Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 31, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | CSG SYSTEMS INTERNATIONAL INC | |
Entity Central Index Key | 1,005,757 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | CSGS | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 33,584,617 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 125,111 | $ 126,351 |
Short-term investments | 119,843 | 150,147 |
Total cash, cash equivalents and short-term investments | 244,954 | 276,498 |
Trade accounts receivable: | ||
Billed, net of allowance of $2,706 and $3,080 | 197,486 | 208,930 |
Unbilled | 37,353 | 30,828 |
Income taxes receivable | 13,517 | 11,931 |
Other current assets | 37,633 | 31,751 |
Total current assets | 530,943 | 559,938 |
Non-current assets: | ||
Property and equipment, net of depreciation of $129,475 and $122,866 | 36,343 | 33,116 |
Intangible assets | 66,979 | 71,102 |
Goodwill | 206,634 | 201,094 |
Deferred income taxes | 13,455 | 14,218 |
Other assets | 10,040 | 12,411 |
Total non-current assets | 333,451 | 331,941 |
Total assets | 864,394 | 891,879 |
Current liabilities: | ||
Current portion of long-term debt, net of unamortized discounts of zero and $296 | 18,750 | 49,426 |
Client deposits | 32,590 | 33,916 |
Trade accounts payable | 29,982 | 35,118 |
Accrued employee compensation | 50,314 | 65,341 |
Deferred revenue | 57,865 | 45,064 |
Income taxes payable | 423 | 822 |
Other current liabilities | 18,960 | 22,342 |
Total current liabilities | 208,884 | 252,029 |
Non-current liabilities: | ||
Long-term debt, net of unamortized discounts of $20,652 and $23,007 | 318,098 | 326,993 |
Deferred revenue | 7,710 | 6,694 |
Income taxes payable | 2,441 | 2,245 |
Deferred income taxes | 100 | 99 |
Other non-current liabilities | 12,035 | 12,618 |
Total non-current liabilities | 340,384 | 348,649 |
Total liabilities | 549,268 | 600,678 |
Current portion of long-term debt conversion obligation | 39,841 | |
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; 33,700 and 32,261 shares outstanding | 689 | 672 |
Common stock warrants; zero and 1,426 warrants vested; 1,425 and 2,851 issued | 16,007 | |
Additional paid-in capital | 421,638 | 391,209 |
Treasury stock, at cost; 33,830 and 34,919 shares | (804,650) | (826,002) |
Accumulated other comprehensive income (loss): | ||
Unrealized loss on short-term investments, net of tax | (12) | (159) |
Cumulative foreign currency translation adjustments | (35,649) | (45,213) |
Accumulated earnings | 733,110 | 714,846 |
Total stockholders' equity | 315,126 | 251,360 |
Total liabilities, current portion of long-term debt conversion obligation and stockholders' equity | 864,394 | 891,879 |
Software | ||
Non-current assets: | ||
Intangible assets | 28,890 | 30,427 |
Client contracts | ||
Non-current assets: | ||
Intangible assets | $ 38,089 | $ 40,675 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Trade accounts receivable-billed, allowance | $ 2,706 | $ 3,080 |
Property and equipment, accumulated depreciation | 129,475 | 122,866 |
Accumulated amortization | 192,658 | 196,039 |
Current portion of long-term debt, unamortized discounts | 0 | 296 |
Long-term debt, unamortized discounts | $ 20,652 | $ 23,007 |
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 outstanding | 33,700,000 | 32,261,000 |
Common stock warrants, vested | 0 | 1,426,000 |
Common stock warrants, issued | 1,425,000 | 2,851,000 |
Treasury stock, shares | 33,830,000 | 34,919,000 |
Software | ||
Accumulated amortization | $ 104,252 | $ 99,316 |
Client contracts | ||
Accumulated amortization | $ 88,406 | $ 96,723 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues: | ||||
Cloud and related solutions | $ 157,879 | $ 149,992 | $ 316,656 | $ 299,806 |
Software and services | 15,896 | 21,152 | 30,954 | 40,330 |
Maintenance | 18,938 | 19,108 | 37,573 | 36,342 |
Total revenues | 192,713 | 190,252 | 385,183 | 376,478 |
Cost of revenues (exclusive of depreciation, shown separately below): | ||||
Cloud and related solutions | 77,286 | 70,195 | 153,338 | 136,428 |
Software and services | 10,405 | 11,461 | 21,679 | 24,827 |
Maintenance | 9,969 | 11,127 | 20,351 | 21,011 |
Total cost of revenues | 97,660 | 92,783 | 195,368 | 182,266 |
Other operating expenses: | ||||
Research and development | 27,939 | 24,281 | 54,779 | 47,907 |
Selling, general and administrative | 36,819 | 34,980 | 74,165 | 69,031 |
Depreciation | 3,316 | 3,509 | 6,631 | 7,025 |
Restructuring and reorganization charges | 2,731 | 5,325 | 2,979 | (416) |
Total operating expenses | 168,465 | 160,878 | 333,922 | 305,813 |
Operating income | 24,248 | 29,374 | 51,261 | 70,665 |
Other income (expense): | ||||
Interest expense | (4,146) | (4,473) | (8,452) | (7,478) |
Amortization of original issue discount | (625) | (1,136) | (1,513) | (2,794) |
Interest and investment income, net | 704 | 523 | 1,510 | 991 |
Loss on repurchase of convertible notes | (5,108) | (8,319) | ||
Other, net | 122 | (1,895) | (153) | (2,686) |
Total other | (3,945) | (12,089) | (8,608) | (20,286) |
Income before income taxes | 20,303 | 17,285 | 42,653 | 50,379 |
Income tax provision | (8,722) | (6,448) | (10,835) | (18,038) |
Net income | $ 11,581 | $ 10,837 | $ 31,818 | $ 32,341 |
Weighted-average shares outstanding: | ||||
Basic | 32,572 | 30,942 | 32,294 | 30,852 |
Diluted | 32,996 | 32,811 | 32,795 | 33,241 |
Earnings per common share: | ||||
Basic | $ 0.36 | $ 0.35 | $ 0.99 | $ 1.05 |
Diluted | $ 0.35 | $ 0.33 | $ 0.97 | $ 0.97 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - UNAUDITED - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 11,581 | $ 10,837 | $ 31,818 | $ 32,341 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 5,225 | (7,938) | 9,564 | (9,040) |
Unrealized holding gains (losses) on short-term investments arising during period | 103 | (254) | 147 | 657 |
Other comprehensive income (loss), net of tax | 5,328 | (8,192) | 9,711 | (8,383) |
Total comprehensive income, net of tax | $ 16,909 | $ 2,645 | $ 41,529 | $ 23,958 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 31,818 | $ 32,341 |
Adjustments to reconcile net income to net cash provided by operating activities- | ||
Depreciation | 6,631 | 7,025 |
Amortization | 14,418 | 13,040 |
Amortization of original issue discount | 1,513 | 2,794 |
Asset impairment | 2,147 | |
(Gain) loss on short-term investments and other | (37) | 3 |
Loss on repurchase of convertible notes | 8,319 | |
Gain on disposition of business operations | (6,611) | |
Deferred income taxes | 1,725 | 78 |
Excess tax benefit of stock-based compensation awards | (3,440) | |
Stock-based compensation | 11,644 | 12,086 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable, net | 7,796 | 5,705 |
Other current and non-current assets | (4,787) | (1,866) |
Income taxes payable/receivable | (1,402) | (7,971) |
Trade accounts payable and accrued liabilities | (19,266) | (18,758) |
Deferred revenue | 12,288 | 8,020 |
Net cash provided by operating activities | 64,488 | 50,765 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (18,738) | (8,863) |
Purchases of short-term investments | (73,831) | (102,110) |
Proceeds from sale/maturity of short-term investments | 104,291 | 61,833 |
Acquisition of and investments in client contracts | (7,526) | (4,461) |
Proceeds from the disposition of business operations | 8,850 | |
Net cash provided by (used in) investing activities | 4,196 | (44,751) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 846 | 715 |
Payment of cash dividends | (13,713) | (12,265) |
Repurchase of common stock | (16,482) | (19,494) |
Proceeds from long-term debt | 230,000 | |
Payments on long-term debt | (7,500) | (3,750) |
Repurchase of convertible notes | (198,367) | |
Settlement of convertible notes | (34,771) | |
Payments of deferred financing costs | (6,744) | |
Excess tax benefit of stock-based compensation awards | 3,440 | |
Net cash used in financing activities | (71,620) | (6,465) |
Effect of exchange rate fluctuations on cash | 1,696 | 2,937 |
Net increase (decrease) in cash and cash equivalents | (1,240) | 2,486 |
Cash and cash equivalents, beginning of period | 126,351 | 132,631 |
Cash and cash equivalents, end of period | 125,111 | 135,117 |
Cash paid during the period for- | ||
Interest | 7,629 | 4,619 |
Income taxes | $ 10,490 | $ 25,923 |
General
General | 6 Months Ended |
Jun. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
General | 1. GENERAL We have prepared the accompanying unaudited condensed consolidated financial statements as of June 30, 2017 and December 31, 2016, and for the quarters and six months ended June 30, 2017 and 2016, in accordance with accounting principles generally accepted in the United States of America (“U.S.”) (“GAAP”) for interim financial information, and pursuant to the instructions to Form 10-Q and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of our management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position and operating results have been included. The unaudited Condensed Consolidated Financial Statements (the “Financial Statements”) should be read in conjunction with the Consolidated Financial Statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), contained in our Annual Report on Form 10-K for the year ended December 31, 2016 (our “2016 10-K”), filed with the SEC. The results of operations for the quarter and six months ended June 30, 2017 are not necessarily indicative of the expected results for the entire year ending December 31, 2017. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates in Preparation of Financial Statements. The preparation of the accompanying Financial Statements in conformity with GAAP 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 periods. Actual results could differ from those estimates. Cash and Cash Equivalents. We consider all highly liquid investments with original maturities of three months or less at the date of the purchase to be cash equivalents. As of June 30, 2017 and December 31, 2016, our cash equivalents consist primarily of institutional money market funds, commercial paper, and time deposits held at major banks. As of June 30, 2017 and December 31, 2016, we had $3.0 million and $4.3 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 Condensed Consolidated Balance Sheets (“Balance Sheets” or “Balance Sheet”). Short-term Investments and Other Financial Instruments . Our financial instruments as of June 30, 2017 and December 31, 2016 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 June 30, 2017 and December 31, 2016 have contractual maturities of less than two years from the time of acquisition. Our short-term investments as of June 30, 2017 and December 31, 2016 consisted almost entirely of fixed income securities. Proceeds from the sale/maturity of short-term investments for the six months ended June 30, 2017 and 2016 were $104.3 million and $61.8 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): June 30, 2017 December 31, 2016 Level 1 Level 2 Total Level 1 Level 2 Total Assets: Cash equivalents: Money market funds $ 14,625 $ — $ 14,625 $ 6,531 $ — $ 6,531 Commercial paper — 17,866 17,866 — 24,826 24,826 Short-term investments: Corporate debt securities — 96,858 96,858 — 109,140 109,140 U.S. government agency bonds — 8,919 8,919 — 26,513 26,513 Asset-backed securities — 14,066 14,066 — 14,494 14,494 Total $ 14,625 $ 137,709 $ 152,334 $ 6,531 $ 174,973 $ 181,504 Valuation inputs used to measure the fair values of our money market funds and corporate equity securities 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 (par value for convertible debt) and estimated fair value of our debt as of the indicated periods (in thousands): June 30, 2017 December 31, 2016 Carrying Fair Carrying Fair Value Value Value Value Credit agreement (carrying value including current maturities) $ 127,500 $ 127,500 $ 135,000 $ 135,000 2010 Convertible debt (par value) — — 34,722 74,795 2016 Convertible debt (par value) 230,000 248,688 230,000 258,175 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 4 for additional discussion regarding our convertible debt. Accounting Pronouncements Adopted. In March 2016, the FASB issued ASU 2016-09, (Topic 718). This ASU simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The methods of adoption for this ASU vary by amendment. We adopted this ASU in the first quarter of 2017, prospectively applying the guidance related to the recognition of excess tax benefits and tax deficiencies in the income statement and the presentation of excess tax benefits on the statement of cash flows. See Note 5 for further discussion of the impact of adopting this ASU. Accounting Pronouncement Issued But Not Yet Effective. The FASB has issued ASU 2014-09, (Topic 606). In August 2015, the FASB issued ASU 2015-14 which deferred the effective date of ASU 2014-09 for one year. In December 2016, the FASB issued ASU 2016-20 Collectively, 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. The accounting guidance is 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 evaluating the impact this ASU will have to our accounting policies, business processes and potential differences in the timing and/or method of revenue recognition for our customer contracts. In conjunction with this evaluation, we are updating our policies to align with the new accounting guidance as well as evaluating our significant customer contracts to determine if the guidance will materially impact our existing portfolio of customer contracts. In addition, we will review new contracts entered into up until the adoption of the ASU. Based upon our initial evaluations, the adoption of this guidance is not expected to have a material impact on our consolidated financial statements. We currently intend to adopt the ASU in the first quarter of 2018, utilizing the cumulative effect approach. In February 2016, the FASB issued ASU 2016-02, Leases In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) Intra-Entity Transfers of Assets Other Than Inventory |
Long-Lived Assets
Long-Lived Assets | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Long-Lived Assets | 3. LONG-LIVED ASSETS Goodwill. The changes in the carrying amount of goodwill for the six months ended June 30, 2017, were as follows (in thousands): January 1, 2017 balance $ 201,094 Adjustments related to prior acquisitions (30 ) Effects of changes in foreign currency exchange rates 5,570 June 30, 2017 balance $ 206,634 Other Intangible Assets. Our intangible assets subject to ongoing amortization consist primarily of client contracts and software. As of June 30, 2017 and December 31, 2016, the carrying values of these assets were as follows (in thousands): June 30, 2017 December 31, 2016 Gross Gross Carrying Accumulated Net Carrying Accumulated Net Amount Amortization Amount Amount Amortization Amount Client contracts $ 126,495 $ (88,406 ) $ 38,089 $ 137,398 $ (96,723 ) $ 40,675 Software 133,142 (104,252 ) 28,890 129,743 (99,316 ) 30,427 Total $ 259,637 $ (192,658 ) $ 66,979 $ 267,141 $ (196,039 ) $ 71,102 The total amortization expense related to intangible assets for the second quarters of 2017 and 2016 were $6.4 million and $6.0 million, respectively, and for the six months ended June 30, 2017 and 2016 were $13.3 million and $11.9 million, respectively. Based on the June 30, 2017 net carrying value of our intangible assets, the estimated total amortization expense for each of the five succeeding fiscal years ending December 31 are: 2017– $26.9 million; 2018 – $21.1 million; 2019 – $14.3 million; 2020– $7.4 million; and 2021 – $3.2 million. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | 4. DEBT Our long-term debt, as of June 30, 2017 and December 31, 2016, was as follows (in thousands): June 30, December 31, 2017 2016 Credit Agreement: Term loan, due February 2020, interest at adjusted LIBOR plus 1.75% (combined rate of 3.05% at June 30, 2017) $ 127,500 $ 135,000 Less - deferred financing costs (2,874 ) (3,489 ) Term loan, net of unamortized discounts 124,626 131,511 $200 million revolving loan facility, due February 2020, interest at adjusted LIBOR plus applicable margin — — Convertible Notes: 2016 Convertible Notes – Senior convertible notes; due March 15, 2036; cash interest at 4.25% 230,000 230,000 Less – unamortized original issue discount (12,764 ) (14,005 ) Less – deferred financing costs (5,014 ) (5,513 ) 2016 Convertible Notes, net of unamortized discounts 212,222 210,482 2010 Convertible Notes – Senior subordinated convertible notes; due March 1, 2017; cash interest at 3.0% — 34,722 Less – unamortized original issue discount — (272 ) Less – deferred financing costs — (24 ) 2010 Convertible Notes, net of unamortized discounts — 34,426 Total debt, net of unamortized discounts 336,848 376,419 Current portion of long-term debt, net of unamortized discounts (18,750 ) (49,426 ) Long-term debt, net of unamortized discounts $ 318,098 $ 326,993 Credit Agreement During the six months ended June 30, 2017, we made $7.5 million of principal repayments on our $150 million aggregate principal five-year term loan (the “2015 Term Loan”). As of June 30, 2017, our interest rate on the 2015 Term Loan is 3.05% (adjusted LIBOR plus 1.75% per annum), effective through September 29, 2017, and our commitment fee on the unused $200 million aggregate principal five-year revolving loan facility (the “2015 Revolver”) is 0.25%. As of June 30, 2017, we had no borrowing outstanding on our 2015 Revolver and had the entire $200.0 million available to us. Convertible Notes 2016 Convertible Notes. Upon conversion of the 2016 Convertible Notes, we will settle our conversion obligation by paying or delivering, as the case may be, cash, shares of our common stock, or a combination thereof, at our election. It is our current intent and policy to settle our conversion obligations as follows: (i) pay cash for 100% of the par value of the 2016 Convertible Notes that are converted; and (ii) to the extent the value of our conversion obligation exceeds the par value, we can satisfy the remaining conversion obligation in our common stock, cash or a combination thereof. The 2016 Convertible Notes will be convertible at the option of the note holders upon the satisfaction of specified conditions and during certain periods. During the period from, and including, December 15, 2021 to the close of business on the business day immediately preceding March 15, 2022 and on or after December 15, 2035, holders may convert all or any portion of their 2016 Convertible Notes at the conversion rate then in effect at any time regardless of these conditions. As a result of us increasing our dividend in March 2017 (see Note 8), the previous conversion rate for the 2016 Convertible Notes of 17.4699 shares of our common stock per $1,000 principal amount of the 2016 Convertible Notes, which is equivalent to an initial conversion price of approximately $57.24 per share of our common stock, has been adjusted to 17.4753 shares of our common stock per $1,000 principal amount of the 2016 Convertible Notes, which is equivalent to an initial conversion price of approximately $57.22 per share of our common stock. Holders may require CSG to repurchase the 2016 Convertible Notes for cash on each of March 15, 2022, March 15, 2026, and March 15, 2031, or upon the occurrence of a fundamental change (as defined in the 2016 Convertible Notes Indenture) in each case at a purchase price equal to the principal amount thereof plus accrued and unpaid interest. We may not redeem the 2016 Convertible Notes prior to March 20, 2020. On or after March 20, 2020, we may redeem for cash all or part of the 2016 Convertible Notes if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which CSG provides notice of redemption. On or after March 15, 2022, we may redeem for cash all or part of the 2016 Convertible Notes regardless of the sales price condition described in the preceding sentence. In each case, the redemption price will equal the principal amount of the 2016 Convertible Notes to be redeemed, plus accrued and unpaid interest. As of June 30, 2017, none of the conversion features have been achieved, and thus, the 2016 Convertible Notes are not convertible by the holders. 2010 Convertible Notes. In March 2017, we settled our conversion obligation for the 2010 Convertible Notes as follows: (i) we paid cash of $34.8 million for the remaining par value of the 2010 Convertible Notes; and (ii) delivered 694,240 shares of our common shares from treasury stock, to settle the $28.8 million value of the conversion obligation in excess of the par value. See Note 8 for discussion of our equity transactions. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 5. INCOME TAXES The effective income tax rates for the second quarters and six months ended June 30, 2017 and 2016 were as follows: Quarter Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 43 % 37 % 25 % 36 % Compensation – Stock Compensation |
Commitments, Guarantees and Con
Commitments, Guarantees and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments, Guarantees and Contingencies | 6. COMMITMENTS, GUARANTEES AND CONTINGENCIES 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 the date of acceptance 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 June 30, 2017, 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 June 30, 2017. In addition, as a result of the insurance policy coverage, we believe these indemnification agreements are not significant to our results of operations. 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. We are not presently a party to any material pending or threatened legal proceedings. |
Earnings Per Common Share
Earnings Per Common Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | 7. EARNINGS PER COMMON SHARE Basic and diluted earnings per common share (“EPS”) amounts are presented on the face of the accompanying 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): Quarter Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Basic weighted-average common shares 32,572 30,942 32,294 30,852 Dilutive effect of restricted common stock 424 602 501 667 Dilutive effect of 2010 Convertible Notes - 907 - 1,403 Dilutive effect of Stock Warrants - 360 - 319 Diluted weighted-average common shares 32,996 32,811 32,795 33,241 The Convertible Notes have a dilutive effect only in those quarterly periods in which our average stock price exceeds the current effective conversion price. The 2010 Convertible Notes were settled in March 2017 (see Note 4). The Stock Warrants have a dilutive effect only 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. All the vested Stock Warrants were exercised in January 2017 (see Note 8). Potentially dilutive common shares related to non-participating unvested restricted stock excluded from the computation of diluted EPS, as the effect was antidilutive, were not material in any period presented. |
Stockholders' Equity and Equity
Stockholders' Equity and Equity Compensation Plans | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity and Equity Compensation Plans | 8. STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION PLANS Stock Repurchase Program. We currently have a stock repurchase program, approved by our Board, authorizing us to repurchase our common stock from time-to-time as market and business conditions warrant (the “Stock Repurchase Program”). During the six months ended June 30, 2017 and 2016 we repurchased 0.3 million shares of our common stock for $10.5 million (weighted-average price of $41.00 per share) and 0.3 million shares of our common stock for $9.5 million (weighted-average price of $36.07 per share), respectively, under a SEC Rule 10b5-1 Plan. As of June 30, 2017, the total remaining number of shares available for repurchase under the Stock Repurchase Program totaled 6.5 million shares. Stock Repurchases for Tax Withholdings. In addition to the above mentioned stock repurchases, during the six months ended June 30, 2017 and 2016, we repurchased and then cancelled 0.2 million shares of common stock for $6.3 million and 0.3 million shares of common stock for $10.0 million, respectively, in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans. Cash During the second quarter of 2017, the Board approved a quarterly cash dividend of $0.1975 per share of common stock, totaling $6.7 million. During the second quarter of 2016, the Board approved a quarterly cash dividend of $0.185 per share of common stock, totaling $6.0 million. Dividends declared for the six months ended June 30, 2017 and 2016 totaled $13.4 million and $12.0 million, respectively. Warrants . In 2014, in conjunction with the execution of an amendment to our current agreement with Comcast Corporation (“Comcast”), we issued stock warrants (the “Warrant Agreement”) for the right to purchase up to approximately 2.9 million shares of our common stock (the “Stock Warrants”) as an additional incentive for Comcast to convert customer accounts onto our Advanced Convergent Platform based on various milestones. The Stock Warrants have a 10-year term and an exercise price of $26.68 per warrant. Upon vesting, the Stock Warrants are recorded as a client incentive asset with the corresponding offset to stockholders’ equity. The client incentive asset related to the Stock Warrants is amortized as a reduction in cloud and related solutions revenues over the remaining term of the Comcast amended agreement. As of June 30, 2017, we recorded a client incentive asset related to these Stock Warrants of $16.0 million and have amortized $6.6 million as a reduction in cloud and related solutions 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, 2016, approximately 1.4 million Stock Warrants had vested. In January 2017, Comcast exercised approximately 1.4 million vested Stock Warrants, which we net share settled under the provisions of the Warrant Agreement (discussed further in Treasury Shares below). As of June 30, 2017, approximately 1.5 million Stock Warrants remain issued, none of which were vested. Treasury Stock. In January 2017, we net share settled the exercise of 1.4 million vested Stock Warrants noted above by delivering 649,221 of our common shares from treasury stock, which had a fair value of $31.5 million. The carrying value of the shares of treasury stock delivered was $15.4 million (weighted-average price of $23.66 per share). The difference between the carrying amount of the treasury shares and the $16.0 million carrying amount of the common stock warrants was recorded as an adjustment to additional paid-in capital. In March 2017, we net share settled the portion of the conversion obligation in excess of the par value related to our 2010 Convertible Notes by delivering 694,240 of our common shares from treasury stock. The carrying value of the shares of treasury stock delivered was $16.5 million (weighted average price of $23.71 per share). The difference between the carrying amount of the treasury shares and the $28.8 million carrying amount of the conversion obligation on the settlement date was recorded as an adjustment to additional paid-in capital. Stock-Based Awards. A summary of our unvested restricted common stock activity during the second quarter is as follows (shares in thousands): Quarter Ended Six Months Ended June 30, 2017 June 30, 2017 Shares Weighted- Average Grant Date Fair Value Shares Weighted- Average Grant Date Fair Value Unvested awards, beginning 1,419 $ 34.90 1,394 $ 31.26 Awards granted 2 40.55 475 39.49 Awards forfeited/cancelled (11 ) 34.63 (20 ) 33.44 Awards vested (19 ) 34.65 (458 ) 28.61 Unvested awards, ending 1,391 $ 34.92 1,391 $ 34.92 Included in the awards granted during the six months ended June 30, 2017 are performance-based awards for 0.1 million restricted common stock shares issued to members of executive management and certain key employees, which vest in equal installments over three years upon meeting either pre-established financial performance objectives or pre-established total shareholder return objectives. The performance-based awards become fully vested upon a change in control, as defined, and the subsequent involuntary termination of employment. All other restricted common stock shares granted during the quarter and six months ended June 30, 2017 are time-based awards, which vest annually over four years with no restrictions other than the passage of time. Certain shares of the restricted common stock become fully vested upon a change in control, as defined, and the subsequent involuntary termination of employment. We recorded stock-based compensation expense for the second quarters of 2017 and 2016 of $6.0 million and $5.6 million, respectively, and for the six months ended June 30, 2017 and 2016 of $11.6 million and $12.1 million, respectively. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Use of Estimates in Preparation of Financial Statements | Use of Estimates in Preparation of Financial Statements. The preparation of the accompanying Financial Statements in conformity with GAAP 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 periods. Actual results could differ from those estimates. |
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 the purchase to be cash equivalents. As of June 30, 2017 and December 31, 2016, our cash equivalents consist primarily of institutional money market funds, commercial paper, and time deposits held at major banks. As of June 30, 2017 and December 31, 2016, we had $3.0 million and $4.3 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 Condensed Consolidated Balance Sheets (“Balance Sheets” or “Balance Sheet”). |
Short-term Investments and Other Financial Instruments | Short-term Investments and Other Financial Instruments . Our financial instruments as of June 30, 2017 and December 31, 2016 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 June 30, 2017 and December 31, 2016 have contractual maturities of less than two years from the time of acquisition. Our short-term investments as of June 30, 2017 and December 31, 2016 consisted almost entirely of fixed income securities. Proceeds from the sale/maturity of short-term investments for the six months ended June 30, 2017 and 2016 were $104.3 million and $61.8 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): June 30, 2017 December 31, 2016 Level 1 Level 2 Total Level 1 Level 2 Total Assets: Cash equivalents: Money market funds $ 14,625 $ — $ 14,625 $ 6,531 $ — $ 6,531 Commercial paper — 17,866 17,866 — 24,826 24,826 Short-term investments: Corporate debt securities — 96,858 96,858 — 109,140 109,140 U.S. government agency bonds — 8,919 8,919 — 26,513 26,513 Asset-backed securities — 14,066 14,066 — 14,494 14,494 Total $ 14,625 $ 137,709 $ 152,334 $ 6,531 $ 174,973 $ 181,504 Valuation inputs used to measure the fair values of our money market funds and corporate equity securities 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 (par value for convertible debt) and estimated fair value of our debt as of the indicated periods (in thousands): June 30, 2017 December 31, 2016 Carrying Fair Carrying Fair Value Value Value Value Credit agreement (carrying value including current maturities) $ 127,500 $ 127,500 $ 135,000 $ 135,000 2010 Convertible debt (par value) — — 34,722 74,795 2016 Convertible debt (par value) 230,000 248,688 230,000 258,175 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 4 for additional discussion regarding our convertible debt. |
Accounting Pronouncements Adopted | |
Accounting Pronouncements | Accounting Pronouncements Adopted. In March 2016, the FASB issued ASU 2016-09, (Topic 718). This ASU simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The methods of adoption for this ASU vary by amendment. We adopted this ASU in the first quarter of 2017, prospectively applying the guidance related to the recognition of excess tax benefits and tax deficiencies in the income statement and the presentation of excess tax benefits on the statement of cash flows. See Note 5 for further discussion of the impact of adopting this ASU. |
Accounting Pronouncements Issued But Not Yet Effective | |
Accounting Pronouncements | Accounting Pronouncement Issued But Not Yet Effective. The FASB has issued ASU 2014-09, (Topic 606). In August 2015, the FASB issued ASU 2015-14 which deferred the effective date of ASU 2014-09 for one year. In December 2016, the FASB issued ASU 2016-20 Collectively, 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. The accounting guidance is 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 evaluating the impact this ASU will have to our accounting policies, business processes and potential differences in the timing and/or method of revenue recognition for our customer contracts. In conjunction with this evaluation, we are updating our policies to align with the new accounting guidance as well as evaluating our significant customer contracts to determine if the guidance will materially impact our existing portfolio of customer contracts. In addition, we will review new contracts entered into up until the adoption of the ASU. Based upon our initial evaluations, the adoption of this guidance is not expected to have a material impact on our consolidated financial statements. We currently intend to adopt the ASU in the first quarter of 2018, utilizing the cumulative effect approach. In February 2016, the FASB issued ASU 2016-02, Leases In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) Intra-Entity Transfers of Assets Other Than Inventory |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
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): June 30, 2017 December 31, 2016 Level 1 Level 2 Total Level 1 Level 2 Total Assets: Cash equivalents: Money market funds $ 14,625 $ — $ 14,625 $ 6,531 $ — $ 6,531 Commercial paper — 17,866 17,866 — 24,826 24,826 Short-term investments: Corporate debt securities — 96,858 96,858 — 109,140 109,140 U.S. government agency bonds — 8,919 8,919 — 26,513 26,513 Asset-backed securities — 14,066 14,066 — 14,494 14,494 Total $ 14,625 $ 137,709 $ 152,334 $ 6,531 $ 174,973 $ 181,504 |
Carrying Value (Par Value for Convertible Debt) 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 (par value for convertible debt) and estimated fair value of our debt as of the indicated periods (in thousands): June 30, 2017 December 31, 2016 Carrying Fair Carrying Fair Value Value Value Value Credit agreement (carrying value including current maturities) $ 127,500 $ 127,500 $ 135,000 $ 135,000 2010 Convertible debt (par value) — — 34,722 74,795 2016 Convertible debt (par value) 230,000 248,688 230,000 258,175 |
Long-Lived Assets (Tables)
Long-Lived Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Changes In Carrying Amount of Goodwill | Goodwill. The changes in the carrying amount of goodwill for the six months ended June 30, 2017, were as follows (in thousands): January 1, 2017 balance $ 201,094 Adjustments related to prior acquisitions (30 ) Effects of changes in foreign currency exchange rates 5,570 June 30, 2017 balance $ 206,634 |
Summary of Carrying Value of Assets | Other Intangible Assets. Our intangible assets subject to ongoing amortization consist primarily of client contracts and software. As of June 30, 2017 and December 31, 2016, the carrying values of these assets were as follows (in thousands): June 30, 2017 December 31, 2016 Gross Gross Carrying Accumulated Net Carrying Accumulated Net Amount Amortization Amount Amount Amortization Amount Client contracts $ 126,495 $ (88,406 ) $ 38,089 $ 137,398 $ (96,723 ) $ 40,675 Software 133,142 (104,252 ) 28,890 129,743 (99,316 ) 30,427 Total $ 259,637 $ (192,658 ) $ 66,979 $ 267,141 $ (196,039 ) $ 71,102 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Our long-term debt, as of June 30, 2017 and December 31, 2016, was as follows (in thousands): June 30, December 31, 2017 2016 Credit Agreement: Term loan, due February 2020, interest at adjusted LIBOR plus 1.75% (combined rate of 3.05% at June 30, 2017) $ 127,500 $ 135,000 Less - deferred financing costs (2,874 ) (3,489 ) Term loan, net of unamortized discounts 124,626 131,511 $200 million revolving loan facility, due February 2020, interest at adjusted LIBOR plus applicable margin — — Convertible Notes: 2016 Convertible Notes – Senior convertible notes; due March 15, 2036; cash interest at 4.25% 230,000 230,000 Less – unamortized original issue discount (12,764 ) (14,005 ) Less – deferred financing costs (5,014 ) (5,513 ) 2016 Convertible Notes, net of unamortized discounts 212,222 210,482 2010 Convertible Notes – Senior subordinated convertible notes; due March 1, 2017; cash interest at 3.0% — 34,722 Less – unamortized original issue discount — (272 ) Less – deferred financing costs — (24 ) 2010 Convertible Notes, net of unamortized discounts — 34,426 Total debt, net of unamortized discounts 336,848 376,419 Current portion of long-term debt, net of unamortized discounts (18,750 ) (49,426 ) Long-term debt, net of unamortized discounts $ 318,098 $ 326,993 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Effective Income Tax Rates | The effective income tax rates for the second quarters and six months ended June 30, 2017 and 2016 were as follows: Quarter Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 43 % 37 % 25 % 36 % |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
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): Quarter Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Basic weighted-average common shares 32,572 30,942 32,294 30,852 Dilutive effect of restricted common stock 424 602 501 667 Dilutive effect of 2010 Convertible Notes - 907 - 1,403 Dilutive effect of Stock Warrants - 360 - 319 Diluted weighted-average common shares 32,996 32,811 32,795 33,241 |
Stockholders' Equity and Equi21
Stockholders' Equity and Equity Compensation Plans (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders Equity Note [Abstract] | |
Summary of Unvested Restricted Common Stock Activity | Stock-Based Awards. A summary of our unvested restricted common stock activity during the second quarter is as follows (shares in thousands): Quarter Ended Six Months Ended June 30, 2017 June 30, 2017 Shares Weighted- Average Grant Date Fair Value Shares Weighted- Average Grant Date Fair Value Unvested awards, beginning 1,419 $ 34.90 1,394 $ 31.26 Awards granted 2 40.55 475 39.49 Awards forfeited/cancelled (11 ) 34.63 (20 ) 33.44 Awards vested (19 ) 34.65 (458 ) 28.61 Unvested awards, ending 1,391 $ 34.92 1,391 $ 34.92 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Summary Of Significant Accounting Policies [Line Items] | |||
Restricted cash | $ 3,000 | $ 4,300 | |
Proceeds from sale/maturity of short-term investments | $ 104,291 | $ 61,833 | |
Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Short-term investment contractual maturities | 2 years | 2 years |
Summary of Significant Accoun23
Summary of Significant Accounting Policies - Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Assets: | ||
Assets fair value | $ 152,334 | $ 181,504 |
Cash equivalents | Money Market Funds | ||
Assets: | ||
Assets fair value | 14,625 | 6,531 |
Cash equivalents | Commercial Paper | ||
Assets: | ||
Assets fair value | 17,866 | 24,826 |
Short-term Investments | Corporate Debt Securities | ||
Assets: | ||
Assets fair value | 96,858 | 109,140 |
Short-term Investments | U.S. Government Agency Bonds | ||
Assets: | ||
Assets fair value | 8,919 | 26,513 |
Short-term Investments | Asset-backed securities | ||
Assets: | ||
Assets fair value | 14,066 | 14,494 |
Level 1 | ||
Assets: | ||
Assets fair value | 14,625 | 6,531 |
Level 1 | Cash equivalents | Money Market Funds | ||
Assets: | ||
Assets fair value | 14,625 | 6,531 |
Level 2 | ||
Assets: | ||
Assets fair value | 137,709 | 174,973 |
Level 2 | Cash equivalents | Commercial Paper | ||
Assets: | ||
Assets fair value | 17,866 | 24,826 |
Level 2 | Short-term Investments | Corporate Debt Securities | ||
Assets: | ||
Assets fair value | 96,858 | 109,140 |
Level 2 | Short-term Investments | U.S. Government Agency Bonds | ||
Assets: | ||
Assets fair value | 8,919 | 26,513 |
Level 2 | Short-term Investments | Asset-backed securities | ||
Assets: | ||
Assets fair value | $ 14,066 | $ 14,494 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies - Carrying Value (Par Value for Convertible Debt) and Estimated Fair Value of Debt (Details 1) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Credit Agreement | Term Loan | ||
Carrying value (par value for convertible debt) and estimated fair value of debt | ||
Carrying Value | $ 127,500 | $ 135,000 |
Fair Value | 127,500 | 135,000 |
Senior Subordinated Convertible Notes 2010 | ||
Carrying value (par value for convertible debt) and estimated fair value of debt | ||
Carrying Value | 34,722 | |
Fair Value | 74,795 | |
Senior Convertible Notes 2016 | ||
Carrying value (par value for convertible debt) and estimated fair value of debt | ||
Carrying Value | 230,000 | 230,000 |
Fair Value | $ 248,688 | $ 258,175 |
Long-Lived Assets - Summary of
Long-Lived Assets - Summary of Changes In Carrying Amount of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Goodwill RollForward | |
Beginning balance | $ 201,094 |
Adjustments related to prior acquisitions | (30) |
Effects of changes in foreign currency exchange rates | 5,570 |
Ending balance | $ 206,634 |
Long-Lived Assets - Summary o26
Long-Lived Assets - Summary of Carrying Value of Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 259,637 | $ 267,141 |
Accumulated Amortization | (192,658) | (196,039) |
Net Amount | 66,979 | 71,102 |
Client contracts | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 126,495 | 137,398 |
Accumulated Amortization | (88,406) | (96,723) |
Net Amount | 38,089 | 40,675 |
Software | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 133,142 | 129,743 |
Accumulated Amortization | (104,252) | (99,316) |
Net Amount | $ 28,890 | $ 30,427 |
Long-Lived Assets (Details Text
Long-Lived Assets (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Total amortization expense | $ 6.4 | $ 6 | $ 13.3 | $ 11.9 |
Estimated total amortization expense 2017 | 26.9 | 26.9 | ||
Estimated total amortization expense 2018 | 21.1 | 21.1 | ||
Estimated total amortization expense 2019 | 14.3 | 14.3 | ||
Estimated total amortization expense 2020 | 7.4 | 7.4 | ||
Estimated total amortization expense 2021 | $ 3.2 | $ 3.2 |
Debt - Long-Term Debt (Details)
Debt - Long-Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Less – unamortized original issue discount | $ (20,652) | $ (23,007) |
Less – unamortized original issue discount | 0 | (296) |
Total debt, net of unamortized discounts | 336,848 | 376,419 |
Current portion of long-term debt, net of unamortized discounts | (18,750) | (49,426) |
Long-term debt, net of unamortized discounts | 318,098 | 326,993 |
Credit Agreement | 2015 Term Loan | ||
Debt Instrument [Line Items] | ||
Total long-term debt, gross | 127,500 | 135,000 |
Less - deferred financing costs | (2,874) | (3,489) |
Total debt, net of unamortized discounts | 124,626 | 131,511 |
Senior Convertible Notes 2016 | ||
Debt Instrument [Line Items] | ||
Total long-term debt, gross | 230,000 | 230,000 |
Less – unamortized original issue discount | (12,764) | (14,005) |
Less - deferred financing costs | (5,014) | (5,513) |
Total debt, net of unamortized discounts | $ 212,222 | 210,482 |
Senior Subordinated Convertible Notes 2010 | ||
Debt Instrument [Line Items] | ||
Total long-term debt, gross | 34,722 | |
Less – unamortized original issue discount | (272) | |
Less – deferred financing costs | (24) | |
Total debt, net of unamortized discounts | $ 34,426 |
Debt - Long-Term Debt (Parenthe
Debt - Long-Term Debt (Parenthetical) (Details) | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Credit Agreement | 2015 Term Loan | |
Debt Instrument [Line Items] | |
Basis spread on term loan | 1.75% |
Term loan combined interest rate | 3.05% |
Maturity period | Feb. 29, 2020 |
Credit Agreement | Revolving Loan | |
Debt Instrument [Line Items] | |
Amount available under credit facility | $ 200,000,000 |
Maturity period | Feb. 29, 2020 |
Senior Subordinated Convertible Notes 2010 | |
Debt Instrument [Line Items] | |
Maturity period | Mar. 1, 2017 |
Interest rate on senior subordinated convertible notes | 3.00% |
Senior Convertible Notes 2016 | |
Debt Instrument [Line Items] | |
Maturity period | Mar. 15, 2036 |
Interest rate on senior subordinated convertible notes | 4.25% |
Debt - Credit Agreement (Detail
Debt - Credit Agreement (Details Textual) - USD ($) | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||
Principal repayments | $ 7,500,000 | $ 3,750,000 | |
Carrying value of debt | $ 336,848,000 | $ 376,419,000 | |
2015 Credit Agreement | Revolving Loan | |||
Debt Instrument [Line Items] | |||
Line of credit facility, unused capacity, commitment fee percentage | 0.25% | ||
Credit facility, outstanding barrowings | $ 0 | ||
Credit facility, current borrowing capacity | 200,000,000 | ||
Credit Agreement | $ 200,000,000 | ||
Credit facility term | 5 years | ||
2015 Credit Agreement | Term Loan | |||
Debt Instrument [Line Items] | |||
Principal repayments | $ 7,500,000 | ||
Term loan combined interest rate | 3.05% | ||
Basis spread on term loan | 1.75% | ||
Carrying value of debt | $ 150,000,000 | ||
Term loan period | 5 years |
Debt - 2016 Convertible Notes (
Debt - 2016 Convertible Notes (Details Textual) - Senior Convertible Notes 2016 $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended |
Mar. 31, 2017USD ($)$ / shares | Jun. 30, 2017USD ($)Tradingday$ / shares | |
Debt Instrument [Line Items] | ||
Percentage of par value of convertible notes to be settled in cash | 100.00% | |
Conversion rate of common stock | 17.4699 | 17.4753 |
Convertible Notes, conversion of Par Value Convertible Notes to common stock | $ | $ 1 | $ 1 |
Initial conversion price | $ / shares | $ 57.24 | $ 57.22 |
Rate of conversion price | 130.00% | |
Debt instrument, convertible, threshold consecutive trading days | 20 | |
Debt instrument, convertible, threshold trading days | 30 |
Debt - 2010 Convertible Notes (
Debt - 2010 Convertible Notes (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended |
Mar. 31, 2017 | Jun. 30, 2017 | |
Debt Instrument [Line Items] | ||
Convertible notes cash paid | $ 34,771 | |
Senior Subordinated Convertible Notes 2010 | ||
Debt Instrument [Line Items] | ||
Convertible notes cash paid | $ 34,800 | |
Settlement of conversion obligation by common shares delivered from treasury stock | 694,240 | |
Settlement of conversion obligation in excess of par value | $ 28,800 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rates (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Effective Income Tax Rate Continuing Operations Tax Rate Reconciliation [Abstract] | ||||
Effective income tax rates | 43.00% | 37.00% | 25.00% | 36.00% |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 31, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2017 | |
Income Taxes [Line Items] | |||||||
Income tax (expense) benefit | $ (8,722) | $ (6,448) | $ (10,835) | $ (18,038) | |||
Estimated full year 2017 effective income tax rate | 43.00% | 37.00% | 25.00% | 36.00% | |||
Warrant Exercise | |||||||
Income Taxes [Line Items] | |||||||
Income tax (expense) benefit | $ 5,000 | ||||||
Scenario, Forecast | |||||||
Income Taxes [Line Items] | |||||||
Estimated full year 2017 effective income tax rate | 32.00% | ||||||
ASU 2016-09 | |||||||
Income Taxes [Line Items] | |||||||
Income tax (expense) benefit | $ 0 | $ 1,000 | |||||
ASU 2016-09 | Scenario, Forecast | |||||||
Income Taxes [Line Items] | |||||||
Income tax (expense) benefit | $ 2,000 | ||||||
Comcast Corporation | |||||||
Income Taxes [Line Items] | |||||||
Stock warrants exercised | 1.4 |
Commitments, Guarantees and C35
Commitments, Guarantees and Contingencies (Details Textual) | 6 Months Ended |
Jun. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Warranty Period | 90 days |
Earnings Per Common Share - Rec
Earnings Per Common Share - Reconciliation of the Basic and Diluted EPS Denominators (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Reconciliation of the basic and diluted EPS denominators | ||||
Basic weighted-average common shares | 32,572 | 30,942 | 32,294 | 30,852 |
Dilutive effect of restricted common stock | 424 | 602 | 501 | 667 |
Dilutive effect of 2010 Convertible Notes | 907 | 1,403 | ||
Dilutive effect of Stock Warrants | 360 | 319 | ||
Diluted weighted-average common shares | 32,996 | 32,811 | 32,795 | 33,241 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details Textual) | Jun. 30, 2017$ / shares |
Common stock Warrants | |
Earnings Per Common Share [Line Items] | |
Common stock warrants issued, per warrant | $ 26.68 |
Stockholders' Equity and Equi38
Stockholders' Equity and Equity Compensation Plans (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Mar. 31, 2017 | Jan. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2014 | |
Stockholders Equity And Equity Compensation Plans [Line Items] | ||||||||
Remaining number of shares available for repurchase | 6,500,000 | 6,500,000 | ||||||
Repurchase of common stock for employee tax withholdings, shares | 200,000 | 300,000 | ||||||
Repurchase of common stock for tax withholdings, value | $ 6,300 | $ 10,000 | ||||||
Cash dividends declared per common share | $ 0.1975 | $ 0.185 | ||||||
Cash dividend | $ 6,700 | $ 6,000 | $ 13,400 | 12,000 | ||||
Stock warrants term | 10 years | |||||||
Stock warrants, exercise price | $ 26.68 | |||||||
Number of stock warrants vested | 1,400,000 | |||||||
Stock warrants issued | 1,500,000 | 1,500,000 | ||||||
Remaining number of stock warrants vested | 0 | |||||||
Carrying amount of common stock warrants | $ 16,007 | |||||||
Stock-based compensation expense | $ 6,000 | $ 5,600 | $ 11,644 | $ 12,086 | ||||
Performance Shares | ||||||||
Stockholders Equity And Equity Compensation Plans [Line Items] | ||||||||
Performance based awards granted to executive management and certain key employees shares | 100,000 | |||||||
Vesting period | 3 years | |||||||
Restricted common stock | ||||||||
Stockholders Equity And Equity Compensation Plans [Line Items] | ||||||||
Vesting period | 4 years | 4 years | ||||||
Senior Subordinated Convertible Notes 2010 | ||||||||
Stockholders Equity And Equity Compensation Plans [Line Items] | ||||||||
Common shares from treasury stock delivered to settle conversion obligation in excess of par value | 694,240 | |||||||
Carrying value of shares of treasury stock delivered | $ 16,500 | |||||||
Carrying value of treasury stock delivered, per share | $ 23.71 | |||||||
Conversion obligation in excess of par value | $ 28,800 | |||||||
Common stock Warrants | ||||||||
Stockholders Equity And Equity Compensation Plans [Line Items] | ||||||||
Stock warrants exercised | 1,400,000 | |||||||
Common shares from treasury stock delivered to settle conversion obligation in excess of par value | 649,221 | |||||||
Fair value of shares of treasury stock delivered | $ 31,500 | |||||||
Carrying value of shares of treasury stock delivered | $ 15,400 | |||||||
Carrying value of treasury stock delivered, per share | $ 23.66 | |||||||
Carrying amount of common stock warrants | $ 16,000 | |||||||
Comcast Corporation | ||||||||
Stockholders Equity And Equity Compensation Plans [Line Items] | ||||||||
Issuance of stock warrants | 2,900,000 | |||||||
Stock warrants exercised | 1,400,000 | |||||||
Comcast Corporation | Common stock Warrants | ||||||||
Stockholders Equity And Equity Compensation Plans [Line Items] | ||||||||
Client contract incentive related to stock warrants | $ 16,000 | |||||||
Amortization expense of client contract incentive related to stock warrants | $ 6,600 | |||||||
SEC Rule 10b5-1 Plan | ||||||||
Stockholders Equity And Equity Compensation Plans [Line Items] | ||||||||
Repurchase of common stock, shares | 300,000 | 300,000 | ||||||
Total amount paid | $ 10,500 | $ 9,500 | ||||||
Weighted-average price per share | $ 41 | $ 36.07 |
Stockholders' Equity and Equi39
Stockholders' Equity and Equity Compensation Plans - Summary of Unvested Restricted Common Stock Activity (Details) - Restricted common stock - $ / shares shares in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | |
Shares | ||
Shares, Unvested awards, beginning balance | 1,419 | 1,394 |
Shares, Awards granted | 2 | 475 |
Shares, Awards forfeited/cancelled | (11) | (20) |
Shares, Awards vested | (19) | (458) |
Shares, Unvested awards, ending balance | 1,391 | 1,391 |
Weighted-Average Grant Date Fair Value | ||
Weighted-Average Grant Date Fair Value, Unvested awards, beginning balance | $ 34.90 | $ 31.26 |
Weighted-Average Grant Date Fair Value, Awards granted | 40.55 | 39.49 |
Weighted-Average Grant Date Fair Value, Awards forfeited/cancelled | 34.63 | 33.44 |
Weighted-Average Grant Date Fair Value, Awards vested | 34.65 | 28.61 |
Weighted-Average Grant Date Fair Value, Unvested awards, ending balance | $ 34.92 | $ 34.92 |