|
|
— |
|
Amortization of intangibles |
67,912 |
|
|
62,045 |
|
Amortization of deferred program and contract costs |
30,584 |
|
|
29,015 |
|
Amortization of deferred financing costs and debt discount |
13,837 |
|
|
6,506 |
|
Employee
stock-based compensation expense |
32,708 |
|
|
32,592 |
|
Change in
fair value of contingent consideration |
(14,937 |
) |
|
2,100 |
|
Loss on
property, equipment and technology disposal / write-down |
6,802 |
|
|
9,838 |
|
Deferred
income taxes |
110,276 |
|
|
(8,899 |
) |
Other |
(1,805 |
) |
|
5,093 |
|
Changes
in operating assets and liabilities: |
|
|
|
Settlement receivables |
(350,138 |
) |
|
6,076 |
|
Settlement payables |
411,248 |
|
|
19,907 |
|
Accounts
receivable, current and long-term |
44,857 |
|
|
(13,012 |
) |
Other
current assets |
(14,914 |
) |
|
(13,891 |
) |
Other
assets |
(40,490 |
) |
|
(24,690 |
) |
Restricted cash related to operating activities |
(56,279 |
) |
|
— |
|
Consumer
and customer deposits |
46,931 |
|
|
13,772 |
|
Accounts
payable and accrued operating expenses |
8,703 |
|
|
(14,835 |
) |
Deferred
revenue |
31,458 |
|
|
33,362 |
|
Other
current and long-term liabilities |
35,422 |
|
|
(21,707 |
) |
Income
taxes, net |
5,297 |
|
|
8,542 |
|
Net cash
provided by operating activities |
345,501 |
|
|
185,231 |
|
INVESTING
ACTIVITIES: |
|
|
|
Expenditures for property, equipment and technology |
(64,599 |
) |
|
(52,332 |
) |
Business
acquisitions, net of cash acquired |
(168,995 |
) |
|
(220,605 |
) |
Proceeds
from divestiture of business, net of cash sold |
13,779 |
|
|
— |
|
Investments in unconsolidated entities |
(6,201 |
) |
|
(10,541 |
) |
Change in
restricted cash |
(59,838 |
) |
|
(7,691 |
) |
Other |
(3,244 |
) |
|
1,408 |
|
Net cash
used in investing activities |
(289,098 |
) |
|
(289,761 |
) |
|
|
|
|
Continued
on next page |
|
52 Weeks Ended |
|
52 Weeks Ended |
|
December 30, 2017 |
|
December 31, 2016 |
FINANCING
ACTIVITIES: |
|
|
|
Payments
for acquisition liability |
(5,503 |
) |
|
— |
|
Proceeds
from issuance of note payable |
75,000 |
|
|
250,000 |
|
Repayment
of note payable |
(10,000 |
) |
|
(463,750 |
) |
Payments
of financing costs |
(1,025 |
) |
|
(16,544 |
) |
Borrowings under revolving bank line of credit |
3,011,270 |
|
|
2,985,490 |
|
Repayments on revolving bank line of credit |
(3,011,270 |
) |
|
(2,985,490 |
) |
Repayments on notes payable to Safeway |
(253 |
) |
|
(890 |
) |
Repayment
of debt assumed in business acquisitions |
(8,585 |
) |
|
(8,964 |
) |
Proceeds
from convertible debt |
— |
|
|
500,000 |
|
Payments
for note hedges |
— |
|
|
(75,750 |
) |
Proceeds
from warrants |
— |
|
|
47,000 |
|
Proceeds
from issuance of common stock from exercise of employee stock
options and employee stock purchase plans |
16,782 |
|
|
10,302 |
|
Other
stock-based compensation related |
(10,551 |
) |
|
(2,284 |
) |
Repurchase of common stock |
(40,023 |
) |
|
(34,843 |
) |
Other |
(343 |
) |
|
(156 |
) |
Net cash
provided by financing activities |
15,499 |
|
|
204,121 |
|
Effect of exchange rate
changes on cash and cash equivalents |
16,168 |
|
|
(6,042 |
) |
Increase in cash and
cash equivalents |
88,070 |
|
|
93,549 |
|
Cash and cash
equivalents—beginning of year |
1,008,125 |
|
|
914,576 |
|
Cash and cash
equivalents—end of year |
$ |
1,096,195 |
|
|
$ |
1,008,125 |
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION |
|
|
|
Cash payments during
the year for: |
|
|
|
Interest
paid (net of amounts capitalized) |
$ |
18,008 |
|
|
$ |
12,756 |
|
Income
taxes paid (refunds received) |
$ |
2,587 |
|
|
$ |
(2,854 |
) |
Spin-Off
income taxes paid (refunds received) funded by (remitted to)
Safeway |
$ |
(253 |
) |
|
$ |
(890 |
) |
|
|
|
|
Noncash investing and
financing activities: |
|
|
|
Financing
of business acquisition with contingent consideration |
$ |
1,640 |
|
|
$ |
21,652 |
|
Forgiveness of notes receivable and accrued interest as part of
business acquisition and divestiture |
$ |
973 |
|
|
$ |
5,445 |
|
Intangible assets recognized for the issuance of fully vested
warrants |
$ |
20,000 |
|
|
$ |
— |
|
Conversion of income tax payable and deferred taxes to (from)
additional paid-in capital |
$ |
(91 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
BLACKHAWK NETWORK HOLDINGS, INC. |
SUPPLEMENTAL INFORMATION |
(Tables 1 & 2 in thousands except
percentages and per share amounts) |
(Unaudited) |
|
TABLE 1: OTHER OPERATIONAL DATA |
|
16 Weeks Ended |
|
16 Weeks Ended |
|
52 Weeks Ended |
|
52 Weeks Ended |
|
December 30, 2017 |
|
December 31, 2016 |
|
December 30, 2017 |
|
December 31, 2016 |
Transaction dollar
volume |
$ |
8,614,618 |
|
|
$ |
6,947,031 |
|
|
$ |
19,397,056 |
|
|
$ |
16,717,834 |
|
Prepaid and processing
revenues |
$ |
834,759 |
|
|
$ |
693,661 |
|
|
$ |
1,946,751 |
|
|
$ |
1,652,072 |
|
Prepaid and processing
revenues as a % of transaction dollar volume |
9.7 |
% |
|
10 |
% |
|
10 |
% |
|
9.9 |
% |
Partner distribution
expense as a % of prepaid and processing revenues |
55.4 |
% |
|
56.4 |
% |
|
53.4 |
% |
|
56.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 2: RECONCILIATION OF NON-GAAP
MEASURES |
|
16 Weeks Ended |
|
16 Weeks Ended |
|
52 Weeks Ended |
|
52 Weeks Ended |
|
December 30, 2017 |
|
December 31, 2016 |
|
December 30, 2017 |
|
December 31, 2016 |
Prepaid and
processing revenues: |
|
|
|
|
|
|
|
Commissions and fees |
661,291 |
|
|
565,062 |
|
|
1,468,867 |
|
|
1,315,755 |
|
Program
and other fees |
173,468 |
|
|
128,599 |
|
|
477,884 |
|
|
336,317 |
|
Total
prepaid and processing revenues |
$ |
834,759 |
|
|
$ |
693,661 |
|
|
$ |
1,946,751 |
|
|
$ |
1,652,072 |
|
Adjusted
operating revenues: |
|
|
|
|
|
|
|
Total operating
revenues |
$ |
941,965 |
|
|
$ |
780,550 |
|
|
$ |
2,231,606 |
|
|
$ |
1,899,778 |
|
Revenue
adjustments from purchase accounting |
1,104 |
|
|
5,055 |
|
|
5,558 |
|
|
16,930 |
|
Marketing
and other pass-through revenues |
(57,220 |
) |
|
(42,200 |
) |
|
(117,189 |
) |
|
(94,298 |
) |
Partner
distribution expense |
(462,672 |
) |
|
(391,393 |
) |
|
(1,040,306 |
) |
|
(933,142 |
) |
Adjusted
operating revenues |
$ |
423,177 |
|
|
$ |
352,012 |
|
|
$ |
1,079,669 |
|
|
$ |
889,268 |
|
Adjusted
EBITDA: |
|
|
|
|
|
|
|
Net income (loss)
before allocation to non-controlling interests |
$ |
(127,747 |
) |
|
$ |
24,878 |
|
|
$ |
(154,890 |
) |
|
$ |
5,038 |
|
Interest
and other (income) expense, net |
2,524 |
|
|
3,707 |
|
|
390 |
|
|
449 |
|
Interest
expense |
10,724 |
|
|
7,996 |
|
|
32,092 |
|
|
21,864 |
|
Income
tax expense (benefit) |
144,024 |
|
|
14,782 |
|
|
117,800 |
|
|
(4,102 |
) |
Depreciation and amortization |
41,397 |
|
|
38,340 |
|
|
123,331 |
|
|
110,424 |
|
EBITDA |
70,922 |
|
|
89,703 |
|
|
118,723 |
|
|
133,673 |
|
Adjustments to
EBITDA: |
|
|
|
|
|
|
|
Employee
stock-based compensation |
8,148 |
|
|
7,727 |
|
|
32,708 |
|
|
32,592 |
|
Acquisition-related employee compensation expense |
(110 |
) |
|
(155 |
) |
|
438 |
|
|
465 |
|
Goodwill
impairment |
68,500 |
|
|
— |
|
|
77,500 |
|
|
— |
|
Revenue
adjustments from purchase accounting, net |
1,048 |
|
|
4,510 |
|
|
5,257 |
|
|
15,624 |
|
Other
(gain)/losses, net |
5,189 |
|
|
5,500 |
|
|
5,189 |
|
|
4,746 |
|
Change in
fair value of contingent consideration |
(9,840 |
) |
|
— |
|
|
(14,937 |
) |
|
2,100 |
|
Adjusted EBITDA |
$ |
143,857 |
|
|
$ |
107,285 |
|
|
$ |
224,878 |
|
|
$ |
189,200 |
|
Adjusted EBITDA
margin: |
|
|
|
|
|
|
|
Total
operating revenues |
$ |
941,965 |
|
|
$ |
780,550 |
|
|
$ |
2,231,606 |
|
|
$ |
1,899,778 |
|
Operating
income (loss) |
29,525 |
|
|
51,363 |
|
|
(4,608 |
) |
|
23,249 |
|
Operating
margin |
3.1 |
% |
|
6.6 |
% |
|
(0.2) |
% |
|
1.2 |
% |
Adjusted
operating revenues |
$ |
423,177 |
|
|
$ |
352,012 |
|
|
$ |
1,079,669 |
|
|
$ |
889,268 |
|
Adjusted
EBITDA |
143,857 |
|
|
107,285 |
|
|
224,878 |
|
|
189,200 |
|
Adjusted
EBITDA margin |
34.0 |
% |
|
30.5 |
% |
|
20.8 |
% |
|
21.3 |
% |
Adjusted net
income: |
|
|
|
|
|
|
|
Income (loss) before
income tax expense |
$ |
16,277 |
|
|
$ |
39,660 |
|
|
$ |
(37,090 |
) |
|
$ |
936 |
|
Employee
stock-based compensation expense |
8,148 |
|
|
7,727 |
|
|
32,708 |
|
|
32,592 |
|
Acquisition-related employee compensation expense |
(110 |
) |
|
(155 |
) |
|
438 |
|
|
465 |
|
Goodwill
impairment |
68,500 |
|
|
— |
|
|
77,500 |
|
|
— |
|
Revenue
adjustments from purchase accounting, net |
1,048 |
|
|
4,510 |
|
|
5,257 |
|
|
15,624 |
|
Other
(gains)/losses, net |
6,025 |
|
|
7,875 |
|
|
6,025 |
|
|
5,177 |
|
Change in
fair value of contingent consideration |
(9,840 |
) |
|
— |
|
|
(14,937 |
) |
|
2,100 |
|
Amortization of intangibles |
23,496 |
|
|
23,057 |
|
|
67,912 |
|
|
62,045 |
|
Adjusted income before
income tax expense |
113,544 |
|
|
82,674 |
|
|
137,813 |
|
|
118,939 |
|
Income tax expense
(benefit) |
144,024 |
|
|
14,782 |
|
|
117,800 |
|
|
(4,102 |
) |
Tax expense (benefit)
on adjustments |
(107,424 |
) |
|
10,586 |
|
|
(75,726 |
) |
|
40,691 |
|
Adjusted income tax
expense |
36,600 |
|
|
25,368 |
|
|
42,074 |
|
|
36,589 |
|
Adjusted net income
before allocation to non-controlling interests |
76,944 |
|
|
57,306 |
|
|
95,739 |
|
|
82,350 |
|
Net loss (income)
attributable to non-controlling interests, net of tax |
(418 |
) |
|
(228 |
) |
|
(878 |
) |
|
(380 |
) |
Adjusted net income
attributable to Blackhawk Network Holdings, Inc. |
$ |
76,526 |
|
|
$ |
57,078 |
|
|
$ |
94,861 |
|
|
$ |
81,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 2: RECONCILIATION OF NON-GAAP MEASURES
(continued) |
|
16 Weeks Ended |
|
16 Weeks Ended |
|
52 Weeks Ended |
|
52 Weeks Ended |
|
December 30, 2017 |
|
December 31, 2016 |
|
December 30, 2017 |
|
December 31, 2016 |
Adjusted
diluted earnings per share: |
|
|
|
|
|
|
|
Net income (loss)
attributable to Blackhawk Network Holdings, Inc. |
$ |
(128,165 |
) |
|
$ |
24,650 |
|
|
$ |
(155,768 |
) |
|
$ |
4,658 |
|
Distributed and
undistributed earnings allocated to participating securities |
— |
|
|
(13 |
) |
|
— |
|
|
(28 |
) |
Net income (loss)
available for common shareholders |
$ |
(128,165 |
) |
|
$ |
24,637 |
|
|
$ |
(155,768 |
) |
|
$ |
4,630 |
|
Diluted weighted
average shares outstanding |
56,126 |
|
|
56,966 |
|
|
56,287 |
|
|
57,260 |
|
Diluted earnings (loss)
per share |
$ |
(2.28 |
) |
|
$ |
0.43 |
|
|
$ |
(2.77 |
) |
|
$ |
0.08 |
|
Adjusted net income
attributable to Blackhawk Network Holdings, Inc. |
$ |
76,526 |
|
|
$ |
57,078 |
|
|
$ |
94,861 |
|
|
$ |
81,970 |
|
Adjusted distributed
and undistributed earnings allocated to participating
securities |
— |
|
|
(51 |
) |
|
— |
|
|
(108 |
) |
Adjusted net income
available for common shareholders |
$ |
76,526 |
|
|
$ |
57,027 |
|
|
$ |
94,861 |
|
|
$ |
81,862 |
|
Diluted weighted
average shares outstanding |
56,126 |
|
|
56,966 |
|
|
56,287 |
|
|
57,260 |
|
Increase in common
share equivalents |
1,656 |
|
|
— |
|
|
1,707 |
|
|
— |
|
Adjusted diluted
weighted average shares outstanding |
57,782 |
|
|
56,966 |
|
|
57,994 |
|
|
57,260 |
|
Adjusted diluted
earnings per share |
$ |
1.32 |
|
|
$ |
1.00 |
|
|
$ |
1.64 |
|
|
$ |
1.43 |
|
Reduction in
income taxes payable: |
|
|
|
|
|
|
|
Reduction in income
taxes payable resulting from amortization of spin-off tax basis
step-up |
9,547 |
|
|
9,424 |
|
|
29,338 |
|
|
29,191 |
|
Reduction in cash taxes
payable from amortization of acquisition intangibles and
utilization of acquired NOLs |
15,705 |
|
|
1,301 |
|
|
22,110 |
|
|
13,907 |
|
Reduction in cash taxes
payable from deductible stock-based compensation and convertible
debt |
3,683 |
|
|
3,793 |
|
|
20,619 |
|
|
15,196 |
|
Reduction in income
taxes payable |
$ |
28,935 |
|
|
$ |
14,518 |
|
|
$ |
72,067 |
|
|
$ |
58,294 |
|
Adjusted diluted
weighted average shares outstanding |
57,782 |
|
|
56,966 |
|
|
57,994 |
|
|
57,260 |
|
Reduction in income
taxes payable per share |
$ |
0.50 |
|
|
$ |
0.25 |
|
|
$ |
1.24 |
|
|
$ |
1.02 |
|
BLACKHAWK NETWORK HOLDINGS, INC (NASDAQ:HAWK)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
BLACKHAWK NETWORK HOLDINGS, INC (NASDAQ:HAWK)
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De Juin 2023 à Juin 2024