Delaware | | | 7374 | | | 13-2740040 |
(State or Other Jurisdiction of Incorporation or Organization) | | | (Primary Standard Industrial Classification Code Number) | | | (I.R.S. Employer Identification Number) |
Corey R. Chivers Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 (212) 310-8000 (Phone) (212) 310-8007 (Fax) | | | Lesley Bolger Thryv Holdings, Inc. 2200 West Airfield Drive P.O. Box 619810 DFW Airport, Texas 75261 (972) 453-7000 | | | Christopher D. Lueking Latham & Watkins LLP 330 North Wabash Avenue, Suite 2800 Chicago, IL 60611 Telephone: (312) 876-7700 |
Large accelerated filer | | | ☐ | | | Accelerated filer | | | ☐ |
Non-accelerated filer | | | ☒ | | | Smaller reporting company | | | ☐ |
| | | | Emerging growth company | | | ☐ |
Title of Each Class of Securities to be Registered | | | Amount to be Registered | | | Proposed Maximum Offering Price Per Share | | | Proposed Maximum Aggregate Offering Price(1) | | | Amount of Registration Fee | | | Amount to be Registered(1) | | | Proposed Maximum Offering Price Per Share(1) | | | Proposed Maximum Aggregate Offering Price(1)(2) | | | Amount of Registration Fee(3) |
Common Stock, $0.01 par value per share | | | 26,726,538 | | | Not applicable | | | $31,537,314.84 | | | $4,093.54 | | | 4,025,000 | | | $24.79 | | | $99,779,750 | | | $10,885.97 |
(1) |
(2) | Pursuant to Rule 457(c) under the Securities Act, and solely for |
(3) | As set forth below, the 4,025,000 shares of the registrant’s common stock previously registered for resale on Registration No. 333-256294 are being carried forward to this registration statement pursuant to Rule 429 under the Securities Act and are being offered by the selling stockholders named herein. A filing fee of $67,120.02 was previously paid in connection with the prior registration statement. $10,885.97 of such amount is applied to the total registration fee herein pursuant to Rule 457(p), offsetting the total registration fee herein. The previously paid fee will continue to be applied to such unsold shares, which the Registrant |
| | Per Share | | | Total | |
Public offering price | | | $ | | | $ |
Underwriting discounts and commissions(1) | | | $ | | | $ |
Proceeds, before expenses, to the selling stockholders | | | $ | | | $ |
(1) | See “Underwriting” for additional information regarding underwriting discounts and commissions and estimated offering expenses. |
William Blair | | | | | ||
| | Needham & Company | | | ||
| | | | CJS Securities |
| | Six Months Ended June 30, | | | Years Ended December 31, | ||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | |
| | (in thousands) (unaudited) | | | (in thousands) | ||||||||||
Marketing Services | | | | | | | | | | | |||||
PYP | | | $276,547 | | | $331,121 | | | $605,952 | | | $798,838 | | | $542,745 |
IYP | | | 144,267 | | | 175,592 | | | 339,416 | | | 379,687 | | | 259,526 |
SEM | | | 90,659 | | | 122,443 | | | 232,345 | | | 328,814 | | | 288,161 |
Other | | | 47,576 | | | 63,122 | | | 115,082 | | | 152,447 | | | 152,582 |
Total Marketing Services | | | $559,049 | | | $692,278 | | | $1,292,795 | | | $1,659,786 | | | $1,243,014 |
| | Six Months Ended June 30, | | | Years Ended December 31, | ||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | |
| | (in thousands) (unaudited) | | | (in thousands) | ||||||||||
SaaS | | | | | | | | | | | |||||
Thryv platform | | | $45,194 | | | $50,048 | | | $96,405 | | | $111,875 | | | $72,755 |
Thryv Leads and add-ons | | | 17,939 | | | 14,802 | | | 32,174 | | | 12,740 | | | 2,397 |
Total SaaS | | | $63,133 | | | $64,850 | | | $128,579 | | | $ 124,615 | | | $ 75,152 |
| | Six Months Ended June 30, | | | Years Ended December 31, | ||||||||||
| | 2020(1)(2) | | | 2019(1)(2) | | | 2019(1)(2) | | | 2018(1)(2) | | | 2017(2) | |
| | (in thousands, except share and per share data) | | | (in thousands, except share and per share data) | ||||||||||
| | (unaudited) | | | |||||||||||
Revenue | | | $622,182 | | | $757,128 | | | $1,421,374 | | | $1,784,401 | | | $1,318,166 |
Operating expenses: | | | | | | | | | | ||||||
Cost of services (exclusive of depreciation and amortization) | | | 191,594 | | | 255,285 | | | 476,355 | | | 647,288 | | | 553,293 |
Sales and marketing | | | 141,164 | | | 182,913 | | | 352,740 | | | 469,238 | | | 370,548 |
General and administrative | | | 82,547 | | | 96,375 | | | 179,956 | | | 238,554 | | | 223,887 |
Depreciation and amortization | | | 75,429 | | | 104,814 | | | 206,270 | | | 266,975 | | | 301,435 |
Impairment charges(3) | | | 18,230 | | | 4,999 | | | — | | | — | | | — |
Total operating expenses | | | 508,964 | | | 644,386 | | | 1,215,321 | | | 1,622,055 | | | 1,449,163 |
| | | | | | | | | | ||||||
Operating income (loss) | | | 113,218 | | | 112,742 | | | 206,053 | | | 162,346 | | | (130,997) |
Other income (expense): | | | | | | | | | | | |||||
Interest expense | | | (37,942) | | | (47,402) | | | (92,951) | | | (82,697) | | | (67,815) |
Other components of net periodic pension costs | | | (1,137) | | | (3,686) | | | (53,161) | | | (516) | | | (40,804) |
(Loss) gain on early extinguishment of debt | | | — | | | (6,375) | | | (6,375) | | | (18,375) | | | 751 |
Income (loss) before (provision) benefit for income taxes | | | 74,139 | | | 55,279 | | | 53,566 | | | 60,758 | | | (238,865) |
(Provision) benefit for income taxes | | | (34,573) | | | (17,450) | | | (18,062) | | | (8,487) | | | 67,541 |
Net income (loss) | | | $39,566 | | | $37,829 | | | $35,504 | | | $52,271 | | | $(171,324) |
Net income (loss) per common share: | | | | | | | | | | | |||||
Basic | | | $1.24 | | | $0.78 | | | $0.87 | | | $0.91 | | | $(3.04) |
Diluted | | | $1.15 | | | $0.74 | | | $0.82 | | | $0.88 | | | $(3.04) |
Weighted-average shares used in computing basic and diluted net income (loss) per common share: | | | | | | | | | | | |||||
Basic | | | 32,007,114 | | | 48,332,797 | | | 40,845,128 | | | 57,331,622 | | | 56,436,681 |
Diluted | | | 34,414,996 | | | 51,307,184 | | | 43,465,998 | | | 59,631,195 | | | 56,436,681 |
| | Six Months Ended June 30, | | | Years Ended December 31, | ||||||||||
| | 2020(1)(2) | | | 2019(1)(2) | | | 2019(1)(2) | | | 2018(1)(2) | | | 2017(2) | |
| | (in thousands) | |||||||||||||
Other Financial Data: | | | | | | | | | | | |||||
Adjusted EBITDA(4) | | | $230,914 | | | $260,788 | | | $481,633 | | | $557,705 | | | $259,547 |
Free Cash Flow(4) | | | 84,896 | | | 117,586 | | | 244,534 | | | 319,632 | | | 220,801 |
| | As of June 30, | | | As of December 31, | ||||
| | 2020(1)(2) | | | 2019(1)(2) | | | 2018(1)(2) | |
| | (in thousands) (unaudited) | | | (in thousands) | ||||
Cash and cash equivalents | | | $1,589 | | | $1,912 | | | $34,169 |
Adjusted working capital(5) | | | 195,384 | | | 221,128 | | | 321,714 |
Total assets(6) | | | 1,300,716 | | | 1,388,292 | | | 1,653,488 |
Long-term debt obligations | | | 658,562 | | | 714,392 | | | 545,861 |
Financing obligations | | | 55,849 | | | 56,117 | | | 57,343 |
Total liabilities(6) | | | 1,264,216 | | | 1,361,032 | | | 1,225,148 |
Total stockholders’ equity | | | 36,500 | | | 27,260 | | | 428,340 |
| | Six Months Ended June 30, | | | Years Ended December 31, | ||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | |
| | (in thousands) | |||||||||||||
Reconciliation of Adjusted EBITDA | | | | | | | | | | | |||||
Net income (loss) | | | $ 39,566 | | | $ 37,829 | | | $ 35,504 | | | $ 52,271 | | | $ (171,324) |
Interest expense | | | 37,942 | | | 47,402 | | | 92,951 | | | 82,697 | | | 67,815 |
Provision (benefit) for income taxes | | | 34,573 | | | 17,450 | | | 18,062 | | | 8,487 | | | (67,541) |
Depreciation and amortization expense | | | 75,429 | | | 104,814 | | | 206,270 | | | 266,975 | | | 301,435 |
Loss (gain) on early extinguishment of debt | | | — | | | 6,375 | | | 6,375 | | | 18,375 | | | (751) |
Restructuring and integration charges(a) | | | 17,192 | | | 22,904 | | | 45,960 | | | 87,307 | | | 65,645 |
Transaction costs(b) | | | 9,766 | | | — | | | 6,081 | | | — | | | — |
Stock-based compensation expense(c) | | | (5,484) | | | 14,399 | | | 14,119 | | | 39,604 | | | 23,364 |
Other components of net periodic pension cost(d) | | | 1,137 | | | 3,686 | | | 53,161 | | | 516 | | | 40,804 |
Non-cash loss (gain) from remeasurement of indemnification asset(e) | | | 4,418 | | | 910 | | | 4,093 | | | (9,518) | | | (6,191) |
Impairment charges(f) | | | 18,230 | | | 4,999 | | | — | | | — | | | — |
Other(g) | | | (1,855) | | | 20 | | | (943) | | | 10,991 | | | 6,291 |
Adjusted EBITDA | | | $ 230,914 | | | $ 260,788 | | | $481,633 | | | $557,705 | | | $259,547 |
| | Six Months Ended June 30, | | | Years Ended December 31, | ||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | |
| | (in thousands) | |||||||||||||
Reconciliation of Free Cash Flow | | | | | | | | | | | |||||
Net cash provided by operating activities | | | $ 97,871 | | | $ 123,542 | | | $ 270,599 | | | $ 347,061 | | | $ 240,793 |
Cash expenditures for additions to fixed assets and capitalized software | | | (12,975) | | | (5,956) | | | (26,065) | | | (27,429) | | | (19,992) |
Free Cash Flow | | | $84,896 | | | $117,586 | | | $244,534 | | | $319,632 | | | $220,801 |
| | Successor | | | Predecessor | |||||||||||||||||||
| | Six Months Ended June 30, | | | Years Ended December 31, | | | Five Months Ended December 31, 2016 | | | Seven Months Ended July 31, 2016 | | | Year Ended December 31, 2015 | ||||||||||
| | 2020(1)(2) | | | 2019(1)(2) | | | 2019(1)(2) | | | 2018(1)(2) | | | 2017(2) | | |||||||||
| | (in thousands, except share and per share data) (unaudited) | | | (in thousands, except share and per share data) | |||||||||||||||||||
Revenue | | | $622,182 | | | $757,128 | | | $1,421,374 | | | $1,784,401 | | | $1,318,166 | | | $230,341 | | | $712,628 | | | $1,498,074 |
Operating expenses: | | | | | | | | | | | | | | | | | ||||||||
Cost of services (exclusive of depreciation and amortization) | | | 191,594 | | | 255,285 | | | 476,355 | | | 647,288 | | | 553,293 | | | 135,546 | | | 267,330 | | | 510,994 |
Sales and marketing | | | 141,164 | | | 182,913 | | | 352,740 | | | 469,238 | | | 370,548 | | | 87,429 | | | 176,954 | | | 345,630 |
General and administrative | | | 82,547 | | | 96,375 | | | 179,956 | | | 238,554 | | | 223,887 | | | 12,633 | | | 87,558 | | | 165,792 |
Depreciation and amortization | | | 75,429 | | | 104,814 | | | 206,270 | | | 266,975 | | | 301,435 | | | 128,947 | | | 150,454 | | | 410,415 |
Impairment charges(3) | | | 18,230 | | | 4,999 | | | — | | | — | | | — | | | 712,795 | | | — | | | — |
Total operating expenses | | | 508,964 | | | 644,386 | | | 1,215,321 | | | 1,622,055 | | | 1,449,163 | | | 1,077,350 | | | 682,296 | | | 1,432,831 |
| | | | | | | | | | | | | | | | |||||||||
Operating income (loss) | | | 113,218 | | | 112,742 | | | 206,053 | | | 162,346 | | | (130,997) | | | (847,009) | | | 30,332 | | | 65,243 |
Other income (expense): | | | | | | | | | | | | | | | | | ||||||||
Interest expense | | | (37,942) | | | (47,402) | | | (92,951) | | | (82,697) | | | (67,815) | | | (27,584) | | | (134,753) | | | (354,612) |
Other components of net periodic pension cost | | | (1,137) | | | (3,686) | | | (53,161) | | | (516) | | | (40,804) | | | (35,702) | | | (1,475) | | | (14,961) |
(Loss) gain on early extinguishment of debt | | | — | | | (6,375) | | | (6,375) | | | (18,375) | | | 751 | | | 1,056 | | | — | | | 1,250 |
Reorganization items and fresh start adjustments, net(4) | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,843,991 | | | — |
Income (loss) before (provision) benefit for income taxes | | | 74,139 | | | 55,279 | | | 53,566 | | | 60,758 | | | (238,865) | | | (909,239) | | | 1,738,095 | | | (303,080) |
(Provision) benefit for income taxes | | | (34,573) | | | (17,450) | | | (18,062) | | | (8,487) | | | 67,541 | | | 286,724 | | | (441,500) | | | 39,617 |
Net income (loss) | | | $39,566 | | | $37,829 | | | $35,504 | | | $52,271 | | | $(171,324) | | | $(622,515) | | | $1,296,595 | | | $(263,463) |
Net income (loss) per common share: | | | | | | | | | | | | | | | | | ||||||||
Basic | | | $1.24 | | | $0.78 | | | $0.87 | | | $0.91 | | | $(3.04) | | | $(11.21) | | | $74.01 | | | $(14.98) |
Diluted | | | $1.15 | | | $0.74 | | | $0.82 | | | $0.88 | | | $(3.04) | | | $(11.21) | | | $74.01 | | | $(14.98) |
Weighted-average shares used in computing basic and diluted net income (loss) per common share: | | | | | | | | | | | | | | | | | ||||||||
Basic | | | 32,007,114 | | | 48,332,797 | | | 40,845,128 | | | 57,331,622 | | | 56,436,681 | | | 55,526,907 | | | 17,518,888 | | | 17,584,843 |
Diluted | | | 34,414,996 | | | 51,307,184 | | | 43,465,998 | | | 59,631,195 | | | 56,436,681 | | | 55,526,907 | | | 17,518,888 | | | 17,584,843 |
| | Successor | | | Predecessor | |||||||||||||
| | As of June 30, | | | As of December 31, | | | As of December 31, | ||||||||||
| | 2020(1)(2)(3) | | | 2019(1)(2)(3) | | | 2018(1)(2) | | | 2017(2) | | | 2016(3)(4) | | | 2015 | |
| | (in thousands) (unaudited) | | | (in thousands) | |||||||||||||
Cash and cash equivalents | | | $1,589 | | | $1,912 | | | $34,169 | | | $2,038 | | | $41,409 | | | $175,057 |
Adjusted working capital(5) | | | 195,384 | | | 221,128 | | | 321,714 | | | 69,906 | | | 204,958 | | | 260,406 |
Total assets(6) | | | 1,300,716 | | | 1,388,292 | | | 1,653,488 | | | 1,747,928 | | | 1,253,096 | | | 1,267,565 |
Current maturities of long-term debt | | | — | | | — | | | — | | | — | | | — | | | 2,301,167 |
Long-term debt obligations | | | 658,562 | | | 714,392 | | | 545,861 | | | 812,012 | | | 481,287 | | | |
Financing obligations | | | 55,849 | | | 56,117 | | | 57,343 | | | 60,460 | | | — | | | — |
Total liabilities(6) | | | 1,264,216 | | | 1,361,032 | | | 1,225,148 | | | 1,534,372 | | | 886,389 | | | 2,648,668 |
Total stockholders’ equity (deficit) | | | 36,500 | | | 27,260 | | | 428,340 | | | 213,556 | | | 366,707 | | | (1,381,103) |
| | As of and for Six Months Ended June 30, | | | As of and for Years Ended December 31, | ||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | |
| | (in thousands, except for dollars) | |||||||||||||
Clients: | | | | | | | | | | | |||||
Marketing Services | | | 349 | | | 422 | | | 387 | | | 467 | | | 579 |
SaaS | | | 44 | | | 52 | | | 47 | | | 54 | | | 36 |
Total(1) | | | 365 | | | 439 | | | 403 | | | 484 | | | 589 |
ARPU (Monthly): | | | | | | | | | | | |||||
Marketing Services | | | $ 224 | | | $ 238 | | | $ 235 | | | $ 250 | | | $ 262 |
SaaS | | | 236 | | | 210 | | | 219 | | | 201 | | | 210 |
Total(2) | | | $243 | | | $254 | | | $252 | | | $262 | | | $269 |
Monthly Active Users - SaaS (“MAUs”)(3) | | | 26 | | | 25 | | | 23 | | | 23 | | | — |
| | Six Months Ended June 30, | | | Years Ended December 31, | ||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | |
| | (in thousands) | |||||||||||||
Reconciliation of Adjusted EBITDA | | | | | | | | | | | |||||
Net income (loss) | | | $ 39,566 | | | $ 37,829 | | | $ 35,504 | | | $ 52,271 | | | $ (171,324) |
Interest expense | | | 37,942 | | | 47,402 | | | 92,951 | | | 82,697 | | | 67,815 |
Provision (benefit) for income taxes | | | 34,573 | | | 17,450 | | | 18,062 | | | 8,487 | | | (67,541) |
Depreciation and amortization expense | | | 75,429 | | | 104,814 | | | 206,270 | | | 266,975 | | | 301,435 |
Loss (gain) on early extinguishment of debt | | | — | | | 6,375 | | | 6,375 | | | 18,375 | | | (751) |
Restructuring and integration charges(a) | | | 17,192 | | | 22,904 | | | 45,960 | | | 87,307 | | | 65,645 |
Transaction costs(b) | | | 9,766 | | | — | | | 6,081 | | | — | | | — |
Stock-based compensation expense(c) | | | (5,484) | | | 14,399 | | | 14,119 | | | 39,604 | | | 23,364 |
Other components of net periodic pension cost(d) | | | 1,137 | | | 3,686 | | | 53,161 | | | 516 | | | 40,804 |
Non-cash loss (gain) from remeasurement of indemnification asset(e) | | | 4,418 | | | 910 | | | 4,093 | | | (9,518) | | | (6,191) |
Impairment charges(f) | | | 18,230 | | | 4,999 | | | — | | | — | | | — |
Other(g) | | | (1,855) | | | 20 | | | (943) | | | 10,991 | | | 6,291 |
Adjusted EBITDA | | | $230,914 | | | $260,788 | | | $481,633 | | | $557,705 | | | $259,547 |
| | Six Month Ended June 30, | | | Years Ended December 31, | ||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | |
| | (in thousands) | |||||||||||||
Reconciliation of Free Cash Flow | | | | | | | | | | | |||||
Net cash provided by operating activities | | | $97,871 | | | $123,542 | | | $270,599 | | | $347,061 | | | $240,793 |
Cash expenditures for additions to fixed assets and capitalized software | | | (12,975) | | | (5,956) | | | (26,065) | | | (27,429) | | | (19,992) |
Free Cash Flow | | | $ 84,896 | | | $ 117,586 | | | $ 244,534 | | | $ 319,632 | | | $ 220,801 |
| | As of June 30, | | | As of December 31, | ||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | |
| | (in thousands) | |||||||||||||
Clients | | | | | | | | | | | |||||
Marketing Services | | | 349 | | | 422 | | | 387 | | | 467 | | | 579 |
SaaS | | | 44 | | | 52 | | | 47 | | | 54 | | | 36 |
Total(1) | | | 365 | | | 439 | | | 403 | | | 484 | | | 589 |
| | Six Months Ended June 30, | | | Year Ended December 31, | ||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | |
| | ||||||||||||||
ARPU (Monthly) | | | | | | | | | | | |||||
Marketing Services | | | $224 | | | $238 | | | $235 | | | $250 | | | $262 |
SaaS | | | 236 | | | 210 | | | 219 | | | 201 | | | 210 |
Total(1) | | | $ 243 | | | $254 | | | $252 | | | $262 | | | $269 |
| | As of June 30, | | | As of December 31, | ||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | |
| | (in thousands) | |||||||||||||
Monthly Active Users – SaaS(1) | | | 26 | | | 25 | | | 23 | | | 23 | | | — |
| | Six Months Ended June 30, | | | Year Ended December 31, | |||||||||||||||||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | ||||||||||||||||
| | (in thousands) (unaudited) | | | (in thousands) | |||||||||||||||||||||||||
| | Amount | | | % of Revenue | | | Amount | | | % of Revenue | | | Amount | | | % of Revenue | | | Amount | | | % of Revenue | | | Amount | | | % of Revenue | |
Revenue | | | $622,182 | | | 100% | | | $ 757,128 | | | 100% | | | $1,421,374 | | | 100% | | | $ 1,784,401 | | | 100% | | | $ 1,318,166 | | | 100% |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | ||||||||||
Cost of services (exclusive of depreciation and amortization) | | | 191,594 | | | 30.8% | | | 255,285 | | | 33.7% | | | 476,355 | | | 33.5% | | | 647,288 | | | 36.3% | | | 553,293 | | | 42.0% |
Sales and marketing | | | 141,164 | | | 22.7% | | | 182,913 | | | 24.2% | | | 352,740 | | | 24.8% | | | 469,238 | | | 26.3% | | | 370,548 | | | 28.1% |
General and administrative | | | 82,547 | | | 13.3% | | | 96,375 | | | 12.7% | | | 179,956 | | | 12.7% | | | 238,554 | | | 13.4% | | | 223,887 | | | 17.0% |
Depreciation and amortization | | | 75,429 | | | 12.1% | | | 104,814 | | | 13.8% | | | 206,270 | | | 14.5% | | | 266,975 | | | 15.0% | | | 301,435 | | | 22.9% |
Impairment charges (i) | | | 18,230 | | | 2.9% | | | 4,999 | | | 0.7% | | | — | | | — | | | — | | | — | | | — | | | — |
Total operating expenses | | | 508,964 | | | 81.8% | | | 644,386 | | | 85.1% | | | 1,215,321 | | | 85.5% | | | 1,622,055 | | | 90.9% | | | 1,449,163 | | | 109.9% |
| | | | | | | | | | | | | | | | | | | | |||||||||||
Operating income | | | 113,218 | | | 18.2% | | | 112,742 | | | 14.9% | | | 206,053 | | | 14.5% | | | 162,346 | | | 9.1% | | | (130,997) | | | 9.9% |
Other income (expense): | | | | | | | | | | | | | | | | | | | | | ||||||||||
Interest expense | | | (37,942) | | | 6.1% | | | (47,402) | | | 6.3% | | | (92,951) | | | 6.5% | | | (82,697) | | | 4.6% | | | (67,815) | | | 5.1% |
Other components of net periodic pension cost | | | (1,137) | | | 0.2% | | | (3,686) | | | 0.5% | | | (53,161) | | | 3.7% | | | (516) | | | — | | | (40,804) | | | 3.1% |
(Loss) on early extinguishment of debt | | | — | | | — | | | (6,375) | | | 0.8% | | | (6,375) | | | 0.4% | | | (18,375) | | | 1.0% | | | 751 | | | 0.1% |
Income before (provision) for income taxes | | | 74,139 | | | 11.9% | | | 55,279 | | | 7.3% | | | 53,566 | | | 3.8% | | | 60,758 | | | 3.4% | | | (238,865) | | | 18.1% |
(Provision) for income taxes | | | (34,573) | | | 5.6% | | | (17,450) | | | 2.3% | | | (18,062) | | | 1.3% | | | (8,487) | | | 0.5% | | | 67,541 | | | 5.1% |
Net income | | | $39,566 | | | 6.4% | | | $37,829 | | | 5.0% | | | $35,504 | | | 2.5% | | | $52,271 | | | 2.9% | | | (171,324) | | | 13.0% |
Other financial data: | | | | | | | | | | | | | | | | | | | | | ||||||||||
Adjusted EBITDA | | | $230,914 | | | | | $260,788 | | | | | $ 481,633 | | | | | $ 557,705 | | | | | $ 259,547 | | |
| | Six Months Ended June 30, | | | Change | |||||||
| | 2020 | | | 2019 | | | Amount | | | % | |
| | (in thousands) | | | | | ||||||
Marketing Services | | | $559,049 | | | $692,278 | | | $(133,229) | | | (19.2)% |
SaaS | | | 63,133 | | | 64,850 | | | (1,717) | | | (2.6)% |
Total revenues | | | $622,182 | | | $757,128 | | | $(134,946) | | | (17.8)% |
| | Years Ended December 31, | | | Change | |||||||
| | 2019 | | | 2018 | | | Amount | | | % | |
| | (in thousands) | ||||||||||
Marketing Services | | | $1,292,795 | | | $1,659,786 | | | $(366,991) | | | (22.1)% |
SaaS | | | 128,579 | | | 124,615 | | | 3,964 | | | 3.2 |
Total revenues | | | $1,421,374 | | | $1,784,401 | | | $(363,027) | | | (20.3)% |
| | Years Ended December 31, | | | Change | |||||||
| | 2018 | | | 2017 | | | Amount | | | % | |
| | (in thousands) | ||||||||||
Marketing Services | | | $1,659,786 | | | $1,243,014 | | | $416,772 | | | 33.5% |
SaaS | | | 124,615 | | | 75,152 | | | 49,463 | | | 65.8 |
Total revenues | | | $1,784,401 | | | $1,318,166 | | | $466,235 | | | 35.4% |
| | As of June 30, | | | As of December 31, | ||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | |
| | (in thousands) (unaudited) | | | (in thousands) | ||||||||||
Cash flows provided by (used in) | | | | | | | | | | | |||||
Operating activities | | | $ 97,871 | | | $123,542 | | | $270,599 | | | $347,061 | | | $240,793 |
Investing activities | | | (11,473) | | | (5,261) | | | (25,365) | | | (28,662) | | | (600,394) |
Financing activities | | | (86,721) | | | (146,462) | | | (277,491) | | | (286,268) | | | 320,230 |
(Decrease) increase in Cash and Cash equivalents | | | $(323) | | | $(28,181) | | | $(32,257) | | | $32,131 | | | $(39,371) |
More than 5 Years | | | Total | | | Less than 1 Year | | | 1-3 Years | | | 3-5 Years | | | More than 5 Years | | |||||
| | (in thousands) | |||||||||||||||||||
Senior Term Loan(1) | | | $609,407 | | | $— | | | $— | | | $609,407 | | | $— | | |||||
ABL Facility(2) | | | 104,985 | | | — | | | — | | | 104,985 | | | — | | |||||
Interest payments(3) | | | 296,581 | | | 74,439 | | | 148,099 | | | 74,043 | | | — | | |||||
Operating leases(4) | | | 48,091 | | | 12,439 | | | 14,974 | | | 13,777 | | | 6,901 | | |||||
Other financing obligations(5) | | | 1,441 | | | 580 | | | 861 | | | — | | | — | | |||||
Purchase commitments(6) | | | 715 | | | 715 | | | — | | | — | | | — | | |||||
Unrecognized tax benefits(7) | | | 53,111 | | | 53,111 | | | — | | | — | | | — | | |||||
Total contractual obligations | | | $1,114,331 | | | $141,284 | | | $163,934 | | | $802,212 | | | $6,901 | |
| | Six Months Ended June 30, | | | Years Ended December 31, | ||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | |
| | (in thousands) (unaudited) | | | (in thousands) | ||||||||||
Marketing Services | | | | | | | | | | | |||||
PYP | | | $276,547 | | | $331,121 | | | $605,952 | | | $798,838 | | | $542,745 |
IYP | | | 144,267 | | | 175,592 | | | 339,416 | | | 379,687 | | | 259,526 |
SEM | | | 90,659 | | | 122,443 | | | 232,345 | | | 328,814 | | | 288,161 |
Other | | | 47,576 | | | 63,122 | | | 115,082 | | | 152,447 | | | 152,582 |
Total Marketing Services | | | $559,049 | | | $692,278 | | | $1,292,795 | | | $1,659,786 | | | $1,243,014 |
| | Six Months Ended June 30, | | | Years Ended December 31, | ||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | |
| | (in thousands) (unaudited) | | | (in thousands) | ||||||||||
SaaS | | | | | | | | | | | |||||
Thryv platform | | | $45,194 | | | $50,048 | | | $96,405 | | | $111,875 | | | $72,755 |
Thryv Leads and add-ons | | | 17,939 | | | 14,802 | | | 32,174 | | | 12,740 | | | 2,397 |
Total SaaS | | | $ 63,133 | | | $ 64,850 | | | $ 128,579 | | | $ 124,615 | | | $ 75,152 |
Named Executive Officers | | | Base Salary Prior to March 31, 2019 | | | Base Salary Following March 31, 2019 |
| | | | |||
Joseph A. Walsh | | | $1,000,000 | | | $1,030,000 |
Paul D. Rouse | | | $491,727 | | | $506,479 |
Gordon Henry | | | $393,382 | | | $405,183 |
James McCusker | | | $393,382 | | | $405,183 |
John Wholey | | | $371,527 | | | $382,673 |
EBITDA (in millions) | | | % of EBITDA Component Payout | | | | | Adjusted FCF (in millions) | | | % of Adjusted FCF Component Payout | |
$ 491.00 | | | 25% | | | Threshold | | | $211.00 | | | 25% |
$ 492.00 | | | 33% | | | | | $ 212.00 | | | 33% | |
$ 493.00 | | | 42% | | | | | $ 213.00 | | | 42% | |
$ 494.00 | | | 50% | | | | | $ 214.00 | | | 50% | |
$ 495.00 | | | 58% | | | | | $ 215.00 | | | 58% | |
$ 496.00 | | | 67% | | | | | $ 216.00 | | | 67% | |
$ 497.00 | | | 75% | | | | | $ 217.00 | | | 75% | |
$ 498.00 | | | 83% | | | | | $ 218.00 | | | 83% | |
$ 499.00 | | | 92% | | | | | $ 219.00 | | | 92% | |
$ 500.00 | | | 100% | | | Target | | | $ 220.00 | | | 100% |
$ 501.50 | | | 104% | | | | | $ 221.00 | | | 104% | |
$ 503.00 | | | 108% | | | | | $ 222.00 | | | 108% | |
$ 504.50 | | | 113% | | | | | $ 223.00 | | | 113% | |
$ 506.00 | | | 117% | | | | | $ 224.00 | | | 117% | |
$ 507.50 | | | 121% | | | | | $ 225.00 | | | 121% | |
$ 509.00 | | | 125% | | | Maximum | | | $ 226.00 | | | 125% |
EBITDA (in millions) | | | % of EBITDA Component Payout | | | | | Adjusted FCF (in millions) | | | % of Adjusted FCF Component Payout | |
$ 509.00 | | | | | Threshold | | | $ 226.00 | | | ||
$ 511.00 | | | 10% | | | | | $228.00 | | | 10% | |
$ 513.00 | | | 20% | | | | | $230.00 | | | 20% | |
$ 515.00 | | | 30% | | | | | $ 232.00 | | | 30% | |
$ 517.00 | | | 40% | | | | | $ 234.00 | | | 40% | |
$ 519.00 | | | 50% | | | | | $ 236.00 | | | 50% | |
$ 521.00 | | | 60% | | | | | $ 238.00 | | | 60% | |
$ 523.00 | | | 70% | | | | | $ 240.00 | | | 70% | |
$ 525.00 | | | 80% | | | | | $ 242.00 | | | 80% | |
$ 527.00 | | | 90% | | | | | $ 244.00 | | | 90% | |
$ 529.00 | | | 100% | | | | | $ 246.00 | | | 100% | |
$ 531.00 | | | 110% | | | | | $ 248.00 | | | 110% | |
$ 533.00 | | | 120% | | | | | $ 250.00 | | | 120% | |
$ 535.00 | | | 130% | | | | | $ 252.00 | | | 130% | |
$ 537.00 | | | 140% | | | | | $ 254.00 | | | 140% | |
$ 539.00+ | | | 150%+ | | | No Cap | | | $256.00+ | | | 150%+ |
Named Executive Officers | | | Stock Options(1) | | | Stock Options Grant Date Value ($)(2) |
| | | | |||
Joseph A. Walsh | | | 1,111,111 | | | 10,793,400 |
Paul D. Rouse | | | 111,111 | | | 1,079,340 |
Gordon Henry | | | 111,111 | | | 1,079,340 |
James McCusker | | | 111,111 | | | 1,079,340 |
John Wholey | | | 111,111 | | | 1,079,340 |
Name and Principal Position | | | Fiscal Year | | | Salary ($)(a) | | | Non-Equity Incentive Plan Compensation ($)(b) | | | Option Awards ($)(c) | | | All Other Compensation ($)(d) | | | Total ($) |
Joseph A. Walsh | | | 2019 | | | 1,021,923 | | | 1,662,163 | | | 10,793,400 | | | 16,869,514 | | | 30,347,000 |
President & CEO | | |||||||||||||||||
Paul D. Rouse | | | 2019 | | | 502,507 | | | 572,131 | | | 1,079,340 | | | 1,814,368 | | | 3,968,346 |
Chief Financial Officer, EVP & Treasurer | | |||||||||||||||||
Gordon Henry | | | 2019 | | | 402,006 | | | 457,705 | | | 1,079,340 | | | 1,696,790 | | | 3,635,841 |
Chief Strategy Officer & EVP | | |||||||||||||||||
James McCusker | | | 2019 | | | 402,006 | | | 457,705 | | | 1,079,340 | | | 1,696,790 | | | 3,635,841 |
Chief Revenue Officer & EVP | | |||||||||||||||||
John Wholey | | | 2019 | | | 379,672 | | | 432,277 | | | 1,079,340 | | | 1,696,790 | | | 3,588,079 |
EVP of Operations | | | | | | | | | | | | |
Name | | | 401(k) Matching Contributions ($)(1) | | | Relocation Expenses (and Gross Up) ($)(2) | | | Allowance ($)(3) | | | Stock Option Tender Offer - Cash Payment ($)(4) | | | Total |
Joseph A. Walsh | | | 13,440 | | | — | | | 30,825 | | | 16,825,249 | | | 16,869,514 |
Paul D. Rouse | | | 13,440 | | | 117,578 | | | 825 | | | 1,682,525 | | | 1,814,368 |
Gordon Henry | | | 13,440 | | | — | | | 825 | | | 1,682,525 | | | 1,696,790 |
James McCusker | | | 13,440 | | | — | | | 825 | | | 1,682,525 | | | 1,696,790 |
John Wholey | | | 13,440 | | | — | | | 825 | | | 1,682,525 | | | 1,696,790 |
| | | | | | Estimated Future Payouts Under Non- Equity Incentive Plan Awards | | | All Other Option/ SAR Awards: Number of Securities Underlying Options/ SARs (#)(2) | | | Exercise or Base Price of Option/ SAR Awards ($/Share) (2) | | | Grant Date Fair Value of Stock and Option/ SAR Awards(2) | |||||||||
Name | | | | | Grant Date | | | Threshold ($)(1) | | | Target ($)(1) | | | Maximum ($)(1) | | |||||||||
Joseph A. Walsh | | | STI | | | 1/1/2019 | | | 450,625 | | | 1,030,000 | | | 1,351,875 | | | | | | | |||
| OPP | | | 1/1/2019 | | | 51,500 | | | 1,030,000 | | | | | | | | | ||||||
| SIP | | | 11/18/2019 | | | | | | | | | 1,111,111 | | | 9.714 | | | 10,793,400 | |||||
Paul D. Rouse | | | STI | | | 1/1/2019 | | | 155,109 | | | 354,535 | | | 465,328 | | | | | | | |||
| OPP | | | 1/1/2019 | | | 17,727 | | | 354,535 | | | | | | | | | ||||||
| SIP | | | 11/18/2019 | | | | | | | | | 111,111 | | | 9.714 | | | 1,079,340 | |||||
Gordon Henry | | | STI | | | 1/1/2019 | | | 124,087 | | | 283,628 | | | 372,262 | | | | | | | |||
| OPP | | | 1/1/2019 | | | 14,181 | | | 283,628 | | | | | | | | | ||||||
| SIP | | | 11/18/2019 | | | | | | | | | 111,111 | | | 9.714 | | | 1,079,340 | |||||
James McCusker | | | STI | | | 1/1/2019 | | | 124,087 | | | 283,628 | | | 372,262 | | | | | | | |||
| OPP | | | 1/1/2019 | | | 14,181 | | | 283,628 | | | | | | | | | ||||||
| SIP | | | 11/18/2019 | | | | | | | | | 111,111 | | | 9.714 | | | 1,079,340 | |||||
John Wholey | | | STI | | | 1/1/2019 | | | 117,194 | | | 267,871 | | | 351,581 | | | | | | | |||
| OPP | | | 1/1/2019 | | | 13,394 | | | 267,871 | | | | | | | | | ||||||
| SIP | | | 11/18/2019 | | | | | | | | | 111,111 | | | 9.714 | | | 1,079,340 |
Name | | | Grant Date | | | Offer Price ($) | | | Exercise Price ($) | | | Payout Price ($) | | | Total Vested Options Repurchased (#) | | | Total Payment ($) |
Joseph A. Walsh | | | 9/26/2016 | | | 18.27 | | | 3.67 | | | 14.60 | | | 1,152,572 | | | 16,825,249 |
Paul D. Rouse | | | 11/14/2016 | | | 18.27 | | | 3.67 | | | 14.60 | | | 115,257 | | | 1,682,525 |
Gordon Henry | | | 9/26/2016 | | | 18.27 | | | 3.67 | | | 14.60 | | | 115,257 | | | 1,682,525 |
James McCusker | | | 9/26/2016 | | | 18.27 | | | 3.67 | | | 14.60 | | | 115,257 | | | 1,682,525 |
John Wholey | | | 9/26/2016 | | | 18.27 | | | 3.67 | | | 14.60 | | | 115,257 | | | 1,682,525 |
Name & Event | | | Cash Severance ($) | | | STI Awards ($)(3) | | | Benefits Continuation ($)(4) | | | Accelerated Vesting of Stock Options ($) | | | Outplacement ($)(5) | | | Total ($) |
Joseph A. Walsh | | | | | | | | | | | | | ||||||
Resignation without Good Reason or Termination for Cause | | | — | | | — | | | — | | | — | | | — | | | — |
Resignation for Good Reason or Termination without Cause(1) | | | 2,060,000 | | | 1,080,213 | | | — | | | — | | | — | | | 3,140,213 |
Death(1) | | | 2,060,000 | | | 1,080,213 | | | — | | | — | | | — | | | 3,140,213 |
Disability(1) | | | 2,060,000 | | | 1,080,213 | | | — | | | — | | | — | | | 3,140,213 |
Resignation for Good Reason, Termination without Cause in connection with a Change in Control(1) | | | 4,120,000 | | | 1,080,213 | | | — | | | 1,033,049(6) | | | — | | | 6,233,262 |
| | | | | | | | | | | | |||||||
Paul D. Rouse | | | | | | | | | | | | | ||||||
Resignation without Good Reason or Termination for Cause | | | — | | | — | | | — | | | — | | | — | | | — |
Resignation for Good Reason or Termination without Cause(2) | | | 1,291,521 | | | 371,819 | | | 1,647 | | | — | | | 7,250 | | | 1,672,237 |
Death | | | — | | | — | | | — | | | — | | | — | | | — |
Disability | | | — | | | — | | | — | | | — | | | — | | | — |
Resignation for Good Reason or Termination without Cause in connection with a Change in Control(2) | | | 1,722,029 | | | 371,819 | | | 1,647 | | | — | | | 7,250 | | | 2,102,745 |
| | | | | | | | | | | | |||||||
Gordon Henry | | | | | | | | | | | | | ||||||
Resignation without Good Reason or Termination for Cause | | | — | | | — | | | — | | | — | | | — | | | — |
Resignation for Good Reason or Termination without Cause(2) | | | 1,033,217 | | | 297,455 | | | 1,318 | | | — | | | 7,250 | | | 1,339,240 |
Death | | | — | | | — | | | — | | | — | | | — | | | — |
Disability | | | — | | | — | | | — | | | — | | | — | | | — |
Resignation for Good Reason or Termination without Cause in connection with a Change in Control(2) | | | 1,377,622 | | | 297,455 | | | 1,318 | | | — | | | 7,250 | | | 1,683,645 |
Name & Event | | | Cash Severance ($) | | | STI Awards ($)(3) | | | Benefits Continuation ($)(4) | | | Accelerated Vesting of Stock Options ($) | | | Outplacement ($)(5) | | | Total ($) |
James McCusker | | | | | | | | | | | | | ||||||
Resignation without Good Reason or Termination for Cause | | | — | | | — | | | — | | | — | | | — | | | — |
Resignation for Good Reason or Termination without Cause(2) | | | 1,033,217 | | | 297,455 | | | 1,245 | | | — | | | 7,250 | | | 1,339,167 |
Death | | | — | | | — | | | — | | | — | | | — | | | — |
Disability | | | — | | | — | | | — | | | — | | | — | | | — |
Resignation for Good Reason or Termination without Cause in connection with a Change in Control(2) | | | 1,377,622 | | | 297,455 | | | 1,245 | | | — | | | 7,250 | | | 1,683,572 |
| | | | | | | | | | | | |||||||
John Wholey | | | | | | | | | | | | | ||||||
Resignation without Good Reason or Termination for Cause | | | — | | | — | | | — | | | — | | | — | | | — |
Resignation for Good Reason or Termination without Cause (2) | | | 975,816 | | | 280,930 | | | 1,245 | | | — | | | 7,250 | | | 1,265,241 |
Death | | | — | | | — | | | — | | | — | | | — | | | — |
Disability | | | — | | | — | | | — | | | — | | | — | | | — |
Resignation for Good Reason or Termination without Cause in connection with a Change in Control(2) | | | 1,301,088 | | | 280,930 | | | 1,245 | | | — | | | 7,250 | | | 1,590,513 |
Name(1) | | | Fees Earned or Paid in Cash ($)(2) | | | Stock Option Awards ($) | | | All Other Compensation ($) | | | Total ($) |
Scott Galloway(2) | | | 120,000 | | | — | | | — | | | 120,000 |
Peter Glusker(2) | | | 120,000 | | | — | | | — | | | 120,000 |
Scott Kasen(2) | | | 120,000 | | | — | | | — | | | 120,000 |
Brian Kushner(2) | | | 120,000 | | | — | | | — | | | 120,000 |
Ross Levinsohn(2) | | | 120,000 | | | — | | | — | | | 120,000 |
Jason Mudrick(3) | | | 60,000 | | | — | | | — | | | 60,000 |
John Slater | | | 115,000 | | | — | | | — | | | 115,000 |
Name and address of Beneficial Owner | | | Number of Shares | | | Shares that may be Acquired within 60 Days | | | Total | | | Percentage of Shares |
5% Stockholders: | | | | | | | | | ||||
Affiliates of Mudrick(1) | | | 18,498,051 | | | 20,242 | | | 18,518,293 | | | 59.89% |
Affiliates of GoldenTree(2) | | | 4,806,951 | | | — | | | 4,806,951 | | | 15.56% |
Affiliates of Paulson(3) | | | 3,216,437 | | | — | | | 3,216,437 | | | 10.41% |
Yosemite Sellers Representative LLC (“Yosemite”)(4) | | | 1,804,715 | | | — | | | 1,804,716 | | | 5.84% |
Named Executive Officers and Directors: | | |||||||||||
Joseph A. Walsh(5) | | | — | | | 1,841,255 | | | 1,841,255 | | | 5.96% |
Paul D. Rouse(6) | | | — | | | 162,521 | | | 162,521 | | | * |
Gordon Henry(7) | | | — | | | 162,521 | | | 162,521 | | | * |
James McCusker(8) | | | — | | | 162,521 | | | 162,521 | | | * |
John Wholey(9) | | | — | | | 162,521 | | | 162,521 | | | * |
Lesley Bolger(10) | | | 100 | | | 1,625 | | | 1,725 | | | * |
Jason Mudrick(11) | | | 18,498,051 | | | 20,242 | | | 18,518,293 | | | 59.89% |
Amer Akhtar | | | — | | | — | | | — | | | — |
Bonnie Kintzer | | | — | | | — | | | — | | | — |
Ryan O’Hara | | | — | | | — | | | — | | | — |
John Slater | | | — | | | — | | | — | | | — |
Lauren Vaccarello | | | — | | | — | | | — | | | — |
Heather Zynczak | | | — | | | — | | | — | | | — |
Directors and Executive Officers as a Group (13 persons) | | | 18,498,151 | | | 2,513,206 | | | 21,011,357 | | | 62.88% |
All Other Registered Stockholders(12) | | | 204,999 | | | — | | | 204,999 | | | * |
| | Number of Shares of our Common Stock Beneficially Owned Prior to This Offering | | | Number of Shares of our Common Stock that May Be Sold in This Offering* | | | Number of Shares of our Common Stock Beneficially Owned After This Offering | |||||||
Name and address of Selling Stockholders: | | | Number | | | % | | | Number | | | Number | | | % |
Affiliates of Mudrick Capital Management, L.P.(1) | | | 16,755,020 | | | 49.7% | | | 3,174,843 | | | 13,580,177 | | | 40.3% |
Affiliates of GoldenTree Asset Management LP(2) | | | 4,486,646 | | | 13.3% | | | 850,157 | | | 3,636,489 | | | 10.8% |
* |
(1) | Consists of |
(2) | Consists of |
Stockholder | | | Shares Purchased | | | Options Purchased | | | Aggregate Purchase Price |
5% Stockholders: | | | | | | | |||
Affiliates of Mudrick Capital(1) | | | 17,465,407 | | | 14,652 | | | $202,792,708 |
Affiliates of GoldenTree(2) | | | 6,505,923 | | | — | | | $75,229,303 |
Affiliates of Paulson(3) | | | 8,808,736 | | | — | | | $102,171,300 |
Affiliates of Grosvenor(4) | | | 257,636 | | | — | | | $2,719,859 |
Directors and Executive Officers: | | | | | | | |||
Joseph A. Walsh | | | — | | | 1,152,572 | | | $16,825,249 |
Paul D. Rouse | | | — | | | 115,257 | | | $1,682,525 |
Gordon Henry | | | — | | | 115,257 | | | $1,682,525 |
James McCusker | | | — | | | 115,257 | | | $1,682,525 |
Deb Ryan(5) | | | — | | | 92,206 | | | $1,346,017 |
John Wholey(6) | | | — | | | 115,257 | | | $1,682,525 |
Lesley Bolger | | | 100 | | | 1,153 | | | $17,845 |
Peter Glusker(7) | | | — | | | 46,103 | | | $673,008 |
Ross Levinsohn(8) | | | — | | | 46,103 | | | $673,008 |
Directors and Executive Officers: | | | | | | | |||
Participating Directors and Executive Officers as a Group (9 persons) | | | — | | | 1,776,113 | | | $26,265,027 |
Underwriter | | | Number of Shares |
William Blair & Company, L.L.C. | | | |
Needham & Company, LLC | | | |
CJS Securities, Inc. | | | |
Total | | | 3,500,000 |
Paid by the Selling Stockholders | | | No Exercise | | | Full Exercise |
Per share | | | $ | | | $ |
Total | | | $ | | | $ |
• | our Definitive Proxy Statement on Schedule 14A, filed with the SEC on April 28, 2021; |
• | our Current Reports on Form 8-K, filed with the SEC on March 2, 2021 (as amended by Amendment No. 1 on Form 8-K/A filed on May 13, 2021), May 19, 2021 and |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Revenue | | | $1,421,374 | | | $1,784,401 | | | $1,318,166 |
Operating expenses: | | | | | | ||||
Cost of services (exclusive of depreciation and amortization) | | | 476,355 | | | 647,288 | | | 553,293 |
Sales and marketing | | | 352,740 | | | 469,238 | | | 370,548 |
General and administrative | | | 179,956 | | | 238,554 | | | 223,887 |
Depreciation and amortization | | | 206,270 | | | 266,975 | | | 301,435 |
Total operating expenses | | | 1,215,321 | | | 1,622,055 | | | 1,449,163 |
| | | | | |||||
Operating income (loss) | | | 206,053 | | | 162,346 | | | (130,997) |
Other income (expense): | | | | | | ||||
Interest expense | | | (68,181) | | | (53,851) | | | (38,536) |
Interest expense, related party | | | (24,770) | | | (28,846) | | | (29,279) |
Other components of net periodic pension cost | | | (53,161) | | | (516) | | | (40,804) |
(Loss) gain on early extinguishment of debt | | | (6,375) | | | (18,375) | | | 751 |
Income (loss) before (provision) benefit for income taxes | | | 53,566 | | | 60,758 | | | (238,865) |
(Provision) benefit for income taxes | | | (18,062) | | | (8,487) | | | 67,541 |
Net income (loss) | | | $35,504 | | | $52,271 | | | $(171,324) |
| | | | | |||||
Net income (loss) per common share: | | | | | | | |||
Basic | | | $0.87 | | | $0.91 | | | $(3.04) |
Diluted | | | $0.82 | | | $0.88 | | | $(3.04) |
Weighted-average shares used in computing basic and diluted net income (loss) per common share: | | | | | | ||||
Basic | | | 40,845,128 | | | 57,331,622 | | | 56,436,681 |
Diluted | | | 43,465,998 | | | 59,631,195 | | | 56,436,681 |
| | December 31, 2019 | | | December 31, 2018 | |
Assets | | | | | ||
Current assets | | | | |||
Cash and cash equivalents | | | $1,912 | | | $34,169 |
Accounts receivable, net of allowance of $26,828 and $22,571 | | | 369,690 | | | 440,735 |
Contract assets | | | 11,682 | | | 13,197 |
Accrued tax receivable | | | 37,460 | | | 40,328 |
Deferred costs | | | 15,321 | | | 16,867 |
Prepaid expenses and other | | | 12,715 | | | 17,924 |
Indemnification asset | | | 29,789 | | | — |
Total current assets | | | 478,569 | | | 563,220 |
Fixed assets and capitalized software, net | | | 101,512 | | | 122,157 |
Operating lease right-of-use assets, net | | | 39,046 | | | — |
Goodwill | | | 609,457 | | | 609,457 |
Intangible assets, net | | | 147,480 | | | 312,242 |
Debt issuance costs | | | 3,451 | | | 3,676 |
Indemnification asset | | | — | | | 33,882 |
Other assets | | | 8,777 | | | 8,854 |
Total assets | | | $1,388,292 | | | $1,653,488 |
Liabilities and Shareholders' Equity | | | | | ||
Current liabilities | | | | |||
Accounts payable | | | $16,067 | | | $24,576 |
Accrued liabilities | | | 140,261 | | | 177,521 |
Current portion of financing obligations | | | 580 | | | 1,226 |
Current portion of operating lease liability | | | 9,579 | | | — |
Current portion of reserve for facility exit costs | | | — | | | 4,392 |
Accrued interest | | | 13,164 | | | 2,721 |
Current portion of unrecognized tax benefits | | | 53,111 | | | — |
Contract liabilities | | | 24,679 | | | 31,070 |
Total current liabilities | | | 257,441 | | | 241,506 |
Senior Term Loan, net of debt issuance costs of $593 and $716 | | | 420,036 | | | 399,284 |
Senior Term Loan, related party | | | 189,371 | | | — |
ABL Facility | | | 104,985 | | | 146,577 |
Financing obligations, net of current portion | | | 55,537 | | | 56,117 |
Pension obligations, net | | | 193,533 | | | 170,919 |
Stock option liability | | | 43,026 | | | 64,250 |
Long-term disability insurance | | | 10,874 | | | 12,406 |
Deferred tax liabilities | | | 54,738 | | | 78,905 |
Unrecognized tax benefits, net of current portion | | | 1,833 | | | 51,372 |
Operating lease liability, net of current portion | | | 28,783 | | | — |
Reserve for facility exit costs, net of current portion | | | — | | | 3,451 |
Other liabilities | | | 875 | | | 361 |
Total long-term liabilities | | | 1,103,591 | | | 983,642 |
| | December 31, 2019 | | | December 31, 2018 | |
Commitments and contingencies (see Note 10 and Note 16) | | | | | ||
Shareholders' equity | | | | |||
Common stock - $0.01 par value, 250,000,000 shares authorized; 57,443,282 shares issued and 33,490,526 shares outstanding at December 31, 2019; and 57,331,622 shares issued and outstanding at December 31, 2018 | | | 574 | | | 573 |
Additional paid-in capital | | | 1,008,701 | | | 1,006,822 |
Treasury stock - 23,952,756 shares at December 31, 2019 and 0 shares at December 31, 2018 | | | (437,962) | | | — |
Accumulated deficit | | | (544,053) | | | (579,055) |
Total shareholders' equity | | | 27,260 | | | 428,340 |
Total liabilities and shareholders' equity | | | $1,388,292 | | | $1,653,488 |
| | Common Stock | | | | | Treasury Stock | | | | |||||||||||
| | Common Shares Issued | | | Par Value | | | Additional Paid-in Capital | | | Shares | | | Amount | | | Accumulated (Deficit) | | | Total Shareholders' Equity | |
Balance as of January 1, 2017 | | | 55,526,907 | | | $555 | | | $988,667 | | | — | | | $— | | | $(622,515) | | | $366,707 |
Issuance of common stock and additional paid-in-capital for acquisition | | | 1,804,715 | | | 18 | | | 18,155 | | | — | | | — | | | — | | | 18,173 |
Net (loss) | | | — | | | — | | | — | | | — | | | — | | | (171,324) | | | (171,324) |
Balance as of December 31, 2017 | | | 57,331,622 | | | $573 | | | $1,006,822 | | | — | | | $— | | | $(793,839) | | | $213,556 |
Cumulative effect of adoption of new revenue recognition standard (Note 2) | | | — | | | — | | | — | | | — | | | — | | | 162,513 | | | 162,513 |
Net income | | | — | | | — | | | — | | | — | | | — | | | 52,271 | | | 52,271 |
Balance as of December 31, 2018 | | | 57,331,622 | | | $573 | | | $1,006,822 | | | — | | | $— | | | $(579,055) | | | $428,340 |
Purchase of treasury stock (Note 13) | | | — | | | — | | | — | | | (23,952,756) | | | (437,962) | | | — | | | (437,962) |
Exercise of stock options | | | 111,660 | | | 1 | | | 1,879 | | | — | | | — | | | — | | | 1,880 |
Cumulative effect of adoption of new lease standard (Note 10) | | | — | | | — | | | — | | | — | | | — | | | (502) | | | (502) |
Net income | | | — | | | — | | | — | | | — | | | — | | | 35,504 | | | 35,504 |
Balance as of December 31, 2019 | | | 57,443,282 | | | $ 574 | | | $1,008,701 | | | (23,952,756) | | | $ (437,962) | | | $(544,053) | | | $27,260 |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Cash flows from operating activities | | | | | | | |||
Net income (loss) | | | $35,504 | | | $52,271 | | | $(171,324) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | | | |||
Depreciation and amortization | | | 206,270 | | | 266,975 | | | 301,435 |
Amortization of debt issuance costs | | | 1,123 | | | 1,576 | | | 1,048 |
Deferred income taxes | | | (25,118) | | | (22,745) | | | (141,996) |
Provision for bad debt | | | 30,092 | | | 24,214 | | | 19,670 |
Provision for service credits | | | 25,467 | | | 31,491 | | | 29,417 |
Stock-based compensation expense | | | 14,119 | | | 39,604 | | | 23,364 |
Other components of net periodic pension cost | | | 53,161 | | | 516 | | | 40,804 |
Loss (gain) on early extinguishment of debt | | | 6,375 | | | 18,375 | | | (751) |
Loss on disposal/write-off of fixed assets and capitalized software | | | 5,942 | | | 11,464 | | | 2,758 |
Impairment of operating lease right-of-use assets | | | 5,670 | | | — | | | — |
Non-cash loss (gain) from remeasurement of indemnification asset | | | 4,093 | | | (9,518) | | | (6,191) |
Changes in assets and liabilities: | | | | | | | |||
Accounts receivable | | | 16,457 | | | 14,456 | | | 232,163 |
Contract assets | | | 1,515 | | | (4,834) | | | — |
Deferred costs | | | 1,931 | | | 682 | | | (56,850) |
Prepaid and other assets | | | 3,745 | | | (3,701) | | | 16,389 |
Accounts payable and accrued liabilities | | | (69,244) | | | (72,112) | | | (49,382) |
Accrued income taxes, net | | | 4,376 | | | (12,797) | | | (22,257) |
Operating lease liability | | | (10,587) | | | — | | | — |
Contract liabilities | | | (6,391) | | | 11,144 | | | — |
Deferred revenue | | | — | | | — | | | 22,496 |
Settlement of stock option liability (see Note 13) | | | (33,901) | | | — | | | — |
Net cash provided by operating activities | | | 270,599 | | | 347,061 | | | 240,793 |
Cash flows from investing activities | | | | | | | |||
Additions to fixed assets and capitalized software | | | (26,065) | | | (27,429) | | | (19,992) |
Proceeds from the sale of building and fixed assets | | | 847 | | | 17 | | | 7,332 |
Acquisition of a business, net of cash acquired | | | (147) | | | (1,250) | | | (587,734) |
Net cash (used in) investing activities | | | (25,365) | | | (28,662) | | | (600,394) |
Cash flows from financing activities | | | | | | ||||
Proceeds from Senior Term Loan, net | | | 193,625 | | | 381,625 | | | — |
Proceeds from Senior Term Loan, related party | | | 225,000 | | | — | | | — |
Payments of Senior Term Loan | | | (148,256) | | | — | | | — |
Payments of Senior Term Loan, related party | | | (66,744) | | | — | | | — |
Proceeds from Original Term Facility | | | — | | | — | | | 278,026 |
Proceeds from Original Term Facility, related party | | | — | | | — | | | 271,974 |
Payments of Original Term Facility, upon extinguishment | | | — | | | (198,973) | | | — |
Payments of Original Term Facility, upon extinguishment, related party | | | — | | | (155,368) | | | — |
Payments of Original Term Facility, prior to extinguishment | | | — | | | (166,774) | | | (126,119) |
Payments of Original Term Facility, prior to extinguishment, related party | | | — | | | (130,226) | | | (152,416) |
Proceeds from ABL Facility | | | 1,142,717 | | | 1,823,207 | | | 1,427,498 |
Payments of ABL Facility | | | (1,184,310) | | | (1,836,642) | | | (1,367,485) |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Payments of financing obligations | | | (1,226) | | | (3,117) | | | (7,073) |
Debt issuance costs | | | (774) | | | — | | | (4,175) |
Purchase of treasury stock (see Note 13) | | | (437,962) | | | — | | | — |
Proceeds from exercise of stock options | | | 439 | | | — | | | — |
Net cash (used in) provided by financing activities | | | (277,491) | | | (286,268) | | | 320,230 |
| | | | | |||||
(Decrease) increase in cash and cash equivalents | | | (32,257) | | | 32,131 | | | (39,371) |
Cash and cash equivalents, beginning of period | | | 34,169 | | | 2,038 | | | 41,409 |
Cash and cash equivalents, end of period | | | $1,912 | | | $34,169 | | | $2,038 |
| | | | | |||||
Supplemental information | | | | | | | |||
Cash paid for interest | | | $81,543 | | | $80,972 | | | $64,628 |
Cash paid for income taxes, net | | | $38,091 | | | $44,029 | | | $96,712 |
| | December 31, | ||||
| | 2019 | | | 2018 | |
Accounts receivable | | | $ 129,953 | | | $ 154,479 |
Unbilled accounts receivable | | | 266,565 | | | 308,827 |
Total accounts receivable | | | 396,518 | | | 463,306 |
Less: allowance for doubtful accounts | | | (26,828) | | | (22,571) |
Accounts receivable, net of allowance | | | $369,690 | | | $440,735 |
| | December 31, | | | January 1, 2018 | ||||
| | 2019 | | | 2018 | | |||
Contract assets | | | $11,682 | | | $13,197 | | | $8,363 |
Contract liabilities | | | 24,679 | | | 31,070 | | | 19,926 |
| | Year Ended December 31, 2018 | |||||||
Consolidated Statements of Operations | | | Under ASC 605 | | | Effect of Adoption of ASC 606 | | | Under ASC 606 |
Revenue | | | $1,792,953 | | | $(8,552) | | | $1,784,401 |
| | | | | | ||||
Operating expenses | | | | | | | |||
Cost of services (exclusive of depreciation and amortization) | | | 644,085 | | | 3,203 | | | 647,288 |
Sales and marketing | | | 480,624 | | | (11,386) | | | 469,238 |
General and administrative | | | 238,710 | | | (156) | | | 238,554 |
| | | | | | ||||
Income before (provision) for income taxes | | | 60,971 | | | (213) | | | 60,758 |
(Provision) for income taxes | | | (9,920) | | | 1,433 | | | (8,487) |
Net income | | | $51,051 | | | $1,220 | | | $52,271 |
| | | | | | ||||
Net income per common share: | | | | | | | |||
Basic | | | $0.90 | | | $0.02 | | | $0.91 |
Diluted | | | $0.86 | | | $0.02 | | | $0.88 |
| | December 31, 2018 | |||||||
Consolidated Balance Sheet | | | Under ASC 605 | | | Effect of Adoption of ASC 606 | | | Under ASC 606 |
Assets | | | | | | | |||
Current assets | | | | | | | |||
Accounts receivable, net of allowance | | | $160,484 | | | $280,251 | | | $440,735 |
Contract assets | | | — | | | 13,197 | | | 13,197 |
Deferred costs | | | 130,761 | | | (113,894) | | | 16,867 |
Long-term assets | | | | | | | |||
Other assets | | | 5,329 | | | 3,525 | | | 8,854 |
| | | | | | ||||
Liabilities and Shareholders' Equity | | | | | | | |||
Current liabilities | | | | | | | |||
Accrued liabilities | | | 170,171 | | | 7,350 | | | 177,521 |
Deferred revenue | | | 68,347 | | | (68,347) | | | — |
Contract liabilities | | | — | | | 31,070 | | | 31,070 |
Long-term liabilities | | | | | | | |||
Deferred tax liabilities | | | 29,632 | | | 49,273 | | | 78,905 |
| | | | | | ||||
Shareholders' equity | | | | | | | |||
Accumulated (deficit) | | | $(742,788) | | | $163,733 | | | $(579,055) |
| | Year Ended December 31, 2018 | |||||||
Consolidated Statements of Cash Flows | | | Under ASC 605 | | | Effect of Adoption of ASC 606 | | | Under ASC 606 |
Cash Flows from Operating Activities | | | | | | | |||
Net income | | | $51,051 | | | $1,220 | | | $52,271 |
Deferred income taxes | | | (21,312) | | | (1,433) | | | (22,745) |
Provision for bad debt | | | 24,370 | | | (156) | | | 24,214 |
Provision for service credits | | | 31,528 | | | (37) | | | 31,491 |
Accounts receivable | | | 12,176 | | | 2,280 | | | 14,456 |
Contract assets | | | — | | | (4,834) | | | (4,834) |
Deferred costs | | | 5,535 | | | (4,853) | | | 682 |
Prepaid and other assets | | | (176) | | | (3,525) | | | (3,701) |
Contract liabilities | | | — | | | 11,144 | | | 11,144 |
Accounts payable, accrued liabilities and refund liability | | | $(72,306) | | | $194 | | | $(72,112) |
| | 2019 | | | 2018 | |
Balance as of January 1 | | | $ 33,882 | | | $ 24,364 |
Change in fair value | | | (4,093) | | | 9,518 |
Balance as of December 31 | | | $29,789 | | | $33,882 |
| | 2019 | | | 2018 | |
Balance as of January 1 | | | $ 64,250 | | | $ 24,646 |
Settlement of stock option liability | | | (33,901) | | | — |
Exercise of stock options | | | (1,442) | | | — |
Change in fair value | | | 8,356 | | | 34,287 |
Amortization of grant date fair value(1) | | | 5,763 | | | 5,317 |
Balance as of December 31 | | | $43,026 | | | $64,250 |
| | December 31, 2019 | | | December 31, 2018 | |||||||
| | Carrying Amount | | | Fair Value | | | Carrying Amount | | | Fair Value | |
Senior Term Loan, net | | | $ 609,407 | | | $ 610,000 | | | $ 399,284 | | | $ 400,000 |
| | Marketing Services | | | SaaS | | | Total | |
Balance as of January 1, 2018 | | | $— | | | $— | | | $609,457 |
Additions | | | — | | | — | | | — |
Impairments | | | — | | | — | | | — |
Balance as of December 31, 2018 | | | $— | | | $— | | | $609,457 |
Reallocations | | | 390,573 | | | 218,884 | | | 609,457 |
Additions | | | — | | | — | | | — |
Impairments | | | — | | | — | | | — |
Balance as of December 31, 2019 | | | $390,573 | | | $218,884 | | | $609,457 |
| | Year Ended December 31, 2019 | ||||||||||
| | Gross | | | Accumulated Amortization | | | Net | | | Weighted Average Remaining Amortization Period in Years | |
Client relationships | | | $701,802 | | | $616,187 | | | $85,615 | | | 1.0 |
Trademarks and domain names | | | 200,300 | | | 139,767 | | | 60,533 | | | 2.6 |
Patented technologies | | | 19,600 | | | 19,600 | | | — | | | — |
Covenants not to compete | | | 1,588 | | | 256 | | | 1,332 | | | 2.5 |
Total intangible assets | | | $923,290 | | | $775,810 | | | $147,480 | | | 1.7 |
| | Year Ended December 31, 2018 | ||||||||||
| | Gross | | | Accumulated Amortization | | | Net | | | Weighted Average Remaining Amortization Period in Years | |
Client relationships | | | $701,802 | | | $489,991 | | | $211,811 | | | 2.0 |
Trademarks and domain names | | | 200,300 | | | 103,763 | | | 96,537 | | | 3.4 |
Patented technologies | | | 19,600 | | | 15,706 | | | 3,894 | | | 1.0 |
Total intangible assets | | | $921,702 | | | $609,460 | | | $312,242 | | | 2.4 |
| | Year Ended December 31, 2019 | |||||||||||||
| | Client relationships | | | Trademarks and domain names | | | Patented technologies | | | Covenants not to compete | | | Total Intangible assets | |
Balance as of January 1 | | | $211,811 | | | $96,537 | | | $3,894 | | | $ — | | | $312,242 |
Additions(1) | | | — | | | — | | | — | | | 1,588 | | | 1,588 |
Amortization expense | | | (126,196) | | | (36,004) | | | (3,894) | | | (256) | | | (166,350) |
Balance as of December 31 | | | $85,615 | | | $60,533 | | | $— | | | $1,332 | | | $147,480 |
| | Year Ended December 31, 2018 | |||||||||||||
| | Client relationships | | | Trademarks and domain names | | | Patented technologies | | | Total Intangible assets | | |||
Balance as of January 1 | | | $381,073 | | | $ 141,496 | | | $9,825 | | | $532,394 | | ||
Additions(1) | | | 702 | | | — | | | — | | | 702 | | ||
Amortization expense | | | (169,964) | | | (44,959) | | | (5,931) | | | (220,854) | | ||
Balance as of December 31 | | | $211,811 | | | $96,537 | | | $3,894 | | | $312,242 | |
Fiscal Year | | | Estimated Future Amortization Expense |
2020 | | | $ 115,639 |
2021 | | | 17,008 |
2022 | | | 14,833 |
Total | | | $147,480 |
| | Years Ended December 31, | | | Year Ended December 31, 2019 | |||||||
| | 2019 | | | 2018 | | | 2017 | | | Cumulative | |
Severance costs | | | $9,487 | | | $ 18,326 | | | $ 30,313 | | | $58,126 |
Facility exit costs | | | 6,532 | | | 13,519 | | | 7,317 | | | 27,368 |
System consolidation costs(1) | | | 11,603 | | | 20,859 | | | 4,927 | | | 37,389 |
Legal costs | | | 5,550 | | | 3,956 | | | 4,420 | | | 13,926 |
Tax and accounting advisory services | | | 1,918 | | | 14,851 | | | 10,589 | | | 27,358 |
Other costs(2) | | | 10,870 | | | 15,796 | | | 8,079 | | | 34,745 |
Total restructuring and integration expenses | | | $45,960 | | | $87,307 | | | $65,645 | | | $ 198,912 |
| | Severance costs | | | Facility exit costs | | | System consolidation costs | | | Legal costs | | | Tax and accounting advisory services | | | Other costs | | | Total | |
Balance as of January 1, 2019 | | | $5,528 | | | $7,621 | | | $1,064 | | | $3,519 | | | $— | | | $ 13,216 | | | $30,948 |
Expense | | | 9,487 | | | 6,532 | | | 11,603 | | | 5,550 | | | 1,918 | | | 10,870 | | | 45,960 |
Payments | | | (11,638) | | | (7,367) | | | (12,653) | | | (4,256) | | | (1,904) | | | (5,781) | | | (43,599) |
Balance as of December 31, 2019 | | | $3,377 | | | $6,786 | | | $14 | | | $4,813 | | | $14 | | | $18,305 | | | $33,309 |
| | Severance costs | | | Facility exit costs | | | System consolidation costs | | | Legal costs | | | Tax and accounting advisory services | | | Other costs | | | Total | |
Balance as of January 1, 2018 | | | $12,364 | | | $6,024 | | | $938 | | | $3,565 | | | $5,082 | | | $3,002 | | | $30,975 |
Expense | | | 18,326 | | | 13,519 | | | 20,859 | | | 3,956 | | | 14,851 | | | 15,796 | | | 87,307 |
Payments | | | (25,162) | | | (11,922) | | | (20,733) | | | (4,002) | | | (19,933) | | | (5,582) | | | (87,334) |
Balance as of December 31, 2018 | | | $5,528 | | | $7,621 | | | $1,064 | | | $3,519 | | | $— | | | $ 13,216 | | | $30,948 |
| | 2019 | | | 2018 | | | 2017 | |
Balance as of January 1 | | | $22,571 | | | $31,193 | | | $7,708 |
Impact from adoption of ASC 606(1) | | | — | | | (7,129) | | | — |
Additions(2) | | | 30,092 | | | 24,214 | | | 49,087 |
Deductions(3) | | | (25,835) | | | (25,707) | | | (25,602) |
Balance as of December 31 | | | $26,828 | | | $22,571 | | | $31,193 |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Capitalized software | | | $71,128 | | | $83,803 |
Assets under financing obligations(1) | | | 54,676 | | | 54,676 |
Computer and data processing equipment | | | 34,792 | | | 39,458 |
Land, buildings and building improvements | | | 6,744 | | | 8,201 |
Furniture and fixtures | | | 3,282 | | | 5,462 |
Leasehold improvements | | | 6,502 | | | 4,321 |
Other | | | 4,230 | | | 1,197 |
Fixed assets and capitalized software | | | 181,354 | | | 197,118 |
Less: accumulated depreciation and amortization | | | 79,842 | | | 74,961 |
Total fixed assets and capitalized software, net | | | $ 101,512 | | | $ 122,157 |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Amortization of capitalized software | | | $25,913 | | | $29,584 | | | $18,653 |
Depreciation of fixed assets(1) | | | 14,007 | | | 16,537 | | | 14,688 |
Total depreciation and amortization expense | | | $39,920 | | | $46,121 | | | $33,341 |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Accrued salaries and related expenses | | | $43,155 | | | $55,815 |
Accrued severance | | | 3,377 | | | 5,528 |
Accrued taxes | | | 27,232 | | | 36,618 |
Accrued expenses | | | 57,474 | | | 72,431 |
Accrued service credits | | | 9,023 | | | 7,129 |
Accrued liabilities | | | $ 140,261 | | | $ 177,521 |
| | Operating Leases | |
2020 | | | $ 12,439 |
2021 | | | 7,962 |
2022 | | | 7,012 |
2023 | | | 6,932 |
2024 | | | 6,845 |
Thereafter | | | 6,901 |
Total undiscounted lease payments | | | $48,091 |
Less: imputed interest | | | (9,729) |
Present value of operating lease liability | | | $38,362 |
| | Minimum Rental Obligations | |
2019 | | | $9,680 |
2020 | | | 9,153 |
2021 | | | 7,125 |
2022 | | | 7,015 |
2023 and thereafter | | | 20,632 |
Total | | | $ 53,605 |
| | | | | | December 31, | ||||||
| | Maturity | | | Interest Rate | | | 2019 | | | 2018 | |
Senior Term Loan, related party, net(1) | | | December 31, 2023 | | | LIBOR + 9.00% | | | $609,407 | | | $399,284 |
ABL Facility | | | September 30, 2023 | | | 3-month LIBOR + 4.00% | | | 104,985 | | | 146,577 |
Total debt obligations | | | | | | | $714,392 | | | $545,861 |
| | December 31, | ||||
| | 2019 | | | 2018 | |
Non-cash residual value of Tucker, Georgia lease | | | $54,676 | | | $54,676 |
Future cash maturities associated with the Tucker, Georgia failed sale-leaseback liability | | | 1,441 | | | 1,877 |
All other financing obligations | | | — | | | 790 |
Reserve for facility exit costs, including current portion(1) | | | — | | | 7,843 |
Total other financing obligations | | | $56,117 | | | $65,186 |
| | Debt Obligations | |
2020 | | | $580 |
2021 | | | 740 |
2022 | | | 121 |
2023 | | | 714,392 |
Total future cash commitments | | | $715,833 |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Interest cost | | | $22,146 | | | $20,946 | | | $18,983 |
Expected return on assets | | | (15,044) | | | (16,716) | | | (19,191) |
Settlement loss/(gain) | | | 693 | | | (204) | | | 708 |
Remeasurement loss/(gain) | | | 45,366 | | | (3,510) | | | 40,304 |
Net periodic pension cost | | | $53,161 | | | $516 | | | $40,804 |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Pension benefit obligations discount rate | | | 4.30% | | | 3.63% | | | 4.00% |
Interest cost discount rate | | | 3.93% | | | 3.23% | | | 3.32% |
Expected return on plan assets, net of administrative expenses | | | 3.68% | | | 3.58% | | | 4.27% |
Rate of compensation expense increase | | | N/A | | | N/A | | | N/A |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Pension benefit obligations discount rate | | | 3.16% | | | 4.30% |
Rate of compensation increase | | | N/A | | | N/A |
Interest crediting rate | | | 3.36% | | | 3.59% |
| | 2019 | | | 2018 | |
Change in Benefit Obligations | | | | | ||
Balance as of January 1 | | | $597,077 | | | $678,147 |
Acquisition | | | — | | | — |
Interest cost | | | 22,146 | | | 20,946 |
Actuarial loss/(gain), net | | | 76,161 | | | (41,518) |
Benefits paid | | | (51,423) | | | (60,498) |
Balance as of December 31 | | | $643,961 | | | $597,077 |
| | | | |||
Change in Plan Assets | | | | | ||
Balance as of January 1 | | | $424,927 | | | $502,597 |
Acquisition | | | — | | | — |
Plan contributions | | | 30,369 | | | 3,918 |
Actual return on plan assets, net of administrative expenses | | | 45,146 | | | (21,090) |
Benefits paid | | | (51,423) | | | (60,498) |
Balance as of December 31 | | | $449,019 | | | $424,927 |
| | | | |||
Funded Status as of December 31 (plan assets less benefit obligations) | | | $(194,942) | | | $(172,150) |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Current liabilities | | | $(1,409) | | | $(1,231) |
Long-term liabilities | | | (193,533) | | | (170,919) |
Total pension liability as of December 31 | | | $(194,942) | | | $(172,150) |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Accumulated benefit obligations | | | $643,961 | | | $597,077 |
Projected benefit obligations | | | 643,961 | | | 597,077 |
Plan assets | | | $449,019 | | | $424,927 |
| | Expected Future Pension Benefit Payments | |
2020 | | | $59,727 |
2021 | | | 51,326 |
2022 | | | 46,852 |
2023 | | | 43,708 |
2024 | | | 42,158 |
2025 to 2029 | | | $182,046 |
| | December 31, 2019 | ||||||||||
| | Total | | | Level 1 (quoted market prices in active markets) | | | Level 2 (significant observable input) | | | Level 3 (Unobservable inputs) | |
Cash and cash equivalents | | | $8,029 | | | $8,029 | | | $— | | | $ — |
Equity funds | | | 99,963 | | | 99,963 | | | — | | | — |
U.S. treasuries and agencies | | | 29,610 | | | — | | | 29,610 | | | — |
Corporate bond funds | | | 187,272 | | | 187,272 | | | — | | | — |
Total | | | $324,874 | | | $295,264 | | | $29,610 | | | $— |
Hedge funds-investments measured at NAV as a practical expedient | | | 124,145 | | | | | | | |||
Total plan assets | | | $449,019 | | | | | | |
| | December 31, 2018 | ||||||||||
| | Total | | | Level 1 (quoted market prices in active markets | | | Level 2 (significant observable input) | | | Level 3 (Unobservable inputs) | |
Cash and cash equivalents | | | $6,927 | | | $3,455 | | | $3,472 | | | $ — |
Equity funds | | | 81,152 | | | 81,152 | | | — | | | — |
U.S. treasuries and agencies | | | 37,085 | | | — | | | 37,085 | | | — |
Corporate bond funds | | | 164,545 | | | 164,545 | | | — | | | — |
Total | | | $289,709 | | | $249,152 | | | $40,557 | | | $— |
Hedge funds-investments measured at NAV as a practical expedient | | | 135,218 | | | | | | | |||
Total plan assets | | | $424,927 | | | | | | |
| | December 31 | ||||
| | 2019 | | | 2018 | |
Cash and cash equivalents | | | 1.8% | | | 1.6% |
U.S. treasuries and agencies, corporate bond funds, and other fixed income | | | 48.3% | | | 47.5% |
Equity funds | | | 22.3% | | | 19.1% |
Hedge funds | | | 27.6% | | | 31.8% |
Total | | | 100.0% | | | 100.0% |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Weighted-average fair value | | | $10.24 | | | $15.43 | | | $10.62 |
Dividend yield | | | — | | | — | | | — |
Volatility | | | 39.37% | | | 47.39% | | | 57.48% |
Risk-free interest rate | | | 1.68% | | | 2.47% | | | 2.18% |
Expected life (in years) | | | 4.47 | | | 4.03 | | | 4.86 |
| | 2019 | ||||||||||
| | Number of Stock Option Awards | | | Weighted- Average Exercise Price | | | Weighted- Average Remaining Contractual Term (years) | | | Aggregate Intrinsic Value | |
Outstanding stock option awards at January 1 | | | 6,069,907 | | | $3.87 | | | 6.79 | | | $90,463,239 |
Granted | | | 2,555,111 | | | 16.20 | | | 9.88 | | | — |
Exercises (net cash settled, see Tender Offer below) | | | (2,326,019) | | | 3.69 | | | 6.75 | | | 33,901,447 |
Exercises (issuance of shares) | | | (111,660) | | | 3.92 | | | 6.78 | | | 1,420,239 |
Forfeitures/expirations | | | (311,508) | | | 4.18 | | | 6.81 | | | 3,745,889 |
Outstanding stock option awards at December 31, 2019 | | | 5,875,832 | | | $9.29 | | | 8.15 | | | $42,433,615 |
| | | | | | | | |||||
Options exercisable as of December 31 | | | 2,341,193 | | | $3.80 | | | 6.78 | | | $29,029,972 |
| | 2018 | ||||||||||
| | Number of Stock Option Awards | | | Weighted- Average Exercise Price | | | Weighted- Average Remaining Contractual Term (years) | | | Aggregate Intrinsic Value | |
Outstanding stock option awards at January 1 | | | 6,166,667 | | | $3.89 | | | 8.79 | | | $59,324,500 |
Granted | | | — | | | — | | | — | | | — |
Exercises | | | (926) | | | 3.67 | | | — | | | — |
Forfeitures/expirations | | | (95,833) | | | 4.48 | | | — | | | — |
Outstanding stock option awards at December 31, 2018 | | | 6,069,907 | | | $3.87 | | | 7.79 | | | $90,463,239 |
| | | | | | | | |||||
Options exercisable as of December 31 | | | 2,821,655 | | | $3.67 | | | 7.75 | | | $42,612,634 |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Cost of services | | | $381 | | | $4,156 | | | $2,492 |
Sales and marketing | | | 1,649 | | | 4,276 | | | 2,369 |
General and administrative | | | 12,089 | | | 31,172 | | | 18,503 |
Stock-based compensation expense | | | $14,119 | | | $39,604 | | | $23,364 |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Basic net income (loss) per share: | | | | | | | |||
Net income (loss) | | | $35,504 | | | $52,271 | | | $(171,324) |
Weighted-average common shares outstanding during the period | | | 40,845,128 | | | 57,331,622 | | | 56,436,681 |
Basic net income (loss) per share | | | $0.87 | | | $0.91 | | | $(3.04) |
Diluted net income (loss) per share: | | | | | | | |||
Net income (loss) | | | $35,504 | | | $52,271 | | | $(171,324) |
Basic shares outstanding during the period | | | 40,845,128 | | | 57,331,622 | | | 56,436,681 |
Plus: Common stock equivalents associated with liability-based stock option awards | | | 2,620,870 | | | 2,299,573 | | | — |
Diluted shares outstanding | | | 43,465,998 | | | 59,631,195 | | | 56,436,681 |
Diluted net income (loss) per share | | | $0.82 | | | $0.88 | | | $(3.04) |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Current tax (provision): | | | | | | | |||
Federal | | | $(37,319) | | | $(23,848) | | | $(64,861) |
State and local | | | (5,861) | | | (7,384) | | | (9,594) |
Total current tax (provision) | | | (43,180) | | | (31,232) | | | (74,455) |
Deferred tax benefit: | | | | | | | |||
Federal | | | 32,327 | | | 7,474 | | | 123,903 |
State and local | | | (7,209) | | | 15,271 | | | 18,093 |
Total deferred tax benefit | | | 25,118 | | | 22,745 | | | 141,996 |
Total (provision) benefit for income taxes | | | $(18,062) | | | $(8,487) | | | $67,541 |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Statutory federal tax rate | | | 21.0% | | | 21.0% | | | 35.0% |
State and local taxes, net of federal tax benefit | | | 19.1 | | | (16.4) | | | (1.8) |
Non-deductible and non-includable items | | | 3.1 | | | (2.8) | | | (0.8) |
Subsidiary basis adjustment | | | — | | | — | | | 0.3 |
Change in federal valuation allowance | | | (14.5) | | | 7.6 | | | (27.8) |
Change in unrecognized tax benefits (including FBOS(1)) | | | 5.3 | | | 2.7 | | | 0.1 |
Impact of federal tax reform legislation | | | — | | | — | | | 7.1 |
Taxable reorganization items | | | — | | | — | | | 15.3 |
Other, net | | | (0.3) | | | 1.9 | | | 0.9 |
Effective tax rate | | | 33.7% | | | 14.0% | | | 28.3% |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Deferred tax assets | | | | | ||
Allowance for doubtful accounts | | | $9,098 | | | $4,876 |
Deferred and other compensation | | | 18,165 | | | 26,761 |
Capital investments | | | 3,780 | | | 3,754 |
Debt, capitalized fees, and other interest | | | 4,644 | | | 4,655 |
Pension and other post-employment benefits | | | 52,219 | | | 46,466 |
Operating lease liability | | | 9,736 | | | — |
Reserve for facility exit costs | | | 1,875 | | | 1,975 |
Net operating loss and credit carryforwards | | | 27,019 | | | 29,872 |
Fixed assets and capitalized software | | | 130 | | | 237 |
Non-compete and other agreements | | | 30,250 | | | 2,990 |
Deferred costs | | | — | | | 27,788 |
Other, net | | | 11,239 | | | 12,250 |
Total deferred tax assets | | | 168,155 | | | 161,624 |
Valuation allowance | | | (126,321) | | | (127,294) |
Net deferred tax assets | | | $41,834 | | | $34,330 |
Deferred tax liabilities | | | | | ||
Goodwill and other intangibles | | | (1,658) | | | (13,682) |
Deferred revenue | | | (71,943) | | | (94,004) |
Deferred costs | | | (3,453) | | | — |
Investment in subsidiaries | | | (4,676) | | | (1,586) |
Operating lease right-of-use assets | | | (10,643) | | | — |
Other, net | | | (4,199) | | | (3,963) |
Total deferred tax liabilities | | | (96,572) | | | (113,235) |
Net deferred tax liability | | | $(54,738) | | | $(78,905) |
| | 2019 | | | 2018 | | | 2017 | |
Balance as of January 1 | | | $ 127,294 | | | $ 136,766 | | | $55,384 |
Impact from adoption of ASC 606 | | | — | | | (4,365) | | | — |
Net change in valuation allowance | | | (973) | | | (5,107) | | | 81,382 |
Balance as of December 31 | | | $126,321 | | | $127,294 | | | $ 136,766 |
| | 2019 | | | 2018 | | | 2017 | |
Balance as of January 1 | | | $ 48,469 | | | $ 49,521 | | | $3,246 |
Gross additions for tax positions related to the current year | | | — | | | 146 | | | 1,569 |
Gross additions for tax positions related to prior years | | | — | | | 550 | | | 47,937 |
Gross reductions for tax positions related to prior years | | | — | | | (665) | | | (851) |
Gross reductions for tax positions related to the lapse of applicable statute of limitations | | | (164) | | | (311) | | | (2,380) |
Gross reductions for tax positions related to current year settlements | | | — | | | (772) | | | — |
Balance as of December 31 | | | $48,305 | | | $48,469 | | | $ 49,521 |
| | Year Ended December 31, 2019 | |||||||
| | Marketing Services | | | SaaS | | | Total | |
Revenue | | | $1,292,795 | | | $128,579 | | | $1,421,374 |
Segment EBITDA | | | 468,934 | | | 12,165 | | | 481,099 |
| | Year Ended December 31, 2018 | |||||||
| | Marketing Services | | | SaaS | | | Total | |
Revenue | | | $1,659,786 | | | $124,615 | | | $1,784,401 |
Segment EBITDA | | | 593,432 | | | (6,927) | | | 586,505 |
| | Year Ended December 31, 2017 | |||||||
| | Marketing Services | | | SaaS | | | Total | |
Revenue | | | $1,243,014 | | | $75,152 | | | $1,318,166 |
Segment EBITDA | | | 485,546 | | | (7,291) | | | 478,255 |
| | Years Ended December 31 | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Total Segment EBITDA | | | $481,099 | | | $586,505 | | | $478,255 |
Impact of ASC 842 | | | 534 | | | — | | | — |
Impact of ASC 606 | | | — | | | (213) | | | — |
Interest expense | | | (92,951) | | | (82,697) | | | (67,815) |
Depreciation and amortization | | | (206,270) | | | (266,975) | | | (301,435) |
Other components of net periodic pension cost | | | (53,161) | | | (516) | | | (40,804) |
(Loss) gain on early extinguishment of debt | | | (6,375) | | | (18,375) | | | 751 |
Adjustments for acquisition accounting, fresh start accounting, and other one-time adjustments including accounting conformity adjustments(1) | | | — | | | (28,587) | | | (218,084) |
Restructuring and integration expenses | | | (45,960) | | | (87,307) | | | (65,645) |
Transaction costs(2) | | | (6,081) | | | — | | | — |
Stock-based compensation expense | | | (14,119) | | | (39,604) | | | (23,364) |
Other | | | (3,150) | | | (1,473) | | | (724) |
Income (loss) before (provision) benefit for income taxes | | | $53,566 | | | $60,758 | | | $(238,865) |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Marketing Services | | | | | | | |||
PYP | | | $605,952 | | | $798,838 | | | $542,745 |
IYP | | | 339,416 | | | 379,687 | | | 259,526 |
SEM | | | 232,345 | | | 328,814 | | | 288,161 |
Other | | | 115,082 | | | 152,447 | | | 152,582 |
Total Marketing Services | | | 1,292,795 | | | 1,659,786 | | | 1,243,014 |
SaaS | | | | | | | |||
Thryv platform | | | 96,405 | | | 111,875 | | | 72,755 |
Thryv Leads and Add-ons | | | 32,174 | | | 12,740 | | | 2,397 |
Total SaaS | | | 128,579 | | | 124,615 | | | 75,152 |
Total Revenue | | | $1,421,374 | | | $1,784,401 | | | $1,318,166 |
| | Six Months Ended June 30, | ||||
| | 2020 | | | 2019 | |
Revenue | | | $622,182 | | | $757,128 |
Operating expenses: | | | | | ||
Cost of services (exclusive of depreciation and amortization) | | | 191,594 | | | 255,285 |
Sales and marketing | | | 141,164 | | | 182,913 |
General and administrative | | | 82,547 | | | 96,375 |
Depreciation and amortization | | | 75,429 | | | 104,814 |
Impairment charges | | | 18,230 | | | 4,999 |
Total operating expenses | | | 508,964 | | | 644,386 |
| | | | |||
Operating income | | | 113,218 | | | 112,742 |
Other income (expense): | | | | | ||
Interest expense | | | (28,206) | | | (34,534) |
Interest expense, related party | | | (9,736) | | | (12,868) |
Other components of net periodic pension cost | | | (1,137) | | | (3,686) |
Loss on early extinguishment of debt | | | — | | | (6,375) |
Income before provision for income taxes | | | 74,139 | | | 55,279 |
(Provision) for income taxes | | | (34,573) | | | (17,450) |
Net income | | | $39,566 | | | $37,829 |
| | | | |||
Net income per common share: | | | | | ||
Basic | | | $1.24 | | | $0.78 |
Diluted | | | $1.15 | | | $0.74 |
Weighted-average shares used in computing basic and diluted net income per common share: | | | | | ||
Basic | | | 32,007,114 | | | 48,332,797 |
Diluted | | | 34,414,996 | | | 51,307,184 |
| | June 30, 2020 | | | December 31, 2019 | |
| | (unaudited) | | | ||
Assets | | | | | ||
Current assets | | | | | ||
Cash and cash equivalents | | | $1,589 | | | $1,912 |
Accounts receivable, net of allowance of $36,166 and $26,828 | | | 376,045 | | | 369,690 |
Contract assets, net of allowance of $463 and $0 | | | 13,732 | | | 11,682 |
Taxes receivable | | | 35,984 | | | 37,460 |
Deferred costs | | | 12,019 | | | 15,321 |
Prepaid expenses and other | | | 12,701 | | | 12,715 |
Indemnification asset | | | 25,371 | | | 29,789 |
Total current assets | | | 477,441 | | | 478,569 |
Fixed assets and capitalized software, net | | | 88,949 | | | 101,512 |
Operating lease right-of-use assets, net | | | 23,317 | | | 39,046 |
Goodwill | | | 609,457 | | | 609,457 |
Intangible assets, net | | | 89,646 | | | 147,480 |
Debt issuance costs | | | 2,991 | | | 3,451 |
Other assets | | | 8,915 | | | 8,777 |
Total assets | | | $1,300,716 | | | $1,388,292 |
Liabilities and Shareholders' Equity | | | | | ||
Current liabilities | | | | | ||
Accounts payable | | | $15,691 | | | $16,067 |
Accrued liabilities | | | 171,513 | | | 140,261 |
Current portion of financing obligations | | | 657 | | | 580 |
Current portion of operating lease liability | | | 7,252 | | | 9,579 |
Accrued interest | | | 10,906 | | | 13,164 |
Current portion of unrecognized tax benefits | | | 54,902 | | | 53,111 |
Contract liabilities | | | 21,136 | | | 24,679 |
Total current liabilities | | | 282,057 | | | 257,441 |
Senior Term Loan, net of debt issuance costs of $519 and $593 | | | 375,020 | | | 420,036 |
Senior Term Loan, related party | | | 169,071 | | | 189,371 |
ABL Facility | | | 114,471 | | | 104,985 |
Financing obligations, net of current portion | | | 55,192 | | | 55,537 |
Pension obligations, net | | | 178,168 | | | 193,533 |
Stock option liability | | | 37,318 | | | 43,026 |
Long-term disability insurance | | | 10,411 | | | 10,874 |
Deferred tax liabilities | | | 12,588 | | | 54,738 |
Unrecognized tax benefits, net of current portion | | | 1,885 | | | 1,833 |
Operating lease liability, net of current portion | | | 27,178 | | | 28,783 |
Other liabilities | | | 857 | | | 875 |
Total long-term liabilities | | | 982,159 | | | 1,103,591 |
Commitments and contingencies (see Note 12) | | | | | ||
Shareholders' equity | | | | | ||
Common stock - $.01 par value, 250,000,000 shares authorized; 57,463,943 shares issued and 30,829,145 shares outstanding at June 30, 2020; and 57,443,282 shares issued and 33,490,526 shares outstanding at December 31, 2019 | | | 574 | | | 574 |
Additional paid-in capital | | | 1,009,001 | | | 1,008,701 |
Treasury stock - 26,634,798 shares at June 30, 2020 and 23,952,756 shares at December 31, 2019 | | | (468,588) | | | (437,962) |
Accumulated deficit | | | (504,487) | | | (544,053) |
Total shareholders’ equity | | | 36,500 | | | 27,260 |
Total liabilities and shareholders’ equity | | | $1,300,716 | | | $1,388,292 |
| | Common Stock | | | | | Treasury Stock | | | | | ||||||||||
| | Common Shares Issued | | | Par Value | | | Additional Paid-in Capital | | | Shares | | | Amount | | | Accumulated (Deficit) | | | Total Shareholders' Equity | |
Balance as of December 31, 2019 | | | 57,443,282 | | | $574 | | | $1,008,701 | | | (23,952,756) | | | $(437,962) | | | $(544,053) | | | $27,260 |
Purchase of treasury stock (see Note 9) | | | — | | | — | | | — | | | (2,682,042) | | | (30,626) | | | — | | | (30,626) |
Exercise of stock options | | | 20,661 | | | — | | | 300 | | | — | | | — | | | — | | | 300 |
Net income | | | — | | | — | | | — | | | — | | | — | | | 39,566 | | | 39,566 |
Balance as of June 30, 2020 | | | 57,463,943 | | | $574 | | | $1,009,001 | | | (26,634,798) | | | $(468,588) | | | $(504,487) | | | $36,500 |
Balance as of December 31, 2018 | | | 57,331,622 | | | $573 | | | $1,006,822 | | | — | | | $— | | | $(579,055) | | | $428,340 |
Purchase of treasury stock (see Note 9) | | | — | | | — | | | — | | | (23,952,756) | | | (437,942) | | | — | | | (437,942) |
Cumulative effect of adoption of new lease standard | | | — | | | — | | | — | | | — | | | — | | | (502) | | | (502) |
Net income | | | — | | | — | | | — | | | — | | | — | | | 37,829 | | | 37,829 |
Balance as of June 30, 2019 | | | 57,331,622 | | | $573 | | | $1,006,822 | | | (23,952,756) | | | $(437,942) | | | $(541,728) | | | $27,725 |
| | Six Months Ended June 30, | ||||
| | 2020 | | | 2019 | |
Cash Flows from Operating Activities | | | | | ||
Net income | | | $39,566 | | | $37,829 |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | ||
Depreciation and amortization | | | 75,429 | | | 104,814 |
Amortization of debt issuance costs | | | 534 | | | 589 |
Deferred income taxes | | | (42,150) | | | (25,167) |
Provision for bad debt | | | 22,436 | | | 16,147 |
Provision for service credits | | | 17,197 | | | 13,261 |
Stock-based compensation (benefit) expense | | | (5,484) | | | 14,399 |
Other components of net periodic pension cost | | | 1,137 | | | 3,686 |
Loss on early extinguishment of debt | | | — | | | 6,375 |
Loss on disposal/write-off of fixed assets and capitalized software | | | 3,491 | | | 5,290 |
Impairment charges | | | 18,230 | | | 4,999 |
Non-cash loss from remeasurement of indemnification asset | | | 4,418 | | | 910 |
Changes in working capital items, excluding acquisitions: | | | | | ||
Accounts receivable | | | (28,791) | | | 16,865 |
Contract assets | | | (2,050) | | | 965 |
Deferred costs | | | 3,302 | | | 1,621 |
Prepaid and other assets | | | (125) | | | (6,752) |
Accounts payable and accrued liabilities | | | (67,064) | | | (56,876) |
Accrued income taxes, net | | | 64,821 | | | 28,371 |
Operating lease liability | | | (3,482) | | | (5,702) |
Contract liabilities | | | (3,544) | | | (4,181) |
Settlement of stock option liability | | | — | | | (33,901) |
Net cash provided by operating activities | | | 97,871 | | | 123,542 |
| | | | |||
Cash Flows from Investing Activities | | | | | ||
Additions to fixed assets and capitalized software | | | (12,975) | | | (5,956) |
Proceeds from the sale of building and fixed assets | | | 1,502 | | | 842 |
Acquisition of a business, net of cash acquired | | | — | | | (147) |
Net cash (used in) investing activities | | | (11,473) | | | (5,261) |
| | | | |||
Cash Flows from Financing Activities | | | | | ||
Payments of Senior Term Loan | | | (45,090) | | | (75,163) |
Payments of Senior Term Loan, related party | | | (20,300) | | | (33,837) |
Proceeds from Senior Term Loan, net | | | — | | | 193,625 |
Proceeds from Senior Term Loan, related party | | | — | | | 225,000 |
Proceeds from ABL Facility | | | 606,455 | | | 471,287 |
Payments of ABL Facility | | | (596,969) | | | (487,823) |
Payments of financing obligations | | | (267) | | | (835) |
Debt issuance costs | | | — | | | (774) |
Purchase of treasury stock (see Note 9) | | | (30,626) | | | (437,942) |
Proceeds from exercise of stock options | | | 76 | | | — |
Net cash (used in) provided by financing activities | | | (86,721) | | | (146,462) |
(Decrease) increase in cash and cash equivalents | | | (323) | | | (28,181) |
Cash and cash equivalents, beginning of period | | | 1,912 | | | 34,169 |
Cash and cash equivalents, end of period | | | $1,589 | | | $5,988 |
| | | | |||
Supplemental Information | | | | | ||
Cash paid for interest | | | $39,671 | | | $34,209 |
Cash paid for income taxes, net | | | $11,902 | | | $14,246 |
| | June 30, 2020 | | | December 31, 2019 | |
Contract assets, net of allowance of $463 and $0 | | | $13,732 | | | $11,682 |
Contract liabilities | | | 21,136 | | | 24,679 |
| | June 30, 2020 | | | December 31, 2019 | |||||||
| | Carrying Amount | | | Fair Value | | | Carrying Amount | | | Fair Value | |
Senior Term Loan, net | | | $544,091 | | | $517,380 | | | $609,407 | | | $610,000 |
| | Six Months Ended June 30, | | | |||||
| | 2020 | | | 2019 | | | Cumulative | |
Severance costs | | | $— | | | $5,409 | | | $58,126 |
Facility exit costs | | | — | | | 3,287 | | | 27,368 |
System consolidation costs(1) | | | — | | | 6,402 | | | 37,389 |
Legal costs | | | — | | | 4,233 | | | 13,926 |
Tax and accounting advisory services | | | — | | | 946 | | | 27,358 |
Other costs(2) | | | — | | | 7,626 | | | 34,745 |
Total restructuring and integration expenses | | | $— | | | $27,903 | | | $198,912 |
| | Severance costs | | | Facility exit costs | | | System consolidation costs | | | Legal costs | | | Tax and accounting advisory services | | | Other costs(1) | | | Total | |
Balance as of January 1, 2020 | | | $3,377 | | | $6,786 | | | $14 | | | $4,813 | | | $14 | | | $— | | | $15,004 |
Expense | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Payments | | | (2,898) | | | (3,005) | | | (14) | | | (3,563) | | | (14) | | | — | | | (9,494) |
Balance as of June 30, 2020 | | | $479 | | | $3,781 | | | $— | | | $1,250 | | | $— | | | $— | | | $5,510 |
| | June 30, 2020 | | | December 31, 2019 | |
Accrued salaries and related expenses | | | $29,083 | | | $43,155 |
Accrued severance(1) | | | 3,480 | | | 3,377 |
Accrued taxes | | | 85,428 | | | 27,232 |
Accrued expenses | | | 44,986 | | | 57,474 |
Accrued service credits | | | 8,536 | | | 9,023 |
Accrued liabilities | | | $171,513 | | | $140,261 |
| | Maturity | | | Interest Rate | | | June 30, 2020 | | | December 31, 2019 | |
Senior Term Loan, related party, net(1) | | | December 31, 2023 | | | LIBOR + 9.00% | | | $544,091 | | | $609,407 |
ABL Facility | | | September 30, 2023 | | | 3-month LIBOR + 4.00% | | | 114,471 | | | 104,985 |
Total debt obligations | | | | | | | $658,562 | | | $714,392 |
| | June 30, 2020 | | | December 31, 2019 | |
Non-cash residual value of Tucker, Georgia lease | | | $54,676 | | | $54,676 |
Future maturities associated with the Tucker, Georgia failed sale-leaseback liability | | | 1,173 | | | 1,441 |
Total other financing obligations | | | $55,849 | | | $56,117 |
| | Six Months Ended June 30, | ||||
| | 2020 | | | 2019 | |
Interest cost | | | $8,433 | | | $11,184 |
Expected return on assets | | | (8,059) | | | (7,498) |
Settlement loss | | | 24 | | | — |
Remeasurement loss | | | 739 | | | — |
Net periodic pension cost | | | $1,137 | | | $3,686 |
| | Six Months Ended June 30, | ||||
| | 2020 | | | 2019 | |
Basic net income per share: | | | | | ||
Net income | | | $39,566 | | | $37,829 |
Weighted-average common shares outstanding during the period | | | 32,007,114 | | | 48,332,797 |
Basic net income per share | | | $1.24 | | | $0.78 |
| | Six Months Ended June 30, | ||||
| | 2020 | | | 2019 | |
Diluted net income per share: | | | | | ||
Net income | | | $39,566 | | | $37,829 |
Basic shares outstanding during the period | | | 32,007,114 | | | 48,332,797 |
Plus: Common stock equivalents associated with liability-based stock option awards | | | 2,407,882 | | | 2,974,387 |
Diluted shares outstanding | | | 34,414,996 | | | 51,307,184 |
Diluted net income per share | | | $1.15 | | | $0.74 |
| | Six Months Ended June 30, 2020 | |||||||
| | Marketing Services | | | SaaS | | | Total | |
Revenue | | | $559,049 | | | $63,133 | | | $622,182 |
Segment EBITDA | | | 222,690 | | | 8,224 | | | 230,914 |
| | Six Months Ended June 30, 2019 | |||||||
| | Marketing Services | | | SaaS | | | Total | |
Revenue | | | $692,278 | | | $64,850 | | | $757,128 |
Segment EBITDA | | | 250,730 | | | 9,738 | | | 260,468 |
| | Six Months Ended June 30, | ||||
| | 2020 | | | 2019 | |
Total Segment EBITDA | | | $230,914 | | | $260,468 |
Impact of ASC 842 | | | — | | | 320 |
Interest expense | | | (37,942) | | | (47,402) |
Depreciation and amortization | | | (75,429) | | | (104,814) |
Other components of net periodic pension cost | | | (1,137) | | | (3,686) |
(Loss) on early extinguishment of debt | | | — | | | (6,375) |
Impairment charges | | | (18,230) | | | (4,999) |
Restructuring and integration expenses(1) | | | (17,192) | | | (22,904) |
Transaction costs(2) | | | (9,766) | | | — |
Stock-based compensation benefit (expense) | | | 5,484 | | | (14,399) |
(Loss) from remeasurement of indemnification asset | | | (4,418) | | | (910) |
Other | | | 1,855 | | | (20) |
Income before (provision) for income taxes | | | $74,139 | | | $55,279 |
| | Six Months Ended June 30, | ||||
| | 2020 | | | 2019 | |
Marketing Services | | | | | ||
PYP | | | $276,547 | | | $331,121 |
IYP | | | 144,267 | | | 175,592 |
SEM | | | 90,659 | | | 122,443 |
Other | | | 47,576 | | | 63,122 |
Total Marketing Services | | | 559,049 | | | 692,278 |
SaaS | | | | | ||
Thryv Platform | | | 45,194 | | | 50,048 |
Thryv Leads and Add-ons | | | 17,939 | | | 14,802 |
Total SaaS | | | 63,133 | | | 64,850 |
Total Revenue | | | $622,182 | | | $757,128 |
Item 13. | Other Expenses of Issuance and Distribution. |
| | Amount Paid or to be Paid | |
SEC registration fee | | | $ |
| | ||
Printing fees and expenses | | | |
Legal fees and expenses | | | |
Accounting fees and expenses | | | |
Transfer agent and registrar fees and expenses | | | |
Miscellaneous expenses | | | |
Total | | |
Item 15. | Recent Sales of Unregistered Securities |
Item 16. | Exhibits and Financial Statement Schedules |
(a) | Exhibits: |
Exhibit No. | | | Description |
| | Form of Underwriting Agreement. | |
| | Share Purchase Agreement (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K, filed with the Securities and Exchange Commission on March 2, 2021). | |
| | Fourth Amended and Restated Certificate of Incorporation of Thryv Holdings, Inc. (incorporated by reference to | |
| | ||
| | Warrant Agreement, dated August 15, 2016, among Thryv, Inc., Computershare Inc. and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 4.11 to the Company’s Registration Statement on Form | |
| | Officer’s Certificate delivered pursuant to the Warrant Agreement, dated November 17, 2016, among Thryv, Inc., Computershare Inc. and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 4.12 to the Company’s Registration Statement on Form S-1, filed with the SEC on September 1, 2020). | |
| | Pledge Agreement, dated June 30, 2017, by and between Yosemite Sellers’ Representative LLC and Thryv Holdings, Inc. (incorporated by reference to Exhibit 4.13 to the Company’s Registration Statement on Form S-1, filed with the SEC on September 1, 2020). | |
| | Opinion of Weil, Gotshal & Manges, LLP. | |
| | Amended and Restated Credit Agreement, dated June 30, 2017, by and among Thryv, Inc., certain other Credit Parties, certain other Subsidiaries of Thryv, Inc., the lenders party thereto and Wells Fargo Bank, National | |
| | First Amendment to Amended and Restated Credit Agreement, dated January 31, 2019, among Thryv, Inc., as borrower, the lenders party thereto and Wells Fargo Bank, National Association, as administrative | |
| | Second Amendment to Amended and Restated Credit Agreement, dated March 21, 2019, among Thryv, Inc., as borrower, Thryv Holdings, Inc., the lenders party thereto and Wells Fargo Bank, National Association, as administrative | |
| | ||
| | Fourth Amendment to Amended and Restated Credit Agreement, dated January 28, 2020, among Thryv, Inc., as borrower, Thryv Holdings, Inc., the lenders party thereto and Wells Fargo Bank, National Association, as administrative | |
| | ||
| | First Amendment to Amended and Restated Credit Agreement, dated January 28, 2020, among Thryv, Inc., as borrower, the lenders party thereto and Wilmington Trust, National Association, as administrative | |
| | Second Amended and Restated Guarantee and Collateral Agreement, dated December 31, 2018 between Thryv Holdings, Inc., Thryv, Inc. and each Subsidiary Guarantor, if any, and Wilmington Trust, National Association, as administrative | |
Exhibit No. | | | Description |
| | Amended and Restated Employment Agreement, dated September 26, 2016, by and between Thryv, Inc. and Joseph A. Walsh (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1, filed with the SEC on September 1, 2020). | |
| | Thryv Holdings, Inc. 2016 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form S-1, filed with the SEC on September 1, 2020). | |
| | Amendment No. 1 to Thryv Holdings, Inc. Stock Incentive Plan (incorporated by reference to Exhibit 10.12 to the Company’s Registration Statement on Form S-1, Amendment 1, filed with the SEC on September 17, 2020). | |
| | Form of Stock Option Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Registration Statement on Form S-1, filed with the SEC on September 1, 2020). | |
| | 2019 Over Performance Plan, dated November 5, 2019 (incorporated by reference to Exhibit 10.4 to the Company’s Registration Statement on Form S-1, filed with the SEC on September 1, 2020). | |
| | 2019 Short Term Incentive Plan, dated November 5, 2019 (incorporated by reference to Exhibit 10.5 to the Company’s Registration Statement on Form S-1, filed with the SEC on September 1, 2020). | |
| | 2020 Over Performance Plan, dated January 2020 (incorporated by reference to Exhibit 10.6 to the Company’s Registration Statement on Form S-1, filed with the SEC on September 1, 2020). | |
| | 2020 Short Term 2020 Short Term Incentive Plan, dated April 2020. Plan, dated April 2020 (incorporated by reference to Exhibit 10.16 to the Company’s Form 10-K filed, with the SEC on March 25, 2021). | |
| | Thryv, Inc. Severance Plan—Executive Vice Presidents and Above, dated January 1, 2018 (incorporated by reference to Exhibit 10.8 to the Company’s Registration Statement on Form S-1, filed with the SEC on September 1, 2020). | |
| | Thryv Holdings, Inc. 2020 Incentive Award Plan (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-8, filed with the SEC on September 23, 2020). | |
| | Form of Thryv Holdings, Inc. Stock Option Agreement (Non-Employee Directors) (incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1, filed with the SEC on September 18, 2020). | |
| | Thryv Holdings, Inc. 2021 Employee Stock Purchase Plan (incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-8, filed with the SEC on September 23, 2020). | |
| | Amended and Restated Stockholders Agreement, dated September 23, 2020, by and among Thryv Holdings, Inc. and the Stockholders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 12, 2020). | |
| | Term Loan Credit Agreement by and among Thryv Holdings, Inc., Thryv, Inc., the Lenders party thereto from time to time and Wells Fargo Bank, National Association, as Administrative Agent, dated as of March 1, 2021 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed, with the SEC on March 2, 2021). | |
| | Fifth Amendment to Amended and Restated Credit Agreement, First Amendment to Guaranty and Security Agreement and Joinder, among Thryv Holdings, Inc., Thryv, Inc. and the other borrowers from time to time party thereto, the Lenders from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent, dated as of March 1, 2021 (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed, with the SEC on March 2, 2021). | |
| | List of significant subsidiaries of Thryv Holdings, Inc. (incorporated by reference to Exhibit 21.1 to the Company’s Form 10-K filed, with the SEC on March 25, 2021). | |
| | Consent of Ernst & Young LLP, Independent Registered Public Accounting | |
| | Consent of Ernst & Young LLP, Independent Auditors for Sensis Holdings Limited. | |
| | Consent of Weil, Gotshal & Manges, LLP (included in Exhibit 5.1). | |
| | Power of Attorney (included on signature page). |
+ | Management contract or compensatory plan or arrangement. |
* |
(b) | Financial Statement Schedules |
Item 17. | Undertakings |
(1) | For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. |
(2) | For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| | THRYV HOLDINGS, INC. | ||||
| | | | |||
| | By: | | | /s/ Joseph A. Walsh | |
| | | | Name: Joseph A. Walsh | ||
| | | | Title: Chief Executive Officer |
Signature | | | Title |
| | ||
/s/ Joseph A. Walsh | | | Chief Executive Officer, President and Director (Principal Executive Officer) |
Joseph A. Walsh | | ||
| | ||
/s/ Paul D. Rouse | | | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
Paul D. Rouse | | ||
| | ||
/s/ Jason Mudrick | | | Chairman and Director |
Jason Mudrick | | ||
| | ||
/s/ Amer Akhtar | | | Director |
Amer Akhtar | | ||
| | ||
/s/ Bonnie Kintzer | | | Director |
Bonnie Kintzer | | ||
| | ||
/s/ Ryan O’Hara | | | Director |
Ryan | | ||
| | ||
/s/ John Slater | | | Director |
John Slater | | ||
| | ||
/s/ Lauren Vaccarello | | | Director |
Lauren Vaccarello | | ||
| | ||
/s/ Heather Zynczak | | | Director |
Heather Zynczak | |