Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 22, 2016 | Jun. 30, 2015 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | CSG SYSTEMS INTERNATIONAL INC | ||
Entity Central Index Key | 1,005,757 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | CSGS | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,004,123,083 | ||
Entity Common Stock, Shares Outstanding | 32,332,186 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 132,631 | $ 81,712 |
Short-term investments | 108,305 | 120,088 |
Total cash, cash equivalents and short-term investments | 240,936 | 201,800 |
Trade accounts receivable: | ||
Billed, net of allowance of $3,600 and $3,323 | 178,854 | 184,369 |
Unbilled | 41,110 | 42,439 |
Deferred income taxes | 18,135 | 13,204 |
Income taxes receivable | 4,038 | 4,088 |
Other current assets | 35,153 | 28,470 |
Total current assets | 518,226 | 474,370 |
Non-current assets: | ||
Property and equipment, net of depreciation of $112,282 and $138,065 | 35,992 | 38,326 |
Goodwill | 219,724 | 225,269 |
Deferred income taxes | 8,382 | 8,890 |
Other assets | 20,076 | 16,142 |
Total non-current assets | 359,007 | 380,262 |
Total assets | 877,233 | 854,632 |
Current liabilities: | ||
Current maturities of long-term debt, net of unamortized original issue discount of $7,923 and zero | 149,577 | 22,500 |
Client deposits | 33,694 | 35,791 |
Trade accounts payable | 43,392 | 37,052 |
Accrued employee compensation | 59,607 | 51,441 |
Deferred revenue | 41,907 | 40,004 |
Income taxes payable | 8,962 | 2,672 |
Other current liabilities | 22,980 | 23,375 |
Total current liabilities | 360,119 | 212,835 |
Non-current liabilities: | ||
Long-term debt, net of unamortized original issue discount of zero and $14,169 | 135,000 | 233,331 |
Deferred revenue | 9,828 | 9,648 |
Income taxes payable | 4,413 | 3,918 |
Deferred income taxes | 9,237 | 20,446 |
Other non-current liabilities | 12,791 | 15,821 |
Total non-current liabilities | 171,269 | 283,164 |
Total liabilities | $ 531,388 | $ 495,999 |
Stockholders' equity: | ||
Preferred stock, par value $.01 per share; 10,000 shares authorized; zero shares issued and outstanding | ||
Common stock, par value $.01 per share; 100,000 shares authorized; 4,664 and 6,032 shares reserved for employee stock purchase plan and stock incentive plans; 32,555 and 33,945 shares outstanding | $ 672 | $ 667 |
Common stock warrants; 2,851 and 2,851 warrants issued and outstanding | 7,310 | 6,694 |
Additional paid-in capital | 503,254 | 486,414 |
Treasury stock, at cost, 34,601 and 32,763 shares | (814,437) | (757,478) |
Accumulated other comprehensive income (loss): | ||
Unrealized gain on short-term investments, net of tax | (97) | 6 |
Cumulative foreign currency translation adjustments | (26,288) | (13,386) |
Accumulated earnings | 675,431 | 635,716 |
Total stockholders' equity | 345,845 | 358,633 |
Total liabilities and stockholders' equity | 877,233 | 854,632 |
Software | ||
Non-current assets: | ||
Intangible assets | 35,095 | 44,732 |
Client contracts | ||
Non-current assets: | ||
Intangible assets | $ 39,738 | $ 46,903 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Trade accounts receivable-billed, allowance | $ 3,600 | $ 3,323 |
Property and equipment, accumulated depreciation | 112,282 | 138,065 |
Current maturities of long-term debt, unamortized original issue discount | 7,923 | 0 |
Long-term debt, unamortized original issue discount | $ 0 | $ 14,169 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares reserved for employee stock purchase plan and stock incentive plans | 4,664,000 | 6,032,000 |
Common stock warrants, issued | 2,851,000 | 2,851,000 |
Common stock, shares outstanding | 32,555,000 | 33,945,000 |
Common stock warrants, outstanding | 2,851,000 | 2,851,000 |
Treasury stock, shares | 34,601,000 | 32,763,000 |
Software | ||
Accumulated amortization | $ 95,094 | $ 86,797 |
Client contracts | ||
Accumulated amortization | $ 87,890 | $ 88,585 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | |||
Processing and related services | $ 577,410 | $ 562,109 | $ 537,453 |
Software and services | 93,678 | 102,585 | 118,988 |
Maintenance | 81,432 | 86,592 | 91,027 |
Total revenues | 752,520 | 751,286 | 747,468 |
Cost of revenues (exclusive of depreciation, shown separately below): | |||
Processing and related services | 270,715 | 277,084 | 253,756 |
Software and services | 68,597 | 79,640 | 84,222 |
Maintenance | 40,429 | 32,619 | 39,187 |
Total cost of revenues | 379,741 | 389,343 | 377,165 |
Other operating expenses: | |||
Research and development | 101,950 | 104,712 | 110,008 |
Selling, general and administrative | 139,839 | 153,488 | 152,553 |
Depreciation | 14,776 | 14,084 | 18,633 |
Restructuring and reorganization charges | 3,074 | 13,969 | 12,405 |
Total operating expenses | 639,380 | 675,596 | 670,764 |
Operating income | 113,140 | 75,690 | 76,704 |
Other income (expense): | |||
Interest expense | (10,967) | (10,453) | (11,621) |
Amortization of original issue discount | (6,246) | (5,781) | (5,352) |
Interest and investment income, net | 1,038 | 798 | 689 |
Other, net | (624) | 1,268 | 1,099 |
Total other | (16,799) | (14,168) | (15,185) |
Income before income taxes | 96,341 | 61,522 | 61,519 |
Income tax provision | (33,774) | (25,811) | (16,251) |
Net income | $ 62,567 | $ 35,711 | $ 45,268 |
Weighted-average shares outstanding: | |||
Basic | 31,051 | 32,449 | 32,117 |
Diluted | 33,438 | 33,736 | 32,873 |
Earnings per common share: | |||
Basic | $ 2.01 | $ 1.10 | $ 1.41 |
Diluted | 1.87 | 1.06 | 1.38 |
Cash dividends declared per common share: | $ 0.70 | $ 0.6225 | $ 0.45 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income | $ 62,567 | $ 35,711 | $ 45,268 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | (12,902) | (15,060) | (600) |
Unrealized holding gains (losses) on short-term investments arising during period | (103) | (35) | 38 |
Defined benefit pension plan: | |||
Net loss arising from period (net of tax effect of $0, $0, and $(119)) | (183) | ||
Amortization of net actuarial loss included in net periodic pension cost (net of tax effect of $0, $0, and $28) | 43 | ||
Final settlement of pension plan liability (net of tax effect of $0, $0, and $1,214) | 1,901 | ||
Net change in defined benefit pension plan | 1,761 | ||
Cash flow hedges: | |||
Unrealized gains on change in fair value of interest rate swap contracts (net of tax effect of $0, $110, and $724) | 195 | 1,140 | |
Reclassification adjustment for losses included in net income (net of tax effect of $0, $(55), and $(368)) | (97) | (580) | |
Net change in cash flow hedges | 98 | 560 | |
Other comprehensive income (loss), net of tax | (13,005) | (14,997) | 1,759 |
Total comprehensive income, net of tax | $ 49,562 | $ 20,714 | $ 47,027 |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net loss arising from period related to defined benefit pension plan, tax | $ 0 | $ 0 | $ (119) |
Amortization of prior service cost included in net periodic pension cost, tax | 0 | 0 | 28 |
Final settlement of pension plan liability, tax | 0 | 0 | 1,214 |
Unrealized gains (losses) on change in fair value of interest rate swap contracts, tax | 0 | 110 | 724 |
Reclassification adjustment for gains (losses) included in net income, tax | $ 0 | $ (55) | $ (368) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Common Stock Warrants | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Accumulated Earnings |
Balance, beginning of period at Dec. 31, 2012 | $ 324,880 | $ 653 | $ 461,497 | $ (728,243) | $ (142) | $ 591,115 | |
Balance, beginning of period, shares at Dec. 31, 2012 | 33,734 | ||||||
Net income | 45,268 | 45,268 | |||||
Unrealized gain (loss) on short-term investments, net of tax | 38 | ||||||
Unrealized pension plan gains and prior service costs, net of tax | 1,761 | ||||||
Unrealized gain on change in fair value of interest rate swap contracts, net of tax | 560 | 560 | |||||
Foreign currency translation adjustments | (600) | (600) | |||||
Total comprehensive income, net of tax | 47,027 | ||||||
Repurchase of common stock | (15,478) | $ (3) | (5,346) | (10,129) | |||
Repurchase of common stock, shares | (764) | ||||||
Issuance of common stock pursuant to employee stock purchase plan | 1,347 | 1,347 | |||||
Issuance of common stock pursuant to employee stock purchase plan, shares | 68 | ||||||
Exercise of stock options | 244 | 244 | |||||
Exercise of stock options, shares | 20 | ||||||
Stock-based compensation income tax benefits | 660 | 660 | |||||
Issuance of restricted common stock pursuant to stock-based compensation plans | $ 8 | (8) | |||||
Issuance of restricted common stock pursuant to stock-based compensation plans, shares | 840 | ||||||
Cancellation of restricted common stock issued pursuant to stock-based compensation plans, shares | (153) | ||||||
Stock-based compensation expense | 14,796 | 14,796 | |||||
Declaration of cash dividends | (15,214) | (15,214) | |||||
Balance, ending of period at Dec. 31, 2013 | 358,262 | $ 658 | 473,190 | (738,372) | 1,617 | 621,169 | |
Balance, ending of period, shares at Dec. 31, 2013 | 33,745 | ||||||
Net income | 35,711 | 35,711 | |||||
Unrealized gain (loss) on short-term investments, net of tax | (35) | ||||||
Unrealized pension plan gains and prior service costs, net of tax | 98 | ||||||
Unrealized gain on change in fair value of interest rate swap contracts, net of tax | 98 | ||||||
Foreign currency translation adjustments | (15,060) | (15,060) | |||||
Total comprehensive income, net of tax | 20,714 | ||||||
Repurchase of common stock | (26,033) | $ (2) | (6,925) | (19,106) | |||
Repurchase of common stock, shares | (985) | ||||||
Issuance of common stock pursuant to employee stock purchase plan | 1,394 | 1,394 | |||||
Issuance of common stock pursuant to employee stock purchase plan, shares | 61 | ||||||
Stock-based compensation income tax benefits | 2,060 | 2,060 | |||||
Issuance of restricted common stock pursuant to stock-based compensation plans | $ 11 | (11) | |||||
Issuance of restricted common stock pursuant to stock-based compensation plans, shares | 1,261 | ||||||
Cancellation of restricted common stock issued pursuant to stock-based compensation plans, shares | (137) | ||||||
Stock-based compensation expense | 16,706 | 16,706 | |||||
Issuance of common stock warrants, granted to Comcast | 6,694 | $ 6,694 | |||||
Declaration of cash dividends | (21,164) | (21,164) | |||||
Balance, ending of period at Dec. 31, 2014 | $ 358,633 | $ 667 | 6,694 | 486,414 | (757,478) | (13,380) | 635,716 |
Balance, ending of period, shares at Dec. 31, 2014 | 33,945 | 33,945 | |||||
Net income | $ 62,567 | 62,567 | |||||
Unrealized gain (loss) on short-term investments, net of tax | (103) | ||||||
Foreign currency translation adjustments | (12,902) | (12,902) | |||||
Total comprehensive income, net of tax | 49,562 | ||||||
Repurchase of common stock | $ (65,027) | $ (3) | (8,065) | (56,959) | |||
Repurchase of common stock, shares | (1,800) | (2,103) | |||||
Issuance of common stock pursuant to employee stock purchase plan | $ 1,547 | $ 1 | 1,546 | ||||
Issuance of common stock pursuant to employee stock purchase plan, shares | 59 | ||||||
Stock-based compensation income tax benefits | 2,185 | 2,185 | |||||
Issuance of restricted common stock pursuant to stock-based compensation plans | $ 8 | (8) | |||||
Issuance of restricted common stock pursuant to stock-based compensation plans, shares | 728 | ||||||
Cancellation of restricted common stock issued pursuant to stock-based compensation plans | $ (1) | 1 | |||||
Cancellation of restricted common stock issued pursuant to stock-based compensation plans, shares | (74) | ||||||
Stock-based compensation expense | 21,181 | 21,181 | |||||
Issuance of common stock warrants, granted to Comcast | 616 | 616 | |||||
Declaration of cash dividends | (22,852) | (22,852) | |||||
Balance, ending of period at Dec. 31, 2015 | $ 345,845 | $ 672 | $ 7,310 | $ 503,254 | $ (814,437) | $ (26,385) | $ 675,431 |
Balance, ending of period, shares at Dec. 31, 2015 | 32,555 | 32,555 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income | $ 62,567 | $ 35,711 | $ 45,268 |
Adjustments to reconcile net income to net cash provided by operating activities- | |||
Depreciation | 14,776 | 14,084 | 18,633 |
Amortization | 29,281 | 33,553 | 37,819 |
Amortization of original issue discount | 6,246 | 5,781 | 5,352 |
Asset impairment | 1,685 | ||
Loss on short-term investments and other | 177 | 1,123 | 910 |
(Gain) loss on disposition of business operations | (3,733) | (222) | 3,017 |
Loss on termination of pension plan | 3,221 | ||
Deferred income taxes | (16,106) | 41 | (1,764) |
Excess tax benefit of stock-based compensation awards | (2,185) | (2,060) | (677) |
Stock-based employee compensation | 21,130 | 16,655 | 14,796 |
Changes in operating assets and liabilities, net of acquired amounts: | |||
Trade accounts receivable, net | 1,831 | (14,326) | (2,319) |
Other current and non-current assets | (5,387) | (3,230) | (7,163) |
Income taxes payable/receivable | 8,953 | (2,260) | 10,639 |
Trade accounts payable and accrued liabilities | 13,916 | 4,359 | (994) |
Deferred revenue | 3,808 | (5,558) | (104) |
Net cash provided by operating activities | 136,959 | 83,651 | 126,634 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (18,845) | (25,985) | (30,076) |
Purchases of short-term investments | (181,553) | (190,427) | (183,575) |
Proceeds from sale/maturity of short-term investments | 192,994 | 197,466 | 89,688 |
Acquisition of and investment in businesses, net of cash acquired | (1,300) | (2,926) | |
Acquisition of and investments in client contracts | (8,018) | (5,600) | (7,092) |
Proceeds from the disposition of business operations | 1,130 | 4,530 | |
Net cash used in investing activities | (16,722) | (23,416) | (129,451) |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock | 1,547 | 1,394 | 1,591 |
Payment of cash dividends | (22,238) | (20,530) | (14,454) |
Repurchase of common stock | (65,027) | (25,138) | (15,478) |
Payments on acquired equipment financing | (829) | (1,097) | (2,723) |
Proceeds from long-term debt | 150,000 | ||
Payments on long-term debt | (127,500) | (15,000) | (15,000) |
Payments of deferred financing costs | (2,742) | ||
Excess tax benefit of stock-based compensation awards | 2,185 | 2,060 | 677 |
Net cash used in financing activities | (64,604) | (58,311) | (45,387) |
Effect of exchange rate fluctuations on cash | (4,714) | (2,898) | (2,857) |
Net increase (decrease) in cash and cash equivalents | 50,919 | (974) | (51,061) |
Cash and cash equivalents, beginning of year | 81,712 | 82,686 | 133,747 |
Cash and cash equivalents, end of year | 132,631 | 81,712 | 82,686 |
Cash paid during the year for- | |||
Interest | 8,380 | 8,265 | 9,440 |
Income taxes | $ 41,860 | $ 25,153 | $ 6,149 |
General
General | 12 Months Ended |
Dec. 31, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
General | 1. General CSG Systems International, Inc. (the “Company”, “CSG”, or forms of the pronoun “we”), a Delaware corporation, was formed in October 1994 and is based in Englewood, Colorado. We are a business support solutions provider primarily serving the communications industry. Our broad suite of solutions helps our clients improve their business operations by creating more compelling product offerings and an enhanced customer experience through more relevant and targeted interactions, while at the same time, more efficiently managing the service provider’s cost structure. Over the years, we have focused our research and development (“R&D”) and acquisition investments on expanding our solution set to address the expanding needs of communications service providers to provide a differentiated, real-time, and personal experience for their consumers. Our suite of solutions includes revenue management, content management and monetization, and customer interaction management. We are a S&P SmallCap 600 company. The accompanying Consolidated Financial Statements (“Financial Statements”) are prepared in conformity with accounting principles generally accepted (“GAAP”) in the United States (“U.S.”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation. Our Financial Statements include all of our accounts and our subsidiaries’ accounts. All material intercompany accounts and transactions have been eliminated. Translation of Foreign Currency. Our foreign subsidiaries use the local currency of the countries in which they operate as their functional currency. Their assets and liabilities are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. Revenues, expenses, and cash flows are translated at the average rates of exchange prevailing during the period. Foreign currency translation adjustments are included in comprehensive income in stockholders’ equity. Foreign currency transaction gains and losses are included in the determination of net income. Use of Estimates in Preparation of Our Financial Statements. The preparation of our Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The more critical estimates and related assumptions that affect our financial position and results of operations are in the areas of: (i) revenue recognition; (ii) allowance for doubtful accounts receivable; (iii) impairment assessments of goodwill and other long-lived assets; (iv) income taxes; (v) business combinations and asset purchases; and (vi) loss contingencies. Revenue Recognition. We use various judgments and estimates in connection with the determination of the amount of revenues to be recognized in each accounting period. Our primary revenue recognition criteria include: (i) persuasive evidence of an arrangement; (ii) delivery; (iii) fixed or determinable fees; and (iv) collectibility of fees. Processing and Related Services. Our processing and related services revenue relates to: (i) our cloud-based, revenue management and content monetization solutions, and various related services; and (ii) our managed services offering in which we operate software solutions (primarily our software solutions) on behalf of our clients. We contract for our cloud-based processing and related services using long-term agreements whose terms have typically ranged from three to ten years. The long-term processing agreements include multiple services delivered each month, to include such things as: (i) revenue billing and data processing services; (ii) business support services (e.g., workforce management tools, consumer credit verifications, etc.); (iii) content monetization and delivery functions; and (iv) customer statement invoice printing and mailing services. The fees for these deliverables typically are billed to our clients monthly based upon actual monthly volumes and/or usage of services (e.g., the number of client customers processed on our systems, the number of transactions processed on our systems, and/or the quantity and content of the monthly statements and mailings processed through our systems) or on a fixed monthly fee. We recognize processing and related services revenue on a monthly basis as we provide the services. We contract for our managed services using long-term arrangements whose terms have ranged from three to eight years. Under managed services agreements, we may operate software products (primarily our software solutions) on behalf of our clients: (i) out of a client’s data center; (ii) out of a data center we own and operate; or (iii) out of a third-party data center we contract with for such services. Managed services can also include us providing other services, such as transitional services, fulfillment, remittance processing, operational consulting, back office, and end user billing services. Software and Services. Our software and services revenue relates primarily to: (i) software license sales; and (ii) professional services to implement the software. The accounting for software license arrangements, especially when software is sold in a multiple-element arrangement, can be complex and requires considerable judgment. Key factors considered in accounting for software license and related services include the following criteria: (i) the identification of the separate elements of the arrangement; (ii) the determination of whether any undelivered elements are essential to the functionality of the delivered elements; (iii) the assessment of whether the software, if hosted, should be accounted for as a services arrangement and thus outside the scope of the software revenue recognition literature; (iv) the determination of vendor specific objective evidence (“VSOE”) of fair value for the undelivered element(s) of the arrangement; (v) the assessment of whether the software license fees are fixed or determinable; (vi) the determination as to whether the fees are considered collectible; and (vii) the assessment of whether services included in the arrangement represent significant production, customization or modification of the software. The evaluation of these factors, and the ultimate revenue recognition decision, requires significant judgments to be made by us. The judgments made in this area could have a significant effect on revenues recognized in any period by changing the amount and/or the timing of the revenue recognized. In addition, because software licenses typically have little or no direct, incremental costs related to the recognition of the revenue, these judgments could also have a significant effect on our results of operations. The initial sale of software products generally requires significant production, modification or customization and thus falls under the guidelines of contract accounting. In these software license arrangements, the elements of the arrangements are typically a software license, professional services, and maintenance. When we have VSOE of fair value for the maintenance, which we generally do, we allocate a portion of the total arrangement fee to the maintenance element based on its VSOE of fair value, and the balance of the arrangement fee is subject to contract accounting using the percentage-of-completion (“POC”) method of accounting. Under the POC method of accounting, software license and professional services revenues are typically recognized as the professional services related to the software implementation project are performed. We are using hours performed on the project as the measure to determine the percentage of the work completed. In certain instances, we sell software license volume upgrades, which provide our clients the right to use our software to process higher transaction volume levels. In these instances, if: (i) maintenance is the only undelivered element of the software arrangement; (ii) we have VSOE of fair value for the maintenance related to the volume upgrade; and (iii) we meet the other revenue recognition criteria, we recognize the software license revenue on the effective date of the volume upgrade. A portion of our professional services revenues does not include an element of software delivery (e.g., business consulting services, etc.), and thus, do not fall within the scope of specific authoritative accounting literature for software arrangements. In these cases, revenues from fixed-price, professional service contracts are recognized using a method consistent with the proportional performance method, which is relatively consistent with our POC methodology. Under a proportional performance model, revenue is recognized by allocating revenue between reporting periods based on relative service provided in each reporting period, and costs are generally recognized as incurred. We utilize an input-based approach (i.e., hours worked) for purposes of measuring performance on these types of contracts. Our input measure is considered a reasonable surrogate for an output measure. In instances when the work performed on fixed price agreements is of relatively short duration, or if we are unable to make reasonably dependable estimates at the outset of the arrangement, we use the completed contract method of accounting whereby revenue is recognized when the work is completed. Our use of the POC and proportional performance methods of accounting on professional services engagements requires estimates of the total project revenues, total project costs and the expected hours necessary to complete a project. Changes in estimates as a result of additional information or experience on a project as work progresses are inherent characteristics of the POC and proportional performance methods of accounting as we are exposed to various business risks in completing these engagements. The estimation process to support these methods of accounting is more difficult for projects of greater length and/or complexity. The judgments and estimates made in this area could: (i) have a significant effect on revenues recognized in any period by changing the amount and/or the timing of the revenue recognized; and/or (ii) impact the expected profitability of a project, including whether an overall loss on an arrangement has occurred. To mitigate the inherent risks in using the POC and proportional performance methods of accounting, we track our performance on projects and reevaluate the appropriateness of our estimates as part of our monthly accounting cycle. Revenues from professional services contracts billed on a time-and-materials basis are recognized as the services are performed and as amounts due from clients are deemed collectible and contractually non-refundable. Maintenance. Our maintenance revenue relates primarily to support of our software once it has been implemented. Maintenance revenues are recognized ratably over the software maintenance period. Our maintenance consists primarily of client and product support, technical updates (e.g., bug fixes, etc.), and unspecified upgrades or enhancements to our software products. If specified upgrades or enhancements are offered in an arrangement, which is rare, they are accounted for as a separate element of the software arrangement. Deferred Revenue and Unbilled Accounts Receivable . Client payments and billed amounts due from clients in excess of revenue recognized are recorded as deferred revenue. Deferred revenue amounts expected to be recognized within the next twelve months are classified as current liabilities. Revenue recognized prior to the scheduled billing date is recorded as unbilled accounts receivable. Postage. We pass through to our clients the cost of postage that is incurred on behalf of those clients, and typically require an advance payment on expected postage costs. These advance payments are included in client deposits in the accompanying Consolidated Balance Sheets (“Balance Sheets” or “Balance Sheet”) and are classified as current liabilities regardless of the contract period. We net the cost of postage against the postage reimbursements for those clients where we require advance deposits, and include the net amount (which is not material) in processing and related services revenues. Cash and Cash Equivalents. We consider all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. As of December 31, 2015 and 2014, our cash equivalents consist primarily of institutional money market funds, commercial paper, and time deposits held at major banks. As of December 31, 2015 and 2014, we had $5.0 million and $4.7 million, respectively, of restricted cash that serves to collateralize outstanding letters of credit. This restricted cash is included in cash and cash equivalents in our Balance Sheet. Short-term Investments and Other Financial Instruments . Our financial instruments as of December 31, 2015 and 2014 include cash and cash equivalents, short-term investments, accounts receivable, accounts payable, and debt. Because of their short maturities, the carrying amounts of cash equivalents, accounts receivable, and accounts payable approximate their fair value. Our short-term investments and certain of our cash equivalents are considered “available-for-sale” and are reported at fair value in our Balance Sheets, with unrealized gains and losses, net of the related income tax effect, excluded from earnings and reported in a separate component of stockholders’ equity. Realized and unrealized gains and losses were not material in any period presented. Primarily all short-term investments held by us as of December 31, 2015 and 2014 have contractual maturities of less than two years from the time of acquisition. Our short-term investments at December 31, 2015 and 2014 consisted almost entirely of fixed income securities. Proceeds from the sale/maturity of short-term investments in 2015, 2014, and 2013 were $193.0 million, $197.5 million, and $89.7 million, respectively. The following table represents the fair value hierarchy based upon three levels of inputs, of which Levels 1 and 2 are considered observable and Level 3 is unobservable, for our financial assets and liabilities measured at fair value (in thousands): December 31, 2015 December 31, 2014 Level 1 Level 2 Total Level 1 Level 2 Total Assets: Cash equivalents: Money market funds $ 35,730 $ — $ 35,730 $ 9,785 $ — $ 9,785 Commercial paper — 63,890 63,890 — 12,248 12,248 Short-term investments: Corporate debt securities — 31,253 31,253 — 88,494 88,494 Municipal bonds — 2,763 2,763 — 9,945 9,945 U.S. government agency bonds — 16,201 16,201 — 11,313 11,313 Asset-backed securities — 11,443 11,443 — 10,336 10,336 Total $ 35,730 $ 125,550 $ 161,280 $ 9,785 $ 132,336 $ 142,121 Valuation inputs used to measure the fair values of our money market funds were derived from quoted market prices. The fair values of all other financial instruments are based upon pricing provided by third-party pricing services. These prices were derived from observable market inputs. We have chosen not to measure our debt at fair value, with changes recognized in earnings each reporting period. The following table indicates the carrying value and estimated fair value of our debt as of the indicated periods (in thousands): December 31, 2015 December 31, 2014 Carrying Fair Carrying Fair Credit Agreement (carrying value including current maturities) $ 142,500 $ 142,500 $ 120,000 $ 120,000 Convertible debt (par value) 150,000 237,900 150,000 178,920 The fair value for our Credit Agreement was estimated using a discounted cash flow methodology, while the fair value for our convertible debt was estimated based upon quoted market prices or recent sales activity, both of which are considered Level 2 inputs. See Note 5 for discussion regarding an amendment to our Credit Agreement. Concentrations of Credit Risk. In the normal course of business, we are exposed to credit risk. The principal concentrations of credit risk relate to cash deposits, cash equivalents, short-term investments, and accounts receivable. We regularly monitor credit risk exposures and take steps to mitigate the likelihood of these exposures resulting in a loss. We hold our cash deposits, cash equivalents, and short-term investments with financial institutions we believe to be of sound financial condition. We generally do not require collateral or other security to support accounts receivable. We evaluate the credit worthiness of our clients in conjunction with our revenue recognition processes, as well as through our ongoing collectibility assessment processes for accounts receivable. We maintain an allowance for doubtful accounts receivable based upon factors surrounding the credit risk of specific clients, historical trends, and other information. We use various judgments and estimates in determining the adequacy of the allowance for doubtful accounts receivable. See Note 3 for additional details of our concentration of accounts receivable. The activity in our allowance for doubtful accounts receivable is as follows (in thousands): 2015 2014 2013 Balance, beginning of year $ 3,323 $ 2,359 $ 3,147 Additions (reductions) to expense 533 1,406 (354 ) Write-offs (318 ) (465 ) (280 ) Recoveries 89 - - Other (27 ) 23 (154 ) Balance, end of year $ 3,600 $ 3,323 $ 2,359 Property and Equipment . Property and equipment are recorded at cost (or at estimated fair value if acquired in a business combination) and are depreciated over their estimated useful lives ranging from three to ten years. Leasehold improvements are depreciated over the shorter of their economic life or the lease term. Depreciation expense is computed using the straight-line method for financial reporting purposes. Depreciation expense for all property and equipment is reflected in our accompanying Consolidated Statements of Income (“Income Statements”) separately in the aggregate and is not included in the cost of revenues or the other components of operating expenses. Depreciation for income tax purposes is computed using accelerated methods. Software. We expend substantial amounts on R&D, particularly for new products and services, or for enhancements of existing products and services. For development of software products that are to be licensed by us, we expense all costs related to the development of the software until technological feasibility is established. For development of software to be used internally (e.g., processing systems software), we expense all costs prior to the application development stage. During 2015, 2014, and 2013, we expended $102.0 million, $104.7 million, and $110.0 million, respectively, on R&D projects. We did not capitalize any R&D costs in 2015, 2014, or 2013, as the costs subject to capitalization during these periods were not material. We did not have any capitalized R&D costs included in our December 31, 2015 or 2014 Balance Sheets. Realizability of Long-Lived Assets. We evaluate our long-lived assets, other than goodwill, for possible impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. A long-lived asset is impaired if estimated future undiscounted cash flows associated with that asset are insufficient to recover the carrying amount of the long-lived asset. If deemed impaired, the long-lived asset is written down to its fair value. Goodwill. We evaluate our goodwill for impairment on an annual basis. In addition, we evaluate our goodwill on a more periodic basis (e.g., quarterly) if events occur or circumstances change that could indicate a potential impairment may have occurred. Goodwill is considered impaired if the carrying value of the reporting unit which includes the goodwill is greater than the estimated fair value of the reporting unit. Contingencies. We accrue for a loss contingency when: (i) it is probable that an asset has been impaired, or a liability has been incurred; and (ii) the amount of the loss can be reasonably estimated. The determination of accounting for loss contingencies is subject to various judgments and estimates. We do not record the benefit from a gain contingency until the benefit is realized. Earnings Per Common Share (“EPS”). Basic and diluted EPS amounts are presented on the face of our Income Statements. No reconciliation of the basic and diluted EPS numerators is necessary as net income is used as the numerators for all periods presented. The reconciliation of the basic and diluted EPS denominators related to the common shares is included in the following table (in thousands): 2015 2014 2013 Basic weighted-average common shares 31,051 32,449 32,117 Dilutive effect of common stock options — — 1 Dilutive effect of restricted common stock 624 569 550 Dilutive effect of 2010 Convertible Notes 1,633 717 205 Dilutive effect of Stock Warrants 130 1 — Diluted weighted-average common shares 33,438 33,736 32,873 In 2015, we repurchased 1.8 million shares of our common stock under our stock repurchase program. The 2010 Convertible Notes have a dilutive effect in those quarterly periods in which our average stock price exceeds the current effective conversion price (see Note 5). The Stock Warrants have a dilutive effect in those quarterly periods in which our average stock price exceeds the exercise price of $26.68 per warrant (under the treasury stock method), and are not subject to performance vesting conditions (see Note 10). Potentially dilutive common shares related to stock options, unvested restricted stock, and Stock Warrants excluded from the computation of diluted EPS, as the effect was antidilutive, were not material in any period presented. Stock-Based Compensation . Stock-based compensation represents the cost related to stock-based awards granted to employees and non-employee directors. We measure stock-based compensation cost at the grant date of the award, based on the estimated fair value of the award and recognize the cost (net of estimated forfeitures) over the requisite service period. Benefits of tax deductions in excess of recognized compensation expense, if any, are reported as a financing cash inflow rather than as an operating cash inflow. Income Taxes. We account for income taxes using the asset and liability method. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Accounting Pronouncement Issued But Not Yet Effective. The Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Update (“ASU”) 2014-09, (Topic 606). This ASU is a single comprehensive model which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. Under the new guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU 2015-14 which defers the effective date of ASU 2014-09 for one year. The updated accounting guidance is now effective for annual and interim reporting periods in fiscal years beginning after December 15, 2017. Early adoption is permitted. An entity may choose to adopt this ASU either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the standard. We are currently in the process of evaluating the impact that this new guidance will have on our Financial Statements and our method of adoption. In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest In November 2015, the FASB issued ASU 2015-17, Income Taxes In February 2016, the FASB issued ASU 2016-02, Leases |
Segment Reporting and Significa
Segment Reporting and Significant Concentration | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting and Significant Concentration | 3 . Segment Reporting and Significant Concentration Segment Information. We have evaluated how our chief operating decision maker has organized our company for purposes of making operating decisions and assessing performance, and have concluded that as of December 31, 2015, we have one reportable segment. Products and Services. Our products and services help companies with complex transaction-centric business models manage the opportunities and challenges associated with accurately capturing, managing, generating, and optimizing the revenue associated with the immense volumes of customer interactions and then manage the intricate nature of those customer relationships. Our core billing and customer care platform, Advanced Convergent Platform (“ACP”), is a pre-integrated cloud-based platform. We generate a substantial percentage of our revenues by providing our ACP processing and customer interaction management solutions, and related software products (e.g., Advanced Customer Service Representative, Workforce Express, etc.) to the North American cable and satellite markets. Additionally, we license certain software products (e.g., WBMS, TSM, and Singleview) and provide our professional services to implement, configure and maintain these software products, and allow clients to effectively roll out new products as well as attract and retain customers. Geographic Regions. For 2015 and 2014, 84% and 85%, respectively, of our revenues were attributable to our operations in the Americas. We use the location of the client as the basis of attributing revenues to individual regions. Financial information relating to our operations by geographic region is as follows (in thousands): Total Revenues: 2015 2014 2013 Americas (principally the U.S.) $ 634,389 $ 636,482 $ 633,163 Europe, Middle East and Africa (principally Europe) 78,711 79,535 80,527 Asia Pacific 39,420 35,269 33,778 Total revenues $ 752,520 $ 751,286 $ 747,468 Property and Equipment: As of December 31, 2015 2014 Americas (principally the U.S.) $ 29,052 $ 31,912 Europe, Middle East and Africa 3,879 3,618 Asia Pacific 3,061 2,796 Total property and equipment $ 35,992 $ 38,326 Significant Clients and Industry Concentration . A large percentage of our historical revenues have been generated from our largest clients, which are Comcast Corporation (“Comcast”), DISH Network Corporation (“DISH”), and Time Warner Cable Inc. (“Time Warner”). Revenues from these clients represented the following percentages of our total revenues for the following years: 2015 2014 2013 Comcast 24 % 22 % 19 % DISH 14 % 15 % 15 % Time Warner 12 % 11 % 11 % As of December 31, 2015 and 2014, the percentage of net billed accounts receivable balances attributable to these clients were as follows: As of December 31, 2015 2014 Comcast 30 % 21 % DISH 13 % 13 % Time Warner 8 % 12 % We expect to continue to generate a significant percentage of our future revenues from a limited number of clients, including Comcast, DISH, and Time Warner. There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of clients. Should a significant client: (i) terminate or fail to renew their contracts with us, in whole or in part for any reason; (ii) significantly reduce the number of customer accounts processed on our solutions, the price paid for our services, or the scope of services that we provide; or (iii) experience significant financial or operating difficulties, it could have a material adverse effect on our financial position and results of operations. |
Long-Lived Assets
Long-Lived Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Long-Lived Assets | 4 . Long-Lived Assets Property and Equipment. Property and equipment at December 31 consisted of the following (in thousands, except years): Useful 2015 2014 Computer equipment 3-5 $ 70,408 $ 96,749 Leasehold improvements 5-10 15,226 16,566 Operating equipment 3-8 53,494 55,501 Furniture and fixtures 8 9,146 7,531 Capital projects in process — - 44 148,274 176,391 Less—accumulated depreciation (112,282 ) ( 138,065 ) Property and equipment, net $ 35,992 $ 38,326 Goodwill. We do not have any intangible assets with indefinite lives other than goodwill. A rollforward of goodwill in 2015 and 2014 is as follows (in thousands): January 1, 2014 balance $ 233,599 Revisions related to prior acquisitions (59 ) Effects of changes in foreign currency exchange rates (8,271 ) December 31, 2014 balance 225,269 Revisions related to prior acquisitions (60 ) Effects of changes in foreign currency exchange rates (5,485 ) December 31, 2015 balance $ 219,724 Other Intangible Assets. Our intangible assets subject to ongoing amortization consist of client contracts and software. Client Contracts Client contracts consist of the following: (i) investments in client contracts; (ii) direct and incremental costs that we have capitalized related to contractual arrangements where we have deferred revenues to convert or set-up client customers onto our outsourced solutions; and (iii) client contracts acquired in business combinations. As of December 31, 2015 and 2014, the carrying values of these assets were as follows (in thousands): 2015 2014 Gross Accumulated Net Gross Accumulated Net Investments in client contracts (1) $ 25,176 $ (17,060 ) $ 8,116 $ 34,657 $ (23,907 ) $ 10,750 Capitalized costs (2) 10,868 (2,489 ) 8,379 6,667 (3,463 ) 3,204 Acquired client contracts (3) 91,584 (68,341 ) 23,243 94,164 (61,215 ) 32,949 Total client contracts $ 127,628 $ (87,890 ) $ 39,738 $ 135,488 $ (88,585 ) $ 46,903 The aggregate amortization related to client contracts included in our operations for 2015, 2014, and 2013, was as follows (in thousands): 2015 2014 2013 Investments in client contracts (1) $ 5,165 $ 6,409 $ 6,181 Capitalized costs (2) 1,334 1,007 2,365 Acquired client contracts (3) 8,902 11,951 14,999 Total client contracts $ 15,401 $ 19,367 $ 23,545 (1) Investments in client contracts consist principally of incentives provided to new or existing clients to convert their customer accounts to, or retain their customer’s accounts on, our customer care and billing systems. Investments in client contracts related to client incentives are amortized ratably over the lives of the respective client contracts, which as of December 31, 2015, have termination dates that range from 2016 through 2020. Amortization of the investments in client contracts related to client incentives is reflected as a reduction in processing and related services revenues in our Income Statements. (2) Capitalized costs related to client conversion/set-up services related to long-term processing or managed services arrangements are generally amortized proportionately over the contract period that the processing or managed services are expected to be provided, and are primarily reflected in cost of processing and related services in our Income Statements. (3) Acquired client contracts represent assets acquired in our prior business acquisitions. Acquired client contracts are being amortized over their estimated useful lives ranging from five to ten years based on the approximate pattern in which the economic benefits of the intangible assets are expected to be realized. Classification of the amortization of acquired client contracts generally follows where the acquired business’ cost of revenues are categorized in our Income Statements. The weighted-average remaining amortization period of client contracts as of December 31, 2015 was approximately 50 months. Based on the December 31, 2015 net carrying value of these intangible assets, the estimated amortization for each of the five succeeding fiscal years ending December 31 will be: 2016 – $13.3 million; 2017 – $9.7 million; 2018 – $7.9 million; 2019 – $5.6 million; and 2020 – $2.7 million. Software Software consists of: (i) software and similar intellectual property rights from various business combinations; and (ii) internal use software. As of December 31, 2015 and 2014, the carrying values of these assets were as follows (in thousands): 2015 2014 Gross Accumulated Net Gross Accumulated Net Acquired software (4) $ 66,798 $ (61,475 ) $ 5,323 $ 67,012 $ (56,806 ) $ 10,206 Internal use software (5) 63,391 (33,619 ) 29,772 64,517 (29,991 ) 34,526 Total software $ 130,189 $ (95,094 ) $ 35,095 $ 131,529 $ (86,797 ) $ 44,732 The aggregate amortization related to software included in our operations for 2015, 2014, and 2013, was as follows (in thousands): 2015 2014 2013 Acquired software (4) $ 3,081 $ 3,457 $ 4,221 Internal use software (5) 8,048 8,404 7,633 Total software $ 11,129 $ 11,861 $ 11,854 (4) Acquired software represents the software intangible assets acquired in our prior business acquisitions, which are being amortized over their estimated useful lives ranging from five to ten years. (5) Internal use software represents: (i) third-party software licenses; and (ii) the internal and external costs related to the implementation of the third-party software licenses. Internal use software is amortized over its estimated useful life ranging from twelve months to ten years. The weighted-average remaining amortization period of the software intangible assets as of December 31, 2015 was approximately 70 months. Based on the December 31, 2015 net carrying value of these intangible assets, the estimated amortization for each of the five succeeding fiscal years ending December 31 will be: 2016 – $8.6 million; 2017 – $7.0 million; 2018 – $5.5 million; 2019 – $4.0 million; and 2020 – $2.9 million. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Debt | 5 . Debt As of December 31, 2015 and 2014, our long-term debt was as follows (in thousands): 2015 2014 2015 Credit Agreement: Term loan, due February 2020, interest at adjusted LIBOR plus 1.75% (combined rate of 2.36% at December 31, 2015) $ 142,500 $ — $200 million revolving loan facility, due February 2020, interest at adjusted LIBOR plus applicable margin — — 2012 Credit Agreement: Term loan, due November 2017 (or December 2016 if certain conditions exist), interest at adjusted LIBOR plus 2.00% (combined rate of 2.25% at December 31, 2014) — 120,000 $100 million revolving loan facility, due November 2017 (or December 2016 if certain conditions exist), interest at adjusted LIBOR plus applicable margin — — Convertible Debt Securities: 2010 Convertible Notes – senior subordinated convertible notes; due March 1, 2017; cash interest at 3.0%; net of unamortized OID of $7,923 and $14,169, respectively 142,077 135,831 284,577 255,831 Current portion of long-term debt ( 149,577 ) ( 22,500 ) Total long-term debt, net $ 135,000 $ 233,331 2015 Credit Agreement. In February 2015, we entered into an amended and restated $350 million credit agreement with several financial institutions (the “2015 Credit Agreement”) to replace the 2012 Credit Agreement. The key benefits of this refinancing include: (i) an increase in the tenor of the loan from November 2017 to February 2020; (ii) an increase in the amount of the revolving loan facility from $100 million to $200 million; (iii) a reduction in the interest rate and other fees; and (iv) financial and other restrictive covenants that are better or equal to that of the 2012 Credit Agreement. The 2015 Credit Agreement provides borrowings in the form of: (i) a $150 million aggregate principal five-year term loan (the “2015 Term Loan”); and (ii) a $200 million aggregate principal five-year revolving loan facility (the “2015 Revolver”). With the $150 million proceeds from the 2015 Term Loan, we repaid the outstanding $120 million balance from term loan under the 2012 Credit Agreement, resulting in a net increase of available cash by $30 million, a portion of which was used to pay certain fees and expenses in connection with the refinancing. The interest rates under the 2015 Credit Agreement are based upon our choice of an adjusted LIBOR rate plus an applicable margin of 1.75% - 2.75%, or an alternate base rate plus an applicable margin of 0.75% -1.75%, with the applicable margin, depending on our then-net secured total leverage ratio. We will pay a commitment fee of 0.250% - 0.375% of the average daily unused amount of the 2015 Revolver, with the commitment fee rate also dependent upon our then-net secured total leverage ratio. As of December 31, 2015, our interest rate on the 2015 Term Loan is 2.36% (adjusted LIBOR plus 1.75% per annum), effective through March 31, 2016, and our commitment fee on the unused 2015 Revolver is 0.25%. As of December 31, 2015, we had no borrowing outstanding on our 2015 Revolver and had the entire $200 million available to us. The 2015 Credit Agreement includes mandatory repayments of the aggregate principal amount of the 2015 Term Loan (payable quarterly) for the first (5% of total), second (5% of total), third (10% of total), fourth (15% of total), and fifth years (15% of total), with the remaining principal balance due at maturity (50% of total). The 2015 Credit Agreement has no prepayment penalties and requires mandatory repayments under certain circumstances, including: (i) asset sales or casualty proceeds; and (ii) proceeds of debt or preferred stock issuances. The 2015 Credit Agreement contains customary affirmative covenants. In addition, the 2015 Credit Agreement has customary negative covenants that places limits on our ability to: (i) incur additional indebtedness; (ii) create liens on its property; (iii) make investments; (iv) enter into mergers and consolidations; (v) sell assets; (vi) declare dividends or repurchase shares; (vii) engage in certain transactions with affiliates; and (viii) prepay certain indebtedness; and (ix) issue capital stock of subsidiaries. We must also meet certain financial covenants to include: (i) a maximum total leverage ratio; (ii) a maximum secured leverage ratio; (iii) a minimum interest coverage ratio; and (iv) a limitation on capital expenditures. As of December 31, 2015, we were in compliance with the financial ratios and other covenants related to the 2015 Credit Agreement. In conjunction with the 2015 Credit Agreement, we have pledged assets under a security agreement in favor of a financial institution as collateral agent (the “Security Agreement”). Under the Security Agreement and 2015 Credit Agreement, all of CSG’s domestic subsidiaries have guaranteed its obligations, and CSG and such subsidiaries have pledged substantially all of its assets to secure the obligations under the 2015 Credit Agreement and such guarantees. In conjunction with the closing of the 2015 Credit Agreement, we incurred financing costs of $2.7 million. When combined with the remaining deferred financing costs for the 2012 Credit Agreement, financing costs of $5.9 million have been deferred and are being amortized to interest expense using the effective interest method over the related term of the 2015 Credit Agreement, and financing costs of $0.9 million were recorded in interest expense. 2012 Credit Agreement. In 2012, we entered into an amended and restated $250 million credit agreement with several financial institutions (the “2012 Credit Agreement”). The 2012 Credit Agreement provided borrowings by us in the form of: (i) a $150 million aggregate principal five-year term loan (the “2012 Term Loan”); and (ii) a $100 million aggregate principal five-year revolving loan facility (the “2012 Revolver”). The interest rates under the 2012 Credit Agreement were based upon our choice of an adjusted LIBOR rate plus an applicable margin of 2.00% - 2.75%, or an alternate base rate plus an applicable margin of 1.00% - 1.75%, depending on our then-current leverage ratio. As of December 31, 2014, our combined interest rate (LIBOR plus applicable margin) for the 2012 Term Loan was 2.25% per annum. 2010 Convertible Notes. In 2010, we completed an offering of $150 million of 3.0% senior subordinated convertible notes due March 1, 2017 (the “2010 Convertible Notes”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2010 Convertible Notes are unsecured obligations, subordinated to any future senior indebtedness and senior to any future junior subordinated debt. The 2010 Convertible Notes were issued at a price of 100% of their par value and bear interest at a rate of 3.0% per annum, which is payable semiannually in arrears on March 1 and September 1 of each year. The 2010 Convertible Notes contain customary affirmative covenants, including compliance with terms of certain other indebtedness of the Company over a defined threshold amount. The 2010 Convertible Notes are convertible into our common stock, under the specified conditions and settlement terms outlined below. As a result of us declaring a quarterly cash dividend beginning in June 2013, the conversion rate has also been adjusted quarterly. As of December 31, 2015, the conversion rate was 43.5933 shares of our common stock per $1,000 par value of the 2010 Convertible Notes (equivalent to a conversion price of $22.94 per share of our common stock). The Indenture related to the 2010 Convertible Notes (“Notes Indenture”) includes anti-dilution provisions for the holders such that the conversion rate (and thus the initial conversion price) can be adjusted in the future for certain events, to include stock dividends, the issuance of rights, options or warrants to purchase our common stock at a price below the then-current market price, and certain distributions of common stock, property or rights, options or warrants to acquire our common stock to all or substantially all holders of our common stock. Additionally, the conversion rate may be adjusted prior to the maturity date in connection with the occurrence of specified corporate transactions for a “make-whole” premium as set forth in the Notes Indenture. Prior to September 1, 2016, holders of the 2010 Convertible Notes can convert their securities: (i) at any time the price of our common stock trades over $29.82 per share (130% of the $22.94 conversion price) for a specified period of time; (ii) at any time the trading price of the 2010 Convertible Notes falls below 98% of the average conversion value for the 2010 Convertible Notes for a specified period of time; and (iii) at any time upon the occurrence of specified corporate transactions, to include a change of control (as defined in the Notes Indenture). On or after September 1, 2016, the holders of the 2010 Convertible Notes can elect to convert their securities at any time, with the settlement occurring on March 1, 2017. As of December 16, 2015, the closing price of our common stock exceeded 130% of the conversion price for the required period, thus allowing the 2010 Convertible Notes to be converted at the holder’s option during the quarter beginning January 1, 2016 and ending March 31, 2016. Upon any conversion of the 2010 Convertible Notes, we will settle our conversion obligation as follows: (i) we will pay cash for 100% of the par value of the 2010 Convertible Notes that are converted; and (ii) to the extent the value of our conversion obligation exceeds the par value, we will satisfy the remaining conversion obligation in our common stock, cash or any combination of our common stock and cash. Based on our December 31, 2015 closing stock price of $35.98 per share, the 2010 Convertible Notes would have had a total settlement value of approximately $235 million. As the 2010 Convertible Notes can be converted at the holder’s option during the quarter beginning January 1, 2016 and ending March 31, 2016, the net carrying value of the 2010 Convertible Notes of $142.1 million has been classified as a current liability in our Balance Sheet as of December 31, 2015. The OID related to the 2010 Convertible Notes of $38.4 million, as a result of an effective interest rate of the liability component of 7.75% compared to the cash interest rate of 3.0%, is being amortized to interest expense through March 1, 2017, the maturity date of the 2010 Convertible Notes. Estimated Maturities on Long-Term Debt . As of December 31, 2015, the maturities of our long-term debt, based upon: (1) the mandatory repayment schedule for the 2015 Term Loan; and (2) the convertibility of the 2010 Convertible Notes beginning January 1, 2016 and ending March 31, 2016, was as follows (in thousands): 2016 2017 2018 2019 2020 2015 Term Loan $ 7,500 $ 15,000 $ 22,500 $ 22,500 $ 75,000 2010 Convertible Notes 150,000 — — — — Total long-term debt repayments $ 157,500 $ 15,000 $ 22,500 $ 22,500 $ 75,000 Deferred Financing Costs. As of December 31, 2015, net deferred financing costs related to the 2015 Credit Agreement were $4.7 million, and are being amortized to interest expense over the related term of the 2015 Credit Agreement (through February 2020). As of December 31, 2015, net deferred financing costs related to the 2010 Convertible Notes were $0.7 million, and are being amortized to interest expense through maturity (March 2017). The net deferred financing costs are reflected in Other Assets in our Balance Sheets. Interest expense for 2015, 2014, and 2013 includes amortization of deferred financing costs of $1.9 million, $2.5 million, and $2.6 million, respectively. The weighted-average interest rate on our debt borrowings, including amortization of OID, amortization of deferred financing costs, and commitment fees on a revolving loan facility, for 2015, 2014, and 2013, was approximately 6%, 6%, and 5%, respectively. |
Restructuring and Reorganizatio
Restructuring and Reorganization Charges | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring And Related Activities [Abstract] | |
Restructuring and Reorganization Charges | 6 . Restructuring and Reorganization Charges Restructuring and reorganization charges are expenses that generally result from cost reduction initiatives and/or significant changes to our business, to include such things as involuntary employee terminations, changes in management structure, divestitures of businesses, facility consolidations and abandonments, impairment of acquired intangible assets, and fundamental reorganizations impacting operational focus and direction. The following are the key restructuring and reorganizational activities we incurred over the last three years that have impacted our results from operations: During 2013 we implemented the following restructuring activities: · We reduced our workforce by approximately 160 employees worldwide. These actions were taken to further align our workforce around our near- and long-term business opportunities. As a result, we incurred restructuring charges related to these involuntary terminations of $5.6 million. · We disposed of a small print operation and our marketing analytics business, resulting in $3.6 million of restructuring charges, including a $3 million loss from the sale. · We terminated our previously frozen defined benefit pension plan resulting in $3.2 million of restructuring expense. During 2014 we implemented the following restructuring and reorganization activities: · In conjunction with the reorganization of our Content Direct solution to facilitate its integration with our other offerings, we terminated an incentive arrangement with certain employees to develop and then grow our Content Direct solution (the “Arrangement”) in exchange for a one-time cash payment of $8.0 million, which was reflected as a reorganization charge in 2014. The Arrangement included certain liquidation options for the employees in the event of a change of control of the Content Direct solution. · We reduced our workforce by approximately 60 employees worldwide, to further align our workforce around our near- and long-term business opportunities. As a result, we recorded restructuring expense of $5.6 million. · We abandoned space at two of our locations to improve our space utilization, resulting in a restructuring charge of $1.1 million. During 2015 we implemented the following restructuring activities: · We reduced our workforce by approximately 160 employees worldwide. These actions were primarily taken to consolidate delivery centers and better align our spending levels with our revenue opportunities. We incurred restructuring charges related to these involuntary terminations of $4.5 million. These actions also led to the discontinuance of certain non-essential products, resulting in an asset impairment charge of $1.7 million. · We abandoned space at five of our locations as a result of workforce reductions and improvements in our space utilization, resulting in restructuring charges of $1.2 million. · We entered into an agreement (the “Agreement”) with certain former management personnel for the sale of our cyber-security business marketed under the Invotas brand, resulting in a reduction in restructuring charges of $3.7 million related to the gain on the sale. In February 2016, this business was acquired by a third-party. Based on the terms of the Agreement, we have received additional proceeds which were contingent upon a liquidation event, as defined in the Agreement, resulting in an additional gain on the sale of approximately $6.6 million. The additional contingent gain on sale will reduce restructuring charges, if any, in the first quarter of 2016. The activities discussed above resulted in total charges for 2015, 2014, and 2013 of $3.1 million, $14.0 million, and $12.4 million, respectively, which have been reflected as a separate line item in our Income Statements. The activity in the business restructuring and reorganization reserves during 2015, 2014, and 2013 is as follows (in thousands): Termination Facilities Disposition of Business Operations Other Total January 1, 2013, balance $ 1,917 $ (453 ) $ — $ — $ 2,370 Charged to expense during year 5,577 — 3,588 3,240 12,405 Cash payments (3,741 ) — (571 ) (19 ) (4,331 ) Adjustment for the loss on the disposition of business operations — — (3,017 ) — (3,017 ) Adjustment for the loss on termination of pension plan — — — (3,221 ) (3,221 ) Other (36 ) (453 ) — — (489 ) December 31, 2013, balance 3,717 — — — 3,717 Charged to expense during year 5,589 1,146 (222 ) 7,456 13,969 Cash payments (6,421 ) — — (8,000 ) (14,421 ) Adjustment for the gain on the disposition of business operations — — 222 — 222 Other (66 ) (33 ) — 560 461 December 31, 2014, balance 2,819 1,113 — 16 3,948 Charged to expense during year 4,544 1,175 (3,733 ) 1,088 3,074 Cash payments (5,694 ) (405 ) — (30 ) (6,129 ) Adjustment for the gain on the disposition of business operations — — 3,733 — 3,733 Adjustment for asset impairment — — — (1,685 ) (1,685 ) Other (32 ) (526 ) — 611 53 December 31, 2015, balance $ 1,637 $ 1,357 $ — $ — $ 2,994 As of December 31, 2015, $2.1 million of the business restructuring and reorganization reserves were included in current liabilities. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7 . Income Taxes Income Tax Provision/(Benefit). The components of net income from continuing operations before income taxes are as follows (in thousands): 2015 2014 2013 Domestic $ 93,390 $ 70,737 $ 63,278 Foreign 2,951 (9,215 ) (1,759 ) Total $ 96,341 $ 61,522 $ 61,519 The income tax provision related to continuing operations consists of the following (in thousands): 2015 2014 2013 Current: Federal $ 41,002 $ 20,374 $ 12,880 State 5,227 2,443 916 Foreign 3,651 2,953 4,273 49,880 25,770 18,069 Deferred: Federal (14,611 ) 1,139 1,130 State (1,147 ) 837 2,329 Foreign (348 ) (1,935 ) (5,277 ) (16,106 ) 41 (1,818 ) Total income tax provision $ 33,774 $ 25,811 $ 16,251 2015 2014 2013 Provision at Federal rate of 35% $ 33,719 $ 21,533 $ 21,532 State income taxes, net of Federal impact 2,652 2,132 2,109 Research and experimentation credits (2,135 ) (450 ) (5,754 ) Tax uncertainties (166 ) 187 (269 ) Section 199 manufacturing deduction (2,884 ) (1,936 ) (2,263 ) Foreign rate differential 688 2,847 1,133 Valuation allowance for deferred tax assets 919 3,602 (3,312 ) Other impact of foreign operations 283 (3,555 ) 2,088 Other 698 1,451 987 Total income tax provision $ 33,774 $ 25,811 $ 16,251 We have undistributed earnings of approximately $40 million from certain foreign subsidiaries. We intend to indefinitely reinvest these foreign earnings, therefore, a provision has not been made for income taxes that might be payable upon remittance of such earnings. Determination of the amount of unrecognized deferred tax liability on unremitted foreign earnings is not practicable because of the complexities of the hypothetical calculation. In the fourth quarter of 2015, we corrected our Financial Statements for an error in the calculation of our research and experimentation income tax credit (“R&D credit”) amount recorded within our 2014, 2013, and 2012 income tax provisions. The error, which relates to the 2009 – 2014 tax years, resulted in the understatement of income tax expense and the overstatement of the net income tax receivable of $1.2 million, $6.1 million, and $1.8 million for each of years ended December 31, 2014, 2013, and 2012 (2013 beginning accumulated earnings), respectively. Due to the timing of claims for certain of the R&D credit amounts, the fiscal year ended December 31, 2013 included the income tax benefits related to not only 2013, but the change in estimate of certain incremental R&D credits claimed for development activities generated in 2009, 2010, and 2012. In none of the individual 2009 – 2014 tax years did the amount of the R&D credit error exceed $1.9 million. We assessed the materiality of the error in accordance with Staff Accounting Bulletin No. 99, Materiality, and determined that the error was immaterial to previously reported amounts contained in our annual report. Deferred Income Taxes. Net deferred income tax liabilities as of December 31, 2015 and 2014 are as follows (in thousands): 2015 2014 Deferred income tax assets $ 77,270 $ 77,201 Deferred income tax liabilities (42,576 ) (55,045 ) Valuation allowance (17,414 ) (20,507 ) Net deferred income tax assets $ 17,280 $ 1,649 The components of our net deferred income tax assets (liabilities) as of December 31, 2015 and 2014 are as follows (in thousands): 2015 2014 Net current deferred income tax assets: Accrued expenses and reserves $ 14,001 $ 10,221 Stock-based compensation 5,528 4,425 Total current deferred income tax assets 19,529 14,646 Less: valuation allowance (1,394 ) (1,442 ) Net current deferred income tax assets $ 18,135 $ 13,204 Net non-current deferred income tax assets: Software $ 412 $ 809 Client contracts and related intangibles (2,914 ) (5,252 ) Net operating loss carryforwards 15,688 18,527 Property and equipment 7,975 11,470 Deferred revenue 914 550 Facility abandonment 143 262 Other 877 305 Total non-current deferred income tax assets 23,095 26,671 Less: valuation allowance (14,713 ) (17,781 ) Net non-current deferred income tax assets $ 8,382 $ 8,890 Net non-current deferred income tax liabilities: Software $ 190 $ 211 Client contracts and related intangibles 835 3,127 Goodwill (7,590 ) (6,747 ) Net operating loss carryforwards 23,038 23,298 Property and equipment (15,219 ) (15,048 ) Convertible debt securities (16,853 ) (27,708 ) Deferred revenue 3,354 961 Contingent payments 849 840 Facility abandonment 2,231 2,194 Other 1,235 (290 ) Total non-current deferred income tax liabilities (7,930 ) (19,162 ) Less: valuation allowance (1,307 ) (1,284 ) Net non-current deferred income tax liabilities $ (9,237 ) $ (20,446 ) We regularly assess the likelihood of the future realization of our deferred income tax assets. To the extent we believe that it is more likely than not that a deferred income tax asset will not be realized, a valuation allowance is established. As of December 31, 2015, we believe that between: (i) carryback opportunities to past periods with taxable income; and (ii) sufficient taxable income to be generated in the future, we will realize 100% of the benefit of our U.S. Federal deferred income tax assets, thus no valuation allowance has been established. As of December 31, 2015, we have deferred income tax assets related to state and foreign income tax jurisdictions of $2.7 million and $29.7 million, respectively, and have established valuation allowances against those deferred income tax assets of $2.5 million and $14.9 million, respectively. As of December 31, 2015 and 2014, we have an acquired U.S. Federal net operating loss (“NOL”) carryforward of approximately $50 million and $51 million, respectively, which will begin to expire in 2019 and can be utilized through 2030. The acquired U.S. Federal NOL carryforward is attributable to the pre-acquisition periods of acquired subsidiaries. The annual utilization of this U.S. Federal NOL carryforward is limited pursuant to Section 382 of the Internal Revenue Code of 1986, as amended. In addition, as of December 31, 2015 and 2014, we have: (i) state NOL carryforwards of approximately $63 million and $63 million, respectively, which will expire beginning in 2016 and end in 2036; and (ii) foreign subsidiary NOL carryforwards of approximately $91 million and $96 million, respectively, which will expire beginning in 2017, with a portion of the losses available over an indefinite period of time. Our 2004 Convertible Debt Securities, which we fully extinguished in 2011, were subject to special U.S. Treasury regulations governing contingent payment debt instruments. These regulations allowed us to take a tax deduction for interest expense on our U.S. Federal income tax return at a constant rate of 9.09% (subject to certain adjustments), compounded semi-annually, which represented the estimated yield on comparable non-contingent, non-convertible, fixed-rate debt instruments with terms and conditions otherwise similar to the 2004 Convertible Debt Securities. This interest expense tax deduction was greater than the interest expense reflected in the accompanying Income Statements, thus creating a deferred income tax liability. The extinguishment of the 2004 Convertible Debt Securities resulted in: (i) the holders of the 2004 Convertible Debt Securities not having the ability to achieve the 9.09% target yield, and (ii) a requirement for us to pay an amount equal to the cumulative deferred income tax liability to the U.S. tax authorities (without interest or penalties). During the third and fourth quarters of 2011, we paid cash of approximately $6 million related to the deferred income tax liabilities associated with the 2004 Convertible Debt Securities repurchased in June and July of 2011. In 2015, we paid cash of $5.6 million related to the deferred income tax liabilities associated with the 2004 Convertible Debt Securities repurchased in 2009 and 2010. The remaining balance owed of approximately $18 million will be paid ratably over the next three years. Accounting for Uncertainty in Income Taxes. We are required to estimate our income tax liability in each jurisdiction in which we operate, including U.S. Federal, state and foreign income tax jurisdictions. Various judgments and estimates are required in evaluating our tax positions and determining our provisions for income taxes. During the ordinary course of business, there are certain transactions and calculations for which the ultimate income tax determination may be uncertain. In addition, we may be subject to examination of our income tax returns by various tax authorities, which could result in adverse outcomes. For these reasons, we establish a liability associated with unrecognized tax benefits based on estimates of whether additional taxes and interest may be due. This liability is adjusted based upon changing facts and circumstances, such as the closing of a tax audit, the expiration of a statute of limitations or the refinement of an estimate. A reconciliation of the beginning and ending balances of our liability for unrecognized tax benefits is as follows (in thousands): 2015 2014 2013 Balance, beginning of year $ 3,417 $ 3,713 $ 3,372 Additions based on tax positions related to current year 150 351 173 Additions for tax positions of prior years 925 30 569 Reductions for tax positions of prior years (413 ) (677 ) (401 ) Balance, end of year $ 4,079 $ 3,417 $ 3,713 As discussed earlier, in connection with our immaterial correction of our 2014 and 2013 Financial Statements, our liability for unrecognized tax benefits was reduced by $0.4 million and $5.8 million, respectively. We recognize interest and penalty expense associated with our liability for unrecognized tax benefits as a component of income tax expense in our Income Statements. In addition to the $4.1 million, $3.4 million, and $3.7 million of liability for unrecognized tax benefits as of December 31, 2015, 2014, and 2013, we had $0.3 million, $0.2 million, and $0.2 million, respectively, of income tax-related accrued interest, net of any federal benefit of deduction. If recognized, the $4.1 million of unrecognized tax benefits as of December 31, 2015, would favorably impact our effective tax rate in future periods. We file income tax returns in the U.S. Federal jurisdiction, various U.S. state and local jurisdictions, and many foreign jurisdictions. The U.S., U.K., and Australia are the main taxing jurisdictions in which we operate. The years open for audit vary depending on the taxing jurisdiction. As of December 31, 2014, the U.S. Internal Revenue Service had commenced an audit of our 2010 through 2012 tax years. We have been audited in Australia for years prior to 2007. In addition, the statute of limitations has expired in Australia for years prior to 2011. We estimate that it is reasonably possible that the amount of gross unrecognized tax benefits will decrease by up to $2.4 million over the next twelve months due to completion of audits and the expiration of statute of limitations. |
Employee Retirement Benefit Pla
Employee Retirement Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Retirement Benefit Plans | 8 . Employee Retirement Benefit Plans Defined Contribution-Type Plans. We sponsor defined contribution plans covering substantially all our U.S.-based employees. Participants may contribute up to 100% of their annual wages, subject to certain limitations, as pretax, salary deferral contributions. We make certain matching, and at our discretion, service-based contributions to the plan. The expense related to matching and service-related contributions for 2015, 2014, and 2013 was $9.7 million, $9.0 million, and $9.7 million, respectively. We also have defined contribution-type plans for certain of our non-U.S.-based employees. The total contributions made to these plans in 2015, 2014, and 2013 were $3.7 million, $5.0 million, and $4.8 million, respectively. |
Commitments, Guarantees and Con
Commitments, Guarantees and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments, Guarantees and Contingencies | 9 . Commitments, Guarantees and Contingencies Operating Leases. We lease certain office and production facilities under noncancellable operating leases, with the longest lease that runs through July 2025. The leases generally are renewable and provide for the payment of real estate taxes and certain other occupancy expenses. Future aggregate minimum lease payments under these facilities are as follows: 2016 - $13.1 million; 2017 - $12.4 million; 2018 - $12.0 million; 2019 - $10.1 million; 2020 - $7.3 million; and thereafter - $28.6 million. Total rent expense for 2015, 2014, and 2013 was $17.1 million, $19.9 million, and $20.0 million, respectively. Service Agreements. We have an agreement with Infocrossing LLC (“Infocrossing”), a Wipro Limited company, to provide us outsourced data center services. We amended our previous agreement with Infocrossing in 2015, which extended the term of the agreement through June 30, 2022. We outsource the data processing and related computer services required for the operation of our outsourced ACP processing services. Our ACP proprietary software and other software applications are run in an outsourced data center environment in order to obtain the necessary computer processing capacity and other computer support services without us having to make the substantial capital and infrastructure investments that would be necessary for us to provide these services internally. Our clients are connected to the outsourced data center environment through a combination of private and commercially-provided networks. Our ACP processing services are generally considered to be mission critical customer management systems by our clients. As a result, we are highly dependent upon Infocrossing for system availability, security, and response time. Warranties. We generally warrant that our solutions and related offerings will conform to published specifications, or to specifications provided in an individual client arrangement, as applicable. The typical warranty period is 90 days from delivery of the solution or offering. For certain service offerings we provide a limited warranty for the duration of the services provided. We generally warrant that services will be performed in a professional and workmanlike manner. The typical remedy for breach of warranty is to correct or replace any defective deliverable, and if not possible or practical, we will accept the return of the defective deliverable and refund the amount paid under the client arrangement that is allocable to the defective deliverable. Our contracts also generally contain limitation of damages provisions in an effort to reduce our exposure to monetary damages arising from breach of warranty claims. Historically, we have incurred minimal warranty costs, and as a result, do not maintain a warranty reserve. Product and Services Indemnifications. Our arrangements with our clients generally include an indemnification provision that will indemnify and defend a client in actions brought against the client that claim our products and/or services infringe upon a copyright, trade secret, or valid patent. Historically, we have not incurred any significant costs related to such indemnification claims, and as a result, do not maintain a reserve for such exposure. Claims for Company Non-performance. Our arrangements with our clients typically cap our liability for breach to a specified amount of the direct damages incurred by the client resulting from the breach. From time-to-time, these arrangements may also include provisions for possible liquidated damages or other financial remedies for our non-performance, or in the case of certain of our outsourced customer care and billing solutions, provisions for damages related to service level performance requirements. The service level performance requirements typically relate to system availability and timeliness of service delivery. As of December 31, 2015, we believe we have adequate reserves, based on our historical experience, to cover any reasonably anticipated exposure as a result of our nonperformance for any past or current arrangements with our clients. Indemnifications Related to Officers and the Board of Directors. We have agreed to indemnify members of our Board of Directors (the “Board”) and certain of our officers if they are named or threatened to be named as a party to any proceeding by reason of the fact that they acted in such capacity. We maintain directors’ and officers’ (“D&O”) insurance coverage to protect against such losses. We have not historically incurred any losses related to these types of indemnifications, and are not aware of any pending or threatened actions or claims against any officer or member of our Board. As a result, we have not recorded any liabilities related to such indemnifications as of December 31, 2015. In addition, as a result of the insurance policy coverage, we believe these indemnification agreements are not significant to our results of operations. Favorable Settlement of Claims . In 2014, we executed a settlement agreement ending litigation we asserted against a third party for patent infringement and misappropriation of trade secrets. In exchange for the release from the lawsuit initiated, we will receive a total of $6 million, with a portion paid in 2014, and the remainder in annual installments through 2017. We recorded a total of $3.9 million (net of a time value discount and legal costs incurred) as a reduction of selling, general and administrative expenses in 2014. Legal Proceedings. From time-to-time, we are involved in litigation relating to claims arising out of our operations in the normal course of business. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | 10. Stockholders’ Equity Stock Repurchase Program. We currently have a stock repurchase program, approved by our Board, authorizing us to repurchase shares of our common stock from time-to-time as market and business conditions warrant (the “Stock Repurchase Program”). In February 2015, our Board approved a 7.5 million share increase in the number of shares authorized for repurchase under the Stock Repurchase Program, bringing the total number of shares authorized to 42.5 million. During 2015, 2014, and 2013, we repurchased 0.3 million shares of our common stock for $6.9 million (weighted–average price of $27.06 per share), 0.7 million shares of our common stock for $19.1 million (weighted-average price of $26.05 per share), and 0.5 million shares of our common stock for $10.1 million (weighted-average price of $20.23 per share), respectively, under a Securities and Exchange Commission (“SEC”) Rule 10b5-1 Plan. In March 2015, we entered into an accelerated share repurchase transaction agreement (the “ASR Agreement”) with a counterparty to repurchase $50 million of our common stock. We paid $50 million to the counterparty and received an initial delivery of 1.3 million shares of our outstanding common stock for an aggregate value of approximately $40 million. The $10 million forward equity contract was settled in December 2015. Total shares purchased under the ASR Agreement in 2015 were 1.6 million shares at an average purchase price of $31.64 per share. The shares were reflected as treasury stock in the periods the shares were delivered. The ASR Agreement met all the applicable criteria for equity classification, and, therefore, was not accounted for as a derivative instrument. As of December 31, 2015, the total remaining number of shares available for repurchase under the Stock Repurchase Program totaled approximately 7.1 million shares. In addition to the above mentioned stock repurchases, during 2015, 2014, and 2013, we repurchased and then cancelled approximately 265,000 shares, 252,000 shares, and 264,000 shares for $8.1 million, $6.9 million, and $5.4 million, respectively, of common stock from our employees in connection with minimum tax withholding requirements resulting from the vesting of restricted stock under our stock incentive plans. Cash Dividend. In 2013, our Board approved the initiation of a quarterly cash dividend to be paid to our stockholders. During 2015 and 2014, the Board approved total cash dividends of $0.70 per share and $0.6225 per share of common stock, totaling $22.9 million and $21.3 million, respectively. Warrants . In 2014, we entered into an amendment to our current agreement with Comcast (the “Amended Agreement”). The Amended Agreement provides the framework for Comcast to consolidate its residential customer accounts onto our ACP customer care and billing solution. As an additional incentive for Comcast to migrate new customer accounts to ACP, the Amended Agreement includes the issuance of stock warrants (the “Warrant Agreement”) for the right to purchase up to approximately 2.9 million shares of our common stock (the “Stock Warrants”), 1.9 million warrants relate to Comcast’s existing residential business and the remaining 1.0 million warrants relate to additional residential customer accounts that Comcast may acquire and migrate onto ACP in the future. The Stock Warrants have a 10-year term and an exercise price of $26.68 per warrant. The 1.9 million of the Stock Warrants relate to Comcast’s existing residential business and vest(ed) as follows: • The first 25% of these Stock Warrants (approximately 0.5 million) vested upon the successful migration of the first 0.5 million customer accounts, which occurred during the fourth quarter of 2014 upon the successful migration of two million new Comcast customer accounts. • The next 25% of these Stock Warrants had a time-based vesting provision, and vested in January 2015. • The next 25% of these Stock Warrants vest only after a cumulative total of 5.5 million customer accounts are migrated onto ACP. • The last 25% of these Stock Warrants vest proportionately based on the number of customer accounts migrated above 5.5 million accounts, with full vesting based on a target of 5.7 million customer accounts above the 5.5 million account level (i.e., a total target of 11.2 million customer account migrations). The remaining 1.0 million Stock Warrants that relate to additional residential accounts that Comcast may acquire and migrate onto ACP in the future only vest proportionately with acquired customer accounts migrated onto ACP from other providers’ billing platforms, with full vesting based on a target of 5 million newly migrated customer accounts. Fifty percent of the unvested Stock Warrants become fully vested upon a fundamental change (including a change in control) of the Company, as defined, proportionally reducing the number of Stock Warrants eligible for vesting based on future performance conditions. Once vested, Comcast may exercise the Stock Warrants and elect either physical delivery of common shares or net share settlement (cashless exercise). Alternatively, the exercise of the Stock Warrants may be settled with cash based solely on our approval, or if Comcast were to beneficially own or control in excess of 19.99% of the common stock or voting of the Company. The fair value of the 0.5 million Stock Warrants that vested in the fourth quarter of 2014 was $3.6 million, as determined using the Black-Scholes option-pricing model. Upon vesting, this amount was recorded as a client incentive asset with the corresponding offset to stockholders’ equity. The fair value of the 0.5 million Stock Warrants that vested in January 2015 was $3.7 million at the grant date, as determined using the Black-Scholes option-pricing model. This amount is being recorded ratably over the vesting period as a client incentive asset with the corresponding offset to stockholders’ equity. The client incentive asset related to the Stock Warrants is being amortized as a reduction in processing and related services revenues over the remaining term of the Comcast amended agreement. As of December 31, 2015, we recorded a client incentive asset related to these Stock Warrants of $7.3 million and have amortized $2.0 million as a reduction in processing and related services revenues. The remaining unvested Stock Warrants will be accounted for as client incentive assets in the period the performance conditions necessary for vesting have been met. As of December 31, 2015, none of the Stock Warrants had been exercised. Convertible Debt Securities. Under GAAP, convertible debt securities that may be settled in cash upon conversion (including partial cash settlement) must be separated into their liability and equity components at initial recognition by: (i) recording the liability component at the fair value of a similar liability that does not have an associated equity component; and (ii) attributing the remaining proceeds from the issuance to the equity component. The carrying amount of the equity component related to our convertible debt securities outstanding, included within additional paid-in capital, net of tax, as of December 31, 2015 and 2014 was $22.9 million. |
Equity Compensation Plans
Equity Compensation Plans | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity Compensation Plans | 1 1 . Equity Compensation Plans Stock Incentive Plans Stock Incentive Plan . In 2014, our stockholders approved an increase of 2.9 million shares authorized for issuance under the 2005 Stock Incentive Plan (the “2005 Plan”), from 15.8 million shares to 18.7 million shares. Shares reserved under the 2005 Plan can be granted to officers and other key employees of our company and its subsidiaries and to non-employee directors of our company in the form of stock options, stock appreciation rights, performance unit awards, restricted stock awards, or stock bonus awards. Shares granted under the 2005 Plan in the form of a performance unit award, restricted stock award or stock bonus award are counted toward the aggregate number of shares of common stock available for issuance under the 2005 Plan as two shares for every one share granted or issued in payment of such award. As of December 31, 2015, 4.2 million shares were available for issuance, with 3.6 million shares available for grant. Restricted Stock . We generally issue new shares (versus treasury shares) to fulfill restricted stock award grants. Restricted stock awards are granted at no cost to the recipient. Historically, our restricted stock awards have vested annually primarily over three or four years with no restrictions other than the passage of time (i.e., the shares are released upon calendar vesting with no further restrictions) (“Time-Based Awards”). Unvested Time-Based Awards are typically forfeited and cancelled upon termination of employment with our company. Certain Time-Based Awards become fully vested (vesting accelerates) upon a change in control, as defined, and the subsequent involuntary termination of employment. The fair value of the Time-Based Awards (determined by using the closing market price of our common stock on the grant date) is charged to expense on a straight-line basis over the requisite service period for the entire award. We also issue restricted stock shares to key members of management that vest in equal installments over three years upon meeting either pre-established financial performance objectives or pre-established stock price objectives (“Performance-Based Awards”). The structure of the performance goals for the Performance-Based Awards has been approved by our stockholders. The Performance-Based Awards become fully vested (vesting accelerates) upon a change in control, as defined, and the subsequent involuntary termination of employment. The fair value of the Performance-Based Awards (determined by using the closing market price of our common stock on the grant date) is charged to expense on a straight-line basis over the requisite service period, taking into consideration the probability of vesting, for each separately vesting portion of the award as if the award is, in-substance, multiple awards. A summary of our unvested restricted stock activity during 2015 is as follows (shares in thousands): 2015 Shares Weighted- Unvested awards, January 1, 2015 2,311 $ 22.81 Awards granted 736 30.71 Awards forfeited/cancelled (109 ) 23.95 Awards vested (814 ) 21.88 Unvested awards, December 31, 2015 2,124 $ 26.03 The weighted-average grant date fair value per share of restricted stock shares granted during 2015, 2014, and 2013 was $30.71, $26.45, and $19.75, respectively. The total market value of restricted stock shares vesting during 2015, 2014, and 2013 was $24.8 million, $20.7 million, and $16.2 million, respectively. 1996 Employee Stock Purchase Plan As of December 31, 2015, we have an employee stock purchase plan whereby 1.7 million shares of our common stock have been reserved for sale to our U.S. employees through payroll deductions. The price for shares purchased under the plan is 85% of market value on the last day of the purchase period. Purchases are made at the end of each month. During 2015, 2014, and 2013, 58,927 shares, 61,592 shares, and 68,845 shares, respectively, were purchased under the plan for $1.6 million ($20.84 to $30.58 per share), $1.4 million ($21.31 to $25.47 per share), and $1.4 million ($16.01 to $24.99 per share), respectively. As of December 31, 2015, 440,622 shares remain eligible for purchase under the plan. Stock-Based Compensation Expense We recorded stock-based compensation expense of $21.1 million, $16.7 million, and $14.8 million, respectively, for 2015, 2014, and 2013. As of December 31, 2015 there was $35.5 million of total compensation cost related to unvested awards not yet recognized. That cost, excluding the impact of forfeitures, is expected to be recognized over a weighted-average period of 2.2 years. We recorded a deferred income tax benefit related to stock-based compensation expense during 2015, 2014, and 2013, of $6.8 million, $5.0 million, and $4.6 million, respectively. The actual income tax benefit realized for the tax deductions from stock option exercises and vesting of restricted stock for 2015, 2014, and 2013, totaled $7.9 million, $6.5 million, and $5.4 million, respectively. |
Unaudited Quarterly Financial D
Unaudited Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Financial Data | 12 . Unaudited Quarterly Financial Data Quarter Ended March 31 June 30 September 30 December 31 (in thousands, except per share amounts) 2015: Total revenues $ 185,631 $ 182,641 $ 186,960 $ 197,288 Total cost of revenues (exclusive of depreciation) 100,266 91,796 92,182 95,497 Operating income (1) 21,893 26,156 31,021 34,070 Income before income taxes (1) 16,711 22,446 27,943 29,241 Income tax provision (2) (7,353 ) (9,652 ) (11,196 ) (5,573 ) Net income (1)(2) 9,358 12,794 16,747 23,668 Basic earnings per common share (1)(2) $ 0.30 $ 0.42 $ 0.54 $ 0.76 Diluted earnings per common share (1)(2) 0.28 0.39 0.50 0.70 2014: Total revenues $ 188,028 $ 184,558 $ 185,003 $ 193,697 Total cost of revenues (exclusive of depreciation) 102,104 93,682 94,470 99,087 Operating income (3) 20,914 21,820 13,831 19,125 Income before income taxes (3) 17,002 17,741 10,064 16,715 Income tax provision (2)(4) (7,311 ) (8,338 ) (4,831 ) (5,331 ) Net income (2)(3)(4) 9,691 9,403 5,233 11,384 Basic earnings per common share (2)(3)(4) $ 0.30 $ 0.29 $ 0.16 $ 0.37 Diluted earnings per common share (2)(3)(4) 0.28 0.28 0.15 0.34 (1) During the first, second, third, and fourth quarters of 2015 we incurred restructuring expenses of $0.6 million, $0.4 million, $0.8 million, and $1.3 million, respectively, or $0.01, $0.01, $0.02, and $0.03 per diluted share (see Note 6). ( 2 ) Fluctuations in our effective income tax rate between quarters generally relates to the accounting for discrete income tax items in any given quarter, and revisions of estimates for certain income tax components during the year. (3 ) During the first, third, and fourth quarters of 2014 we incurred restructuring expenses of $1.2 million, $7.8 million, and $4.9 million, respectively, or $0.02, $0.12, and $0.10 per diluted share (see Note 6). (4) As explained in Note 7, our 2014 results have been adjusted as a result of the immaterial correction made to the fourth quarter 2014 income tax provision. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Principles of Consolidation | Principles of Consolidation. Our Financial Statements include all of our accounts and our subsidiaries’ accounts. All material intercompany accounts and transactions have been eliminated. |
Translation of Foreign Currency | Translation of Foreign Currency. Our foreign subsidiaries use the local currency of the countries in which they operate as their functional currency. Their assets and liabilities are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. Revenues, expenses, and cash flows are translated at the average rates of exchange prevailing during the period. Foreign currency translation adjustments are included in comprehensive income in stockholders’ equity. Foreign currency transaction gains and losses are included in the determination of net income. |
Use of Estimates in Preparation of Our Financial Statements | Use of Estimates in Preparation of Our Financial Statements. The preparation of our Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The more critical estimates and related assumptions that affect our financial position and results of operations are in the areas of: (i) revenue recognition; (ii) allowance for doubtful accounts receivable; (iii) impairment assessments of goodwill and other long-lived assets; (iv) income taxes; (v) business combinations and asset purchases; and (vi) loss contingencies. |
Revenue Recognition | Revenue Recognition. We use various judgments and estimates in connection with the determination of the amount of revenues to be recognized in each accounting period. Our primary revenue recognition criteria include: (i) persuasive evidence of an arrangement; (ii) delivery; (iii) fixed or determinable fees; and (iv) collectibility of fees. |
Deferred Revenue and Unbilled Accounts Receivable | Deferred Revenue and Unbilled Accounts Receivable . Client payments and billed amounts due from clients in excess of revenue recognized are recorded as deferred revenue. Deferred revenue amounts expected to be recognized within the next twelve months are classified as current liabilities. Revenue recognized prior to the scheduled billing date is recorded as unbilled accounts receivable. |
Postage | Postage. We pass through to our clients the cost of postage that is incurred on behalf of those clients, and typically require an advance payment on expected postage costs. These advance payments are included in client deposits in the accompanying Consolidated Balance Sheets (“Balance Sheets” or “Balance Sheet”) and are classified as current liabilities regardless of the contract period. We net the cost of postage against the postage reimbursements for those clients where we require advance deposits, and include the net amount (which is not material) in processing and related services revenues. |
Cash and Cash Equivalents | Cash and Cash Equivalents. We consider all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. As of December 31, 2015 and 2014, our cash equivalents consist primarily of institutional money market funds, commercial paper, and time deposits held at major banks. As of December 31, 2015 and 2014, we had $5.0 million and $4.7 million, respectively, of restricted cash that serves to collateralize outstanding letters of credit. This restricted cash is included in cash and cash equivalents in our Balance Sheet. |
Short-term Investments and Other Financial Instruments | Short-term Investments and Other Financial Instruments . Our financial instruments as of December 31, 2015 and 2014 include cash and cash equivalents, short-term investments, accounts receivable, accounts payable, and debt. Because of their short maturities, the carrying amounts of cash equivalents, accounts receivable, and accounts payable approximate their fair value. Our short-term investments and certain of our cash equivalents are considered “available-for-sale” and are reported at fair value in our Balance Sheets, with unrealized gains and losses, net of the related income tax effect, excluded from earnings and reported in a separate component of stockholders’ equity. Realized and unrealized gains and losses were not material in any period presented. Primarily all short-term investments held by us as of December 31, 2015 and 2014 have contractual maturities of less than two years from the time of acquisition. Our short-term investments at December 31, 2015 and 2014 consisted almost entirely of fixed income securities. Proceeds from the sale/maturity of short-term investments in 2015, 2014, and 2013 were $193.0 million, $197.5 million, and $89.7 million, respectively. The following table represents the fair value hierarchy based upon three levels of inputs, of which Levels 1 and 2 are considered observable and Level 3 is unobservable, for our financial assets and liabilities measured at fair value (in thousands): December 31, 2015 December 31, 2014 Level 1 Level 2 Total Level 1 Level 2 Total Assets: Cash equivalents: Money market funds $ 35,730 $ — $ 35,730 $ 9,785 $ — $ 9,785 Commercial paper — 63,890 63,890 — 12,248 12,248 Short-term investments: Corporate debt securities — 31,253 31,253 — 88,494 88,494 Municipal bonds — 2,763 2,763 — 9,945 9,945 U.S. government agency bonds — 16,201 16,201 — 11,313 11,313 Asset-backed securities — 11,443 11,443 — 10,336 10,336 Total $ 35,730 $ 125,550 $ 161,280 $ 9,785 $ 132,336 $ 142,121 Valuation inputs used to measure the fair values of our money market funds were derived from quoted market prices. The fair values of all other financial instruments are based upon pricing provided by third-party pricing services. These prices were derived from observable market inputs. We have chosen not to measure our debt at fair value, with changes recognized in earnings each reporting period. The following table indicates the carrying value and estimated fair value of our debt as of the indicated periods (in thousands): December 31, 2015 December 31, 2014 Carrying Fair Carrying Fair Credit Agreement (carrying value including current maturities) $ 142,500 $ 142,500 $ 120,000 $ 120,000 Convertible debt (par value) 150,000 237,900 150,000 178,920 The fair value for our Credit Agreement was estimated using a discounted cash flow methodology, while the fair value for our convertible debt was estimated based upon quoted market prices or recent sales activity, both of which are considered Level 2 inputs. See Note 5 for discussion regarding an amendment to our Credit Agreement. |
Concentrations of Credit Risk | Concentrations of Credit Risk. In the normal course of business, we are exposed to credit risk. The principal concentrations of credit risk relate to cash deposits, cash equivalents, short-term investments, and accounts receivable. We regularly monitor credit risk exposures and take steps to mitigate the likelihood of these exposures resulting in a loss. We hold our cash deposits, cash equivalents, and short-term investments with financial institutions we believe to be of sound financial condition. We generally do not require collateral or other security to support accounts receivable. We evaluate the credit worthiness of our clients in conjunction with our revenue recognition processes, as well as through our ongoing collectibility assessment processes for accounts receivable. We maintain an allowance for doubtful accounts receivable based upon factors surrounding the credit risk of specific clients, historical trends, and other information. We use various judgments and estimates in determining the adequacy of the allowance for doubtful accounts receivable. See Note 3 for additional details of our concentration of accounts receivable. The activity in our allowance for doubtful accounts receivable is as follows (in thousands): 2015 2014 2013 Balance, beginning of year $ 3,323 $ 2,359 $ 3,147 Additions (reductions) to expense 533 1,406 (354 ) Write-offs (318 ) (465 ) (280 ) Recoveries 89 - - Other (27 ) 23 (154 ) Balance, end of year $ 3,600 $ 3,323 $ 2,359 |
Property and Equipment | Property and Equipment . Property and equipment are recorded at cost (or at estimated fair value if acquired in a business combination) and are depreciated over their estimated useful lives ranging from three to ten years. Leasehold improvements are depreciated over the shorter of their economic life or the lease term. Depreciation expense is computed using the straight-line method for financial reporting purposes. Depreciation expense for all property and equipment is reflected in our accompanying Consolidated Statements of Income (“Income Statements”) separately in the aggregate and is not included in the cost of revenues or the other components of operating expenses. Depreciation for income tax purposes is computed using accelerated methods. |
Software | Software. We expend substantial amounts on R&D, particularly for new products and services, or for enhancements of existing products and services. For development of software products that are to be licensed by us, we expense all costs related to the development of the software until technological feasibility is established. For development of software to be used internally (e.g., processing systems software), we expense all costs prior to the application development stage. During 2015, 2014, and 2013, we expended $102.0 million, $104.7 million, and $110.0 million, respectively, on R&D projects. We did not capitalize any R&D costs in 2015, 2014, or 2013, as the costs subject to capitalization during these periods were not material. We did not have any capitalized R&D costs included in our December 31, 2015 or 2014 Balance Sheets. |
Realizability of Long-Lived Assets | Realizability of Long-Lived Assets. We evaluate our long-lived assets, other than goodwill, for possible impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. A long-lived asset is impaired if estimated future undiscounted cash flows associated with that asset are insufficient to recover the carrying amount of the long-lived asset. If deemed impaired, the long-lived asset is written down to its fair value. |
Goodwill | Goodwill. We evaluate our goodwill for impairment on an annual basis. In addition, we evaluate our goodwill on a more periodic basis (e.g., quarterly) if events occur or circumstances change that could indicate a potential impairment may have occurred. Goodwill is considered impaired if the carrying value of the reporting unit which includes the goodwill is greater than the estimated fair value of the reporting unit. |
Contingencies | Contingencies. We accrue for a loss contingency when: (i) it is probable that an asset has been impaired, or a liability has been incurred; and (ii) the amount of the loss can be reasonably estimated. The determination of accounting for loss contingencies is subject to various judgments and estimates. We do not record the benefit from a gain contingency until the benefit is realized. |
Earnings Per Common Share | Earnings Per Common Share (“EPS”). Basic and diluted EPS amounts are presented on the face of our Income Statements. No reconciliation of the basic and diluted EPS numerators is necessary as net income is used as the numerators for all periods presented. The reconciliation of the basic and diluted EPS denominators related to the common shares is included in the following table (in thousands): 2015 2014 2013 Basic weighted-average common shares 31,051 32,449 32,117 Dilutive effect of common stock options — — 1 Dilutive effect of restricted common stock 624 569 550 Dilutive effect of 2010 Convertible Notes 1,633 717 205 Dilutive effect of Stock Warrants 130 1 — Diluted weighted-average common shares 33,438 33,736 32,873 In 2015, we repurchased 1.8 million shares of our common stock under our stock repurchase program. The 2010 Convertible Notes have a dilutive effect in those quarterly periods in which our average stock price exceeds the current effective conversion price (see Note 5). The Stock Warrants have a dilutive effect in those quarterly periods in which our average stock price exceeds the exercise price of $26.68 per warrant (under the treasury stock method), and are not subject to performance vesting conditions (see Note 10). Potentially dilutive common shares related to stock options, unvested restricted stock, and Stock Warrants excluded from the computation of diluted EPS, as the effect was antidilutive, were not material in any period presented. |
Stock-Based Compensation | Stock-Based Compensation . Stock-based compensation represents the cost related to stock-based awards granted to employees and non-employee directors. We measure stock-based compensation cost at the grant date of the award, based on the estimated fair value of the award and recognize the cost (net of estimated forfeitures) over the requisite service period. Benefits of tax deductions in excess of recognized compensation expense, if any, are reported as a financing cash inflow rather than as an operating cash inflow. |
Income Taxes | Income Taxes. We account for income taxes using the asset and liability method. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. |
Accounting Pronouncement Issued but Not yet Effective | Accounting Pronouncement Issued But Not Yet Effective. The Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Update (“ASU”) 2014-09, (Topic 606). This ASU is a single comprehensive model which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. Under the new guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU 2015-14 which defers the effective date of ASU 2014-09 for one year. The updated accounting guidance is now effective for annual and interim reporting periods in fiscal years beginning after December 15, 2017. Early adoption is permitted. An entity may choose to adopt this ASU either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the standard. We are currently in the process of evaluating the impact that this new guidance will have on our Financial Statements and our method of adoption. In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest In November 2015, the FASB issued ASU 2015-17, Income Taxes In February 2016, the FASB issued ASU 2016-02, Leases |
Processing and Related Services Revenue | |
Revenue Recognition | Processing and Related Services. Our processing and related services revenue relates to: (i) our cloud-based, revenue management and content monetization solutions, and various related services; and (ii) our managed services offering in which we operate software solutions (primarily our software solutions) on behalf of our clients. We contract for our cloud-based processing and related services using long-term agreements whose terms have typically ranged from three to ten years. The long-term processing agreements include multiple services delivered each month, to include such things as: (i) revenue billing and data processing services; (ii) business support services (e.g., workforce management tools, consumer credit verifications, etc.); (iii) content monetization and delivery functions; and (iv) customer statement invoice printing and mailing services. The fees for these deliverables typically are billed to our clients monthly based upon actual monthly volumes and/or usage of services (e.g., the number of client customers processed on our systems, the number of transactions processed on our systems, and/or the quantity and content of the monthly statements and mailings processed through our systems) or on a fixed monthly fee. We recognize processing and related services revenue on a monthly basis as we provide the services. We contract for our managed services using long-term arrangements whose terms have ranged from three to eight years. Under managed services agreements, we may operate software products (primarily our software solutions) on behalf of our clients: (i) out of a client’s data center; (ii) out of a data center we own and operate; or (iii) out of a third-party data center we contract with for such services. Managed services can also include us providing other services, such as transitional services, fulfillment, remittance processing, operational consulting, back office, and end user billing services. |
Software and Services Revenue | |
Revenue Recognition | Software and Services. Our software and services revenue relates primarily to: (i) software license sales; and (ii) professional services to implement the software. The accounting for software license arrangements, especially when software is sold in a multiple-element arrangement, can be complex and requires considerable judgment. Key factors considered in accounting for software license and related services include the following criteria: (i) the identification of the separate elements of the arrangement; (ii) the determination of whether any undelivered elements are essential to the functionality of the delivered elements; (iii) the assessment of whether the software, if hosted, should be accounted for as a services arrangement and thus outside the scope of the software revenue recognition literature; (iv) the determination of vendor specific objective evidence (“VSOE”) of fair value for the undelivered element(s) of the arrangement; (v) the assessment of whether the software license fees are fixed or determinable; (vi) the determination as to whether the fees are considered collectible; and (vii) the assessment of whether services included in the arrangement represent significant production, customization or modification of the software. The evaluation of these factors, and the ultimate revenue recognition decision, requires significant judgments to be made by us. The judgments made in this area could have a significant effect on revenues recognized in any period by changing the amount and/or the timing of the revenue recognized. In addition, because software licenses typically have little or no direct, incremental costs related to the recognition of the revenue, these judgments could also have a significant effect on our results of operations. The initial sale of software products generally requires significant production, modification or customization and thus falls under the guidelines of contract accounting. In these software license arrangements, the elements of the arrangements are typically a software license, professional services, and maintenance. When we have VSOE of fair value for the maintenance, which we generally do, we allocate a portion of the total arrangement fee to the maintenance element based on its VSOE of fair value, and the balance of the arrangement fee is subject to contract accounting using the percentage-of-completion (“POC”) method of accounting. Under the POC method of accounting, software license and professional services revenues are typically recognized as the professional services related to the software implementation project are performed. We are using hours performed on the project as the measure to determine the percentage of the work completed. In certain instances, we sell software license volume upgrades, which provide our clients the right to use our software to process higher transaction volume levels. In these instances, if: (i) maintenance is the only undelivered element of the software arrangement; (ii) we have VSOE of fair value for the maintenance related to the volume upgrade; and (iii) we meet the other revenue recognition criteria, we recognize the software license revenue on the effective date of the volume upgrade. A portion of our professional services revenues does not include an element of software delivery (e.g., business consulting services, etc.), and thus, do not fall within the scope of specific authoritative accounting literature for software arrangements. In these cases, revenues from fixed-price, professional service contracts are recognized using a method consistent with the proportional performance method, which is relatively consistent with our POC methodology. Under a proportional performance model, revenue is recognized by allocating revenue between reporting periods based on relative service provided in each reporting period, and costs are generally recognized as incurred. We utilize an input-based approach (i.e., hours worked) for purposes of measuring performance on these types of contracts. Our input measure is considered a reasonable surrogate for an output measure. In instances when the work performed on fixed price agreements is of relatively short duration, or if we are unable to make reasonably dependable estimates at the outset of the arrangement, we use the completed contract method of accounting whereby revenue is recognized when the work is completed. Our use of the POC and proportional performance methods of accounting on professional services engagements requires estimates of the total project revenues, total project costs and the expected hours necessary to complete a project. Changes in estimates as a result of additional information or experience on a project as work progresses are inherent characteristics of the POC and proportional performance methods of accounting as we are exposed to various business risks in completing these engagements. The estimation process to support these methods of accounting is more difficult for projects of greater length and/or complexity. The judgments and estimates made in this area could: (i) have a significant effect on revenues recognized in any period by changing the amount and/or the timing of the revenue recognized; and/or (ii) impact the expected profitability of a project, including whether an overall loss on an arrangement has occurred. To mitigate the inherent risks in using the POC and proportional performance methods of accounting, we track our performance on projects and reevaluate the appropriateness of our estimates as part of our monthly accounting cycle. Revenues from professional services contracts billed on a time-and-materials basis are recognized as the services are performed and as amounts due from clients are deemed collectible and contractually non-refundable. |
Maintenance Revenue | |
Revenue Recognition | Maintenance. Our maintenance revenue relates primarily to support of our software once it has been implemented. Maintenance revenues are recognized ratably over the software maintenance period. Our maintenance consists primarily of client and product support, technical updates (e.g., bug fixes, etc.), and unspecified upgrades or enhancements to our software products. If specified upgrades or enhancements are offered in an arrangement, which is rare, they are accounted for as a separate element of the software arrangement. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Fair Value Measurements | The following table represents the fair value hierarchy based upon three levels of inputs, of which Levels 1 and 2 are considered observable and Level 3 is unobservable, for our financial assets and liabilities measured at fair value (in thousands): December 31, 2015 December 31, 2014 Level 1 Level 2 Total Level 1 Level 2 Total Assets: Cash equivalents: Money market funds $ 35,730 $ — $ 35,730 $ 9,785 $ — $ 9,785 Commercial paper — 63,890 63,890 — 12,248 12,248 Short-term investments: Corporate debt securities — 31,253 31,253 — 88,494 88,494 Municipal bonds — 2,763 2,763 — 9,945 9,945 U.S. government agency bonds — 16,201 16,201 — 11,313 11,313 Asset-backed securities — 11,443 11,443 — 10,336 10,336 Total $ 35,730 $ 125,550 $ 161,280 $ 9,785 $ 132,336 $ 142,121 |
Carrying Value and Estimated Fair Value of Debt | We have chosen not to measure our debt at fair value, with changes recognized in earnings each reporting period. The following table indicates the carrying value and estimated fair value of our debt as of the indicated periods (in thousands): December 31, 2015 December 31, 2014 Carrying Fair Carrying Fair Credit Agreement (carrying value including current maturities) $ 142,500 $ 142,500 $ 120,000 $ 120,000 Convertible debt (par value) 150,000 237,900 150,000 178,920 |
Allowance for Doubtful Accounts Receivable | The activity in our allowance for doubtful accounts receivable is as follows (in thousands): 2015 2014 2013 Balance, beginning of year $ 3,323 $ 2,359 $ 3,147 Additions (reductions) to expense 533 1,406 (354 ) Write-offs (318 ) (465 ) (280 ) Recoveries 89 - - Other (27 ) 23 (154 ) Balance, end of year $ 3,600 $ 3,323 $ 2,359 |
Reconciliation of the Basic and Diluted EPS denominators | The reconciliation of the basic and diluted EPS denominators related to the common shares is included in the following table (in thousands): 2015 2014 2013 Basic weighted-average common shares 31,051 32,449 32,117 Dilutive effect of common stock options — — 1 Dilutive effect of restricted common stock 624 569 550 Dilutive effect of 2010 Convertible Notes 1,633 717 205 Dilutive effect of Stock Warrants 130 1 — Diluted weighted-average common shares 33,438 33,736 32,873 |
Segment Reporting and Signifi23
Segment Reporting and Significant Concentration (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Summary of Financial Information Relating to Operations by Geographic Region | Financial information relating to our operations by geographic region is as follows (in thousands): Total Revenues: 2015 2014 2013 Americas (principally the U.S.) $ 634,389 $ 636,482 $ 633,163 Europe, Middle East and Africa (principally Europe) 78,711 79,535 80,527 Asia Pacific 39,420 35,269 33,778 Total revenues $ 752,520 $ 751,286 $ 747,468 Property and Equipment: As of December 31, 2015 2014 Americas (principally the U.S.) $ 29,052 $ 31,912 Europe, Middle East and Africa 3,879 3,618 Asia Pacific 3,061 2,796 Total property and equipment $ 35,992 $ 38,326 |
Summary of Revenues from Significant Clients | Revenues from these clients represented the following percentages of our total revenues for the following years: 2015 2014 2013 Comcast 24 % 22 % 19 % DISH 14 % 15 % 15 % Time Warner 12 % 11 % 11 % |
Summary of Net Billed Accounts Receivable from Significant Clients | As of December 31, 2015 and 2014, the percentage of net billed accounts receivable balances attributable to these clients were as follows: As of December 31, 2015 2014 Comcast 30 % 21 % DISH 13 % 13 % Time Warner 8 % 12 % |
Long-Lived Assets (Tables)
Long-Lived Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Property and Equipment | Property and Equipment. Property and equipment at December 31 consisted of the following (in thousands, except years): Useful 2015 2014 Computer equipment 3-5 $ 70,408 $ 96,749 Leasehold improvements 5-10 15,226 16,566 Operating equipment 3-8 53,494 55,501 Furniture and fixtures 8 9,146 7,531 Capital projects in process — - 44 148,274 176,391 Less—accumulated depreciation (112,282 ) ( 138,065 ) Property and equipment, net $ 35,992 $ 38,326 |
Rollforward of Goodwill | Goodwill. We do not have any intangible assets with indefinite lives other than goodwill. A rollforward of goodwill in 2015 and 2014 is as follows (in thousands): January 1, 2014 balance $ 233,599 Revisions related to prior acquisitions (59 ) Effects of changes in foreign currency exchange rates (8,271 ) December 31, 2014 balance 225,269 Revisions related to prior acquisitions (60 ) Effects of changes in foreign currency exchange rates (5,485 ) December 31, 2015 balance $ 219,724 |
Summary of Carrying Value of Assets | As of December 31, 2015 and 2014, the carrying values of these assets were as follows (in thousands): 2015 2014 Gross Accumulated Net Gross Accumulated Net Investments in client contracts (1) $ 25,176 $ (17,060 ) $ 8,116 $ 34,657 $ (23,907 ) $ 10,750 Capitalized costs (2) 10,868 (2,489 ) 8,379 6,667 (3,463 ) 3,204 Acquired client contracts (3) 91,584 (68,341 ) 23,243 94,164 (61,215 ) 32,949 Total client contracts $ 127,628 $ (87,890 ) $ 39,738 $ 135,488 $ (88,585 ) $ 46,903 As of December 31, 2015 and 2014, the carrying values of these assets were as follows (in thousands): 2015 2014 Gross Accumulated Net Gross Accumulated Net Acquired software (4) $ 66,798 $ (61,475 ) $ 5,323 $ 67,012 $ (56,806 ) $ 10,206 Internal use software (5) 63,391 (33,619 ) 29,772 64,517 (29,991 ) 34,526 Total software $ 130,189 $ (95,094 ) $ 35,095 $ 131,529 $ (86,797 ) $ 44,732 |
Summary of Aggregate Amortization | The aggregate amortization related to client contracts included in our operations for 2015, 2014, and 2013, was as follows (in thousands): 2015 2014 2013 Investments in client contracts (1) $ 5,165 $ 6,409 $ 6,181 Capitalized costs (2) 1,334 1,007 2,365 Acquired client contracts (3) 8,902 11,951 14,999 Total client contracts $ 15,401 $ 19,367 $ 23,545 (1) Investments in client contracts consist principally of incentives provided to new or existing clients to convert their customer accounts to, or retain their customer’s accounts on, our customer care and billing systems. Investments in client contracts related to client incentives are amortized ratably over the lives of the respective client contracts, which as of December 31, 2015, have termination dates that range from 2016 through 2020. Amortization of the investments in client contracts related to client incentives is reflected as a reduction in processing and related services revenues in our Income Statements. (2) Capitalized costs related to client conversion/set-up services related to long-term processing or managed services arrangements are generally amortized proportionately over the contract period that the processing or managed services are expected to be provided, and are primarily reflected in cost of processing and related services in our Income Statements. (3) Acquired client contracts represent assets acquired in our prior business acquisitions. Acquired client contracts are being amortized over their estimated useful lives ranging from five to ten years based on the approximate pattern in which the economic benefits of the intangible assets are expected to be realized. Classification of the amortization of acquired client contracts generally follows where the acquired business’ cost of revenues are categorized in our Income Statements. The aggregate amortization related to software included in our operations for 2015, 2014, and 2013, was as follows (in thousands): 2015 2014 2013 Acquired software (4) $ 3,081 $ 3,457 $ 4,221 Internal use software (5) 8,048 8,404 7,633 Total software $ 11,129 $ 11,861 $ 11,854 (1) Acquired software represents the software intangible assets acquired in our prior business acquisitions, which are being amortized over their estimated useful lives ranging from five to ten years. (2) Internal use software represents: (i) third-party software licenses; and (ii) the internal and external costs related to the implementation of the third-party software licenses. Internal use software is amortized over its estimated useful life ranging from twelve months to ten years. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | As of December 31, 2015 and 2014, our long-term debt was as follows (in thousands): 2015 2014 2015 Credit Agreement: Term loan, due February 2020, interest at adjusted LIBOR plus 1.75% (combined rate of 2.36% at December 31, 2015) $ 142,500 $ — $200 million revolving loan facility, due February 2020, interest at adjusted LIBOR plus applicable margin — — 2012 Credit Agreement: Term loan, due November 2017 (or December 2016 if certain conditions exist), interest at adjusted LIBOR plus 2.00% (combined rate of 2.25% at December 31, 2014) — 120,000 $100 million revolving loan facility, due November 2017 (or December 2016 if certain conditions exist), interest at adjusted LIBOR plus applicable margin — — Convertible Debt Securities: 2010 Convertible Notes – senior subordinated convertible notes; due March 1, 2017; cash interest at 3.0%; net of unamortized OID of $7,923 and $14,169, respectively 142,077 135,831 284,577 255,831 Current portion of long-term debt ( 149,577 ) ( 22,500 ) Total long-term debt, net $ 135,000 $ 233,331 |
Estimated Maturities on Long-Term Debt | As of December 31, 2015, the maturities of our long-term debt, based upon: (1) the mandatory repayment schedule for the 2015 Term Loan; and (2) the convertibility of the 2010 Convertible Notes beginning January 1, 2016 and ending March 31, 2016, was as follows (in thousands): 2016 2017 2018 2019 2020 2015 Term Loan $ 7,500 $ 15,000 $ 22,500 $ 22,500 $ 75,000 2010 Convertible Notes 150,000 — — — — Total long-term debt repayments $ 157,500 $ 15,000 $ 22,500 $ 22,500 $ 75,000 |
Restructuring and Reorganizat26
Restructuring and Reorganization Charges (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring And Related Activities [Abstract] | |
Restructuring and Reorganization Charges | The activity in the business restructuring and reorganization reserves during 2015, 2014, and 2013 is as follows (in thousands): Termination Facilities Disposition of Business Operations Other Total January 1, 2013, balance $ 1,917 $ (453 ) $ — $ — $ 2,370 Charged to expense during year 5,577 — 3,588 3,240 12,405 Cash payments (3,741 ) — (571 ) (19 ) (4,331 ) Adjustment for the loss on the disposition of business operations — — (3,017 ) — (3,017 ) Adjustment for the loss on termination of pension plan — — — (3,221 ) (3,221 ) Other (36 ) (453 ) — — (489 ) December 31, 2013, balance 3,717 — — — 3,717 Charged to expense during year 5,589 1,146 (222 ) 7,456 13,969 Cash payments (6,421 ) — — (8,000 ) (14,421 ) Adjustment for the gain on the disposition of business operations — — 222 — 222 Other (66 ) (33 ) — 560 461 December 31, 2014, balance 2,819 1,113 — 16 3,948 Charged to expense during year 4,544 1,175 (3,733 ) 1,088 3,074 Cash payments (5,694 ) (405 ) — (30 ) (6,129 ) Adjustment for the gain on the disposition of business operations — — 3,733 — 3,733 Adjustment for asset impairment — — — (1,685 ) (1,685 ) Other (32 ) (526 ) — 611 53 December 31, 2015, balance $ 1,637 $ 1,357 $ — $ — $ 2,994 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Components of Net Income Before Income Taxes | Income Tax Provision/(Benefit). The components of net income from continuing operations before income taxes are as follows (in thousands): 2015 2014 2013 Domestic $ 93,390 $ 70,737 $ 63,278 Foreign 2,951 (9,215 ) (1,759 ) Total $ 96,341 $ 61,522 $ 61,519 |
Schedule of Components of Income Tax Expense (Benefit) | The income tax provision related to continuing operations consists of the following (in thousands): 2015 2014 2013 Current: Federal $ 41,002 $ 20,374 $ 12,880 State 5,227 2,443 916 Foreign 3,651 2,953 4,273 49,880 25,770 18,069 Deferred: Federal (14,611 ) 1,139 1,130 State (1,147 ) 837 2,329 Foreign (348 ) (1,935 ) (5,277 ) (16,106 ) 41 (1,818 ) Total income tax provision $ 33,774 $ 25,811 $ 16,251 |
Schedule of Effective Income Tax Rate Reconciliation | 2015 2014 2013 Provision at Federal rate of 35% $ 33,719 $ 21,533 $ 21,532 State income taxes, net of Federal impact 2,652 2,132 2,109 Research and experimentation credits (2,135 ) (450 ) (5,754 ) Tax uncertainties (166 ) 187 (269 ) Section 199 manufacturing deduction (2,884 ) (1,936 ) (2,263 ) Foreign rate differential 688 2,847 1,133 Valuation allowance for deferred tax assets 919 3,602 (3,312 ) Other impact of foreign operations 283 (3,555 ) 2,088 Other 698 1,451 987 Total income tax provision $ 33,774 $ 25,811 $ 16,251 |
Net Deferred Income Tax Assets | Deferred Income Taxes. Net deferred income tax liabilities as of December 31, 2015 and 2014 are as follows (in thousands): 2015 2014 Deferred income tax assets $ 77,270 $ 77,201 Deferred income tax liabilities (42,576 ) (55,045 ) Valuation allowance (17,414 ) (20,507 ) Net deferred income tax assets $ 17,280 $ 1,649 |
The Components of Net Deferred Income Tax Assets (Liabilities) | The components of our net deferred income tax assets (liabilities) as of December 31, 2015 and 2014 are as follows (in thousands): 2015 2014 Net current deferred income tax assets: Accrued expenses and reserves $ 14,001 $ 10,221 Stock-based compensation 5,528 4,425 Total current deferred income tax assets 19,529 14,646 Less: valuation allowance (1,394 ) (1,442 ) Net current deferred income tax assets $ 18,135 $ 13,204 Net non-current deferred income tax assets: Software $ 412 $ 809 Client contracts and related intangibles (2,914 ) (5,252 ) Net operating loss carryforwards 15,688 18,527 Property and equipment 7,975 11,470 Deferred revenue 914 550 Facility abandonment 143 262 Other 877 305 Total non-current deferred income tax assets 23,095 26,671 Less: valuation allowance (14,713 ) (17,781 ) Net non-current deferred income tax assets $ 8,382 $ 8,890 Net non-current deferred income tax liabilities: Software $ 190 $ 211 Client contracts and related intangibles 835 3,127 Goodwill (7,590 ) (6,747 ) Net operating loss carryforwards 23,038 23,298 Property and equipment (15,219 ) (15,048 ) Convertible debt securities (16,853 ) (27,708 ) Deferred revenue 3,354 961 Contingent payments 849 840 Facility abandonment 2,231 2,194 Other 1,235 (290 ) Total non-current deferred income tax liabilities (7,930 ) (19,162 ) Less: valuation allowance (1,307 ) (1,284 ) Net non-current deferred income tax liabilities $ (9,237 ) $ (20,446 ) |
Reconciliation of Beginning and Ending Balances of Liability for Unrecognized Tax Benefits | A reconciliation of the beginning and ending balances of our liability for unrecognized tax benefits is as follows (in thousands): 2015 2014 2013 Balance, beginning of year $ 3,417 $ 3,713 $ 3,372 Additions based on tax positions related to current year 150 351 173 Additions for tax positions of prior years 925 30 569 Reductions for tax positions of prior years (413 ) (677 ) (401 ) Balance, end of year $ 4,079 $ 3,417 $ 3,713 |
Equity Compensation Plans (Tabl
Equity Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Unvested Restricted Common Stock Activity | A summary of our unvested restricted stock activity during 2015 is as follows (shares in thousands): 2015 Shares Weighted- Unvested awards, January 1, 2015 2,311 $ 22.81 Awards granted 736 30.71 Awards forfeited/cancelled (109 ) 23.95 Awards vested (814 ) 21.88 Unvested awards, December 31, 2015 2,124 $ 26.03 |
Unaudited Quarterly Financial29
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | Quarter Ended March 31 June 30 September 30 December 31 (in thousands, except per share amounts) 2015: Total revenues $ 185,631 $ 182,641 $ 186,960 $ 197,288 Total cost of revenues (exclusive of depreciation) 100,266 91,796 92,182 95,497 Operating income (1) 21,893 26,156 31,021 34,070 Income before income taxes (1) 16,711 22,446 27,943 29,241 Income tax provision (2) (7,353 ) (9,652 ) (11,196 ) (5,573 ) Net income (1)(2) 9,358 12,794 16,747 23,668 Basic earnings per common share (1)(2) $ 0.30 $ 0.42 $ 0.54 $ 0.76 Diluted earnings per common share (1)(2) 0.28 0.39 0.50 0.70 2014: Total revenues $ 188,028 $ 184,558 $ 185,003 $ 193,697 Total cost of revenues (exclusive of depreciation) 102,104 93,682 94,470 99,087 Operating income (3) 20,914 21,820 13,831 19,125 Income before income taxes (3) 17,002 17,741 10,064 16,715 Income tax provision (2)(4) (7,311 ) (8,338 ) (4,831 ) (5,331 ) Net income (2)(3)(4) 9,691 9,403 5,233 11,384 Basic earnings per common share (2)(3)(4) $ 0.30 $ 0.29 $ 0.16 $ 0.37 Diluted earnings per common share (2)(3)(4) 0.28 0.28 0.15 0.34 (1) During the first, second, third, and fourth quarters of 2015 we incurred restructuring expenses of $0.6 million, $0.4 million, $0.8 million, and $1.3 million, respectively, or $0.01, $0.01, $0.02, and $0.03 per diluted share (see Note 6). ( 2 ) Fluctuations in our effective income tax rate between quarters generally relates to the accounting for discrete income tax items in any given quarter, and revisions of estimates for certain income tax components during the year. (3 ) During the first, third, and fourth quarters of 2014 we incurred restructuring expenses of $1.2 million, $7.8 million, and $4.9 million, respectively, or $0.02, $0.12, and $0.10 per diluted share (see Note 6). (4) As explained in Note 7, our 2014 results have been adjusted as a result of the immaterial correction made to the fourth quarter 2014 income tax provision. |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Details Textual) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summary Of Significant Accounting Policies [Line Items] | |||
Restricted cash | $ 5,000 | $ 4,700 | |
Proceeds from sale/maturity of short-term investments | 192,994 | 197,466 | $ 89,688 |
Research and development | $ 101,950 | $ 104,712 | $ 110,008 |
Repurchase of common stock, shares | 1.8 | ||
Common Stock Warrants | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Common stock warrants issued, per warrant | $ 26.68 | ||
Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Short-term investment contractual maturities | 2 years | 2 years |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Assets: | ||
Assets fair value | $ 161,280 | $ 142,121 |
Level 1 | ||
Assets: | ||
Assets fair value | 35,730 | 9,785 |
Level 2 | ||
Assets: | ||
Assets fair value | 125,550 | 132,336 |
Cash equivalents | Money Market Funds | ||
Assets: | ||
Assets fair value | 35,730 | 9,785 |
Cash equivalents | Commercial Paper | ||
Assets: | ||
Assets fair value | 63,890 | 12,248 |
Cash equivalents | Level 1 | Money Market Funds | ||
Assets: | ||
Assets fair value | 35,730 | 9,785 |
Cash equivalents | Level 2 | Commercial Paper | ||
Assets: | ||
Assets fair value | 63,890 | 12,248 |
Short-term Investments | Municipal Bonds | ||
Assets: | ||
Assets fair value | 2,763 | 9,945 |
Short-term Investments | Corporate Debt Securities | ||
Assets: | ||
Assets fair value | 31,253 | 88,494 |
Short-term Investments | U.S. Government Agency Bonds | ||
Assets: | ||
Assets fair value | 16,201 | 11,313 |
Short-term Investments | Asset-backed securities | ||
Assets: | ||
Assets fair value | 11,443 | 10,336 |
Short-term Investments | Level 2 | Municipal Bonds | ||
Assets: | ||
Assets fair value | 2,763 | 9,945 |
Short-term Investments | Level 2 | Corporate Debt Securities | ||
Assets: | ||
Assets fair value | 31,253 | 88,494 |
Short-term Investments | Level 2 | U.S. Government Agency Bonds | ||
Assets: | ||
Assets fair value | 16,201 | 11,313 |
Short-term Investments | Level 2 | Asset-backed securities | ||
Assets: | ||
Assets fair value | $ 11,443 | $ 10,336 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Carrying Value and Estimated Fair Value of Debt (Details 1) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Carrying value and estimated fair value of debt | ||
Credit Agreement, carrying value | $ 142,500 | $ 120,000 |
Credit Agreement, fair value | 142,500 | 120,000 |
Convertible debt, carrying value | 150,000 | 150,000 |
Convertible debt, fair value | $ 237,900 | $ 178,920 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Allowance for Doubtful Accounts Receivable (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for Doubtful Accounts Receivable | |||
Balance, beginning of year | $ 3,323 | $ 2,359 | $ 3,147 |
Additions (reductions) to expense | 533 | 1,406 | (354) |
Write-offs | (318) | (465) | (280) |
Recoveries | 89 | ||
Other | (27) | 23 | (154) |
Balance, end of year | $ 3,600 | $ 3,323 | $ 2,359 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Reconciliation of the Basic and Diluted EPS Denominators (Details 3) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of the basic and diluted EPS denominators | |||
Basic weighted-average common shares | 31,051 | 32,449 | 32,117 |
Dilutive effect of common stock options | 1 | ||
Dilutive effect of restricted common stock | 624 | 569 | 550 |
Dilutive effect of 2010 Convertible Notes | 1,633 | 717 | 205 |
Dilutive effect of Stock Warrants | 130 | 1 | |
Diluted weighted-average common shares | 33,438 | 33,736 | 32,873 |
Segment Reporting and Signifi35
Segment Reporting and Significant Concentration (Details Textual) | 12 Months Ended | |
Dec. 31, 2015SegmentClient | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | Segment | 1 | |
Number of major clients | Client | 3 | |
Americas | Sales Revenue, Net | Customer Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Revenues attributable to operations in Americas | 84.00% | 85.00% |
Segment Reporting and Signifi36
Segment Reporting and Significant Concentration (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Total Revenues: | |||||||||||
Total revenues | $ 197,288 | $ 186,960 | $ 182,641 | $ 185,631 | $ 193,697 | $ 185,003 | $ 184,558 | $ 188,028 | $ 752,520 | $ 751,286 | $ 747,468 |
Property and Equipment: | |||||||||||
Property and Equipment | 35,992 | 38,326 | 35,992 | 38,326 | |||||||
Americas (principally the U.S.) | |||||||||||
Total Revenues: | |||||||||||
Total revenues | 634,389 | 636,482 | 633,163 | ||||||||
Property and Equipment: | |||||||||||
Property and Equipment | 29,052 | 31,912 | 29,052 | 31,912 | |||||||
Europe, Middle East and Africa (principally Europe) | |||||||||||
Total Revenues: | |||||||||||
Total revenues | 78,711 | 79,535 | 80,527 | ||||||||
Property and Equipment: | |||||||||||
Property and Equipment | 3,879 | 3,618 | 3,879 | 3,618 | |||||||
Asia Pacific | |||||||||||
Total Revenues: | |||||||||||
Total revenues | 39,420 | 35,269 | $ 33,778 | ||||||||
Property and Equipment: | |||||||||||
Property and Equipment | $ 3,061 | $ 2,796 | $ 3,061 | $ 2,796 |
Segment Reporting and Signifi37
Segment Reporting and Significant Concentration - Schedule of Percentages of Revenue from Significant Clients (Details) - Customer Concentration Risk - Sales Revenue, Net | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Comcast | |||
Segment Reporting Information [Line Items] | |||
Revenue by Major Client, Percentage | 24.00% | 22.00% | 19.00% |
DISH | |||
Segment Reporting Information [Line Items] | |||
Revenue by Major Client, Percentage | 14.00% | 15.00% | 15.00% |
Time Warner | |||
Segment Reporting Information [Line Items] | |||
Revenue by Major Client, Percentage | 12.00% | 11.00% | 11.00% |
Segment Reporting and Signifi38
Segment Reporting and Significant Concentration (Details 2) - Accounts Receivable - Customer Concentration Risk | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Comcast | ||
Trade accounts receivable: | ||
Accounts Receivable by Significant Client, Percentage | 30.00% | 21.00% |
DISH | ||
Trade accounts receivable: | ||
Accounts Receivable by Significant Client, Percentage | 13.00% | 13.00% |
Time Warner | ||
Trade accounts receivable: | ||
Accounts Receivable by Significant Client, Percentage | 8.00% | 12.00% |
Long-Lived Assets (Details)
Long-Lived Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of Property and Equipment | ||
Property and equipment, gross | $ 148,274 | $ 176,391 |
Less—accumulated depreciation | (112,282) | (138,065) |
Property and equipment, net | 35,992 | 38,326 |
Computer equipment | ||
Summary of Property and Equipment | ||
Property and equipment, gross | $ 70,408 | 96,749 |
Computer equipment | Minimum | ||
Summary of Property and Equipment | ||
Property and equipment, useful lives | 3 years | |
Computer equipment | Maximum | ||
Summary of Property and Equipment | ||
Property and equipment, useful lives | 5 years | |
Leasehold improvements | ||
Summary of Property and Equipment | ||
Property and equipment, gross | $ 15,226 | 16,566 |
Leasehold improvements | Minimum | ||
Summary of Property and Equipment | ||
Property and equipment, useful lives | 5 years | |
Leasehold improvements | Maximum | ||
Summary of Property and Equipment | ||
Property and equipment, useful lives | 10 years | |
Operating equipment | ||
Summary of Property and Equipment | ||
Property and equipment, gross | $ 53,494 | 55,501 |
Operating equipment | Minimum | ||
Summary of Property and Equipment | ||
Property and equipment, useful lives | 3 years | |
Operating equipment | Maximum | ||
Summary of Property and Equipment | ||
Property and equipment, useful lives | 8 years | |
Furniture and fixtures | ||
Summary of Property and Equipment | ||
Property and equipment, useful lives | 8 years | |
Property and equipment, gross | $ 9,146 | 7,531 |
Capital projects in process | ||
Summary of Property and Equipment | ||
Property and equipment, gross | $ 44 |
Long-Lived Assets (Details 1)
Long-Lived Assets (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill Rollforward | ||
Beginning balance | $ 225,269 | $ 233,599 |
Revisions related to prior acquisitions | (60) | (59) |
Effects of changes in foreign currency exchange rates | (5,485) | (8,271) |
Ending balance | $ 219,724 | $ 225,269 |
Long-Lived Assets - Schedule of
Long-Lived Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Client contracts | ||
Summary of carrying value of assets | ||
Gross Carrying Amount | $ 127,628 | $ 135,488 |
Accumulated Amortization | (87,890) | (88,585) |
Net Amount | 39,738 | 46,903 |
Client contracts | Investments in client contracts | ||
Summary of carrying value of assets | ||
Gross Carrying Amount | 25,176 | 34,657 |
Accumulated Amortization | (17,060) | (23,907) |
Net Amount | 8,116 | 10,750 |
Client contracts | Capitalized costs | ||
Summary of carrying value of assets | ||
Gross Carrying Amount | 10,868 | 6,667 |
Accumulated Amortization | (2,489) | (3,463) |
Net Amount | 8,379 | 3,204 |
Client contracts | Acquired client contracts | ||
Summary of carrying value of assets | ||
Gross Carrying Amount | 91,584 | 94,164 |
Accumulated Amortization | (68,341) | (61,215) |
Net Amount | 23,243 | 32,949 |
Software | ||
Summary of carrying value of assets | ||
Gross Carrying Amount | 130,189 | 131,529 |
Accumulated Amortization | (95,094) | (86,797) |
Net Amount | 35,095 | 44,732 |
Software | Acquired software | ||
Summary of carrying value of assets | ||
Gross Carrying Amount | 66,798 | 67,012 |
Accumulated Amortization | (61,475) | (56,806) |
Net Amount | 5,323 | 10,206 |
Software | Internal use software | ||
Summary of carrying value of assets | ||
Gross Carrying Amount | 63,391 | 64,517 |
Accumulated Amortization | (33,619) | (29,991) |
Net Amount | $ 29,772 | $ 34,526 |
Long Lived Assets (Details 3)
Long Lived Assets (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Client contracts | |||
Summary of aggregate amortization | |||
Total amortization expense | $ 15,401 | $ 19,367 | $ 23,545 |
Client contracts | Investments in client contracts | |||
Summary of aggregate amortization | |||
Total amortization expense | 5,165 | 6,409 | 6,181 |
Client contracts | Capitalized costs | |||
Summary of aggregate amortization | |||
Total amortization expense | 1,334 | 1,007 | 2,365 |
Client contracts | Acquired client contracts | |||
Summary of aggregate amortization | |||
Total amortization expense | 8,902 | 11,951 | 14,999 |
Software | |||
Summary of aggregate amortization | |||
Total amortization expense | 11,129 | 11,861 | 11,854 |
Software | Acquired software | |||
Summary of aggregate amortization | |||
Total amortization expense | 3,081 | 3,457 | 4,221 |
Software | Internal use software | |||
Summary of aggregate amortization | |||
Total amortization expense | $ 8,048 | $ 8,404 | $ 7,633 |
Long-Lived Assets (Parenthetica
Long-Lived Assets (Parenthetical) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Acquired client contracts | Minimum | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful life | 5 years |
Acquired client contracts | Maximum | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful life | 10 years |
Acquired software | Minimum | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful life | 5 years |
Acquired software | Maximum | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful life | 10 years |
Internal use software | Minimum | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful life | 12 months |
Internal use software | Maximum | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful life | 10 years |
Long-Lived Assets (Details Text
Long-Lived Assets (Details Textual) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Client contracts | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful life | 50 months |
Estimated total amortization expense 2016 | $ 13.3 |
Estimated total amortization expense 2017 | 9.7 |
Estimated total amortization expense 2018 | 7.9 |
Estimated total amortization expense 2019 | 5.6 |
Estimated total amortization expense 2020 | $ 2.7 |
Software | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful life | 70 months |
Estimated total amortization expense 2016 | $ 8.6 |
Estimated total amortization expense 2017 | 7 |
Estimated total amortization expense 2018 | 5.5 |
Estimated total amortization expense 2019 | 4 |
Estimated total amortization expense 2020 | $ 2.9 |
Debt -Long-Term Debt (Details)
Debt -Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Carrying value of debt | $ 284,577 | $ 255,831 |
Current portion of long-term debt | (149,577) | (22,500) |
Total long-term debt, net | 135,000 | 233,331 |
2015 Credit Agreement | Term Loan | ||
Debt Instrument [Line Items] | ||
Carrying value of debt | 142,500 | |
2012 Credit Agreement | Term Loan | ||
Debt Instrument [Line Items] | ||
Carrying value of debt | 120,000 | |
Senior Subordinated Convertible Notes 2010 | ||
Debt Instrument [Line Items] | ||
Carrying value of debt | $ 142,077 | $ 135,831 |
Debt - Long-Term Debt (Parenthe
Debt - Long-Term Debt (Parenthetical) (Details) - USD ($) | Feb. 03, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2012 | Dec. 31, 2010 |
Debt Instrument [Line Items] | |||||
Long-term debt, unamortized original issue discount | $ 0 | $ 14,169,000 | |||
2015 Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Term loan combined interest rate | 1.75% | ||||
Amount available under credit facility | $ 350,000,000 | ||||
2015 Credit Agreement | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Basis spread on term loan | 1.75% | ||||
Term loan combined interest rate | 2.36% | ||||
Maturity period | Feb. 29, 2020 | ||||
2015 Credit Agreement | Revolving Loan | |||||
Debt Instrument [Line Items] | |||||
Amount available under credit facility | 200,000,000 | $ 200,000,000 | |||
Maturity period | Feb. 29, 2020 | ||||
2012 Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Amount available under credit facility | $ 250,000,000 | ||||
2012 Credit Agreement | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Basis spread on term loan | 2.00% | ||||
Term loan combined interest rate | 2.25% | ||||
Maturity period | Nov. 30, 2017 | ||||
2012 Credit agreement early termination date | Dec. 1, 2016 | ||||
2012 Credit Agreement | Revolving Loan | |||||
Debt Instrument [Line Items] | |||||
Amount available under credit facility | $ 100,000,000 | $ 100,000,000 | |||
Maturity period | Nov. 30, 2017 | ||||
2012 Credit agreement early termination date | Dec. 1, 2016 | ||||
Senior Subordinated Convertible Notes 2010 | |||||
Debt Instrument [Line Items] | |||||
Maturity period | Mar. 1, 2017 | ||||
Interest rate on senior subordinated convertible notes | 3.00% | 3.00% | |||
Long-term debt, unamortized original issue discount | $ 7,923,000 | $ 14,169,000 | $ 38,400,000 |
Debt - 2015 Credit Agreement (D
Debt - 2015 Credit Agreement (Details Textual) - USD ($) | Feb. 03, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Debt Instrument [Line Items] | |||||
Carrying value of debt | $ 284,577,000 | $ 255,831,000 | |||
Proceeds from long-term debt | 150,000,000 | ||||
Cash used for repayment of debt | $ 127,500,000 | 15,000,000 | $ 15,000,000 | ||
Debt instrument, interest rate terms | The 2015 Credit Agreement includes mandatory repayments of the aggregate principal amount of the 2015 Term Loan (payable quarterly) for the first (5% of total), second (5% of total), third (10% of total), fourth (15% of total), and fifth years (15% of total), with the remaining principal balance due at maturity (50% of total). The 2015 Credit Agreement has no prepayment penalties and requires mandatory repayments under certain circumstances, including: (i) asset sales or casualty proceeds; and (ii) proceeds of debt or preferred stock issuances. | ||||
Deferred financing costs related to convertible notes | $ 5,900,000 | ||||
Financing costs directly recorded to interest expense | $ 900,000 | ||||
2015 Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Credit Agreement | 350,000,000 | ||||
Cash used for repayment of debt | $ 120,000,000 | ||||
Increase (decrease) in available cash | $ 30,000,000 | ||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.25% | ||||
Credit agreement interest rate | 2.36% | ||||
Term loan combined interest rate | 1.75% | ||||
Debt instrument, frequency of periodic payment | payable quarterly | ||||
Financing cost | $ 2,700,000 | ||||
Deferred financing costs related to convertible notes | 4,700,000 | ||||
2015 Credit Agreement | Minimum | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.25% | ||||
2015 Credit Agreement | Maximum | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.375% | ||||
2015 Credit Agreement | London Interbank Offered Rate (LIBOR) | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on term loan | 1.75% | ||||
2015 Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on term loan | 2.75% | ||||
2015 Credit Agreement | Base Rate | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on term loan | 0.75% | ||||
2015 Credit Agreement | Base Rate | Maximum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on term loan | 1.75% | ||||
2015 Credit Agreement | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Carrying value of debt | 142,500,000 | ||||
Proceeds from long-term debt | $ 150,000,000 | ||||
Basis spread on term loan | 1.75% | ||||
Term loan combined interest rate | 2.36% | ||||
2015 Credit Agreement | Revolving Loan | |||||
Debt Instrument [Line Items] | |||||
Credit Agreement | $ 200,000,000 | $ 200,000,000 | |||
Credit facility, current borrowing capacity | $ 200,000,000 | ||||
2012 Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Credit Agreement | $ 250,000,000 | ||||
2012 Credit Agreement | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on term loan | 2.00% | ||||
2012 Credit Agreement | Maximum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on term loan | 2.75% | ||||
2012 Credit Agreement | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Carrying value of debt | $ 120,000,000 | ||||
Basis spread on term loan | 2.00% | ||||
Term loan combined interest rate | 2.25% | ||||
2012 Credit Agreement | Revolving Loan | |||||
Debt Instrument [Line Items] | |||||
Credit Agreement | $ 100,000,000 | $ 100,000,000 |
Debt - 2012 Credit Agreement (D
Debt - 2012 Credit Agreement (Details Textual) | 12 Months Ended |
Dec. 31, 2012USD ($) | |
2012 Credit Agreement | |
Debt Instrument [Line Items] | |
Credit Agreement | $ 250,000,000 |
2012 Credit Agreement | Minimum | |
Debt Instrument [Line Items] | |
Basis spread on term loan | 2.00% |
2012 Credit Agreement | Maximum | |
Debt Instrument [Line Items] | |
Basis spread on term loan | 2.75% |
2012 Credit Agreement | Term Loan 2012 | Minimum | |
Debt Instrument [Line Items] | |
Basis spread on term loan | 1.00% |
2012 Credit Agreement | Term Loan 2012 | Maximum | Base Rate | |
Debt Instrument [Line Items] | |
Basis spread on term loan | 1.75% |
2012 Credit Agreement Term Loan | |
Debt Instrument [Line Items] | |
Credit Agreement | $ 150,000,000 |
Credit agreement period | 5 years |
Term loan combined interest rate | 2.25% |
2012 Credit Agreement Revolving Loan | |
Debt Instrument [Line Items] | |
Credit Agreement | $ 100,000,000 |
Credit agreement period | 5 years |
Debt - 2010 Convertible Notes (
Debt - 2010 Convertible Notes (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2010 | |
Debt Instrument [Line Items] | |||
Carrying value of debt | $ 284,577 | $ 255,831 | |
Long-term debt, unamortized original issue discount | $ 0 | 14,169 | |
Senior Subordinated Convertible Notes 2010 | |||
Debt Instrument [Line Items] | |||
Senior subordinated convertible notes face amount | $ 150,000 | ||
Interest rate on senior subordinated convertible notes | 3.00% | 3.00% | |
Notes Issuance price percentage of par value | 100.00% | ||
Maturity date of 2010 Convertible Notes | Mar. 1, 2017 | ||
Initial conversion price | $ 22.94 | ||
Initial conversion rate of common stock | 43.5933 | ||
Convertible Notes, initial conversion of Par Value Convertible Notes to common stock | $ 1 | ||
Common stock price trigger | $ 29.82 | ||
Rate of conversion price | 130.00% | ||
Average Conversion Value for the 2010 Convertible Notes | 98.00% | ||
Debt instrument, convertible, terms of conversion feature | Prior to September 1, 2016, holders of the 2010 Convertible Notes can convert their securities: (i) at any time the price of our common stock trades over $29.82 per share (130% of the $22.94 conversion price) for a specified period of time; (ii) at any time the trading price of the 2010 Convertible Notes falls below 98% of the average conversion value for the 2010 Convertible Notes for a specified period of time | ||
Conversion obligation settlement in cash | 100.00% | ||
Stock price | $ 35.98 | ||
Debt instrument convertible, settlement value | $ 235,000 | ||
Carrying value of debt | 142,077 | 135,831 | |
Long-term debt, unamortized original issue discount | $ 7,923 | $ 14,169 | $ 38,400 |
Effective interest rate of the liability | 7.75% |
Debt (Details 1)
Debt (Details 1) $ in Thousands | Dec. 31, 2015USD ($) |
Maturities on Long-Term Debt | |
2,016 | $ 157,500 |
2,017 | 15,000 |
2,018 | 22,500 |
2,019 | 22,500 |
2,020 | 75,000 |
Senior Subordinated Convertible Notes 2010 | |
Maturities on Long-Term Debt | |
2,016 | 150,000 |
Term Loan | 2015 Credit Agreement | |
Maturities on Long-Term Debt | |
2,016 | 7,500 |
2,017 | 15,000 |
2,018 | 22,500 |
2,019 | 22,500 |
2,020 | $ 75,000 |
Debt - Deferred Financing Costs
Debt - Deferred Financing Costs (Details Textual) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 03, 2015 | |
Debt Instrument [Line Items] | ||||
Deferred financing costs related to convertible notes | $ 5.9 | |||
Amortization expenses of deferred financing costs included in Interest expense | $ 1.9 | $ 2.5 | $ 2.6 | |
Weighted-average interest rate on debt borrowings | 6.00% | 6.00% | 5.00% | |
2015 Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Deferred financing costs related to convertible notes | $ 4.7 | |||
Senior Subordinated Convertible Notes 2010 | ||||
Debt Instrument [Line Items] | ||||
Deferred financing costs related to convertible notes | $ 0.7 |
Restructuring and Reorganizat52
Restructuring and Reorganization Charges (Details Textual) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 29, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)Employees | Dec. 31, 2014USD ($)Employees | Dec. 31, 2013USD ($)Employees | Dec. 31, 2012USD ($) | |
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Reduced workforce | Employees | 160 | 60 | 160 | |||||||||
Restructuring and reorganization charges recorded during the year | $ 1,300 | $ 800 | $ 400 | $ 600 | $ 4,900 | $ 7,800 | $ 1,200 | $ 3,074 | $ 13,969 | $ 12,405 | ||
(Gain) loss on disposition of business operations | (3,733) | (222) | 3,017 | |||||||||
Adjustment for the loss on termination of pension plan | 3,221 | |||||||||||
Cash payments | 6,129 | 14,421 | 4,331 | |||||||||
Asset impairment charge | 1,685 | |||||||||||
Restructuring and reorganization reserve | 2,994 | $ 3,948 | 2,994 | 3,948 | 3,717 | $ 2,370 | ||||||
Current Liabilities | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Restructuring and reorganization reserve | $ 2,100 | 2,100 | ||||||||||
Cyber Security Business | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
(Gain) loss on disposition of business operations | (3,700) | |||||||||||
Cyber Security Business | Subsequent Event | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
(Gain) loss on disposition of business operations | $ (6,600) | |||||||||||
Abandonment of Office Facility | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Restructuring and reorganization charges recorded during the year | 1,200 | 1,100 | ||||||||||
Print operation | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Restructuring and reorganization charges recorded during the year | 3,600 | |||||||||||
Involuntary Terminations | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Restructuring and reorganization charges recorded during the year | $ 4,500 | 5,600 | $ 5,600 | |||||||||
Termination costs | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Cash payments | $ 8,000 |
Restructuring and Reorganizat53
Restructuring and Reorganization Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Activity in the business restructuring reserves related to continuing operations | ||||||||||
Beginning Balance | $ 3,948 | $ 3,717 | $ 3,948 | $ 3,717 | $ 2,370 | |||||
Restructuring and reorganization charges recorded during the year | $ 1,300 | $ 800 | $ 400 | 600 | $ 4,900 | $ 7,800 | 1,200 | 3,074 | 13,969 | 12,405 |
Cash payments | (6,129) | (14,421) | (4,331) | |||||||
Adjustment for the gain (loss) on the disposition of business operations | 3,733 | 222 | (3,017) | |||||||
Adjustment for the loss on termination of pension plan | (3,221) | |||||||||
Adjustment for asset impairment | (1,685) | |||||||||
Other | 53 | 461 | (489) | |||||||
Ending Balance | 2,994 | 3,948 | 2,994 | 3,948 | 3,717 | |||||
Termination Benefits | ||||||||||
Activity in the business restructuring reserves related to continuing operations | ||||||||||
Beginning Balance | 2,819 | 3,717 | 2,819 | 3,717 | 1,917 | |||||
Restructuring and reorganization charges recorded during the year | 4,544 | 5,589 | 5,577 | |||||||
Cash payments | (5,694) | (6,421) | (3,741) | |||||||
Adjustment for the gain (loss) on the disposition of business operations | 0 | 0 | 0 | |||||||
Adjustment for the loss on termination of pension plan | 0 | |||||||||
Adjustment for asset impairment | 0 | |||||||||
Other | (32) | (66) | (36) | |||||||
Ending Balance | 1,637 | 2,819 | 1,637 | 2,819 | 3,717 | |||||
Facilities Abandonment | ||||||||||
Activity in the business restructuring reserves related to continuing operations | ||||||||||
Beginning Balance | 1,113 | 0 | 1,113 | 0 | (453) | |||||
Restructuring and reorganization charges recorded during the year | 1,175 | 1,146 | 0 | |||||||
Cash payments | (405) | 0 | 0 | |||||||
Adjustment for the gain (loss) on the disposition of business operations | 0 | 0 | 0 | |||||||
Adjustment for the loss on termination of pension plan | 0 | |||||||||
Adjustment for asset impairment | 0 | |||||||||
Other | (526) | (33) | (453) | |||||||
Ending Balance | 1,357 | 1,113 | 1,357 | 1,113 | 0 | |||||
Disposition of Business Operations | ||||||||||
Activity in the business restructuring reserves related to continuing operations | ||||||||||
Beginning Balance | 0 | 0 | 0 | 0 | 0 | |||||
Restructuring and reorganization charges recorded during the year | (3,733) | (222) | 3,588 | |||||||
Cash payments | 0 | 0 | (571) | |||||||
Adjustment for the gain (loss) on the disposition of business operations | 3,733 | 222 | (3,017) | |||||||
Adjustment for the loss on termination of pension plan | 0 | |||||||||
Adjustment for asset impairment | 0 | |||||||||
Other | 0 | 0 | 0 | |||||||
Ending Balance | 0 | 0 | 0 | 0 | 0 | |||||
Other | ||||||||||
Activity in the business restructuring reserves related to continuing operations | ||||||||||
Beginning Balance | $ 16 | $ 0 | 16 | 0 | 0 | |||||
Restructuring and reorganization charges recorded during the year | 1,088 | 7,456 | 3,240 | |||||||
Cash payments | (30) | (8,000) | (19) | |||||||
Adjustment for the gain (loss) on the disposition of business operations | 0 | 0 | 0 | |||||||
Adjustment for the loss on termination of pension plan | (3,221) | |||||||||
Adjustment for asset impairment | (1,685) | |||||||||
Other | 611 | 560 | 0 | |||||||
Ending Balance | $ 0 | $ 16 | $ 0 | $ 16 | $ 0 |
Income Taxes - Components of Ne
Income Taxes - Components of Net Income Before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2015 | [1] | Sep. 30, 2015 | [1] | Jun. 30, 2015 | [1] | Mar. 31, 2015 | [1] | Dec. 31, 2014 | [2] | Sep. 30, 2014 | [2] | Jun. 30, 2014 | [2] | Mar. 31, 2014 | [2] | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Components of net income before income taxes | |||||||||||||||||||
Domestic | $ 93,390 | $ 70,737 | $ 63,278 | ||||||||||||||||
Foreign | 2,951 | (9,215) | (1,759) | ||||||||||||||||
Income before income taxes | $ 29,241 | $ 27,943 | $ 22,446 | $ 16,711 | $ 16,715 | $ 10,064 | $ 17,741 | $ 17,002 | $ 96,341 | $ 61,522 | $ 61,519 | ||||||||
[1] | During the first, second, third, and fourth quarters of 2015 we incurred restructuring expenses of $0.6 million, $0.4 million, $0.8 million, and $1.3 million, respectively, or $0.01, $0.01, $0.02, and $0.03 per diluted share (see Note 6). | ||||||||||||||||||
[2] | During the first, third, and fourth quarters of 2014 we incurred restructuring expenses of $1.2 million, $7.8 million, and $4.9 million, respectively, or $0.02, $0.12, and $0.10 per diluted share (see Note 6). |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2015 | [1] | Sep. 30, 2015 | [1] | Jun. 30, 2015 | [1] | Mar. 31, 2015 | [1] | Dec. 31, 2014 | [1],[2] | Sep. 30, 2014 | [1],[2] | Jun. 30, 2014 | [1],[2] | Mar. 31, 2014 | [1],[2] | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||||||||||||||||||
Federal | $ 41,002 | $ 20,374 | $ 12,880 | ||||||||||||||||
State | 5,227 | 2,443 | 916 | ||||||||||||||||
Foreign | 3,651 | 2,953 | 4,273 | ||||||||||||||||
Total | 49,880 | 25,770 | 18,069 | ||||||||||||||||
Deferred: | |||||||||||||||||||
Federal | (14,611) | 1,139 | 1,130 | ||||||||||||||||
State | (1,147) | 837 | 2,329 | ||||||||||||||||
Foreign | (348) | (1,935) | (5,277) | ||||||||||||||||
Total | (16,106) | 41 | (1,818) | ||||||||||||||||
Total income tax provision | $ 5,573 | $ 11,196 | $ 9,652 | $ 7,353 | $ 5,331 | $ 4,831 | $ 8,338 | $ 7,311 | $ 33,774 | $ 25,811 | $ 16,251 | ||||||||
[1] | Fluctuations in our effective income tax rate between quarters generally relates to the accounting for discrete income tax items in any given quarter, and revisions of estimates for certain income tax components during the year. •For 2015: Our effective income tax rates for the first, second, third, and fourth quarters were 44%, 43%, 40%, and 19%, respectively. The low fourth quarter rate can be mainly attributed to full year impact of the 2015 R&D tax credits, as the legislation was not passed until December 2015. •For 2014: Our effective income tax rates for the first, second, third, and fourth quarters were 43%, 47%, 48%, and 32%, respectively. The low fourth quarter rate can be mainly attributed to full year impact of the 2014 R&D tax credits, as the legislation was not passed until December 2014. | ||||||||||||||||||
[2] | As explained in Note 7, our 2014 results have been adjusted as a result of the immaterial correction made to the fourth quarter 2014 income tax provision. |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2015 | [1] | Sep. 30, 2015 | [1] | Jun. 30, 2015 | [1] | Mar. 31, 2015 | [1] | Dec. 31, 2014 | [1],[2] | Sep. 30, 2014 | [1],[2] | Jun. 30, 2014 | [1],[2] | Mar. 31, 2014 | [1],[2] | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Difference between income tax provision computed at the statutory Federal income tax rate and financial statement income tax related to continuing operations | |||||||||||||||||||
Provision at Federal rate of 35% | $ 33,719 | $ 21,533 | $ 21,532 | ||||||||||||||||
State income taxes, net of Federal impact | 2,652 | 2,132 | 2,109 | ||||||||||||||||
Research and experimentation credits | (2,135) | (450) | (5,754) | ||||||||||||||||
Tax uncertainties | (166) | 187 | (269) | ||||||||||||||||
Section 199 manufacturing deduction | (2,884) | (1,936) | (2,263) | ||||||||||||||||
Foreign rate differential | 688 | 2,847 | 1,133 | ||||||||||||||||
Valuation allowance for deferred tax assets | 919 | 3,602 | (3,312) | ||||||||||||||||
Other impact of foreign operations | 283 | (3,555) | 2,088 | ||||||||||||||||
Other | 698 | 1,451 | 987 | ||||||||||||||||
Total income tax provision | $ 5,573 | $ 11,196 | $ 9,652 | $ 7,353 | $ 5,331 | $ 4,831 | $ 8,338 | $ 7,311 | $ 33,774 | $ 25,811 | $ 16,251 | ||||||||
[1] | Fluctuations in our effective income tax rate between quarters generally relates to the accounting for discrete income tax items in any given quarter, and revisions of estimates for certain income tax components during the year. •For 2015: Our effective income tax rates for the first, second, third, and fourth quarters were 44%, 43%, 40%, and 19%, respectively. The low fourth quarter rate can be mainly attributed to full year impact of the 2015 R&D tax credits, as the legislation was not passed until December 2015. •For 2014: Our effective income tax rates for the first, second, third, and fourth quarters were 43%, 47%, 48%, and 32%, respectively. The low fourth quarter rate can be mainly attributed to full year impact of the 2014 R&D tax credits, as the legislation was not passed until December 2014. | ||||||||||||||||||
[2] | As explained in Note 7, our 2014 results have been adjusted as a result of the immaterial correction made to the fourth quarter 2014 income tax provision. |
Income Taxes - (Parenthetical)
Income Taxes - (Parenthetical) (Details 2) | 12 Months Ended |
Dec. 31, 2015 | |
Difference between income tax provision computed at the statutory Federal income tax rate and financial statement income tax related to continuing operations | |
Provision at Federal rate | 35.00% |
Income Taxes - Income Tax Provi
Income Taxes - Income Tax Provision/(Benefit) and Deferred Income Taxes (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2011 | Sep. 30, 2011 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Taxes [Line Items] | ||||||
Undistributed Earnings of Foreign Subsidiaries | $ 40,000,000 | |||||
Correction of immaterial error related to R&D credit recorded within income tax provision | $ 1,200,000 | $ 6,100,000 | $ 1,800,000 | |||
Maximum amount of the R&D credit error in any individual tax year between 2009 – 2014 | 1,900,000 | |||||
Deferred income tax assets benefits percentage | 100.00% | |||||
Valuation allowance | $ 17,414,000 | 20,507,000 | ||||
Deferred income tax assets related to state income tax jurisdictions | 2,700,000 | |||||
Deferred income tax assets related to foreign income tax jurisdictions | 29,700,000 | |||||
Valuation allowance against deferred tax assets related to state jurisdictions | 2,500,000 | |||||
Valuation allowance against deferred tax assets related to foreign jurisdictions | 14,900,000 | |||||
Cash payments related to the deferred income tax liabilities associated with the 2004 Convertible Debt Securities | $ 6,000,000 | $ 6,000,000 | 5,600,000 | |||
Balance owed U.S. Tax Authorities related to deferred income tax liabilities associated with the 2004 Convertible Debt Securities repurchased | $ 18,000,000 | |||||
Payment period of balance owed U.S. Tax Authorities related to deferred income tax liabilities associated with the 2004 Convertible Debt Securities repurchased | 3 years | |||||
Domestic Country | ||||||
Income Taxes [Line Items] | ||||||
Valuation allowance | $ 0 | |||||
Operating loss carryforward | $ 50,000,000 | 51,000,000 | ||||
Operating Loss Carryforwards, Expiration Dates | begin to expire in 2019 and can be utilized through 2030 | |||||
Interest rate used for tax deduction | 9.09% | |||||
State And Local Jurisdiction | ||||||
Income Taxes [Line Items] | ||||||
Operating loss carryforward | $ 63,000,000 | 63,000,000 | ||||
Operating Loss Carryforwards, Expiration Dates | will expire beginning in 2016 and end in 2036 | |||||
Foreign Country | ||||||
Income Taxes [Line Items] | ||||||
Operating loss carryforward | $ 91,000,000 | $ 96,000,000 | ||||
Operating Loss Carryforwards, Expiration Dates | 2,017 |
Income Taxes - Net Deferred Inc
Income Taxes - Net Deferred Income Tax Liabilities (Details 3) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Net deferred income tax liabilities | ||
Deferred income tax assets | $ 77,270 | $ 77,201 |
Deferred income tax liabilities | (42,576) | (55,045) |
Valuation allowance | (17,414) | (20,507) |
Net deferred income tax assets | $ 17,280 | $ 1,649 |
Income Taxes - The Components o
Income Taxes - The Components of Net Deferred Income Tax Assets (Liabilities) (Details 4) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Net current deferred income tax assets: | ||
Accrued expenses and reserves | $ 14,001 | $ 10,221 |
Stock-based compensation | 5,528 | 4,425 |
Total current deferred income tax assets | 19,529 | 14,646 |
Less: valuation allowance | (1,394) | (1,442) |
Net current deferred income tax assets | 18,135 | 13,204 |
Net non-current deferred income tax assets: | ||
Net operating loss carryforwards | 15,688 | 18,527 |
Property and equipment | 7,975 | 11,470 |
Deferred revenue | 914 | 550 |
Facility abandonment | 143 | 262 |
Other | 877 | 305 |
Total non-current deferred income tax assets | 23,095 | 26,671 |
Less: valuation allowance | (14,713) | (17,781) |
Net non-current deferred income tax assets | 8,382 | 8,890 |
Net non-current deferred income tax liabilities: | ||
Software | 190 | 211 |
Client contracts and related intangibles | 835 | 3,127 |
Goodwill | (7,590) | (6,747) |
Net operating loss carryforwards | 23,038 | 23,298 |
Property and equipment | (15,219) | (15,048) |
Convertible debt securities | (16,853) | (27,708) |
Deferred revenue | 3,354 | 961 |
Contingent payments | 849 | 840 |
Facility abandonment | 2,231 | 2,194 |
Other | 1,235 | (290) |
Total non-current deferred income tax liabilities | (7,930) | (19,162) |
Less: valuation allowance | (1,307) | (1,284) |
Net non-current deferred income tax liabilities | (9,237) | (20,446) |
Software | ||
Net non-current deferred income tax assets: | ||
Intangibles | 412 | 809 |
Client contracts | ||
Net non-current deferred income tax assets: | ||
Intangibles | $ (2,914) | $ (5,252) |
Income Taxes - A Reconciliation
Income Taxes - A Reconciliation of the Beginning and Ending Balances of our Liability for Unrecognized Tax Benefits (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Unrecognized tax benefits | |||
Balance, beginning of year | $ 3,417 | $ 3,713 | $ 3,372 |
Additions based on tax positions related to current year | 150 | 351 | 173 |
Additions for tax positions of prior years | 925 | 30 | 569 |
Reductions for tax positions of prior years | (413) | (677) | (401) |
Balance, end of year | $ 4,079 | $ 3,417 | $ 3,713 |
Income Taxes - Accounting for U
Income Taxes - Accounting for Uncertainty in Income Taxes (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2012 | |
Income Taxes (Textual) [Abstract] | ||||
Liability for unrecognized tax benefits | $ 3,417 | $ 3,713 | $ 4,079 | $ 3,372 |
Income tax related to accrued interest, net of federal benefit | 200 | 200 | 300 | |
Unrecognized tax benefits that would favorably impact the tax rate | 4,100 | |||
Reduction in liability for unrecognized tax benefits | $ 400 | $ 5,800 | ||
Maximum | ||||
Income Taxes (Textual) [Abstract] | ||||
Unrecognized tax benefits decrease amount over next twelve months | $ 2,400 |
Employee Retirement Benefit P63
Employee Retirement Benefit Plans (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Retirement Benefit Plans (Textual) [Abstract] | |||
Maximum employee annual contributions, percent | 100.00% | ||
US Based Employees | |||
Employee Retirement Benefit Plans (Textual) [Abstract] | |||
Total contributions under plans | $ 9.7 | $ 9 | $ 9.7 |
Non US Based Employees | |||
Employee Retirement Benefit Plans (Textual) [Abstract] | |||
Total contributions under plans | $ 3.7 | $ 5 | $ 4.8 |
Commitments, Guarantees and C64
Commitments, Guarantees and Contingencies (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Loss Contingencies [Line Items] | |||
Payments under operating lease agreement in 2016 | $ 13.1 | ||
Payments under operating lease agreement in 2017 | 12.4 | ||
Payments under operating lease agreement in 2018 | 12 | ||
Payments under operating lease agreement in 2019 | 10.1 | ||
Payments under operating lease agreement in 2020 | 7.3 | ||
Thereafter | 28.6 | ||
Operating Leases, Rent Expense | $ 17.1 | $ 19.9 | $ 20 |
Infocrossing service agreement expiry date | Jun. 30, 2022 | ||
Warranty Period | 90 days | ||
Litigation Settlement Amount to be Received | 6 | ||
Reduction of SG&A expense, net related to litigation settlement | $ 3.9 | ||
Building and Building Improvements | |||
Loss Contingencies [Line Items] | |||
Noncancellable operating leases expiry term | 2025-07 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2015USD ($)shares | Mar. 31, 2015USD ($)shares | Jan. 31, 2015USD ($) | Dec. 31, 2014USD ($)CustomerAccountshares | Dec. 31, 2015USD ($)CustomerAccount$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares | Feb. 28, 2015shares | |
Stockholders Equity Transaction [Line Items] | ||||||||
Increase in number of shares authorized for repurchase | 7,500,000 | |||||||
Number of shares authorized for repurchase under stock repurchase program | 42,500,000 | |||||||
Repurchase of common stock, shares | 1,800,000 | |||||||
Total amount paid | $ | $ 65,027 | $ 26,033 | $ 15,478 | |||||
Remaining number of shares available for repurchase | 7,100,000 | 7,100,000 | ||||||
Repurchase of common stock for employee tax withholdings, shares | 265,000 | 252,000 | 264,000 | |||||
Repurchase of common stock for tax withholdings, value | $ | $ 8,100 | $ 6,900 | $ 5,400 | |||||
Cash dividends declared per common share | $ / shares | $ 0.70 | $ 0.6225 | $ 0.45 | |||||
Cash dividend | $ | $ 22,900 | $ 21,300 | ||||||
Stock warrants term | 10 years | |||||||
Stock warrants, exercise price | $ / shares | $ 26.68 | |||||||
Additional number of Residential Customer Accounts migrated | CustomerAccount | 5,000,000 | |||||||
Senior Subordinated Convertible Notes 2010 | ||||||||
Stockholders Equity Transaction [Line Items] | ||||||||
Carrying amount of the equity component of convertible debt securities outstanding | $ | $ 22,900 | $ 22,900 | $ 22,900 | $ 22,900 | ||||
Migration Of Comcast Current Residential Customer Accounts | ||||||||
Stockholders Equity Transaction [Line Items] | ||||||||
Issuance of stock warrants | 1,900,000 | 1,900,000 | ||||||
Number of customer account migrated | CustomerAccount | 2,000,000 | |||||||
Migration Of Comcast Current Residential Customer Accounts | First 25 % of Stock Warrants | ||||||||
Stockholders Equity Transaction [Line Items] | ||||||||
Vesting percentage of stock warrants | 25.00% | |||||||
Number of customer account migrated | CustomerAccount | 500,000 | |||||||
Number of stock warrants vesting | 500,000 | |||||||
Fair value of stock warrants vesting | $ | $ 3,600 | |||||||
Migration Of Comcast Current Residential Customer Accounts | Second 25 % of Stock Warrants | ||||||||
Stockholders Equity Transaction [Line Items] | ||||||||
Vesting percentage of stock warrants | 25.00% | |||||||
Vesting date of stock warrants | 2015-01 | |||||||
Fair value of stock warrants vesting | $ | $ 3,700 | |||||||
Migration Of Comcast Current Residential Customer Accounts | Third 25 % of Stock Warrants | ||||||||
Stockholders Equity Transaction [Line Items] | ||||||||
Vesting percentage of stock warrants | 25.00% | |||||||
Number of customer account migrated | CustomerAccount | 5,500,000 | |||||||
Migration Of Comcast Current Residential Customer Accounts | Last 25 % of Stock Warrants | ||||||||
Stockholders Equity Transaction [Line Items] | ||||||||
Vesting percentage of stock warrants | 25.00% | |||||||
Additional number of Residential Customer Accounts migrated | CustomerAccount | 5,700,000 | |||||||
Total target of customer account migrations | CustomerAccount | 11,200,000 | |||||||
Migration Of Comcast Current Residential Customer Accounts | Last 25 % of Stock Warrants | Minimum | ||||||||
Stockholders Equity Transaction [Line Items] | ||||||||
Number of customer account migrated | CustomerAccount | 5,500,000 | |||||||
Migration Of Comcast Acquired Additional Residential Customer Accounts | ||||||||
Stockholders Equity Transaction [Line Items] | ||||||||
Issuance of stock warrants | 1,000,000 | 1,000,000 | ||||||
Comcast | ||||||||
Stockholders Equity Transaction [Line Items] | ||||||||
Issuance of stock warrants | 2,900,000 | 2,900,000 | ||||||
Amount of unvested stock warrants that become vested upon a fundamental change of the Company | 50.00% | |||||||
Beneficial ownership required for potential cash settlement | 19.99% | 19.99% | ||||||
Stock warrants exercised | 0 | |||||||
Comcast | Stock Warrants | ||||||||
Stockholders Equity Transaction [Line Items] | ||||||||
Client contract incentive related to stock warrants | $ | $ 7,300 | $ 7,300 | ||||||
Amortization expense of client contract incentive related to stock warrants | $ | 2,000 | $ 2,000 | ||||||
SEC Rule 10b5-1 Plan | ||||||||
Stockholders Equity Transaction [Line Items] | ||||||||
Repurchase of common stock, shares | 300,000 | 700,000 | 500,000 | |||||
Total amount paid | $ | $ 6,900 | $ 19,100 | $ 10,100 | |||||
Weighted-average price per share | $ / shares | $ 27.06 | $ 26.05 | $ 20.23 | |||||
ASR Agreement | ||||||||
Stockholders Equity Transaction [Line Items] | ||||||||
Repurchase of common stock, shares | 1,300,000 | 1,600,000 | ||||||
Total amount paid | $ | $ 10,000 | $ 40,000 | ||||||
Weighted-average price per share | $ / shares | $ 31.64 | |||||||
Accelerated share repurchase agreement, total amount paid | $ | $ 50,000 |
Equity Compensation Plans - Sto
Equity Compensation Plans - Stock Incentive Plan (Details Textual) - Stock Incentive Plan 2005 | 12 Months Ended | ||
Dec. 31, 2014shares | Dec. 31, 2015shares | Dec. 31, 2013shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of shares authorized for issuance under incentive plane | 18,700,000 | 15,800,000 | |
Number of shares counted for every share granted | 2 | ||
Number of increased authorized shares under incentive plan | 2,900,000 | ||
Stockholder approved shares available for issuance | 4,200,000 | ||
Stockholder approved shares available for grant | 3,600,000 |
Equity Compensation Plans - Sum
Equity Compensation Plans - Summary of Unvested Restricted Common Stock Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Shares | |||
Shares, Unvested awards, beginning balance | 2,311 | ||
Shares, Awards granted | 736 | ||
Shares, Awards forfeited/cancelled | (109) | ||
Shares, Awards vested | (814) | ||
Shares, Unvested awards, ending balance | 2,124 | 2,311 | |
Weighted average grant date fair value | |||
Weighted-Average Grant Date Fair Value, Unvested awards, beginning balance | $ 22.81 | ||
Weighted-Average Grant Date Fair Value, Awards granted | 30.71 | $ 26.45 | $ 19.75 |
Weighted-Average Grant Date Fair Value, Awards forfeited/cancelled | 23.95 | ||
Weighted-Average Grant Date Fair Value, Awards vested | 21.88 | ||
Weighted-Average Grant Date Fair Value, Unvested awards, ending balance | $ 26.03 | $ 22.81 |
Equity Compensation Plans - Res
Equity Compensation Plans - Restricted Stock (Details Textual) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Weighted-Average Grant Date Fair Value, Awards granted | $ 30.71 | $ 26.45 | $ 19.75 |
Market value of restricted stock shares vesting | $ 24.8 | $ 20.7 | $ 16.2 |
Minimum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Restricted stock vesting period | 3 years | ||
Maximum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Restricted stock vesting period | 4 years |
Equity Compensation Plans - 199
Equity Compensation Plans - 1996 Employee Stock Purchase Plan (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Value of stock purchases made pursuant to employee stock purchase plan | $ 1,547 | $ 1,394 | $ 1,347 |
1996 Employee Stock Purchase Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of shares authorized for issue to employees under the employee stock purchase plan | 1,700,000 | ||
Purchase Price of shares as a percentage of market value | 85.00% | ||
Issuance of common stock pursuant to employee stock purchase plan, shares | 58,927 | 61,592 | 68,845 |
Value of stock purchases made pursuant to employee stock purchase plan | $ 1,600 | $ 1,400 | $ 1,400 |
Remaining number of shares eligible for purchase under employee stock purchase plan | 440,622 | ||
1996 Employee Stock Purchase Plan | Minimum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Purchase price of shares under the plan | $ 20.84 | $ 21.31 | $ 16.01 |
1996 Employee Stock Purchase Plan | Maximum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Purchase price of shares under the plan | $ 30.58 | $ 25.47 | $ 24.99 |
Equity Compensation Plans - S70
Equity Compensation Plans - Stock-Based Compensation Expense (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Stock-based compensation expense | $ 21.1 | $ 16.7 | $ 14.8 |
Total compensation cost related to unvested awards not yet recognized | $ 35.5 | ||
Stock based compensation expense period | 2 years 2 months 12 days | ||
Deferred income tax benefit related to stock-based compensation expense | $ 6.8 | 5 | 4.6 |
Income tax benefit realized for the tax deductions from stock-based compensation | $ 7.9 | $ 6.5 | $ 5.4 |
Unaudited Quarterly Financial71
Unaudited Quarterly Financial Data - Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||||||||
Quarterly Financial Information | ||||||||||||||||||||
Total revenues | $ 197,288 | $ 186,960 | $ 182,641 | $ 185,631 | $ 193,697 | $ 185,003 | $ 184,558 | $ 188,028 | $ 752,520 | $ 751,286 | $ 747,468 | |||||||||
Total cost of revenues (exclusive of depreciation) | 95,497 | 92,182 | 91,796 | 100,266 | 99,087 | 94,470 | 93,682 | 102,104 | 379,741 | 389,343 | 377,165 | |||||||||
Operating income | 34,070 | [1] | 31,021 | [1] | 26,156 | [1] | 21,893 | [1] | 19,125 | [2] | 13,831 | [2] | 21,820 | [2] | 20,914 | [2] | 113,140 | 75,690 | 76,704 | |
Income before income taxes | 29,241 | [1] | 27,943 | [1] | 22,446 | [1] | 16,711 | [1] | 16,715 | [2] | 10,064 | [2] | 17,741 | [2] | 17,002 | [2] | 96,341 | 61,522 | 61,519 | |
Income tax provision | (5,573) | [3] | (11,196) | [3] | (9,652) | [3] | (7,353) | [3] | (5,331) | [3],[4] | (4,831) | [3],[4] | (8,338) | [3],[4] | (7,311) | [3],[4] | $ (33,774) | $ (25,811) | $ (16,251) | |
Net income | [3] | $ 23,668 | [1] | $ 16,747 | [1] | $ 12,794 | [1] | $ 9,358 | [1] | $ 11,384 | [2],[4] | $ 5,233 | [2],[4] | $ 9,403 | [2],[4] | $ 9,691 | [2],[4] | |||
Basic earnings per common share | $ 0.76 | [1],[3] | $ 0.54 | [1],[3] | $ 0.42 | [1],[3] | $ 0.30 | [1],[3] | $ 0.37 | [2],[3],[4] | $ 0.16 | [2],[3],[4] | $ 0.29 | [2],[3],[4] | $ 0.30 | [2],[3],[4] | $ 2.01 | $ 1.10 | $ 1.41 | |
Diluted earnings per common share | $ 0.70 | [1],[3] | $ 0.50 | [1],[3] | $ 0.39 | [1],[3] | $ 0.28 | [1],[3] | $ 0.34 | [2],[3],[4] | $ 0.15 | [2],[3],[4] | $ 0.28 | [2],[3],[4] | $ 0.28 | [2],[3],[4] | $ 1.87 | $ 1.06 | $ 1.38 | |
[1] | During the first, second, third, and fourth quarters of 2015 we incurred restructuring expenses of $0.6 million, $0.4 million, $0.8 million, and $1.3 million, respectively, or $0.01, $0.01, $0.02, and $0.03 per diluted share (see Note 6). | |||||||||||||||||||
[2] | During the first, third, and fourth quarters of 2014 we incurred restructuring expenses of $1.2 million, $7.8 million, and $4.9 million, respectively, or $0.02, $0.12, and $0.10 per diluted share (see Note 6). | |||||||||||||||||||
[3] | Fluctuations in our effective income tax rate between quarters generally relates to the accounting for discrete income tax items in any given quarter, and revisions of estimates for certain income tax components during the year. •For 2015: Our effective income tax rates for the first, second, third, and fourth quarters were 44%, 43%, 40%, and 19%, respectively. The low fourth quarter rate can be mainly attributed to full year impact of the 2015 R&D tax credits, as the legislation was not passed until December 2015. •For 2014: Our effective income tax rates for the first, second, third, and fourth quarters were 43%, 47%, 48%, and 32%, respectively. The low fourth quarter rate can be mainly attributed to full year impact of the 2014 R&D tax credits, as the legislation was not passed until December 2014. | |||||||||||||||||||
[4] | As explained in Note 7, our 2014 results have been adjusted as a result of the immaterial correction made to the fourth quarter 2014 income tax provision. |
Unaudited Quarterly Financial72
Unaudited Quarterly Financial Data (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information | |||||||||||
Restructuring and reorganization charges recorded during the year | $ 1,300 | $ 800 | $ 400 | $ 600 | $ 4,900 | $ 7,800 | $ 1,200 | $ 3,074 | $ 13,969 | $ 12,405 | |
Impact of Restructuring expenses on EPS | $ 0.03 | $ 0.02 | $ 0.01 | $ 0.01 | $ 0.10 | $ 0.12 | $ 0.02 | ||||
Effective income tax rate | 19.00% | 40.00% | 43.00% | 44.00% | 32.00% | 48.00% | 47.00% | 43.00% |