Document and Entity Information
Document and Entity Information - shares | 8 Months Ended | |
Sep. 09, 2017 | Oct. 10, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 9, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | BLACKHAWK NETWORK HOLDINGS, INC | |
Entity Central Index Key | 1,411,488 | |
Current Fiscal Year End Date | --12-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 56,813,300 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 09, 2017 | Dec. 31, 2016 | Sep. 10, 2016 |
Current assets: | |||
Cash and cash equivalents | $ 304,904 | $ 1,008,125 | $ 300,349 |
Restricted cash | 66,509 | 10,793 | 2,500 |
Settlement receivables, net | 429,494 | 641,691 | 275,471 |
Accounts receivable, net | 226,126 | 262,672 | 199,552 |
Other current assets | 191,691 | 131,375 | 123,919 |
Total current assets | 1,218,724 | 2,054,656 | 901,791 |
Property, equipment and technology, net | 180,554 | 172,381 | 168,865 |
Intangible assets, net | 418,046 | 350,185 | 293,034 |
Goodwill | 656,266 | 570,398 | 508,607 |
Deferred income taxes | 351,760 | 362,302 | 352,683 |
Other assets | 86,610 | 85,856 | 69,039 |
TOTAL ASSETS | 2,911,960 | 3,595,778 | 2,294,019 |
Current liabilities: | |||
Settlement payables | 646,160 | 1,626,827 | 522,133 |
Consumer and customer deposits | 267,642 | 173,344 | 115,085 |
Accounts payable and accrued operating expenses | 142,029 | 153,885 | 103,920 |
Deferred revenue | 151,425 | 150,582 | 113,867 |
Note payable, current portion | 9,890 | 9,856 | 9,846 |
Notes payable to Safeway | 4,201 | 3,163 | 3,239 |
Bank line of credit | 115,000 | 0 | 0 |
Other current liabilities | 74,804 | 51,176 | 48,630 |
Total current liabilities | 1,411,151 | 2,168,833 | 916,720 |
Deferred income taxes | 30,516 | 27,887 | 19,930 |
Note payable | 178,048 | 137,984 | 137,848 |
Convertible notes payable | 437,769 | 429,026 | 425,833 |
Other liabilities | 26,644 | 39,653 | 25,429 |
Total liabilities | 2,084,128 | 2,803,383 | 1,525,760 |
Commitments and contingencies (see Note 9) | |||
Stockholders’ equity: | |||
Preferred stock: $0.001 par value; 10,000 shares authorized; no shares outstanding | 0 | 0 | 0 |
Common stock: $0.001 par value; 210,000 shares authorized; 56,777, 55,667 and 55,368 shares outstanding, respectively | 57 | 56 | 55 |
Additional paid-in capital | 638,008 | 608,568 | 594,739 |
Accumulated other comprehensive loss | (14,934) | (48,877) | (34,398) |
Retained earnings | 200,484 | 228,451 | 203,791 |
Total Blackhawk Network Holdings, Inc. equity | 823,615 | 788,198 | 764,187 |
Non-controlling interests | 4,217 | 4,197 | 4,072 |
Total stockholders’ equity | 827,832 | 792,395 | 768,259 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 2,911,960 | $ 3,595,778 | $ 2,294,019 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 09, 2017 | Dec. 31, 2016 | Sep. 10, 2016 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 210,000,000 | 210,000,000 | 210,000,000 |
Common stock, shares outstanding | 56,777,000 | 55,667,000 | 56,368,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 8 Months Ended | ||
Sep. 09, 2017 | Sep. 10, 2016 | Sep. 09, 2017 | Sep. 10, 2016 | |
OPERATING REVENUES: | ||||
Commissions and fees | $ 269,737 | $ 248,138 | $ 807,576 | $ 750,693 |
Program and other fees | 95,592 | 64,857 | 304,416 | 207,718 |
Marketing | 14,348 | 17,943 | 53,454 | 52,098 |
Product sales | 39,582 | 30,622 | 124,195 | 108,719 |
Total operating revenues | 419,259 | 361,560 | 1,289,641 | 1,119,228 |
OPERATING EXPENSES: | ||||
Partner distribution expense | 196,633 | 178,363 | 577,634 | 541,749 |
Processing and services | 93,877 | 75,818 | 303,829 | 226,634 |
Sales and marketing | 58,711 | 52,327 | 199,218 | 166,176 |
Costs of products sold | 37,148 | 29,122 | 117,882 | 103,163 |
General and administrative | 24,122 | 21,773 | 78,710 | 67,827 |
Transition and acquisition | 665 | 2,574 | 2,021 | 4,160 |
Amortization of acquisition intangibles | 13,904 | 10,376 | 40,577 | 35,533 |
Change in fair value of contingent consideration | (2,100) | 1,300 | (5,097) | 2,100 |
Goodwill impairment | 9,000 | 0 | 9,000 | 0 |
Total operating expenses | 431,960 | 371,653 | 1,323,774 | 1,147,342 |
OPERATING INCOME (LOSS) | (12,701) | (10,093) | (34,133) | (28,114) |
OTHER INCOME (EXPENSE): | ||||
Interest income and other income (expense), net | 631 | 2,360 | 2,134 | 3,258 |
Interest expense | (7,374) | (5,684) | (21,368) | (13,868) |
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) | (19,444) | (13,417) | (53,367) | (38,724) |
INCOME TAX EXPENSE (BENEFIT) | (11,858) | (8,357) | (26,224) | (18,884) |
NET INCOME (LOSS) BEFORE ALLOCATION TO NON-CONTROLLING INTERESTS | (7,586) | (5,060) | (27,143) | (19,840) |
Loss (income) attributable to non-controlling interests, net of tax | (180) | (42) | (460) | (152) |
NET INCOME (LOSS) ATTRIBUTABLE TO BLACKHAWK NETWORK HOLDINGS, INC. | $ (7,766) | $ (5,102) | $ (27,603) | $ (19,992) |
EARNINGS (LOSS) PER SHARE: | ||||
Basic (in usd per share) | $ (0.14) | $ (0.09) | $ (0.49) | $ (0.36) |
Diluted (in usd per share) | $ (0.14) | $ (0.09) | $ (0.49) | $ (0.36) |
Weighted average shares outstanding—basic (in shares) | 56,709 | 55,668 | 56,355 | 55,851 |
Weighted average shares outstanding—diluted (in shares) | 56,709 | 55,668 | 56,355 | 55,851 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 8 Months Ended | ||
Sep. 09, 2017 | Sep. 10, 2016 | Sep. 09, 2017 | Sep. 10, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
NET INCOME (LOSS) BEFORE ALLOCATION TO NON-CONTROLLING INTERESTS | $ (7,586) | $ (5,060) | $ (27,143) | $ (19,840) |
Other comprehensive income (loss): | ||||
Currency translation adjustments | 19,764 | (2,504) | 33,503 | 5,547 |
COMPREHENSIVE INCOME (LOSS) BEFORE ALLOCATION TO NON-CONTROLLING INTERESTS | 12,178 | (7,564) | 6,360 | (14,293) |
Comprehensive loss (income) attributable to non-controlling interests, net of tax | 15 | 129 | (20) | 98 |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO BLACKHAWK NETWORK HOLDINGS, INC. | $ 12,193 | $ (7,435) | $ 6,340 | $ (14,195) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 8 Months Ended | |
Sep. 09, 2017 | Sep. 10, 2016 | |
OPERATING ACTIVITIES: | ||
Net income (loss) before allocation to non-controlling interests | $ (27,143) | $ (19,840) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization of property, equipment and technology | 37,518 | 33,096 |
Goodwill impairment | 9,000 | 0 |
Amortization of intangibles | 44,416 | 38,988 |
Amortization of deferred program and contract costs | 21,706 | 18,805 |
Amortization of deferred financing costs and debt discount | 9,546 | 2,984 |
Loss on property, equipment and technology disposal/write-down | 660 | 2,758 |
Employee stock-based compensation expense | 24,560 | 24,865 |
Change in fair value of contingent consideration | (5,097) | 2,100 |
Other | (3,388) | 38 |
Changes in operating assets and liabilities: | ||
Settlement receivables | 233,441 | 359,398 |
Settlement payables | (1,003,220) | (1,091,151) |
Accounts receivable, current and long-term | 35,179 | 44,585 |
Other current assets | 16,807 | 3,940 |
Other assets | (12,172) | (9,299) |
Consumer and customer deposits | 12,330 | 13,963 |
Accounts payable and accrued operating expenses | (17,426) | (28,775) |
Deferred revenue | 4,948 | 2,703 |
Other current and long-term liabilities | 5,334 | (24,912) |
Income taxes, net | (28,276) | (13,883) |
Net cash (used in) provided by operating activities | (641,277) | (639,637) |
INVESTING ACTIVITIES: | ||
Expenditures for property, equipment and technology | (43,484) | (33,522) |
Business acquisitions, net of cash acquired | (170,773) | (144,284) |
Investment in unconsolidated entities | (5,801) | (3,901) |
Change in restricted cash | 2,500 | 689 |
Other | (3,245) | 4,000 |
Net cash (used in) provided by investing activities | (220,803) | (177,018) |
FINANCING ACTIVITIES: | ||
Payments for acquisition liability | (5,503) | 0 |
Repayment of debt assumed in business acquisitions | (8,585) | (8,964) |
Proceeds from issuance of note payable | 50,000 | 250,000 |
Repayment of note payable | (10,000) | (463,750) |
Payments of financing costs | (1,025) | (15,926) |
Borrowings under revolving bank line of credit | 1,771,381 | 1,959,749 |
Repayments on revolving bank line of credit | (1,656,381) | (1,959,749) |
Proceeds from convertible debt | 0 | 500,000 |
Payments for note hedges | 0 | (75,750) |
Proceeds from warrants | 0 | 47,000 |
Repayment on notes payable to Safeway | (254) | (890) |
Proceeds from issuance of common stock from exercise of employee stock options and employee stock purchase plans | 13,286 | 4,491 |
Other stock-based compensation related | (10,157) | (2,135) |
Repurchase of common stock | 0 | (34,845) |
Other | 0 | (155) |
Net cash (used in) provided by financing activities | 142,762 | 199,076 |
Effect of exchange rate changes on cash and cash equivalents | 16,097 | 3,352 |
Decrease in cash and cash equivalents | (703,221) | (614,227) |
Cash and cash equivalents—beginning of period | 1,008,125 | 914,576 |
Cash and cash equivalents—end of period | 304,904 | 300,349 |
NONCASH FINANCING AND INVESTING ACTIVITIES: | ||
Financing of business acquisition with contingent consideration | $ 1,640 | $ 20,100 |
The Company and Significant Acc
The Company and Significant Accounting Policies | 8 Months Ended |
Sep. 09, 2017 | |
Accounting Policies [Abstract] | |
The Company and Significant Accounting Policies | The Company and Significant Accounting Policies The Company Blackhawk Network Holdings, Inc., together with its subsidiaries (“we”, “us”, “our”, the “Company”), is a leading prepaid payment network utilizing proprietary technology to offer consumers and businesses a broad selection of prepaid cards in physical and electronic forms, as well as complementary prepaid products, payment services and incentives solutions. We currently offer our products and/or solutions directly or through commercial relationships in the United States and 25 other countries and can deliver solutions in over 100 countries. Our product offerings include single-use gift cards; loyalty, incentive and reward products and services; prepaid telecom products and prepaid financial services products, including general purpose reloadable (“GPR”) cards, and our reload network (collectively, “prepaid products”). We offer gift cards from leading consumer brands (known as “closed loop”) as well as branded gift and incentive cards from leading payment network card associations such as American Express, Discover, MasterCard and Visa (known as “open loop”) and prepaid telecom products offered by prepaid wireless telecom carriers. We also distribute GPR cards and operate a proprietary reload network named Reloadit, which allows consumers to reload funds onto their previously purchased GPR cards. We distribute these prepaid products across multiple high-traffic channels such as grocery, convenience, specialty and online retailers (referred to as “retail distribution partners”) in the Americas, Europe, Africa, Australia and Asia and provide these prepaid products and related services to business clients for their loyalty, incentive and reward programs. Basis of Presentation The accompanying condensed consolidated financial statements of Blackhawk Network Holdings, Inc. are unaudited. We have prepared our unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. We have condensed or omitted certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP pursuant to such rules and regulations. Accordingly, our interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K, filed with the SEC on February 27, 2017 (the “Annual Report”). We have prepared our condensed consolidated financial statements on the same basis as our annual audited consolidated financial statements and, in the opinion of management, have reflected all adjustments, which include only normal recurring adjustments, necessary to present fairly our financial position and results of operations for the interim periods presented. Our results for the interim periods are not necessarily reflective of the results to be expected for the year ending December 30, 2017 or for any other interim period or other future year. Our condensed consolidated balance sheet as of December 31, 2016 , included herein was derived from our audited consolidated financial statements as of that date but does not include all disclosures required by GAAP for annual financial statements, including notes to the financial statements. Seasonality For our retail business, a significant portion of gift card sales occurs in late December each year during the holiday selling season. As a result, we earn a significant portion of our revenues, net income and cash flows during the fourth quarter of each year and remit the majority of the cash, less commissions, to our content providers in January of the following year. The timing of our fiscal year-end, December holiday sales and the related January cash settlement with content providers significantly increases our Cash and cash equivalents, Settlement receivables and Settlement payables balances at the end of each fiscal year relative to normal daily balances. The cash settlement with our content providers in January accounts for the majority of the use of cash from operating activities in our condensed consolidated statements of cash flows during our first three fiscal quarters. We also experience an increase in revenues, net income and cash flows during the second quarter of each year, which we primarily attribute to the Mother’s Day, Father’s Day and graduation gifting season and the Easter holiday. Depending on when the Easter holiday occurs, the associated increase is in either the first or second quarter. As a result, quarterly financial results are not necessarily reflective of the results to be expected for the year or any other interim or future period. Seasonality also impacts our incentives businesses, but such impact is smaller in comparison to our retail business. Recently Issued or Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (Topic 606), which, along with amendments issued in 2015 and 2016, replaces nearly all current U.S. GAAP guidance on this topic with a comprehensive revenue measurement and recognition standard and expanded disclosure requirements. This new guidance provides a five-step analysis in determining when and how revenue is recognized. Under the new guidance, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the new guidance requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We will adopt this new guidance using the full retrospective method in the first quarter of fiscal 2018 to restate each prior reporting period presented. While we are continuing to evaluate the impacts of this new guidance on our consolidated financial statements, including disclosures, we have identified the following areas that will be affected by the adoption of this new standard: Revenue Content Provider Commissions— Under the new guidance, we will continue to recognize content provider commissions as revenue at the time of card activation, as our performance obligation to the content provider is complete. However, the actual revenue recognition treatment required under the new guidance may be dependent on contract-specific terms and, therefore, may vary in some instances. Consumer Purchase Fees and Program Management Fees— Under the new guidance, we consider the transaction price for our open loop gift cards, including our Visa gift card, to include consumer purchase fees and program management fees. Under the new guidance, we have identified three performance obligations - distribution-and-activation, redemption service and customer care. Revenue from Consumer Purchase Fees and Program Management Fees, included within Commissions and fees and Program and other fees , respectively, related to our Visa gift cards will predominantly be recognized as revenue at the time of card activation when our distribution-and-activation obligation is complete. The remainder will be recognized over the estimated period of card redemption as redemption service and customer care obligations are performed. Under current GAAP, we defer these revenues and recognize them based on the redemption pattern of the card. Interchange revenue will be recognized over the period of card redemption as we track and redeem cards, similar to our current revenue recognition. Additionally, revenue from program management fees related to our proprietary Visa gift cards issued by MetaBank will be based on a blended rate over the appropriate periods as required by the contract-specific terms compared to a contractually stated rate under the current accounting policy. Although we expect the blended rate to be lower than the contract rate initially, the economics of the arrangement will be the same over the long term. Under current GAAP, we defer consumer purchase fees and program management fees related to our Visa gift cards in Deferred revenue and recognize revenue ratably in proportion to the historical redemption patterns of the card portfolio over the estimated life of the card. There may be changes to the classification of program management fees and breakage revenue from Program and other fees to Commission and fees within Total Operating Revenue. Rebate Processing Fees— While we expect the recognition of revenue for rebates fulfilled by checks or closed loop cards to remain unchanged under the new guidance, the new guidance will require us to recognize revenue for rebates fulfilled with open loop incentive cards when we fulfill the cards to the end consumer versus ratably in proportion to historical redemption patterns as our performance obligation for rebate processing is complete at time of fulfillment. Incentive Merchandise Rewards— The adoption of the new guidance is expected to classify certain incentive merchandise rewards costs as a reduction to revenue versus a cost of products sold. Under the new accounting guidance, these costs will only be recorded as a cost of product sold if it is determined that we control the goods or services before they are transferred to the customer. In doing so, we will evaluate (i) if we are primarily responsible for fulfilling the promise to provide the good or service; (ii) if we have inventory risk before the good or service has been transferred to customer or after transfer of control to the customer; and (iii) if we have discretion in establishing the price for the good or service. Operating Expenses Partner Distribution Expense— Under the new guidance, partner distribution expense for Visa gift and open loop incentive cards will predominantly be recognized at the time of card activation when our distribution-and-activation obligation is complete. The remainder will be recognized over the estimated period of card redemption. Under current GAAP, we defer these expenses and amortize them based on the redemption pattern of the card. Processing and Services— Under the new guidance, processing and services costs, card production and upfront transaction processing fees for the Visa gift card and open loop incentive cards will predominantly be recognized at the time of card activation when our distribution-and-activation obligation is complete. The remainder will be recognized over the estimated period of card redemption. Under current GAAP, these costs are deferred and expensed based on the same redemption pattern as the related revenue. Sales and Marketing— The accounting for the recognition of costs related to obtaining customer contracts under the new guidance is different from our current capitalization policy. The adoption of the new guidance will result in additional capitalized commissions which will be amortized over a longer term than our current policy. As part of our assessment and implementation plan, we are also evaluating and making changes to our policies, procedures and internal controls. We continue to evaluate the impact of this new guidance on the Company, including any impacts on purchase accounting or intangibles assets from our recent acquisitions. We expect to continue providing relevant information prior to adoption. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which simplifies the existing two-step guidance for goodwill impairment testing by eliminating the second step resulting in a write-down to goodwill equal to the initial amount of impairment determined in step one. The ASU is to be applied prospectively for reporting periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. We have early adopted this standard in the first quarter of 2017 to reduce the complexity of calculating goodwill impairment. During the third quarter of 2017, we recognized a $9.0 million goodwill impairment charge related to our Cardpool reporting unit, reducing the carrying value of goodwill to $31.5 million . See Note 6 — Goodwill for additional information on this charge. Significant Accounting Policies Except for Cardpool goodwill as stated above, there have been no material changes to our significant accounting policies, as compared to the significant accounting policies described in the audited consolidated financial statements and related notes included in the Annual Report. |
Business Acquisitions
Business Acquisitions | 8 Months Ended |
Sep. 09, 2017 | |
Business Combinations [Abstract] | |
Business Acquisitions | Business Acquisitions 2017 Acquisitions CashStar On August 29, 2017, we acquired CashStar, Inc. and its subsidiaries (collectively “CashStar”), for $166.0 million in cash. CashStar provides a digital commerce platform for the sales, marketing and distribution of digital and physical gift cards. This acquisition strengthens our position in the emerging digital gift card market and establishes our Company as a leading provider in the fast-growing, first-party digital gift card market. We financed the purchase using cash on hand and approximately $110 million of borrowings under our Restated Credit Agreement (See Note 3 — Financing ). We accounted for this acquisition as a business combination. The following table presents our initial estimates of the purchase price allocation. We may make adjustments to these amounts through the measurement period as we finalize information regarding our forecasts, valuation assumptions and income taxes (in thousands): Cash and cash equivalents $ 14,469 Restricted cash 7,820 Settlement receivables, net 2,815 Identifiable technology and intangible assets 89,132 Goodwill 95,387 Other tangible assets, net 1,570 Settlement payables (7,852 ) Consumer and customer deposits (11,779 ) Accounts payable and accrued operating expenses (7,025 ) Debt assumed (8,285 ) Deferred income taxes (10,256 ) Total purchase consideration $ 165,996 Deferred income taxes include $32.7 million of deferred tax liabilities for nondeductible amortization of identifiable technology and intangible assets, $20.2 million of deferred tax assets for net operating loss carryforwards, and $2.2 million for other deferred tax assets, net. At closing, we repaid the assumed debt, which we present in financing activities in our condensed consolidated statements of cash flows. We also paid $3.2 million of CashStar's transaction expenses included above within accounts payable and accrued operating expenses, which we present in operating activities in our condensed consolidated statements of cash flows. Goodwill represents the value of the future cash flows from new customers and the value of the assembled workforce. Goodwill is not expected to be deductible for income tax purposes. The following table summarizes the components of the identifiable technology and intangible assets and their estimated useful lives at the acquisition date (dollars in thousands): Fair Value Useful Life Customer relationships $ 87,132 5 years Technology 2,000 1.5 years Total identifiable technology and intangible assets $ 89,132 Customer relationships represent the estimated fair value of the underlying relationships and agreements with CashStar's business clients. Technology consists of CashStar's internally-developed software. Pro forma financial information The following table summarizes the combined pro forma results of operations of us and CashStar as though we have been combined as of the beginning of fiscal 2016 (in thousands, except per share amounts): 36 weeks ended September 9, 2017 September 10, 2016 (Unaudited) Total revenues $ 1,317,226 $ 1,139,796 Net loss attributable to Blackhawk Network Holdings, Inc. $ (35,782 ) $ (30,846 ) Pro forma EPS—Basic $ (0.63 ) $ (0.55 ) Pro forma EPS—Diluted $ (0.63 ) $ (0.55 ) The pro forma financial information includes adjustments to reclassify acquisition-related costs from 2017 to 2016, to amortize technology and intangible assets starting at the beginning of 2016, to reflect the impact on revenue resulting from the step-down in basis of deferred revenue from its book value to its fair value as of the beginning of 2016 and to increase interest expense assuming the related financing had been applied to the beginning of 2016. The pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2016. We have not presented separate results of operations since closing of us and the acquisition since the beginning of fiscal 2016, as results of operations for the acquisition are immaterial. Acquisition-related expenses totaled $0.4 million , which we report in Transition and acquisition expense. Other Acquisitions During the first quarter of 2017, we completed an acquisition of a rebates and incentives business. During the third quarter of 2017, we acquired certain assets of a full-service recognition and reward provider with operations primarily in Australia. The purchase consideration for these acquisitions totaled approximately $30.1 million , which includes $27.6 million cash on hand and approximately $1.6 million related to contingent consideration, which is a cash payment of up to $2.0 million based on the performance of the acquired business through December 31, 2017, and $0.9 million relating to working capital adjustments. In aggregate, $8.3 million cash was acquired, and based on our initial estimate of the purchase price allocation, $15.5 million was attributed to intangible assets, $13.1 million was attributed to goodwill, and $6.8 million was attributed to net tangible liabilities acquired. For the intangible assets acquired, customer relationships have an average useful life ranging from 7 to 10 years. We expect to deduct $9.9 million of goodwill and $7.8 million of identifiable technology and intangible assets for tax purposes, a portion of which will commence upon settlement of contingent consideration and contingent liabilities. We have not presented separate results of operations since closing or combined pro forma financial information of us and these acquisitions since the beginning of fiscal 2016, as results of operations for these acquisitions are immaterial. Acquisition-related expenses totaled $0.4 million , which we report in Transition and acquisition expense. 2016 Acquisitions On October 6, 2016, we acquired all of the outstanding common stock of The Grass Roots Group Holdings Limited and its subsidiaries (collectively, “Grass Roots”) for total purchase consideration of £93.9 million , or $119.3 million based on the exchange rate on the acquisition date. Grass Roots is a leading provider of employee and customer engagement solutions, and the acquisition broadens the global capabilities of our incentives and rewards businesses. The acquisition was funded using a combination of cash on hand and borrowings under our Credit Agreement. The purchase consideration included £87.2 million , or $110.8 million , in cash and an additional £6.7 million , or $8.5 million , related to the Grass Roots Employee Benefit Trust (“GREBT”), which we include in our consolidated financial statements. At closing, we paid $0.6 million for transaction expenses. During the second quarter of 2017, we recorded a measurement period adjustment for Grass Roots, which increased the purchase price by $0.8 million , increased accounts receivables by $0.4 million , decreased consumer and customer deposits by $1.8 million and decreased goodwill by $1.4 million . We also recorded a measurement period adjustment for Spafinder Wellness, Inc. and its subsidiaries (collectively, “Spafinder”), which increased goodwill by $0.3 million and decreased inventory by $0.3 million . The measurement periods for IMShopping, Inc. and its subsidiary (collectively, “NimbleCommerce”) and 888extramoney.com LLC (“Extrameasures”) were closed in the first and second quarter of 2017, respectively. The measurement period for our acquisitions of Grass Roots, Spafinder and Samba Days Experience Group Ltd. and certain of its subsidiaries remains open with respect to intangibles and deferred taxes. |
Financing
Financing | 8 Months Ended |
Sep. 09, 2017 | |
Debt Disclosure [Abstract] | |
Financing | Financing Credit Agreement In March 2017, we repaid $10.0 million of the term loan outstanding under our Credit Agreement, as amended and restated (the “Restated Credit Agreement”). On April 20, 2017, we borrowed an additional $50.0 million of term loan under the Restated Credit Agreement. The terms of the new term loan are substantially similar to the outstanding term loan. On April 25, 2017, we entered into an amendment to the Restated Credit Agreement to extend the term loan commitments provided by the lenders under our Restated Credit Agreement to January 12, 2018 and made certain modifications to the financial and other covenants to add operating flexibility, including modification of the leverage covenant and increasing the dollar limitation on dividends, stock repurchases and other restricted payments under certain conditions. On August 28, 2017, we entered into the second amendment to the Restated Credit Agreement which, among other things, modified the definition of Consolidated EBITDA. As a result, we can access an increased portion of the available lending commitments to fund permitted acquisitions and for other corporate purposes under the Restated Credit Agreement. The following table presents the amounts due by maturity date of our term loan and convertible notes as of September 9, 2017 (in thousands): September 9, 2017 2018 $ 10,000 2019 10,000 2020 20,000 2021 150,000 2022 500,000 Total long-term debt $ 690,000 As a result of the covenants in our Restated Credit Agreement which require us to maintain certain leverage ratios of total debt to adjusted EBITDA (as defined in the Restated Credit Agreement), and depending on our levels of adjusted EBITDA, we are limited in our ability to incur additional indebtedness either under the Restated Credit Agreement or through other debt facilities. These limitations also affect the amount of capital we can allocate to acquisitions, internal capital developments and capital returned to stockholders. |
Fair Value Measurements
Fair Value Measurements | 8 Months Ended |
Sep. 09, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We measure certain assets and liabilities at fair value on a recurring basis. The table below summarizes the fair values of these assets and liabilities as of September 9, 2017 , December 31, 2016 and September 10, 2016 (in thousands): September 9, 2017 Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents Money market mutual funds $ 75 $ — $ — $ 75 Liabilities Contingent consideration $ — $ — $ 14,792 $ 14,792 December 31, 2016 Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents Money market mutual funds $ 300,015 $ — $ — $ 300,015 Liabilities Contingent consideration $ — $ — $ 23,752 $ 23,752 September 10, 2016 Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents Money market mutual funds $ 5,112 $ — $ — $ 5,112 Liabilities Contingent consideration $ — $ — $ 22,200 $ 22,200 Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities. Level 1 investments include money market mutual funds. Level 2 — Inputs other than quoted prices included in Level 1 that are either directly or indirectly observable. Level 3 — Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the inputs that market participants would use in pricing. Level 3 includes the estimated fair value of our contingent consideration liabilities. During the 36 weeks ended September 9, 2017 , there were no transfers between levels. Term loan —As of September 9, 2017 , using Level 2 inputs, we estimate the fair value of our term loan (classified as Note payable on the balance sheet) to be approximately $190.0 million . Convertible notes payable —As of September 9, 2017 , using Level 2 inputs, we estimate the fair value of our convertible notes payable to be approximately $565.0 million . Contingent consideration —We estimate the fair value of the contingent consideration based on our estimates of the probability of achieving the relevant targets and discount rates reflecting the risk of meeting these targets. The changes in fair value of contingent consideration for the 36 weeks ended September 9, 2017 and September 10, 2016 are as follows (in thousands): 36 weeks ended September 9, 2017 September 10, 2016 Balance, beginning of period $ 23,752 $ — Additions from acquisitions (see Note 2—Business Acquisitions ) 1,640 20,100 Change in fair value of contingent consideration (5,097 ) 2,100 Settlement (5,503 ) — Balance, end of period $ 14,792 $ 22,200 We present the change in the fair value of contingent consideration in Change in fair value of contingent consideration and as a noncash adjustment to net income in our condensed consolidated statements of cash flows. A significant increase (decrease) in our estimates of the amounts payable for and probability of achieving the relevant targets or a significant decrease (increase) in the discount rate could materially increase (decrease) the estimated fair value of contingent consideration. The issuance and increase in fair value of contingent consideration during 2016 was related to our acquisition of Extrameasures. During the 36 weeks ended September 9, 2017 , we paid out $5.5 million for achieving relevant targets during the first earn-out year, and we estimated the fair value of the remaining contingent consideration based on our estimates of the amounts payable for and probability of achieving the relevant targets and a discount rate of 17% . |
Consolidated Financial Statemen
Consolidated Financial Statement Details | 8 Months Ended |
Sep. 09, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated Financial Statement Details | Consolidated Financial Statement Details The following tables represent the components of Other current assets , Other assets , Other current liabilities and Other liabilities as of September 9, 2017 , December 31, 2016 and September 10, 2016 consisted of the following (in thousands): September 9, 2017 December 31, 2016 September 10, 2016 Other current assets: Inventory $ 40,124 $ 43,950 $ 35,634 Deferred expenses 19,194 22,148 12,099 Income tax receivables 41,393 13,599 38,427 Other 44,159 51,678 37,759 Assets held for sale 46,821 — — Total other current assets $ 191,691 $ 131,375 $ 123,919 Other assets: Deferred program and contract costs $ 38,820 $ 48,066 $ 44,388 Other receivables 1,646 2,713 1,390 Income tax receivables 2,270 2,358 — Deferred financing costs 2,999 2,688 2,871 Other 40,875 30,031 20,390 Total other assets $ 86,610 $ 85,856 $ 69,039 Other current liabilities: Payroll and related liabilities $ 28,920 $ 24,944 $ 25,425 Income taxes payable 4,994 4,199 3,158 Acquisition liability 5,983 6,672 11,250 Other payables and accrued liabilities 10,509 15,361 8,797 Liabilities held for sale 24,398 — — Total other current liabilities $ 74,804 $ 51,176 $ 48,630 Other liabilities: Contingent consideration $ 9,800 $ 17,080 $ 10,950 Income taxes payable 4,595 6,957 6,213 Deferred income and other liabilities 12,249 15,616 8,266 Total other liabilities $ 26,644 $ 39,653 $ 25,429 Assets held for sale During the third quarter of 2017, the Company recorded an impairment charge to reduce the carrying value of the Cardpool reporting unit to its estimated fair value. See Note 6 — Goodwill for additional information on this charge. On October 9, 2017, subsequent to the end of the third quarter of 2017, the Board of Directors approved management’s plan to sell the Cardpool gift card exchange business. As we begin to actively market the Cardpool business, we may identify specific assets and liabilities to be retained by the Company. It is probable that such sale will occur within one year. As a result, beginning from the time the plan was approved, Cardpool’s assets and liabilities will be accounted for as held for sale and measured at the lower of its carrying value or fair value less cost to sell. If it is determined, as a result of our selling efforts, that the carrying value of the net assets to be sold is higher than the expected selling price less the costs to sell, additional impairment charges will be recorded. The following table presents the aggregate carrying amounts of the major classes of assets and liabilities as of September 9, 2017 related to the Cardpool business (in thousands): September 9, 2017 Other current assets $ 5,708 Property, equipment and technology, net 7,097 Goodwill 31,491 Intangible assets, net 431 Total assets $ 44,727 Accounts payable and accrued operating expenses $ 1,479 Other current liabilities 503 Deferred revenue 167 Total liabilities $ 2,149 During the first quarter of 2017, management approved a plan to sell all assets and liabilities related to Grass Roots’ Meetings & Events (“M&E”) business. It is probable that such sale will occur within one year. As a result, beginning from the time the plan was approved, each of the relevant asset and liability balances will be accounted for as held for sale and measured at the lower of its carrying value or fair value less cost to sell. Based on the purchase price allocation performed in the fourth quarter of 2016, we believe that the carrying value of all the relevant assets and liabilities does not exceed fair value less cost to sell. The following table presents the aggregate carrying amounts of the major classes of assets and liabilities related to the M&E business as of September 9, 2017 (in thousands): September 9, 2017 Accounts receivable, net $ 9,737 Other current assets 3,002 Property, equipment and technology, net 490 Intangible assets, net 6,173 Goodwill 26,303 Deferred income taxes 1,116 Total assets held for sale $ 46,821 Settlement payables $ 7,061 Consumer and customer deposits 1,812 Accounts payable and accrued operating expenses 3,135 Deferred revenue 1,784 Other current liabilities 10,493 Deferred income taxes 113 Total liabilities held for sale $ 24,398 During the first three quarters of 2017, the M&E business recorded pre-tax income of $1.6 million during the period it was accounted for as an asset held for sale. |
Goodwill
Goodwill | 8 Months Ended |
Sep. 09, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill We have assigned goodwill to our U.S. Retail, Incentives & Rewards and International segments. During the first quarter of 2017, as a result of changes in reporting financial results to our Chief Operating Decision Maker (“CODM”), we concluded that we would report the international incentives businesses within the International reportable segment. Accordingly, we re-allocated a portion of the goodwill from the Incentives & Rewards segment to the International segment based on their relative fair values. As we continue to develop our e-commerce strategy, we also re-allocated a portion of the e-commerce goodwill from U.S. Retail to Incentives & Rewards to align with the way our business is managed. We had performed our annual review of goodwill balances for impairment as of September 11, 2016. For the Cardpool reporting unit, we performed both a qualitative and quantitative assessment of goodwill impairment and determined that Cardpool had an elevated risk of goodwill impairment due to its exposure to lowered expectations of sales volume related to the card exchange business and lower operating margins. Based on this assessment, the fair value of the Cardpool reporting unit exceeded its carrying value by $3.4 million , or 6.9% . Subsequent to the annual goodwill impairment assessment performed in the fourth quarter of 2016, we continued to monitor the actual performance of Cardpool and determined the fair value of Cardpool was not less than its carrying value for the first and second quarter of fiscal 2017. During the third quarter of 2017, we determined that there were indicators present to suggest that it was more likely than not that the fair value of the Cardpool reporting unit was less than its carrying amount. The significant changes for the Cardpool reporting unit, subsequent to the annual goodwill impairment test performed in the fourth quarter of 2016, included a decline in forecasted operating revenues, operating income and cash flows. To test for impairment, we estimated the fair value of the Cardpool reporting unit under the income approach, discounting estimated future cash flows using a weighted-average cost of capital, based on a rate of return available from similar, alternative investments and reflecting the inherent risks associated with the estimated cash flows. To reduce the carrying value to its estimated fair value, we recorded an impairment charge of $9.0 million during the third quarter of 2017, reducing the carrying value of Cardpool goodwill to $31.5 million . On October 9, 2017, subsequent to the end of the third quarter of 2017, the Board of Directors approved management’s plan to sell the Cardpool gift card exchange business. If it is determined, as a result of our selling efforts, that the carrying value of the net assets to be sold is higher than the expected selling price less the costs to sell, additional impairment charges will be recorded. See Note 5 — Consolidated Financial Statement Details for additional information. A summary of changes in goodwill during the 36 weeks ended September 9, 2017 is as follows (in thousands): September 9, 2017 U.S. Retail Incentives & Rewards International Total Balance, beginning of period $ 99,685 $ 366,508 $ 104,205 $ 570,398 Goodwill impairment (9,000 ) — — (9,000 ) Re-allocation of international Incentives goodwill — (7,152 ) 7,152 — Re-allocation of e-commerce goodwill (10,505 ) 10,505 — — Acquisitions (see Note 2—Business Acquisitions ) — 105,306 3,153 108,459 Measurement period of adjustments for 2016 acquisitions 338 — (1,384 ) (1,046 ) Asset held for sale (see Note 5—Consolidated Financial Statement Details ) — — (26,303 ) (26,303 ) Foreign currency translation adjustments — 2,344 11,414 13,758 Balance, end of period $ 80,518 $ 477,511 $ 98,237 $ 656,266 |
Stock-Based Compensation
Stock-Based Compensation | 8 Months Ended |
Sep. 09, 2017 | |
Equity [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation During the 36 weeks ended September 9, 2017 , our Board of Directors granted 1,024,169 restricted stock units and 200,700 performance stock units. The following table presents total stock-based compensation expense according to the income statement line in our condensed consolidated statements of income (loss) for the 12 weeks ended and 36 weeks ended September 9, 2017 and September 10, 2016 (in thousands): 12 weeks ended 36 weeks ended September 9, 2017 September 10, 2016 September 9, 2017 September 10, 2016 Processing and services $ 1,681 $ 1,401 $ 5,181 $ 4,365 Sales and marketing 2,705 2,759 8,401 8,600 Cost of products sold 14 31 35 89 General and administrative 3,709 4,102 10,943 11,811 Total stock-based compensation expense $ 8,109 $ 8,293 $ 24,560 $ 24,865 |
Income Taxes
Income Taxes | 8 Months Ended |
Sep. 09, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rates were 61.0% and 62.3% for the 12 weeks ended September 9, 2017 and September 10, 2016 , respectively, and 49.1% and 48.8% for the 36 weeks ended September 9, 2017 and September 10, 2016 , respectively. The decrease in the effective tax rate for the 12 weeks ended September 9, 2017 compared to the 12 weeks ended September 10, 2016 was primarily due to prior year discrete tax benefit for a tax return to provision true-up, compared to a current year discrete tax benefit related to an uncertain tax position. The increase in the effective tax rate for the 36 weeks ended September 9, 2017 compared to the 36 weeks ended September 10, 2016 was primarily due to a current year discrete tax benefit related to an uncertain tax position and excess tax benefits of employee stock-based compensation (both increasing the effective tax rate due to pre-tax loss), compared to a prior year discrete tax benefit for a tax return to provision true-up. |
Commitments and Contingencies
Commitments and Contingencies | 8 Months Ended |
Sep. 09, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contingencies From time to time, we enter into contracts containing provisions that require us to indemnify various parties against certain potential claims from third parties. Under contracts with certain issuing banks, we are responsible to the banks for any unrecovered overdrafts on cardholders’ accounts. Under contracts with certain content providers, retail distribution partners and issuing banks, we are responsible for potential losses resulting from certain claims from third parties. Because the indemnity amounts associated with these agreements are not explicitly stated, the maximum amount of the obligation cannot be reasonably estimated. Historically, we have paid immaterial amounts pursuant to these indemnification provisions. We are subject to audits related to various indirect taxes, including, but not limited to, sales and use taxes, value-added tax, and goods and services tax, in various foreign and state jurisdictions. We evaluate our exposure related to these audits and potential audits and do not believe that it is probable that any audit would hold us liable for any material amounts due. Legal Matters There are various claims and lawsuits arising in the normal course of business pending against us, including the matters described below, some of which seek damages and other relief which, if granted, may require future cash expenditures. Management does not believe that it is probable that the resolution of these matters would result in any liability that would materially affect our results of operations or financial condition. On March 30, 2015, Greg Haney in his capacity as representative of the selling stockholders of CardLab, Inc. filed a lawsuit against us in the Delaware Chancery Court (the “Court”) (CardLab, Inc. v. Blackhawk Network Holdings, Inc., Case No. 10851). The complaint generally alleged that we failed to disclose material information relating to a potential earn-out payment in connection with our acquisition of CardLab, Inc. in 2014. On August 8, 2017, the parties agreed to dismiss the action in its entirety with prejudice. Accordingly, the parties filed a Stipulation of Dismissal, which was granted on August 15, 2017, dismissing all claims with prejudice. In addition, we transact business in non-U.S. markets and may, from time to time, be subject to disputes and tax audits by foreign tax authorities related to value added or other indirect taxes typically on commissions or fees we receive from non-resident content providers. After the application of third party indemnities, our present exposure is approximately $5.1 million , primarily in a single jurisdiction. If we were to be assessed for this exposure, we believe it is probable that we will prevail. |
Segment Reporting
Segment Reporting | 8 Months Ended |
Sep. 09, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Our three reportable segments are U.S. Retail, Incentives & Rewards and International. During the first quarter of 2017, as a result of changes in reporting financial results to our CODM, we concluded that we would report the international incentives businesses within the International reportable segment. We also determined that it would be appropriate to allocate all costs that have been previously reported within Corporate and Unallocated: i) account management and marketing personnel, ii) the substantial majority of our technology personnel and related depreciation and amortization of technology and related hardware, iii) accounting, finance, legal, compliance, human resources and other administrative functions and iv) noncash charges including amortization of acquisition intangibles, stock-based compensation and change in fair value of contingent consideration, to the respective reportable segments. We do not assess performance based on assets and do not provide information on the assets of our reportable segments to our CODM. The key metrics used by our CODM to assess segment performance include Operating revenues , Operating revenues, net of Partner distribution expense and segment profit. The following tables present the key metrics used by our CODM for the evaluation of segment performance, including certain significant noncash charges (consisting of certain depreciation and amortization of property, equipment and technology and distribution partner stock-based compensation expense) which have been deducted from the segment profit amounts shown below, and reconciliations of these amounts to our condensed consolidated financial statements (in thousands): 12 weeks ended September 9, 2017 U.S. Retail Incentives & Rewards International Consolidated Total operating revenues $ 204,420 $ 80,671 $ 134,168 $ 419,259 Partner distribution expense 115,565 5,521 75,547 196,633 Operating revenues, net of Partner distribution expense 88,855 75,150 58,621 222,626 Other operating expenses 100,527 76,382 58,418 235,327 Segment profit (loss) / Operating income (loss) $ (11,672 ) $ (1,232 ) $ 203 $ (12,701 ) Other income (expense) (6,743 ) Income (loss) before income tax expense $ (19,444 ) Noncash charges $ 22,324 $ 12,953 $ 8,377 12 weeks ended September 10, 2016 U.S. Retail Incentives & Rewards International Consolidated Total operating revenues $ 195,878 $ 63,803 $ 101,879 $ 361,560 Partner distribution expense 103,473 4,996 69,894 178,363 Operating revenues, net of Partner distribution expense 92,405 58,807 31,985 183,197 Other operating expenses 89,768 65,981 37,541 193,290 Segment profit (loss) / Operating income (loss) $ 2,637 $ (7,174 ) $ (5,556 ) $ (10,093 ) Other income (expense) (3,324 ) Income (loss) before income tax expense $ (13,417 ) Noncash charges $ 10,070 $ 22,148 $ 4,402 36 weeks ended September 9, 2017 U.S. Retail Incentives & Rewards International Consolidated Total operating revenues $ 649,763 $ 224,598 $ 415,280 $ 1,289,641 Partner distribution expense 342,041 16,257 219,336 577,634 Operating revenues, net of Partner distribution expense 307,722 208,341 195,944 712,007 Other operating expenses 321,138 219,130 205,872 746,140 Segment profit (loss) / Operating income (loss) $ (13,416 ) $ (10,789 ) $ (9,928 ) $ (34,133 ) Other income (expense) (19,234 ) Income (loss) before income tax expense $ (53,367 ) Noncash charges $ 49,600 $ 40,652 $ 24,902 36 weeks ended September 10, 2016 U.S. Retail Incentives & Rewards International Consolidated Total operating revenues $ 648,982 $ 184,576 $ 285,670 $ 1,119,228 Partner distribution expense 329,827 13,045 198,877 541,749 Operating revenues, net of Partner distribution expense 319,155 171,531 86,793 577,479 Other operating expenses 304,212 196,122 105,259 605,593 Segment profit (loss) / Operating income (loss) $ 14,943 $ (24,591 ) $ (18,466 ) $ (28,114 ) Other income (expense) (10,610 ) Income (loss) before income tax expense $ (38,724 ) Noncash charges $ 35,313 $ 60,449 $ 14,267 |
Earnings Per Share
Earnings Per Share | 8 Months Ended |
Sep. 09, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table provides reconciliations of net income (loss) and shares used in calculating basic earnings (loss) per share (“EPS”) to those used in calculating diluted EPS (in thousands, except per share amounts): 12 weeks ended September 9, 2017 September 10, 2016 Basic Diluted Basic Diluted Net income (loss) attributable to Blackhawk Network Holdings, Inc. $ (7,766 ) $ (7,766 ) $ (5,102 ) $ (5,102 ) Distributed and undistributed earnings allocated to participating securities — — — — Net income (loss) attributable to common stockholders $ (7,766 ) $ (7,766 ) $ (5,102 ) $ (5,102 ) Weighted-average common shares outstanding 56,709 56,709 55,668 55,668 Common share equivalents — — Weighted-average shares outstanding 56,709 55,668 Earnings (loss) per share $ (0.14 ) $ (0.14 ) $ (0.09 ) $ (0.09 ) 36 weeks ended September 9, 2017 September 10, 2016 Basic Diluted Basic Diluted Net income (loss) attributable to Blackhawk Network Holdings, Inc. $ (27,603 ) $ (27,603 ) $ (19,992 ) $ (19,992 ) Distributed and undistributed earnings allocated to participating securities — — (15 ) (15 ) Net income (loss) attributable to common stockholders $ (27,603 ) $ (27,603 ) $ (20,007 ) $ (20,007 ) Weighted-average common shares outstanding 56,355 56,355 55,851 55,851 Common share equivalents — — Weighted-average shares outstanding 56,355 55,851 Earnings (loss) per share $ (0.49 ) $ (0.49 ) $ (0.36 ) $ (0.36 ) The weighted-average common shares outstanding for diluted EPS for the 12 weeks ended September 9, 2017 and September 10, 2016 , excluded approximately 4,770,000 and 6,266,000 , respectively, and for the 36 weeks ended September 9, 2017 and September 10, 2016 , excluded approximately 5,041,000 and 5,971,000 , respectively, of total potential common stock outstanding because the effect would have been anti-dilutive. |
The Company and Significant A18
The Company and Significant Accounting Policies (Policies) | 8 Months Ended |
Sep. 09, 2017 | |
Accounting Policies [Abstract] | |
The Company | The Company Blackhawk Network Holdings, Inc., together with its subsidiaries (“we”, “us”, “our”, the “Company”), is a leading prepaid payment network utilizing proprietary technology to offer consumers and businesses a broad selection of prepaid cards in physical and electronic forms, as well as complementary prepaid products, payment services and incentives solutions. We currently offer our products and/or solutions directly or through commercial relationships in the United States and 25 other countries and can deliver solutions in over 100 countries. Our product offerings include single-use gift cards; loyalty, incentive and reward products and services; prepaid telecom products and prepaid financial services products, including general purpose reloadable (“GPR”) cards, and our reload network (collectively, “prepaid products”). We offer gift cards from leading consumer brands (known as “closed loop”) as well as branded gift and incentive cards from leading payment network card associations such as American Express, Discover, MasterCard and Visa (known as “open loop”) and prepaid telecom products offered by prepaid wireless telecom carriers. We also distribute GPR cards and operate a proprietary reload network named Reloadit, which allows consumers to reload funds onto their previously purchased GPR cards. We distribute these prepaid products across multiple high-traffic channels such as grocery, convenience, specialty and online retailers (referred to as “retail distribution partners”) in the Americas, Europe, Africa, Australia and Asia and provide these prepaid products and related services to business clients for their loyalty, incentive and reward programs. |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements of Blackhawk Network Holdings, Inc. are unaudited. We have prepared our unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. We have condensed or omitted certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP pursuant to such rules and regulations. Accordingly, our interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K, filed with the SEC on February 27, 2017 (the “Annual Report”). We have prepared our condensed consolidated financial statements on the same basis as our annual audited consolidated financial statements and, in the opinion of management, have reflected all adjustments, which include only normal recurring adjustments, necessary to present fairly our financial position and results of operations for the interim periods presented. Our results for the interim periods are not necessarily reflective of the results to be expected for the year ending December 30, 2017 or for any other interim period or other future year. Our condensed consolidated balance sheet as of December 31, 2016 , included herein was derived from our audited consolidated financial statements as of that date but does not include all disclosures required by GAAP for annual financial statements, including notes to the financial statements. |
Seasonality | Seasonality For our retail business, a significant portion of gift card sales occurs in late December each year during the holiday selling season. As a result, we earn a significant portion of our revenues, net income and cash flows during the fourth quarter of each year and remit the majority of the cash, less commissions, to our content providers in January of the following year. The timing of our fiscal year-end, December holiday sales and the related January cash settlement with content providers significantly increases our Cash and cash equivalents, Settlement receivables and Settlement payables balances at the end of each fiscal year relative to normal daily balances. The cash settlement with our content providers in January accounts for the majority of the use of cash from operating activities in our condensed consolidated statements of cash flows during our first three fiscal quarters. We also experience an increase in revenues, net income and cash flows during the second quarter of each year, which we primarily attribute to the Mother’s Day, Father’s Day and graduation gifting season and the Easter holiday. Depending on when the Easter holiday occurs, the associated increase is in either the first or second quarter. As a result, quarterly financial results are not necessarily reflective of the results to be expected for the year or any other interim or future period. Seasonality also impacts our incentives businesses, but such impact is smaller in comparison to our retail business. |
Recently Issued or Adopted Accounting Pronouncements | Recently Issued or Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (Topic 606), which, along with amendments issued in 2015 and 2016, replaces nearly all current U.S. GAAP guidance on this topic with a comprehensive revenue measurement and recognition standard and expanded disclosure requirements. This new guidance provides a five-step analysis in determining when and how revenue is recognized. Under the new guidance, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the new guidance requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We will adopt this new guidance using the full retrospective method in the first quarter of fiscal 2018 to restate each prior reporting period presented. While we are continuing to evaluate the impacts of this new guidance on our consolidated financial statements, including disclosures, we have identified the following areas that will be affected by the adoption of this new standard: Revenue Content Provider Commissions— Under the new guidance, we will continue to recognize content provider commissions as revenue at the time of card activation, as our performance obligation to the content provider is complete. However, the actual revenue recognition treatment required under the new guidance may be dependent on contract-specific terms and, therefore, may vary in some instances. Consumer Purchase Fees and Program Management Fees— Under the new guidance, we consider the transaction price for our open loop gift cards, including our Visa gift card, to include consumer purchase fees and program management fees. Under the new guidance, we have identified three performance obligations - distribution-and-activation, redemption service and customer care. Revenue from Consumer Purchase Fees and Program Management Fees, included within Commissions and fees and Program and other fees , respectively, related to our Visa gift cards will predominantly be recognized as revenue at the time of card activation when our distribution-and-activation obligation is complete. The remainder will be recognized over the estimated period of card redemption as redemption service and customer care obligations are performed. Under current GAAP, we defer these revenues and recognize them based on the redemption pattern of the card. Interchange revenue will be recognized over the period of card redemption as we track and redeem cards, similar to our current revenue recognition. Additionally, revenue from program management fees related to our proprietary Visa gift cards issued by MetaBank will be based on a blended rate over the appropriate periods as required by the contract-specific terms compared to a contractually stated rate under the current accounting policy. Although we expect the blended rate to be lower than the contract rate initially, the economics of the arrangement will be the same over the long term. Under current GAAP, we defer consumer purchase fees and program management fees related to our Visa gift cards in Deferred revenue and recognize revenue ratably in proportion to the historical redemption patterns of the card portfolio over the estimated life of the card. There may be changes to the classification of program management fees and breakage revenue from Program and other fees to Commission and fees within Total Operating Revenue. Rebate Processing Fees— While we expect the recognition of revenue for rebates fulfilled by checks or closed loop cards to remain unchanged under the new guidance, the new guidance will require us to recognize revenue for rebates fulfilled with open loop incentive cards when we fulfill the cards to the end consumer versus ratably in proportion to historical redemption patterns as our performance obligation for rebate processing is complete at time of fulfillment. Incentive Merchandise Rewards— The adoption of the new guidance is expected to classify certain incentive merchandise rewards costs as a reduction to revenue versus a cost of products sold. Under the new accounting guidance, these costs will only be recorded as a cost of product sold if it is determined that we control the goods or services before they are transferred to the customer. In doing so, we will evaluate (i) if we are primarily responsible for fulfilling the promise to provide the good or service; (ii) if we have inventory risk before the good or service has been transferred to customer or after transfer of control to the customer; and (iii) if we have discretion in establishing the price for the good or service. Operating Expenses Partner Distribution Expense— Under the new guidance, partner distribution expense for Visa gift and open loop incentive cards will predominantly be recognized at the time of card activation when our distribution-and-activation obligation is complete. The remainder will be recognized over the estimated period of card redemption. Under current GAAP, we defer these expenses and amortize them based on the redemption pattern of the card. Processing and Services— Under the new guidance, processing and services costs, card production and upfront transaction processing fees for the Visa gift card and open loop incentive cards will predominantly be recognized at the time of card activation when our distribution-and-activation obligation is complete. The remainder will be recognized over the estimated period of card redemption. Under current GAAP, these costs are deferred and expensed based on the same redemption pattern as the related revenue. Sales and Marketing— The accounting for the recognition of costs related to obtaining customer contracts under the new guidance is different from our current capitalization policy. The adoption of the new guidance will result in additional capitalized commissions which will be amortized over a longer term than our current policy. As part of our assessment and implementation plan, we are also evaluating and making changes to our policies, procedures and internal controls. We continue to evaluate the impact of this new guidance on the Company, including any impacts on purchase accounting or intangibles assets from our recent acquisitions. We expect to continue providing relevant information prior to adoption. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which simplifies the existing two-step guidance for goodwill impairment testing by eliminating the second step resulting in a write-down to goodwill equal to the initial amount of impairment determined in step one. The ASU is to be applied prospectively for reporting periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. We have early adopted this standard in the first quarter of 2017 to reduce the complexity of calculating goodwill impairment. During the third quarter of 2017, we recognized a $9.0 million goodwill impairment charge related to our Cardpool reporting unit, reducing the carrying value of goodwill to $31.5 million . See Note 6 — Goodwill for additional information on this charge. |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 8 Months Ended |
Sep. 09, 2017 | |
Business Combinations [Abstract] | |
Purchase Price Allocation | The following table presents our initial estimates of the purchase price allocation. We may make adjustments to these amounts through the measurement period as we finalize information regarding our forecasts, valuation assumptions and income taxes (in thousands): Cash and cash equivalents $ 14,469 Restricted cash 7,820 Settlement receivables, net 2,815 Identifiable technology and intangible assets 89,132 Goodwill 95,387 Other tangible assets, net 1,570 Settlement payables (7,852 ) Consumer and customer deposits (11,779 ) Accounts payable and accrued operating expenses (7,025 ) Debt assumed (8,285 ) Deferred income taxes (10,256 ) Total purchase consideration $ 165,996 |
Identifiable Technology and Intangible Assets Acquired | The following table summarizes the components of the identifiable technology and intangible assets and their estimated useful lives at the acquisition date (dollars in thousands): Fair Value Useful Life Customer relationships $ 87,132 5 years Technology 2,000 1.5 years Total identifiable technology and intangible assets $ 89,132 |
Summary of Pro Forma Information | The following table summarizes the combined pro forma results of operations of us and CashStar as though we have been combined as of the beginning of fiscal 2016 (in thousands, except per share amounts): 36 weeks ended September 9, 2017 September 10, 2016 (Unaudited) Total revenues $ 1,317,226 $ 1,139,796 Net loss attributable to Blackhawk Network Holdings, Inc. $ (35,782 ) $ (30,846 ) Pro forma EPS—Basic $ (0.63 ) $ (0.55 ) Pro forma EPS—Diluted $ (0.63 ) $ (0.55 ) |
Financing (Tables)
Financing (Tables) | 8 Months Ended |
Sep. 09, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | The following table presents the amounts due by maturity date of our term loan and convertible notes as of September 9, 2017 (in thousands): September 9, 2017 2018 $ 10,000 2019 10,000 2020 20,000 2021 150,000 2022 500,000 Total long-term debt $ 690,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 8 Months Ended |
Sep. 09, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value of Assets, Liabilities and Equity Instruments on Recurring Basis | The table below summarizes the fair values of these assets and liabilities as of September 9, 2017 , December 31, 2016 and September 10, 2016 (in thousands): September 9, 2017 Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents Money market mutual funds $ 75 $ — $ — $ 75 Liabilities Contingent consideration $ — $ — $ 14,792 $ 14,792 December 31, 2016 Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents Money market mutual funds $ 300,015 $ — $ — $ 300,015 Liabilities Contingent consideration $ — $ — $ 23,752 $ 23,752 September 10, 2016 Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents Money market mutual funds $ 5,112 $ — $ — $ 5,112 Liabilities Contingent consideration $ — $ — $ 22,200 $ 22,200 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The changes in fair value of contingent consideration for the 36 weeks ended September 9, 2017 and September 10, 2016 are as follows (in thousands): 36 weeks ended September 9, 2017 September 10, 2016 Balance, beginning of period $ 23,752 $ — Additions from acquisitions (see Note 2—Business Acquisitions ) 1,640 20,100 Change in fair value of contingent consideration (5,097 ) 2,100 Settlement (5,503 ) — Balance, end of period $ 14,792 $ 22,200 |
Consolidated Financial Statem22
Consolidated Financial Statement Details (Tables) | 8 Months Ended |
Sep. 09, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Other Current Assets | The following tables represent the components of Other current assets , Other assets , Other current liabilities and Other liabilities as of September 9, 2017 , December 31, 2016 and September 10, 2016 consisted of the following (in thousands): September 9, 2017 December 31, 2016 September 10, 2016 Other current assets: Inventory $ 40,124 $ 43,950 $ 35,634 Deferred expenses 19,194 22,148 12,099 Income tax receivables 41,393 13,599 38,427 Other 44,159 51,678 37,759 Assets held for sale 46,821 — — Total other current assets $ 191,691 $ 131,375 $ 123,919 Other assets: Deferred program and contract costs $ 38,820 $ 48,066 $ 44,388 Other receivables 1,646 2,713 1,390 Income tax receivables 2,270 2,358 — Deferred financing costs 2,999 2,688 2,871 Other 40,875 30,031 20,390 Total other assets $ 86,610 $ 85,856 $ 69,039 Other current liabilities: Payroll and related liabilities $ 28,920 $ 24,944 $ 25,425 Income taxes payable 4,994 4,199 3,158 Acquisition liability 5,983 6,672 11,250 Other payables and accrued liabilities 10,509 15,361 8,797 Liabilities held for sale 24,398 — — Total other current liabilities $ 74,804 $ 51,176 $ 48,630 Other liabilities: Contingent consideration $ 9,800 $ 17,080 $ 10,950 Income taxes payable 4,595 6,957 6,213 Deferred income and other liabilities 12,249 15,616 8,266 Total other liabilities $ 26,644 $ 39,653 $ 25,429 |
Schedule of Other Assets | The following tables represent the components of Other current assets , Other assets , Other current liabilities and Other liabilities as of September 9, 2017 , December 31, 2016 and September 10, 2016 consisted of the following (in thousands): September 9, 2017 December 31, 2016 September 10, 2016 Other current assets: Inventory $ 40,124 $ 43,950 $ 35,634 Deferred expenses 19,194 22,148 12,099 Income tax receivables 41,393 13,599 38,427 Other 44,159 51,678 37,759 Assets held for sale 46,821 — — Total other current assets $ 191,691 $ 131,375 $ 123,919 Other assets: Deferred program and contract costs $ 38,820 $ 48,066 $ 44,388 Other receivables 1,646 2,713 1,390 Income tax receivables 2,270 2,358 — Deferred financing costs 2,999 2,688 2,871 Other 40,875 30,031 20,390 Total other assets $ 86,610 $ 85,856 $ 69,039 Other current liabilities: Payroll and related liabilities $ 28,920 $ 24,944 $ 25,425 Income taxes payable 4,994 4,199 3,158 Acquisition liability 5,983 6,672 11,250 Other payables and accrued liabilities 10,509 15,361 8,797 Liabilities held for sale 24,398 — — Total other current liabilities $ 74,804 $ 51,176 $ 48,630 Other liabilities: Contingent consideration $ 9,800 $ 17,080 $ 10,950 Income taxes payable 4,595 6,957 6,213 Deferred income and other liabilities 12,249 15,616 8,266 Total other liabilities $ 26,644 $ 39,653 $ 25,429 |
Schedule of Other Current Liabilities | The following tables represent the components of Other current assets , Other assets , Other current liabilities and Other liabilities as of September 9, 2017 , December 31, 2016 and September 10, 2016 consisted of the following (in thousands): September 9, 2017 December 31, 2016 September 10, 2016 Other current assets: Inventory $ 40,124 $ 43,950 $ 35,634 Deferred expenses 19,194 22,148 12,099 Income tax receivables 41,393 13,599 38,427 Other 44,159 51,678 37,759 Assets held for sale 46,821 — — Total other current assets $ 191,691 $ 131,375 $ 123,919 Other assets: Deferred program and contract costs $ 38,820 $ 48,066 $ 44,388 Other receivables 1,646 2,713 1,390 Income tax receivables 2,270 2,358 — Deferred financing costs 2,999 2,688 2,871 Other 40,875 30,031 20,390 Total other assets $ 86,610 $ 85,856 $ 69,039 Other current liabilities: Payroll and related liabilities $ 28,920 $ 24,944 $ 25,425 Income taxes payable 4,994 4,199 3,158 Acquisition liability 5,983 6,672 11,250 Other payables and accrued liabilities 10,509 15,361 8,797 Liabilities held for sale 24,398 — — Total other current liabilities $ 74,804 $ 51,176 $ 48,630 Other liabilities: Contingent consideration $ 9,800 $ 17,080 $ 10,950 Income taxes payable 4,595 6,957 6,213 Deferred income and other liabilities 12,249 15,616 8,266 Total other liabilities $ 26,644 $ 39,653 $ 25,429 |
Schedule of Other Liabilities | The following tables represent the components of Other current assets , Other assets , Other current liabilities and Other liabilities as of September 9, 2017 , December 31, 2016 and September 10, 2016 consisted of the following (in thousands): September 9, 2017 December 31, 2016 September 10, 2016 Other current assets: Inventory $ 40,124 $ 43,950 $ 35,634 Deferred expenses 19,194 22,148 12,099 Income tax receivables 41,393 13,599 38,427 Other 44,159 51,678 37,759 Assets held for sale 46,821 — — Total other current assets $ 191,691 $ 131,375 $ 123,919 Other assets: Deferred program and contract costs $ 38,820 $ 48,066 $ 44,388 Other receivables 1,646 2,713 1,390 Income tax receivables 2,270 2,358 — Deferred financing costs 2,999 2,688 2,871 Other 40,875 30,031 20,390 Total other assets $ 86,610 $ 85,856 $ 69,039 Other current liabilities: Payroll and related liabilities $ 28,920 $ 24,944 $ 25,425 Income taxes payable 4,994 4,199 3,158 Acquisition liability 5,983 6,672 11,250 Other payables and accrued liabilities 10,509 15,361 8,797 Liabilities held for sale 24,398 — — Total other current liabilities $ 74,804 $ 51,176 $ 48,630 Other liabilities: Contingent consideration $ 9,800 $ 17,080 $ 10,950 Income taxes payable 4,595 6,957 6,213 Deferred income and other liabilities 12,249 15,616 8,266 Total other liabilities $ 26,644 $ 39,653 $ 25,429 |
Schedule of Assets Held-for-sale | The following table presents the aggregate carrying amounts of the major classes of assets and liabilities related to the M&E business as of September 9, 2017 (in thousands): September 9, 2017 Accounts receivable, net $ 9,737 Other current assets 3,002 Property, equipment and technology, net 490 Intangible assets, net 6,173 Goodwill 26,303 Deferred income taxes 1,116 Total assets held for sale $ 46,821 Settlement payables $ 7,061 Consumer and customer deposits 1,812 Accounts payable and accrued operating expenses 3,135 Deferred revenue 1,784 Other current liabilities 10,493 Deferred income taxes 113 Total liabilities held for sale $ 24,398 The following table presents the aggregate carrying amounts of the major classes of assets and liabilities as of September 9, 2017 related to the Cardpool business (in thousands): September 9, 2017 Other current assets $ 5,708 Property, equipment and technology, net 7,097 Goodwill 31,491 Intangible assets, net 431 Total assets $ 44,727 Accounts payable and accrued operating expenses $ 1,479 Other current liabilities 503 Deferred revenue 167 Total liabilities $ 2,149 |
Goodwill (Tables)
Goodwill (Tables) | 8 Months Ended |
Sep. 09, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Goodwill | A summary of changes in goodwill during the 36 weeks ended September 9, 2017 is as follows (in thousands): September 9, 2017 U.S. Retail Incentives & Rewards International Total Balance, beginning of period $ 99,685 $ 366,508 $ 104,205 $ 570,398 Goodwill impairment (9,000 ) — — (9,000 ) Re-allocation of international Incentives goodwill — (7,152 ) 7,152 — Re-allocation of e-commerce goodwill (10,505 ) 10,505 — — Acquisitions (see Note 2—Business Acquisitions ) — 105,306 3,153 108,459 Measurement period of adjustments for 2016 acquisitions 338 — (1,384 ) (1,046 ) Asset held for sale (see Note 5—Consolidated Financial Statement Details ) — — (26,303 ) (26,303 ) Foreign currency translation adjustments — 2,344 11,414 13,758 Balance, end of period $ 80,518 $ 477,511 $ 98,237 $ 656,266 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 8 Months Ended |
Sep. 09, 2017 | |
Equity [Abstract] | |
Schedule of Stock-Based Compensation Expense | The following table presents total stock-based compensation expense according to the income statement line in our condensed consolidated statements of income (loss) for the 12 weeks ended and 36 weeks ended September 9, 2017 and September 10, 2016 (in thousands): 12 weeks ended 36 weeks ended September 9, 2017 September 10, 2016 September 9, 2017 September 10, 2016 Processing and services $ 1,681 $ 1,401 $ 5,181 $ 4,365 Sales and marketing 2,705 2,759 8,401 8,600 Cost of products sold 14 31 35 89 General and administrative 3,709 4,102 10,943 11,811 Total stock-based compensation expense $ 8,109 $ 8,293 $ 24,560 $ 24,865 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 8 Months Ended |
Sep. 09, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | The following tables present the key metrics used by our CODM for the evaluation of segment performance, including certain significant noncash charges (consisting of certain depreciation and amortization of property, equipment and technology and distribution partner stock-based compensation expense) which have been deducted from the segment profit amounts shown below, and reconciliations of these amounts to our condensed consolidated financial statements (in thousands): 12 weeks ended September 9, 2017 U.S. Retail Incentives & Rewards International Consolidated Total operating revenues $ 204,420 $ 80,671 $ 134,168 $ 419,259 Partner distribution expense 115,565 5,521 75,547 196,633 Operating revenues, net of Partner distribution expense 88,855 75,150 58,621 222,626 Other operating expenses 100,527 76,382 58,418 235,327 Segment profit (loss) / Operating income (loss) $ (11,672 ) $ (1,232 ) $ 203 $ (12,701 ) Other income (expense) (6,743 ) Income (loss) before income tax expense $ (19,444 ) Noncash charges $ 22,324 $ 12,953 $ 8,377 12 weeks ended September 10, 2016 U.S. Retail Incentives & Rewards International Consolidated Total operating revenues $ 195,878 $ 63,803 $ 101,879 $ 361,560 Partner distribution expense 103,473 4,996 69,894 178,363 Operating revenues, net of Partner distribution expense 92,405 58,807 31,985 183,197 Other operating expenses 89,768 65,981 37,541 193,290 Segment profit (loss) / Operating income (loss) $ 2,637 $ (7,174 ) $ (5,556 ) $ (10,093 ) Other income (expense) (3,324 ) Income (loss) before income tax expense $ (13,417 ) Noncash charges $ 10,070 $ 22,148 $ 4,402 36 weeks ended September 9, 2017 U.S. Retail Incentives & Rewards International Consolidated Total operating revenues $ 649,763 $ 224,598 $ 415,280 $ 1,289,641 Partner distribution expense 342,041 16,257 219,336 577,634 Operating revenues, net of Partner distribution expense 307,722 208,341 195,944 712,007 Other operating expenses 321,138 219,130 205,872 746,140 Segment profit (loss) / Operating income (loss) $ (13,416 ) $ (10,789 ) $ (9,928 ) $ (34,133 ) Other income (expense) (19,234 ) Income (loss) before income tax expense $ (53,367 ) Noncash charges $ 49,600 $ 40,652 $ 24,902 36 weeks ended September 10, 2016 U.S. Retail Incentives & Rewards International Consolidated Total operating revenues $ 648,982 $ 184,576 $ 285,670 $ 1,119,228 Partner distribution expense 329,827 13,045 198,877 541,749 Operating revenues, net of Partner distribution expense 319,155 171,531 86,793 577,479 Other operating expenses 304,212 196,122 105,259 605,593 Segment profit (loss) / Operating income (loss) $ 14,943 $ (24,591 ) $ (18,466 ) $ (28,114 ) Other income (expense) (10,610 ) Income (loss) before income tax expense $ (38,724 ) Noncash charges $ 35,313 $ 60,449 $ 14,267 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 8 Months Ended |
Sep. 09, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliations of Net Income and Shares Used in Calculating Basic and Diluted EPS | The following table provides reconciliations of net income (loss) and shares used in calculating basic earnings (loss) per share (“EPS”) to those used in calculating diluted EPS (in thousands, except per share amounts): 12 weeks ended September 9, 2017 September 10, 2016 Basic Diluted Basic Diluted Net income (loss) attributable to Blackhawk Network Holdings, Inc. $ (7,766 ) $ (7,766 ) $ (5,102 ) $ (5,102 ) Distributed and undistributed earnings allocated to participating securities — — — — Net income (loss) attributable to common stockholders $ (7,766 ) $ (7,766 ) $ (5,102 ) $ (5,102 ) Weighted-average common shares outstanding 56,709 56,709 55,668 55,668 Common share equivalents — — Weighted-average shares outstanding 56,709 55,668 Earnings (loss) per share $ (0.14 ) $ (0.14 ) $ (0.09 ) $ (0.09 ) 36 weeks ended September 9, 2017 September 10, 2016 Basic Diluted Basic Diluted Net income (loss) attributable to Blackhawk Network Holdings, Inc. $ (27,603 ) $ (27,603 ) $ (19,992 ) $ (19,992 ) Distributed and undistributed earnings allocated to participating securities — — (15 ) (15 ) Net income (loss) attributable to common stockholders $ (27,603 ) $ (27,603 ) $ (20,007 ) $ (20,007 ) Weighted-average common shares outstanding 56,355 56,355 55,851 55,851 Common share equivalents — — Weighted-average shares outstanding 56,355 55,851 Earnings (loss) per share $ (0.49 ) $ (0.49 ) $ (0.36 ) $ (0.36 ) |
The Company and Significant A27
The Company and Significant Accounting Policies (Detail) $ in Thousands | 3 Months Ended | 8 Months Ended | |||
Sep. 09, 2017USD ($)country | Sep. 10, 2016USD ($) | Sep. 09, 2017USD ($)country | Sep. 10, 2016USD ($) | Dec. 31, 2016USD ($) | |
Description of Business [Line Items] | |||||
Goodwill impairment | $ 9,000 | $ 0 | $ 9,000 | $ 0 | |
Goodwill | 656,266 | $ 508,607 | 656,266 | $ 508,607 | $ 570,398 |
Cardpool | |||||
Description of Business [Line Items] | |||||
Goodwill impairment | 9,000 | ||||
Goodwill | $ 31,500 | $ 31,500 | |||
United States | |||||
Description of Business [Line Items] | |||||
Number of countries in which entity operates | country | 1 | 1 | |||
Foreign Countries | |||||
Description of Business [Line Items] | |||||
Number of countries in which entity operates | country | 25 | 25 |
Business Acquisitions - Narrati
Business Acquisitions - Narrative (Details) $ in Thousands, £ in Millions | Aug. 29, 2017USD ($) | Oct. 06, 2016USD ($) | Oct. 06, 2016GBP (£) | Sep. 09, 2017USD ($) | Jun. 17, 2017USD ($) | Mar. 25, 2017USD ($) | Sep. 10, 2016USD ($) | Sep. 09, 2017USD ($) | Sep. 10, 2016USD ($) | Oct. 06, 2016GBP (£) |
Business Acquisition [Line Items] | ||||||||||
Borrowings used to finance business acquisition | $ 1,771,381 | $ 1,959,749 | ||||||||
Acquisition related costs | $ 665 | $ 2,574 | 2,021 | $ 4,160 | ||||||
Goodwill acquired during period | 108,459 | |||||||||
CashStar | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase consideration | $ 166,000 | |||||||||
Deferred tax liabilities, nondeductible amortization of identifiable technology and intangible assets | 32,700 | |||||||||
Deferred tax assets for net operating loss carryforwards | 20,200 | |||||||||
Other deferred tax assets, net | 2,200 | |||||||||
Transaction expenses paid | 3,200 | |||||||||
Acquisition related costs | $ 400 | |||||||||
Cash acquired | 14,469 | |||||||||
Intangible assets acquired | 89,132 | |||||||||
Restricted cash | 7,820 | |||||||||
CashStar | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Intangible assets acquired | 87,132 | |||||||||
Weighted average useful lives of acquired intangible assets | 5 years | |||||||||
Other Acquisitions | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase consideration | $ 27,600 | |||||||||
Acquisition related costs | $ 400 | |||||||||
Total consideration transferred | 30,100 | |||||||||
Contingent consideration transferred | 1,600 | |||||||||
Potential contingent consideration payment | 2,000 | |||||||||
Consideration transferred, working capital adjustments | $ 900 | |||||||||
Cash acquired | 8,300 | 8,300 | ||||||||
Intangible assets acquired | 15,500 | 15,500 | ||||||||
Goodwill acquired during period | 13,100 | |||||||||
Net tangible liabilities acquired | 6,800 | 6,800 | ||||||||
Expected deductible goodwill | 9,900 | 9,900 | ||||||||
Expected deductible intangible assets | $ 7,800 | $ 7,800 | ||||||||
Grass Roots | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase consideration | $ 110,800 | £ 87.2 | ||||||||
Transaction expenses paid | 600 | |||||||||
Total consideration transferred | 119,300 | £ 93.9 | ||||||||
Restricted cash | $ 8,500 | £ 6.7 | ||||||||
Increase in purchase price | $ 800 | |||||||||
Increase in accounts receivable | 400 | |||||||||
Decrease in customer deposits | 1,800 | |||||||||
Increase (decrease) in goodwill | 1,400 | |||||||||
Spafinder | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Increase (decrease) in goodwill | 300 | |||||||||
(Decrease) in inventory | $ 300 | |||||||||
Minimum | Other Acquisitions | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Weighted average useful lives of acquired intangible assets | 7 years | |||||||||
Maximum | Other Acquisitions | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Weighted average useful lives of acquired intangible assets | 10 years | |||||||||
Restated Credit Agreement | CashStar | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Borrowings used to finance business acquisition | $ 110,000 |
Business Acquisitions - Purchas
Business Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Sep. 09, 2017 | Aug. 29, 2017 | Dec. 31, 2016 | Sep. 10, 2016 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 656,266 | $ 570,398 | $ 508,607 | |
CashStar | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 14,469 | |||
Restricted cash | 7,820 | |||
Settlement receivables, net | 2,815 | |||
Identifiable technology and intangible assets | 89,132 | |||
Goodwill | 95,387 | |||
Other tangible assets, net | 1,570 | |||
Settlement payables | (7,852) | |||
Consumer and customer deposits | (11,779) | |||
Accounts payable and accrued operating expenses | (7,025) | |||
Debt assumed | (8,285) | |||
Deferred income taxes | (10,256) | |||
Total purchase consideration | $ 165,996 |
Business Acquisitions - Identif
Business Acquisitions - Identifiable Technology and Intangible Assets (Details) - CashStar - USD ($) $ in Thousands | 8 Months Ended | |
Sep. 09, 2017 | Aug. 29, 2017 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair Value | $ 89,132 | |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair Value | 87,132 | |
Useful Life | 5 years | |
Technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair Value | $ 2,000 | |
Useful Life | 1 year 6 months |
Business Acquisitions - Pro For
Business Acquisitions - Pro Forma Financial Information (Details) - CashStar - USD ($) $ / shares in Units, $ in Thousands | 8 Months Ended | |
Sep. 09, 2017 | Sep. 10, 2016 | |
Business Acquisition [Line Items] | ||
Total revenues | $ 1,317,226 | $ 1,139,796 |
Net loss attributable to Blackhawk Network Holdings, Inc. | $ (35,782) | $ (30,846) |
Pro forma EPS—Basic (in usd per share) | $ (0.63) | $ (0.55) |
Pro forma EPS—Diluted (in usd per share) | $ (0.63) | $ (0.55) |
Financing - Credit Agreement (D
Financing - Credit Agreement (Details) - USD ($) $ in Thousands | Apr. 20, 2017 | Mar. 31, 2017 | Sep. 09, 2017 | Sep. 10, 2016 |
Debt Instrument [Line Items] | ||||
Term loan, repayments | $ 10,000 | $ 463,750 | ||
Term Loan | Restated Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Term loan, repayments | $ 10,000 | |||
Term loan borrowings | $ 50,000 |
Financing - Maturities of Conve
Financing - Maturities of Convertible Notes (Details) $ in Thousands | Sep. 09, 2017USD ($) |
Debt Disclosure [Abstract] | |
2,018 | $ 10,000 |
2,019 | 10,000 |
2,020 | 20,000 |
2,021 | 150,000 |
2,022 | 500,000 |
Total long-term debt | $ 690,000 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value of Assets, Liabilities and Equity Instruments on Recurring Basis (Detail) - Fair Value Measurements, Recurring - USD ($) $ in Thousands | Sep. 09, 2017 | Dec. 31, 2016 | Sep. 10, 2016 |
Liabilities | |||
Contingent consideration | $ 14,792 | $ 23,752 | $ 22,200 |
Money Market Mutual Funds | |||
Assets | |||
Cash and cash equivalents | 75 | 300,015 | 5,112 |
Level 1 | |||
Liabilities | |||
Contingent consideration | 0 | 0 | 0 |
Level 1 | Money Market Mutual Funds | |||
Assets | |||
Cash and cash equivalents | 75 | 300,015 | 5,112 |
Level 2 | |||
Liabilities | |||
Contingent consideration | 0 | 0 | 0 |
Level 2 | Money Market Mutual Funds | |||
Assets | |||
Cash and cash equivalents | 0 | 0 | 0 |
Level 3 | |||
Liabilities | |||
Contingent consideration | 14,792 | 23,752 | 22,200 |
Level 3 | Money Market Mutual Funds | |||
Assets | |||
Cash and cash equivalents | $ 0 | $ 0 | $ 0 |
Fair Value Measurements - Sum35
Fair Value Measurements - Summary of Changes in Fair Value of Contingent Consideration Classified as Level 3 (Details) - USD ($) $ in Thousands | 8 Months Ended | |
Sep. 09, 2017 | Sep. 10, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Balance - beginning of period | $ 23,752 | $ 0 |
Additions from acquisitions (see Note 2—Business Acquisitions) | 1,640 | 20,100 |
Change in fair value of contingent consideration | (5,097) | 2,100 |
Settlement | (5,503) | 0 |
Balance - end of period | $ 14,792 | $ 22,200 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Detail) - USD ($) $ in Thousands | 8 Months Ended | |
Sep. 09, 2017 | Sep. 10, 2016 | |
Business Acquisition [Line Items] | ||
Settlement | $ (5,503) | $ 0 |
Fair value inputs, discount rate percentage | 17.00% | |
Level 2 | Term Loan | ||
Business Acquisition [Line Items] | ||
Fair value of debt instrument | $ 190,000 | |
Level 2 | Convertible Notes Payable | ||
Business Acquisition [Line Items] | ||
Fair value of debt instrument | $ 565,000 |
Consolidated Financial Statem37
Consolidated Financial Statement Details - Components of Other Current Assets, Other Assets, Other Current Liabilities, and Other Liabilities (Detail) - USD ($) $ in Thousands | Sep. 09, 2017 | Dec. 31, 2016 | Sep. 10, 2016 |
Other current assets: | |||
Inventory | $ 40,124 | $ 43,950 | $ 35,634 |
Deferred expenses | 19,194 | 22,148 | 12,099 |
Income tax receivables | 41,393 | 13,599 | 38,427 |
Other | 44,159 | 51,678 | 37,759 |
Assets held for sale | 46,821 | 0 | 0 |
Total other current assets | 191,691 | 131,375 | 123,919 |
Other assets: | |||
Deferred program and contract costs | 38,820 | 48,066 | 44,388 |
Other receivables | 1,646 | 2,713 | 1,390 |
Income tax receivables | 2,270 | 2,358 | 0 |
Deferred financing costs | 2,999 | 2,688 | 2,871 |
Other | 40,875 | 30,031 | 20,390 |
Total other assets | 86,610 | 85,856 | 69,039 |
Other current liabilities: | |||
Payroll and related liabilities | 28,920 | 24,944 | 25,425 |
Income taxes payable | 4,994 | 4,199 | 3,158 |
Acquisition liability | 5,983 | 6,672 | 11,250 |
Other payables and accrued liabilities | 10,509 | 15,361 | 8,797 |
Liabilities held for sale | 24,398 | 0 | 0 |
Total other current liabilities | 74,804 | 51,176 | 48,630 |
Other liabilities: | |||
Contingent consideration | 9,800 | 17,080 | 10,950 |
Income taxes payable | 4,595 | 6,957 | 6,213 |
Deferred income and other liabilities | 12,249 | 15,616 | 8,266 |
Total other liabilities | $ 26,644 | $ 39,653 | $ 25,429 |
Consolidated Financial Statem38
Consolidated Financial Statement Details - Assets Held for Sale (Details) - USD ($) $ in Thousands | Sep. 09, 2017 | Dec. 31, 2016 | Sep. 10, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Total assets held for sale | $ 46,821 | $ 0 | $ 0 |
Total liabilities held for sale | 24,398 | $ 0 | $ 0 |
Cardpool | Assets Held-for-sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Other current assets | 5,708 | ||
Property, equipment and technology, net | 7,097 | ||
Intangible assets, net | 431 | ||
Goodwill | 31,491 | ||
Total assets held for sale | 44,727 | ||
Accounts payable and accrued operating expenses | 1,479 | ||
Deferred revenue | 167 | ||
Other current liabilities | 503 | ||
Total liabilities held for sale | 2,149 | ||
Grass Roots, Inc. | Assets Held-for-sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Accounts receivable, net | 9,737 | ||
Other current assets | 3,002 | ||
Property, equipment and technology, net | 490 | ||
Intangible assets, net | 6,173 | ||
Goodwill | 26,303 | ||
Deferred income taxes | 1,116 | ||
Total assets held for sale | 46,821 | ||
Settlement payables | 7,061 | ||
Consumer and customer deposits | 1,812 | ||
Accounts payable and accrued operating expenses | 3,135 | ||
Deferred revenue | 1,784 | ||
Other current liabilities | 10,493 | ||
Deferred income taxes | 113 | ||
Total liabilities held for sale | $ 24,398 |
Consolidated Financial Statem39
Consolidated Financial Statement Details - Narrative (Details) $ in Millions | 8 Months Ended |
Sep. 09, 2017USD ($) | |
Grass Roots, Inc. | Assets Held-for-sale | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Pre-tax income during period | $ 1.6 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 8 Months Ended | |||
Sep. 09, 2017 | Sep. 10, 2016 | Sep. 09, 2017 | Sep. 10, 2016 | Dec. 31, 2016 | |
Goodwill [Line Items] | |||||
Goodwill impairment | $ 9,000 | $ 0 | $ 9,000 | $ 0 | |
Goodwill | 656,266 | $ 508,607 | 656,266 | $ 508,607 | $ 570,398 |
Cardpool | |||||
Goodwill [Line Items] | |||||
Amount of fair value in excess of carrying value | $ 3,400 | ||||
Percentage of fair value in excess of carrying value | 6.90% | ||||
Goodwill impairment | 9,000 | ||||
Goodwill | $ 31,500 | $ 31,500 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in Goodwill (Detail) - USD ($) $ in Thousands | 3 Months Ended | 8 Months Ended | ||
Sep. 09, 2017 | Sep. 10, 2016 | Sep. 09, 2017 | Sep. 10, 2016 | |
Goodwill | ||||
Balance, beginning of period | $ 570,398 | |||
Goodwill impairment | $ (9,000) | $ 0 | (9,000) | $ 0 |
Transfers of goodwill | 0 | |||
Acquisitions (see Note 2—Business Acquisitions) | 108,459 | |||
Measurement period of adjustments for 2016 acquisitions | (1,046) | |||
Foreign currency translation adjustments | 13,758 | |||
Balance, end of period | 656,266 | $ 508,607 | 656,266 | $ 508,607 |
U.S. Retail | ||||
Goodwill | ||||
Balance, beginning of period | 99,685 | |||
Goodwill impairment | (9,000) | |||
Transfers of goodwill | 0 | |||
Acquisitions (see Note 2—Business Acquisitions) | 0 | |||
Measurement period of adjustments for 2016 acquisitions | 338 | |||
Foreign currency translation adjustments | 0 | |||
Balance, end of period | 80,518 | 80,518 | ||
Incentives & Rewards | ||||
Goodwill | ||||
Balance, beginning of period | 366,508 | |||
Goodwill impairment | 0 | |||
Transfers of goodwill | (7,152) | |||
Acquisitions (see Note 2—Business Acquisitions) | 105,306 | |||
Measurement period of adjustments for 2016 acquisitions | 0 | |||
Foreign currency translation adjustments | 2,344 | |||
Balance, end of period | 477,511 | 477,511 | ||
International | ||||
Goodwill | ||||
Balance, beginning of period | 104,205 | |||
Goodwill impairment | 0 | |||
Transfers of goodwill | 7,152 | |||
Acquisitions (see Note 2—Business Acquisitions) | 3,153 | |||
Measurement period of adjustments for 2016 acquisitions | (1,384) | |||
Foreign currency translation adjustments | 11,414 | |||
Balance, end of period | $ 98,237 | 98,237 | ||
Assets Held-for-sale | ||||
Goodwill | ||||
Transfers of goodwill | (26,303) | |||
Assets Held-for-sale | U.S. Retail | ||||
Goodwill | ||||
Transfers of goodwill | 0 | |||
Assets Held-for-sale | Incentives & Rewards | ||||
Goodwill | ||||
Transfers of goodwill | 0 | |||
Assets Held-for-sale | International | ||||
Goodwill | ||||
Transfers of goodwill | (26,303) | |||
E-Commerce | ||||
Goodwill | ||||
Transfers of goodwill | 0 | |||
E-Commerce | U.S. Retail | ||||
Goodwill | ||||
Transfers of goodwill | (10,505) | |||
E-Commerce | Incentives & Rewards | ||||
Goodwill | ||||
Transfers of goodwill | 10,505 | |||
E-Commerce | International | ||||
Goodwill | ||||
Transfers of goodwill | $ 0 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Detail) | 8 Months Ended |
Sep. 09, 2017shares | |
Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Stock awards and stock units granted during period (in shares) | 1,024,169 |
Performance Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Stock awards and stock units granted during period (in shares) | 200,700 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 8 Months Ended | ||
Sep. 09, 2017 | Sep. 10, 2016 | Sep. 09, 2017 | Sep. 10, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||||
Stock-based compensation expense | $ 8,109 | $ 8,293 | $ 24,560 | $ 24,865 |
Processing and services | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||||
Stock-based compensation expense | 1,681 | 1,401 | 5,181 | 4,365 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||||
Stock-based compensation expense | 2,705 | 2,759 | 8,401 | 8,600 |
Cost of products sold | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||||
Stock-based compensation expense | 14 | 31 | 35 | 89 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||||
Stock-based compensation expense | $ 3,709 | $ 4,102 | $ 10,943 | $ 11,811 |
Income Taxes (Detail)
Income Taxes (Detail) | 3 Months Ended | 8 Months Ended | ||
Sep. 09, 2017 | Sep. 10, 2016 | Sep. 09, 2017 | Sep. 10, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate (percentage) | 61.00% | 62.30% | 49.10% | 48.80% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 09, 2017USD ($) |
Foreign Tax Jurisdiction | |
Loss Contingencies [Line Items] | |
Estimate of possible loss, tax liability | $ 5.1 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Reporting Information (Detail) $ in Thousands | 3 Months Ended | 8 Months Ended | ||
Sep. 09, 2017USD ($) | Sep. 10, 2016USD ($) | Sep. 09, 2017USD ($)segment | Sep. 10, 2016USD ($) | |
Segment Reporting Information | ||||
Number of reportable segments | segment | 3 | |||
Total operating revenues | $ 419,259 | $ 361,560 | $ 1,289,641 | $ 1,119,228 |
Partner distribution expense | 196,633 | 178,363 | 577,634 | 541,749 |
Operating revenues, net of Partner distribution expense | 222,626 | 183,197 | 712,007 | 577,479 |
Other operating expenses | 235,327 | 193,290 | 746,140 | 605,593 |
OPERATING INCOME (LOSS) | (12,701) | (10,093) | (34,133) | (28,114) |
Other income (expense) | (6,743) | (3,324) | (19,234) | (10,610) |
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) | (19,444) | (13,417) | (53,367) | (38,724) |
U.S. Retail | ||||
Segment Reporting Information | ||||
Total operating revenues | 204,420 | 195,878 | 649,763 | 648,982 |
Partner distribution expense | 115,565 | 103,473 | 342,041 | 329,827 |
Operating revenues, net of Partner distribution expense | 88,855 | 92,405 | 307,722 | 319,155 |
Other operating expenses | 100,527 | 89,768 | 321,138 | 304,212 |
OPERATING INCOME (LOSS) | (11,672) | 2,637 | (13,416) | 14,943 |
Noncash charges | 22,324 | 10,070 | 49,600 | 35,313 |
Incentives & Rewards | ||||
Segment Reporting Information | ||||
Total operating revenues | 80,671 | 63,803 | 224,598 | 184,576 |
Partner distribution expense | 5,521 | 4,996 | 16,257 | 13,045 |
Operating revenues, net of Partner distribution expense | 75,150 | 58,807 | 208,341 | 171,531 |
Other operating expenses | 76,382 | 65,981 | 219,130 | 196,122 |
OPERATING INCOME (LOSS) | (1,232) | (7,174) | (10,789) | (24,591) |
Noncash charges | 12,953 | 22,148 | 40,652 | 60,449 |
International | ||||
Segment Reporting Information | ||||
Total operating revenues | 134,168 | 101,879 | 415,280 | 285,670 |
Partner distribution expense | 75,547 | 69,894 | 219,336 | 198,877 |
Operating revenues, net of Partner distribution expense | 58,621 | 31,985 | 195,944 | 86,793 |
Other operating expenses | 58,418 | 37,541 | 205,872 | 105,259 |
OPERATING INCOME (LOSS) | 203 | (5,556) | (9,928) | (18,466) |
Noncash charges | $ 8,377 | $ 4,402 | $ 24,902 | $ 14,267 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliations of Net Income and Shares Used in Calculating Basic and Diluted EPS (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 8 Months Ended | ||
Sep. 09, 2017 | Sep. 10, 2016 | Sep. 09, 2017 | Sep. 10, 2016 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to Blackhawk Network Holdings, Inc. | $ (7,766) | $ (5,102) | $ (27,603) | $ (19,992) |
Distributed and undistributed earnings allocated to participating securities, Basic | 0 | 0 | 0 | (15) |
Distributed and undistributed earnings allocated to participating securities, Diluted | 0 | 0 | 0 | (15) |
Net income (loss) attributable to common stockholders, basic | (7,766) | (5,102) | (27,603) | (20,007) |
Net income (loss) attributable to common stockholders, diluted | $ (7,766) | $ (5,102) | $ (27,603) | $ (20,007) |
Weighted-average common shares outstanding-basic (in shares) | 56,709 | 55,668 | 56,355 | 55,851 |
Basic earnings (loss) per share (in usd per share) | $ (0.14) | $ (0.09) | $ (0.49) | $ (0.36) |
Common share equivalents (in shares) | 0 | 0 | 0 | 0 |
Weighted-average common shares outstanding-diluted (in shares) | 56,709 | 55,668 | 56,355 | 55,851 |
Diluted earnings (loss) per share (in usd per share) | $ (0.14) | $ (0.09) | $ (0.49) | $ (0.36) |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Detail) - shares | 3 Months Ended | 8 Months Ended | ||
Sep. 09, 2017 | Sep. 10, 2016 | Sep. 09, 2017 | Sep. 10, 2016 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 4,770,000 | 6,266,000 | 5,041,000 | 5,971,000 |