Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | May 02, 2022 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Entity File Number | 001-40776 | |
Entity Registrant Name | Loyalty Ventures Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 87-1353472 | |
Entity Address State Or Province | TX | |
Entity Address, Address Line One | 8235 Douglas Avenue, Suite 1200 | |
Entity Address, City or Town | Dallas | |
Entity Address, Postal Zip Code | 75225 | |
City Area Code | 972 | |
Local Phone Number | 338-5170 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | LYLT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,611,546 | |
Entity Central Index Key | 0001870997 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 139,724 | $ 167,601 |
Accounts receivable, net, less allowance for doubtful accounts ($3.9 million and $4.7 million at March 31, 2022 and December 31, 2021, respectively) | 271,084 | 288,251 |
Inventories, net | 213,183 | 188,577 |
Redemption settlement assets, restricted | 699,531 | 735,131 |
Other current assets | 28,653 | 28,627 |
Total current assets | 1,352,175 | 1,408,187 |
Property and equipment, net | 74,563 | 79,959 |
Right of use assets - operating | 96,459 | 99,515 |
Deferred tax asset, net | 58,363 | 58,128 |
Intangible assets, net | 2,729 | 3,095 |
Goodwill | 639,947 | 649,958 |
Other non-current assets | 24,739 | 24,885 |
Total assets | 2,248,975 | 2,323,727 |
LIABILITIES AND EQUITY | ||
Accounts payable | 81,149 | 103,482 |
Accrued expenses | 136,660 | 144,997 |
Deferred revenue | 916,679 | 924,789 |
Current operating lease liabilities | 9,414 | 10,055 |
Current debt | 50,625 | 50,625 |
Other current liabilities | 133,527 | 118,444 |
Total current liabilities | 1,328,054 | 1,352,392 |
Deferred revenue | 95,443 | 97,167 |
Long-term operating lease liabilities | 100,422 | 103,242 |
Long-term debt | 591,714 | 603,488 |
Other liabilities | 20,676 | 20,874 |
Total liabilities | 2,136,309 | 2,177,163 |
Commitments and contingencies | ||
EQUITY | ||
Common stock, $0.01 par value; authorized, 200,000 shares; issued, 24,612 shares and 24,585 shares at March 31, 2022 and December 31, 2021, respectively | 246 | 246 |
Additional paid-in-capital | 269,847 | 266,775 |
Accumulated deficit | (54,365) | (55,383) |
Accumulated other comprehensive loss | (103,062) | (65,074) |
Total equity | 112,666 | 146,564 |
Total liabilities and equity | $ 2,248,975 | $ 2,323,727 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Allowance for doubtful accounts | $ 3.9 | $ 4.7 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 200,000 | 200,000 |
Common stock, issued shares | 24,612 | 24,585 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Total revenue | $ 154,945 | $ 176,554 |
Operating expenses | ||
Cost of operations (exclusive of depreciation and amortization disclosed separately below) | 127,878 | 135,846 |
General and administrative | 6,209 | 3,685 |
Depreciation and other amortization | 9,125 | 8,595 |
Amortization of purchased intangibles | 288 | 439 |
Total operating expenses | 143,500 | 148,565 |
Operating income | 11,445 | 27,989 |
Interest expense (income), net | 9,052 | (69) |
Income before income taxes and loss from investment in unconsolidated subsidiary | 2,393 | 28,058 |
Provision for income taxes | 1,375 | 8,984 |
Loss from investment in unconsolidated subsidiary - related party, net of tax | 36 | |
Net income | $ 1,018 | $ 19,038 |
Net income per share - Basic (Note 3) | $ 0.04 | $ 0.77 |
Net income per share - Diluted (Note 3) | $ 0.04 | $ 0.77 |
Weighted average shares - Basic (Note 3) | 24,598 | 24,585 |
Weighted average shares - Diluted (Note 3) | 24,626 | 24,585 |
Redemption | ||
Total revenue | $ 84,976 | $ 104,864 |
Services | ||
Total revenue | 63,783 | 66,223 |
Other Revenue | ||
Total revenue | $ 6,186 | $ 5,467 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE LOSS | ||
Net income | $ 1,018 | $ 19,038 |
Other comprehensive income (loss): | ||
Unrealized loss on securities available-for-sale | (20,801) | (6,400) |
Unrealized loss on securities available-for-sale, net of tax | (20,801) | (6,400) |
Unrealized gain on cash flow hedges | 2 | 1,121 |
Tax benefit (expense) | 34 | (204) |
Unrealized gain on cash flow hedges, net of tax | 36 | 917 |
Foreign currency translation adjustments | (17,223) | (29,699) |
Other comprehensive loss, net of tax | (37,988) | (35,182) |
Total comprehensive loss, net of tax | $ (36,970) | $ (16,144) |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Former Parent's Net Investment | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Beginning at Dec. 31, 2020 | $ 1,093,920 | $ 381 | $ 1,094,301 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 19,038 | 19,038 | ||||
Other comprehensive loss | (35,182) | (35,182) | ||||
Change in former Parent's net investment | (119,731) | (119,731) | ||||
Balance at Ending at Mar. 31, 2021 | $ 993,227 | (34,801) | 958,426 | |||
Balance at Beginning at Dec. 31, 2021 | $ 246 | $ 266,775 | $ (55,383) | (65,074) | 146,564 | |
Balance at Beginning (in shares) at Dec. 31, 2021 | 24,585 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 1,018 | 1,018 | ||||
Other comprehensive loss | (37,988) | (37,988) | ||||
Net transfers from former Parent for Separation-related transactions | 1,354 | 1,354 | ||||
Stock-based compensation | 2,328 | 2,328 | ||||
Other | (610) | (610) | ||||
Other (in shares) | 27 | |||||
Balance at Ending at Mar. 31, 2022 | $ 246 | $ 269,847 | $ (54,365) | $ (103,062) | $ 112,666 | |
Balance at Ending (in shares) at Mar. 31, 2022 | 24,612 |
UNAUDITED CONDENSED CONSOLIDA_6
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 1,018 | $ 19,038 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 9,413 | 9,034 |
Deferred income tax benefit | (1,054) | (478) |
Non-cash stock compensation | 2,328 | 1,853 |
Change in other operating assets and liabilities: | ||
Change in deferred revenue | (20,700) | 4,433 |
Change in accounts receivable | 16,800 | 16,518 |
Change in accounts payable and accrued expenses | (28,551) | (23,778) |
Change in other assets | (25,778) | 15,913 |
Change in other liabilities | 14,440 | 49,402 |
Other | 3,366 | 4,922 |
Net cash (used in) provided by operating activities | (28,718) | 96,857 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Change in redemption settlement assets, restricted | (8,324) | (13,109) |
Capital expenditures | (3,698) | (4,548) |
Distributions from investment in unconsolidated subsidiary - related party | 795 | |
Net cash used in investing activities | (12,022) | (16,862) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings under debt agreements | 1,000 | |
Repayments of borrowings | (13,656) | |
Dividends paid to former Parent | (120,000) | |
Net transfers to former Parent | (3,514) | |
Net transfers from former Parent for Separation-related transactions | 1,569 | |
Other | (579) | |
Net cash used in financing activities | (11,666) | (123,514) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (662) | (1,571) |
Change in cash, cash equivalents and restricted cash | (53,068) | (45,090) |
Cash, cash equivalents and restricted cash at beginning of year | 232,602 | 337,525 |
Cash, cash equivalents and restricted cash at end of year | 179,534 | 292,435 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Interest paid | 8,280 | 92 |
Income taxes paid, net | $ 8,535 | $ 15,769 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2022 | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of the Business On November 5, 2021, Bread Financial Holdings, Inc., previously named Alliance Data Systems Corporation (“former Parent”), completed the spinoff of its LoyaltyOne reportable segment (the “Separation”) into an independent, publicly traded company, Loyalty Ventures Inc. (the “Company” or “Loyalty Ventures”). Loyalty Ventures provides coalition and campaign-based loyalty solutions through the Canadian AIR MILES ® Basis of Presentation Prior to the Separation, the Company had operated as part of the former Parent and not as a standalone company. The unaudited condensed combined financial statements for the three months ended March 31, 2021 have been derived from the former Parent’s historical accounting records and are presented on a “carve-out” basis. The unaudited condensed combined financial statements for the three months ended March 31, 2021 also include allocations of certain general and administrative expenses from the former Parent that directly or indirectly benefited Loyalty Ventures’ business. However, amounts recognized by the Company are not necessarily representative of the amounts that would have been reflected in the unaudited condensed combined financial statements had the Company operated independently. The former Parent’s third-party long-term debt and the related interest expense was not allocated for the three months ended March 31, 2021 as the Company was not the legal obligor of such debt. The former Parent’s net investment represents its interest in the recorded net assets of the Company. All significant transactions between the Company and its former Parent have been included in the accompanying unaudited condensed combined financial statements. Transactions with the former Parent as contributions to the carve-out entity or distributions from the carve-out entity are reflected in the accompanying unaudited condensed combined statements of equity as “Change in former Parent’s net investment.” The unaudited consolidated financial statements for the three months ended March 31, 2022 were based on the reported results of Loyalty Ventures as a standalone company and prepared on a consolidated basis. All significant intercompany accounts and transactions between the businesses comprising the Company have been eliminated in the accompanying unaudited condensed consolidated and combined financial statements. The Company’s unaudited condensed consolidated and combined financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s unaudited condensed consolidated and combined financial statements and accompanying notes are presented in U.S. Dollars (“USD”), the Company’s reporting currency. The unaudited condensed consolidated and combined financial statements included herein reflect all adjustments (consisting of normal, recurring adjustments) which are, in the opinion of management, necessary to state fairly the results for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the fiscal year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated and combined financial statements should be read in conjunction with the consolidated and combined financial statements and the notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2022. Recently Issued Accounting Standards In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. This ASU is elective and is effective upon issuance for all entities. The Company is evaluating the impact that adoption of ASU 2020-04 will have on its consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Accounting Standards Codification (“ASC”) 606. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022 and early adoption is permitted. The Company is evaluating the impact that adoption of ASU 2021-08 will have on its consolidated financial statements. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2022 | |
REVENUE | |
REVENUE | 2. REVENUE The Company’s products and services are reported under two segments—AIR MILES Reward Program and BrandLoyalty, as shown below. The following tables present revenue disaggregated by major source, as well as geographic region based on the location of the subsidiary that generally correlates with the location of the customer: AIR MILES Three Months Ended March 31, 2022 Reward Program BrandLoyalty Eliminations Total (in thousands) Disaggregation of Revenue by Major Source: Coalition loyalty program $ 62,401 $ — $ — $ 62,401 Campaign-based loyalty programs — 87,600 — 87,600 Other 41 1,681 (44) 1,678 Revenue from contracts with customers $ 62,442 $ 89,281 $ (44) $ 151,679 Investment income 3,266 — — 3,266 Total $ 65,708 $ 89,281 $ (44) $ 154,945 AIR MILES Three Months Ended March 31, 2021 Reward Program BrandLoyalty Eliminations Total (in thousands) Disaggregation of Revenue by Major Source: Coalition loyalty program $ 66,745 $ — $ — $ 66,745 Campaign-based loyalty programs — 106,297 — 106,297 Other — — — — Revenue from contracts with customers $ 66,745 $ 106,297 $ — $ 173,042 Investment income 3,512 — — 3,512 Total $ 70,257 $ 106,297 $ — $ 176,554 AIR MILES Three Months Ended March 31, 2022 Reward Program BrandLoyalty Eliminations Total (in thousands) Disaggregation of Revenue by Geographic Region: United States $ — $ — $ — $ — Canada 65,708 6,020 (44) 71,684 Europe, Middle East and Africa — 62,689 — 62,689 Asia Pacific — 18,278 — 18,278 Other — 2,294 — 2,294 Total $ 65,708 $ 89,281 $ (44) $ 154,945 AIR MILES Three Months Ended March 31, 2021 Reward Program BrandLoyalty Eliminations Total (in thousands) Disaggregation of Revenue by Geographic Region: United States $ — $ 1,045 $ — $ 1,045 Canada 70,257 9,685 — 79,942 Europe, Middle East and Africa — 79,414 — 79,414 Asia Pacific — 14,919 — 14,919 Other — 1,234 — 1,234 Total $ 70,257 $ 106,297 $ — $ 176,554 Contract Liabilities The Company records a contract liability when cash payments are received in advance of its performance, which applies to the service and redemption of an AIR MILES reward mile and the reward products for its campaign-based loyalty programs. A reconciliation of contract liabilities for the AIR MILES Reward Program is as follows: Deferred Revenue Service Redemption Total (in thousands) Balance at January 1, 2022 $ 230,492 $ 791,464 $ 1,021,956 Cash proceeds 40,352 62,538 102,890 Revenue recognized (1) (47,220) (76,573) (123,793) Other — 306 306 Effects of foreign currency translation 2,399 8,364 10,763 Balance at March 31, 2022 $ 226,023 $ 786,099 $ 1,012,122 Amounts recognized in the consolidated balance sheets: Deferred revenue (current) $ 130,580 $ 786,099 $ 916,679 Deferred revenue (non-current) $ 95,443 $ — $ 95,443 (1) Reported on a gross basis herein. The deferred redemption obligation associated with the AIR MILES Reward Program is effectively due on demand from the collector base, thus the timing of revenue recognition is based on the redemption by the collector. Service revenue is amortized over the expected life of a mile, with the deferred revenue balance expected to be recognized into revenue in the amount of $107.1 million in 2022 2023 2024 2025 The contract liabilities for BrandLoyalty’s campaign-based loyalty programs are recognized in other current liabilities in the Company’s unaudited condensed consolidated balance sheets. The beginning balance as of January 1, 2022 was $85.4 million and the closing balance as of March 31, 2022 was $100.7 million, with the change due to cash payments received in advance of program performance, offset in part by revenue recognized of approximately $66.7 million during the three months ended March 31, 2022. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2022 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 3. EARNINGS PER SHARE A total of 24,585,237 shares of Loyalty Ventures common stock were outstanding at November 5, 2021, the date of the Separation, and this share amount was utilized for the calculation of basic and diluted earnings per share for all periods presented prior to the Separation. For the three months ended March 31, 2021, these shares are treated as issued and outstanding for purposes of calculating historical basic and diluted earnings per share. For the three months ended March 31, 2022, the calculation of basic and diluted earnings per share is based on the weighted average number of common shares outstanding. The dilutive effect of equity awards of Loyalty Ventures granted subsequent to the Separation is included in the diluted calculation. The following table sets forth the computation of basic and diluted earnings per share of common stock: Three Months Ended March 31, 2022 2021 (in thousands, except per share amounts) Numerator: Net income $ 1,018 $ 19,038 Denominator: Weighted average shares, basic 24,598 24,585 Weighted average effect of dilutive securities: Net effect of dilutive unvested restricted stock (1) 28 — Denominator for diluted calculation 24,626 24,585 Basic net income per share: $ 0.04 $ 0.77 Diluted net income per share: $ 0.04 $ 0.77 (1) For the three months ended March 31, 2022, there were 0.2 million restricted stock units that were anti-dilutive. For the three months ended March 31, 2021, there are no dilutive equity instruments as there were no equity awards of Loyalty Ventures outstanding prior to the Separation. |
INVENTORIES, NET
INVENTORIES, NET | 3 Months Ended |
Mar. 31, 2022 | |
INVENTORIES, NET | |
INVENTORIES, NET | 4. INVENTORIES, NET Inventories, net of $213.2 million and $188.6 million at March 31, 2022 and December 31, 2021, respectively, primarily consist of finished goods to be utilized as rewards in the Company’s loyalty programs. Inventories are stated at the lower of cost and net realizable value and valued primarily on a first-in-first-out basis. The Company records valuation adjustments to its inventories if the cost of inventory exceeds the amount it expects to realize from the ultimate sale or disposal of the inventory. These estimates are based on management’s judgment regarding future market conditions and an analysis of historical experience. |
REDEMPTION SETTLEMENT ASSETS, R
REDEMPTION SETTLEMENT ASSETS, RESTRICTED | 3 Months Ended |
Mar. 31, 2022 | |
REDEMPTION SETTLEMENT ASSETS, RESTRICTED. | |
REDEMPTION SETTLEMENT ASSETS, RESTRICTED | 5. REDEMPTION SETTLEMENT ASSETS, RESTRICTED Redemption settlement assets consist of restricted cash, mutual funds, and securities available-for-sale and are designated for settling redemptions by collectors of the AIR MILES Reward Program in Canada under certain contractual relationships with sponsors of the AIR MILES Reward Program. The principal components of redemption settlement assets, which are carried at fair value, are as follows: March 31, December 31, 2022 2021 Fair Value Fair Value (in thousands) Restricted cash $ 29,256 $ 58,752 Mutual funds 24,955 25,990 Corporate bonds 645,320 650,389 Total $ 699,531 $ 735,131 The following table shows the amortized cost, unrealized gains and losses, and fair value of securities available-for-sale as of March 31, 2022 and December 31, 2021, respectively: March 31, 2022 December 31, 2021 Amortized Unrealized Unrealized Amortized Unrealized Unrealized Cost Gains Losses Fair Value Cost Gains Losses Fair Value (in thousands) Corporate bonds $ 663,980 $ 783 $ (19,443) $ 645,320 $ 648,248 $ 6,389 $ (4,248) $ 650,389 Total $ 663,980 $ 783 $ (19,443) $ 645,320 $ 648,248 $ 6,389 $ (4,248) $ 650,389 The following tables show the unrealized losses and fair value for those investments that were in an unrealized loss position as of March 31, 2022 and December 31, 2021, respectively, aggregated by investment category and the length of time that individual securities have been in a continuous loss position: March 31, 2022 Less than 12 months 12 Months or Greater Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses (in thousands) Corporate bonds $ 347,095 $ (11,395) $ 112,652 $ (8,048) $ 459,747 $ (19,443) Total $ 347,095 $ (11,395) $ 112,652 $ (8,048) $ 459,747 $ (19,443) December 31, 2021 Less than 12 months 12 Months or Greater Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses (in thousands) Corporate bonds $ 104,052 $ (1,341) $ 123,382 $ (2,907) $ 227,434 $ (4,248) Total $ 104,052 $ (1,341) $ 123,382 $ (2,907) $ 227,434 $ (4,248) The amortized cost and estimated fair value of the securities available-for-sale at March 31, 2022 by contractual maturity are as follows: Amortized Estimated Cost Fair Value (in thousands) Due in one year or less $ 131,903 $ 132,384 Due after one year through five years 515,585 497,130 Due after five years through ten years 16,492 15,806 Total $ 663,980 $ 645,320 Market values were determined for each individual security in the investment portfolio. The Company recorded losses associated with the change in fair value of mutual funds of $1.3 million and $0.6 million for the three months ended March 31, 2022 and 2021, respectively. For available-for-sale debt securities in which fair value is less than cost, ASC 326, “Financial Instruments – Credit Losses,” requires that credit-related impairment, if any, is recognized through an allowance for credit losses and adjusted each period for changes in credit risk. The Company typically invests in highly rated securities with low probabilities of default and has the intent and ability to hold the investments until maturity, and the Company performs an assessment each period for credit-related impairment. As of March 31, 2022, the Company does not consider its investments to be impaired. Gains from the sale of investment securities were de minimis for the three months ended March 31, 2022. There were no realized gains or losses from the sale of investment securities for the three months ended March 31, 2021. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2022 | |
LEASES | |
LEASES | 6. LEASES The Company has operating leases for general office properties, warehouses, data centers, customer care centers, automobiles and certain equipment. As of March 31, 2022, the Company’s leases have remaining lease terms of less than 1 year to 12 years, some of which may include renewal options. For leases in which the implicit rate is not readily determinable, the Company uses its incremental borrowing rate as of the lease commencement date to determine the present value of the lease payments. The incremental borrowing rate is based on the Company’s specific rate of interest to borrow on a collateralized basis, over a similar term and in a similar economic environment as the lease. Leases with an initial term of 12 months or less are not recognized on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Additionally, the Company accounts for lease and nonlease components as a single lease component for its identified asset classes. The components of lease expense were as follows: Three Months Ended March 31, 2022 2021 (in thousands) Operating lease cost $ 3,742 $ 3,991 Short-term lease cost 70 84 Variable lease cost 1,134 1,131 Total $ 4,946 $ 5,206 Sublease income was $0.9 million and $0.5 million for the three months ended March 31, 2022 and 2021, respectively, and is presented net of lease expense. Other information related to leases was as follows: March 31, March 31, 2022 2021 Weighted-average remaining lease term (in years): Operating leases 10.5 11.2 Weighted-average discount rate: Operating leases 4.7 % 4.6 % Supplemental cash flow information related to leases was as follows: Three Months Ended March 31, 2022 2021 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3,969 $ 4,164 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 852 $ 7 Maturities of the lease liabilities as of March 31, 2022 were as follows: Operating Year Leases (in thousands) 2022 (excluding the three months ended March 31, 2022) $ 10,683 2023 14,122 2024 13,262 2025 12,909 2026 12,540 Thereafter 77,013 Total undiscounted lease liabilities 140,529 Less: Amount representing interest (30,693) Total present value of minimum lease payments $ 109,836 Amounts recognized in the March 31, 2022 consolidated balance sheet: Current operating lease liabilities $ 9,414 Long-term operating lease liabilities 100,422 Total $ 109,836 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 3 Months Ended |
Mar. 31, 2022 | |
INTANGIBLE ASSETS AND GOODWILL | |
INTANGIBLE ASSETS AND GOODWILL | 7. INTANGIBLE ASSETS AND GOODWILL Intangible Assets Intangible assets consist of the following: March 31, 2022 Gross Accumulated Assets Amortization Net Amortization Life and Method (in thousands) Tradenames $ 31,430 $ (28,701) $ 2,729 8‑15 years—straight line Total intangible assets $ 31,430 $ (28,701) $ 2,729 December 31, 2021 Gross Accumulated Assets Amortization Net Amortization Life and Method (in thousands) Tradenames $ 32,289 $ (29,194) $ 3,095 8‑15 years—straight line Collector database 55,397 (55,397) — 5 years—straight line Total intangible assets $ 87,686 $ (84,591) $ 3,095 The estimated amortization expense related to intangible assets for the next five years and thereafter is as follows: For the Years Ending December 31, (in thousands) 2022 (excluding the three months ended March 31, 2022) $ 852 2023 1,136 2024 583 2025 30 2026 30 Thereafter 98 Goodwill The changes in the carrying amount of goodwill are as follows: AIR MILES Reward Program BrandLoyalty (1) Total (in thousands) Balance at January 1, 2022 $ 194,767 $ 455,191 $ 649,958 Effects of foreign currency translation 2,103 (12,114) (10,011) Balance at March 31, 2022 $ 196,870 $ 443,077 $ 639,947 (1) Amount of goodwill as of March 31, 2022 and December 31, 2021 is net of an accumulated goodwill impairment charge of $50.0 million within the BrandLoyalty segment incurred as of December 31, 2021. As of December 31, 2021, Management’s estimated fair value of its BrandLoyalty reporting unit exceeded its carrying value by less than 10%. The Company tests goodwill for impairment annually, as of July 1, or when events and circumstances change that would indicate the carrying value may not be recoverable. As of March 31, 2022, the Company does not believe it is more likely than not that the fair value of any reporting unit is less than its carrying amount. However, with the uncertainty in the macroeconomic environment, future deterioration in the economy, changes in profitability and cash flows, or changes in sales trends or customer demand could adversely impact the Company’s reporting units. In addition, while Russia does not constitute a material portion of the Company’s business, a significant escalation of the conflict’s current scope or expansion of economic disruption to a portion or all of the global economy could further disrupt the Company’s supply chain, broaden inflationary costs, and have a material adverse effect on its results of operations and result in an additional goodwill impairment. |
INVESTMENTS IN UNCONSOLIDATED S
INVESTMENTS IN UNCONSOLIDATED SUBSIDIARY - RELATED PARTY | 3 Months Ended |
Mar. 31, 2022 | |
INVESTMENTS IN UNCONSOLIDATED SUBSIDIARY - RELATED PARTY | |
INVESTMENTS IN UNCONSOLIDATED SUBSIDIARY - RELATED PARTY | 8. INVESTMENT IN UNCONSOLIDATED SUBSIDIARY – RELATED PARTY The Company previously owned a 99.9% interest in Comenity Canada L.P., a limited partnership, which is a consolidated subsidiary of the former Parent, and was accounted for using the equity method of accounting, as the Company exercised significant influence but did not control the entity. The investment was included in the AIR MILES Reward Program segment. In March 2021, the Company received a partnership distribution from Comenity Canada L.P. of $0.8 million, and the Company’s ownership interest declined from 99.9% to 98.0%. Under the equity method, the Company’s share of its investee’s earnings or loss is recognized in the consolidated and combined statements of income. The Company recognized a di minimis amount of loss from investment in unconsolidated related party subsidiary for the three months ended March 31, 2021. In August 2021, the Company’s investment in Comenity Canada L.P. was sold to an affiliate of the former Parent. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2022 | |
DEBT | |
DEBT | 9. DEBT Debt consists of the following: March 31, December 31, Description 2022 2021 Maturity (in thousands) Revolving credit facility (1) $ — $ — November 2026 Term loan A 171,719 175,000 November 2026 Term loan B 490,625 500,000 November 2027 Total long-term debt $ 662,344 $ 675,000 Less: unamortized debt issuance costs 20,005 20,887 Less: current portion 50,625 50,625 Long-term portion $ 591,714 $ 603,488 (1) As of March 31, 2022, availability under the revolving credit facility was $133.9 million as a result of $16.1 million in letters of credit outstanding under the Credit Agreement. As of December 31, 2021, availability under the revolving credit facility was $137.5 million as a result of $12.5 million in letters of credit outstanding under the Credit Agreement. Credit Agreement The Company has a senior secured credit agreement (the “Credit Agreement”) which provides for a $175.0 million term loan A facility, a $500.0 million term loan B facility, and a revolving credit facility in the maximum amount of $150.0 million. The term loan A and revolving credit facility mature November 3, 2026. The term loan B matures November 3, 2027. In the first quarter of 2022, the Company made its quarterly principal amortization payments of $12.7 million applicable to the term loan A and term loan B. As of March 31, 2022, the Company was in compliance with its financial covenants. Uncommitted Overdraft Facility The Company has an uncommitted overdraft facility with Deutsche Bank AG that provides overdraft protection in several currencies, up to a maximum amount of €10.0 million ($11.1 million as of March 31, 2022). Interest is calculated on debit balances at a rate of 3.5% per annum plus a relevant benchmark, due and payable at the end of each quarter. There were no amounts outstanding under the uncommitted overdraft facility as of March 31, 2022 and December 31, 2021, respectively. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 3 Months Ended |
Mar. 31, 2022 | |
DERIVATIVE INSTRUMENTS | |
DERIVATIVE INSTRUMENTS. | 10. DERIVATIVE INSTRUMENTS The Company uses derivatives to manage risks associated with certain assets and liabilities arising from the potential adverse impact of fluctuations in foreign currency exchange rates. Certain derivatives used to manage the Company’s exposure to foreign currency exchange rate movements are not designated as hedges and do not qualify for hedge accounting. The fair value of the Company’s derivative instruments as of March 31, 2022 was $3.0 million included in other current assets and $0.8 million included in other current liabilities in the Company’s unaudited condensed consolidated balance sheets. The fair value of the Company’s derivative instruments as of December 31, 2021 was $2.5 million included in other current assets and $0.5 million included in other current liabilities in the Company’s unaudited condensed consolidated balance sheets. |
SHARE-BASED PAYMENTS
SHARE-BASED PAYMENTS | 3 Months Ended |
Mar. 31, 2022 | |
SHARE-BASED PAYMENTS | |
SHARE-BASED PAYMENTS | 11. SHARE-BASED PAYMENTS Stock Compensation Expense During the three months ended March 31, 2022, the Company awarded 511,855 service-based restricted stock units with a weighted average grant date fair value per share of $24.19 as determined on the date of grant. Service-based restricted stock unit awards typically vest ratably over a three-year period provided that the participant is employed by the Company on each such vesting date. The Company also awarded 88,033 performance-based restricted stock units with a weighted average grant date fair value per share of $24.19 as determined on the date of grant with pre-defined vesting criteria that permit a range from 0% to 150% to be earned. If the performance targets are met, the restrictions will lapse with respect to 33% of the award on February 15, 2023, an additional 33% of the award on February 15, 2024 and the final 34% of the award on February 15, 2025, provided that the participant is employed by the Company on each such vesting date. Stock-based compensation expense recognized in the Company’s unaudited condensed consolidated and combined statements of income for the three months ended March 31, 2022 and 2021 is as follows: Three Months Ended March 31, 2022 2021 (in thousands) Cost of operations $ 1,499 $ 1,448 General and administrative 829 405 Total $ 2,328 $ 1,853 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
Mar. 31, 2022 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The changes in each component of accumulated other comprehensive income (loss), net of tax effects, are as follows: Net Net Unrealized Foreign Accumulated Unrealized Gains (Losses) Currency Other Gains (Losses) on Cash Translation Comprehensive Three Months Ended March 31, 2022 on Securities Flow Hedges Adjustments (1) Loss (in thousands) Balance at January 1, 2022 $ 2,141 $ 1,270 $ (68,485) $ (65,074) Changes in other comprehensive income (loss) (20,801) 36 (17,223) (37,988) Balance at March 31, 2022 $ (18,660) $ 1,306 $ (85,708) $ (103,062) Net Net Unrealized Foreign Accumulated Unrealized Gains (Losses) Currency Other Gains (Losses) on Cash Translation Comprehensive Three Months Ended March 31, 2021 on Securities Flow Hedges Adjustments (1) Income (Loss) (in thousands) Balance at January 1, 2021 $ 18,267 $ (700) $ (17,186) $ 381 Changes in other comprehensive income (loss) (6,400) 917 (29,699) (35,182) Balance at March 31, 2021 $ 11,867 $ 217 $ (46,885) $ (34,801) (1) Primarily related to the impact of changes in the Canadian dollar and Euro foreign currency exchange rates. Other reclassifications from accumulated other comprehensive income (loss) into net income for each of the periods presented were not material. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | 13. INCOME TAXES For the three months ended March 31, 2022 and 2021, the Company utilized an effective tax rate of 57.5% and 32.0%, respectively, to calculate its provision for income taxes. The increase in the effective tax rate for the three months ended March 31, 2022 as compared to the respective prior year period was a result of the Company’s increased U.S. corporate expenses. The Company does not believe these expenses will be deductible; therefore, a deferred tax asset has been established with an associated valuation allowance. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2022 | |
FINANCIAL INSTRUMENTS | |
FINANCIAL INSTRUMENTS | 14. FINANCIAL INSTRUMENTS In accordance with ASC 825, “Financial Instruments,” the Company is required to disclose the fair value of financial instruments for which it is practical to estimate fair value. To obtain fair values, observable market prices are used if available. In some instances, observable market prices are not readily available and fair value is determined using present value or other techniques appropriate for a particular financial instrument. These techniques involve judgment and as a result are not necessarily indicative of the amounts the Company would realize in a current market exchange. The use of different assumptions or estimation techniques may have a material effect on the estimated fair value amounts. Fair Value of Financial Instruments March 31, 2022 December 31, 2021 Carrying Fair Carrying Fair Amount Value Amount Value (in thousands) Financial assets Redemption settlement assets, restricted $ 699,531 $ 699,531 $ 735,131 $ 735,131 Other investments 476 476 471 471 Derivative instruments 3,023 3,023 2,465 2,465 Financial liabilities Derivative instruments 755 755 487 487 Long-term debt 642,339 642,339 654,113 654,113 The following techniques and assumptions were used by the Company in estimating fair values of financial instruments as disclosed herein: Redemption settlement assets, restricted — Other investments Derivative instruments derivative. This analysis reflected the contractual terms of the derivatives, including the period to maturity, and used observable market-based inputs. Long-term debt Financial Assets and Financial Liabilities Fair Value Hierarchy ASC 820, “Fair Value Measurement,” establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: ● Level 1, defined as observable inputs such as quoted prices in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and ● Level 3, defined as unobservable inputs where little or no market data exists, therefore requiring an entity to develop its own assumptions. Financial instruments are considered Level 3 when their values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Level 3 financial instruments also include those for which the determination of fair value requires significant management judgment or estimation. The use of different techniques to determine fair value of these financial instruments could result in different estimates of fair value at the reporting date. The following tables provide information for the assets and liabilities carried at fair value measured on a recurring basis as of March 31, 2022 and December 31, 2021: Balance at Fair Value Measurements at March 31, March 31, 2022 Using 2022 Level 1 Level 2 Level 3 (in thousands) Mutual funds (1) $ 24,955 $ 24,955 $ — $ — Corporate bonds (1) 645,320 — 645,320 — Marketable securities (2) 476 476 — — Derivative instruments (3) 3,023 — 3,023 — Total assets measured at fair value $ 673,774 $ 25,431 $ 648,343 $ — Derivative instruments (3) $ 755 $ — $ 755 $ — Total liabilities measured at fair value $ 755 $ — $ 755 $ — Balance at Fair Value Measurements at December 31, December 31, 2021 Using 2021 Level 1 Level 2 Level 3 (in thousands) Mutual funds (1) $ 25,990 $ 25,990 $ — $ — Corporate bonds (1) 650,389 — 650,389 — Marketable securities (2) 471 471 — — Derivative instruments (3) 2,465 — 2,465 — Total assets measured at fair value $ 679,315 $ 26,461 $ 652,854 $ — Derivative instruments (3) $ 487 $ — $ 487 $ — Total liabilities measured at fair value $ 487 $ — $ 487 $ — (1) Amounts are included in redemption settlement assets, restricted in the unaudited condensed consolidated balance sheets. (2) Amounts are included in other current assets in the unaudited condensed consolidated balance sheets. (3) Amounts are included in other current assets and other current liabilities in the unaudited condensed consolidated balance sheets . Financial Instruments Disclosed but Not Carried at Fair Value The following table provides assets and liabilities disclosed but not carried at fair value as of March 31, 2022 and December 31, 2021: Balance at Fair Value Measurements at March 31, March 31, 2022 Using 2022 Level 1 Level 2 Level 3 (in thousands) Long-term debt $ 642,339 $ — $ 642,339 $ — Total liabilities measured at fair value $ 642,339 $ — $ 642,339 $ — Balance at Fair Value Measurements at December 31, December 31, 2021 Using 2021 Level 1 Level 2 Level 3 (in thousands) Long-term debt $ 654,113 $ — $ 654,113 $ — Total liabilities measured at fair value $ 654,113 $ — $ 654,113 $ — |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2022 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 15. SEGMENT INFORMATION Operating segments are defined by ASC 280, “Segment Reporting,” as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The operating segments are reviewed separately because each operating segment represents a strategic business unit that generally offers different products and services. ● The AIR MILES Reward Program is a full-service outsourced coalition loyalty program for its sponsors, who pay the AIR MILES Reward Program a fee per AIR MILES reward mile issued, in return for which it provides all marketing, customer service, rewards and redemption management. ● BrandLoyalty designs, implements, conducts and evaluates innovative and tailor-made loyalty programs for grocers and other high-frequency retailers worldwide. These loyalty programs are designed to generate immediate changes in consumer behavior and are offered through leading grocers across Europe and Asia, as well as around the world. ● Corporate and other consists of corporate overhead not allocated to any of the Company’s segments. Income taxes and equity in earnings (losses) from related party investments accounted for under the equity method are not included in the computation of segment operating profit for internal evaluation purposes. AIR MILES Corporate/ Three Months Ended March 31, 2022 Reward Program BrandLoyalty Other Eliminations Total (in thousands) Revenues $ 65,708 $ 89,281 $ — $ (44) $ 154,945 Income (loss) before income taxes $ 21,722 $ (3,979) $ (15,350) $ — $ 2,393 Interest (income) expense, net (136) 47 9,141 — 9,052 Depreciation and amortization 6,813 2,600 — — 9,413 Stock compensation expense 707 792 829 — 2,328 Strategic transaction costs 299 776 438 — 1,513 Adjusted EBITDA (1) $ 29,405 $ 236 $ (4,942) $ — $ 24,699 AIR MILES Corporate/ Three Months Ended March 31, 2021 Reward Program BrandLoyalty Other Eliminations Total (in thousands) Revenues $ 70,257 $ 106,297 $ — $ — $ 176,554 Income (loss) before income taxes $ 30,162 $ 1,582 $ (3,686) $ — $ 28,058 Interest (income) expense, net (182) 113 — — (69) Depreciation and amortization 5,784 3,250 — — 9,034 Stock compensation expense 687 761 405 — 1,853 Adjusted EBITDA (1) $ 36,451 $ 5,706 $ (3,281) $ — $ 38,876 (1) Adjusted EBITDA is presented in accordance with ASC 280 as it is the primary performance metric utilized to assess performance of the segments and to determine the allocation of resources. Adjusted EBITDA is a non-GAAP financial measure equal to net income, the most directly comparable financial measure based on GAAP, plus loss from investment in unconsolidated subsidiary – related party, provision for income taxes, interest expense (income), net, depreciation and other amortization, amortization of purchased intangibles, and stock compensation expense. Adjusted EBITDA also excludes strategic transaction costs, which represent costs associated with the Separation, which were comprised of amounts associated with the Employee Matters Agreement. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended |
Mar. 31, 2022 | |
SUPPLEMENTAL CASH FLOW INFORMATION | |
SUPPLEMENTAL CASH FLOW INFORMATION | 16. SUPPLEMENTAL CASH FLOW INFORMATION The following table provides a reconciliation of cash and cash equivalents to the total of the amounts reported in the unaudited condensed consolidated and combined statements of cash flows: March 31, March 31, 2022 2021 (in thousands) Cash and cash equivalents $ 139,724 $ 217,708 Restricted cash included within other current assets (1) 10,554 2,877 Restricted cash included within redemption settlement assets, restricted (2) 29,256 71,850 Total cash, cash equivalents and restricted cash $ 179,534 $ 292,435 (1) Includes cash restricted for travel deposits within the AIR MILES Reward Program. (2) See Note 5, “Redemption Settlement Assets, Restricted,” for additional information regarding the nature of restrictions on redemption settlement assets. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 17. RELATED PARTY TRANSACTIONS Prior to the Separation, transactions between the Company and its former Parent were considered to be effectively settled at the time the transaction was recorded. The net effect of the settlement of these intercompany transactions is reflected in the unaudited condensed combined statements of cash flow as a financing activity as net transfers to the former Parent for the three months ended March 31, 2021. In January 2021, the Company paid cash dividends to the former Parent of $124.2 million, of which $4.2 million was withheld for taxes. The former Parent allocated $3.7 million for the three months ended March 31, 2021 of corporate overhead costs that directly or indirectly benefit the Company that is included in general and administrative expense within the Company’s unaudited condensed combined statements of income. These assessments relate to information technology, finance, accounting, and tax services provided, as well as human resources, and other functional support. These allocations were determined based on management estimates on the number of employees and non-employee costs associated with the use of these functions by the Company and may not be indicative of the costs that the Company would otherwise incur on a standalone basis. In addition, the Company had an investment in unconsolidated subsidiary that was a consolidated subsidiary of the former Parent. See Note 8, “Investment in Unconsolidated Subsidiary - Related Party,” for additional information. As part of the Separation, the Company entered into certain agreements with its former Parent, including a Transition Services Agreement, Employee Matters Agreement, and Tax Matters Agreement. For the three months ended March 31, 2022, the Company incurred $0.6 million of expenses in connection with the Transition Services Agreement for various corporate, administrative and information technology services provided by its former Parent and have been included in general and administrative expenses in the Company’s unaudited condensed consolidated statement of income. Pursuant to the terms of the Employee Matters Agreement, the Company received a net cash payment of $1.6 million as final settlement of the estimated prorated bonus amounts established at the time of the Separation. Additionally, the Company has certain assets and liabilities associated with the Tax Matters Agreement. The Company has $20.1 million of accounts receivable as of March 31, 2022 and December 31, 2021, accrued expenses of $80.3 million and $80.0 million as of March 31, 2022 and December 31, 2021, respectively and $1.0 million of other liabilities as of March 31, 2022 and December 31, 2021 included in the Company’s consolidated balance sheets. |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION. | |
Description of the Business | Description of the Business On November 5, 2021, Bread Financial Holdings, Inc., previously named Alliance Data Systems Corporation (“former Parent”), completed the spinoff of its LoyaltyOne reportable segment (the “Separation”) into an independent, publicly traded company, Loyalty Ventures Inc. (the “Company” or “Loyalty Ventures”). Loyalty Ventures provides coalition and campaign-based loyalty solutions through the Canadian AIR MILES ® |
Basis of Presentation | Basis of Presentation Prior to the Separation, the Company had operated as part of the former Parent and not as a standalone company. The unaudited condensed combined financial statements for the three months ended March 31, 2021 have been derived from the former Parent’s historical accounting records and are presented on a “carve-out” basis. The unaudited condensed combined financial statements for the three months ended March 31, 2021 also include allocations of certain general and administrative expenses from the former Parent that directly or indirectly benefited Loyalty Ventures’ business. However, amounts recognized by the Company are not necessarily representative of the amounts that would have been reflected in the unaudited condensed combined financial statements had the Company operated independently. The former Parent’s third-party long-term debt and the related interest expense was not allocated for the three months ended March 31, 2021 as the Company was not the legal obligor of such debt. The former Parent’s net investment represents its interest in the recorded net assets of the Company. All significant transactions between the Company and its former Parent have been included in the accompanying unaudited condensed combined financial statements. Transactions with the former Parent as contributions to the carve-out entity or distributions from the carve-out entity are reflected in the accompanying unaudited condensed combined statements of equity as “Change in former Parent’s net investment.” The unaudited consolidated financial statements for the three months ended March 31, 2022 were based on the reported results of Loyalty Ventures as a standalone company and prepared on a consolidated basis. All significant intercompany accounts and transactions between the businesses comprising the Company have been eliminated in the accompanying unaudited condensed consolidated and combined financial statements. The Company’s unaudited condensed consolidated and combined financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s unaudited condensed consolidated and combined financial statements and accompanying notes are presented in U.S. Dollars (“USD”), the Company’s reporting currency. The unaudited condensed consolidated and combined financial statements included herein reflect all adjustments (consisting of normal, recurring adjustments) which are, in the opinion of management, necessary to state fairly the results for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the fiscal year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated and combined financial statements should be read in conjunction with the consolidated and combined financial statements and the notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2022. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. This ASU is elective and is effective upon issuance for all entities. The Company is evaluating the impact that adoption of ASU 2020-04 will have on its consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Accounting Standards Codification (“ASC”) 606. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022 and early adoption is permitted. The Company is evaluating the impact that adoption of ASU 2021-08 will have on its consolidated financial statements. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
REVENUE | |
Schedule of revenue disaggregation | AIR MILES Three Months Ended March 31, 2022 Reward Program BrandLoyalty Eliminations Total (in thousands) Disaggregation of Revenue by Major Source: Coalition loyalty program $ 62,401 $ — $ — $ 62,401 Campaign-based loyalty programs — 87,600 — 87,600 Other 41 1,681 (44) 1,678 Revenue from contracts with customers $ 62,442 $ 89,281 $ (44) $ 151,679 Investment income 3,266 — — 3,266 Total $ 65,708 $ 89,281 $ (44) $ 154,945 AIR MILES Three Months Ended March 31, 2021 Reward Program BrandLoyalty Eliminations Total (in thousands) Disaggregation of Revenue by Major Source: Coalition loyalty program $ 66,745 $ — $ — $ 66,745 Campaign-based loyalty programs — 106,297 — 106,297 Other — — — — Revenue from contracts with customers $ 66,745 $ 106,297 $ — $ 173,042 Investment income 3,512 — — 3,512 Total $ 70,257 $ 106,297 $ — $ 176,554 AIR MILES Three Months Ended March 31, 2022 Reward Program BrandLoyalty Eliminations Total (in thousands) Disaggregation of Revenue by Geographic Region: United States $ — $ — $ — $ — Canada 65,708 6,020 (44) 71,684 Europe, Middle East and Africa — 62,689 — 62,689 Asia Pacific — 18,278 — 18,278 Other — 2,294 — 2,294 Total $ 65,708 $ 89,281 $ (44) $ 154,945 AIR MILES Three Months Ended March 31, 2021 Reward Program BrandLoyalty Eliminations Total (in thousands) Disaggregation of Revenue by Geographic Region: United States $ — $ 1,045 $ — $ 1,045 Canada 70,257 9,685 — 79,942 Europe, Middle East and Africa — 79,414 — 79,414 Asia Pacific — 14,919 — 14,919 Other — 1,234 — 1,234 Total $ 70,257 $ 106,297 $ — $ 176,554 |
Schedule of reconciliation of contract liabilities | Deferred Revenue Service Redemption Total (in thousands) Balance at January 1, 2022 $ 230,492 $ 791,464 $ 1,021,956 Cash proceeds 40,352 62,538 102,890 Revenue recognized (1) (47,220) (76,573) (123,793) Other — 306 306 Effects of foreign currency translation 2,399 8,364 10,763 Balance at March 31, 2022 $ 226,023 $ 786,099 $ 1,012,122 Amounts recognized in the consolidated balance sheets: Deferred revenue (current) $ 130,580 $ 786,099 $ 916,679 Deferred revenue (non-current) $ 95,443 $ — $ 95,443 (1) Reported on a gross basis herein. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
EARNINGS PER SHARE | |
Schedule of computation of basic and diluted earning per share of common stock | Three Months Ended March 31, 2022 2021 (in thousands, except per share amounts) Numerator: Net income $ 1,018 $ 19,038 Denominator: Weighted average shares, basic 24,598 24,585 Weighted average effect of dilutive securities: Net effect of dilutive unvested restricted stock (1) 28 — Denominator for diluted calculation 24,626 24,585 Basic net income per share: $ 0.04 $ 0.77 Diluted net income per share: $ 0.04 $ 0.77 (1) For the three months ended March 31, 2022, there were 0.2 million restricted stock units that were anti-dilutive. For the three months ended March 31, 2021, there are no dilutive equity instruments as there were no equity awards of Loyalty Ventures outstanding prior to the Separation. |
REDEMPTION SETTLEMENT ASSETS,_2
REDEMPTION SETTLEMENT ASSETS, RESTRICTED (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
REDEMPTION SETTLEMENT ASSETS, RESTRICTED. | |
Schedule of redemption settlement assets | March 31, December 31, 2022 2021 Fair Value Fair Value (in thousands) Restricted cash $ 29,256 $ 58,752 Mutual funds 24,955 25,990 Corporate bonds 645,320 650,389 Total $ 699,531 $ 735,131 |
Schedule of amortized cost, unrealized gains and losses, and fair value of securities available-for-sale | March 31, 2022 December 31, 2021 Amortized Unrealized Unrealized Amortized Unrealized Unrealized Cost Gains Losses Fair Value Cost Gains Losses Fair Value (in thousands) Corporate bonds $ 663,980 $ 783 $ (19,443) $ 645,320 $ 648,248 $ 6,389 $ (4,248) $ 650,389 Total $ 663,980 $ 783 $ (19,443) $ 645,320 $ 648,248 $ 6,389 $ (4,248) $ 650,389 |
Schedule of unrealized loss position and fair value of debt securities available for sale | March 31, 2022 Less than 12 months 12 Months or Greater Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses (in thousands) Corporate bonds $ 347,095 $ (11,395) $ 112,652 $ (8,048) $ 459,747 $ (19,443) Total $ 347,095 $ (11,395) $ 112,652 $ (8,048) $ 459,747 $ (19,443) December 31, 2021 Less than 12 months 12 Months or Greater Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses (in thousands) Corporate bonds $ 104,052 $ (1,341) $ 123,382 $ (2,907) $ 227,434 $ (4,248) Total $ 104,052 $ (1,341) $ 123,382 $ (2,907) $ 227,434 $ (4,248) |
Schedule of contractual maturity of debt securities available for sale | Amortized Estimated Cost Fair Value (in thousands) Due in one year or less $ 131,903 $ 132,384 Due after one year through five years 515,585 497,130 Due after five years through ten years 16,492 15,806 Total $ 663,980 $ 645,320 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
LEASES | |
Schedule of components of lease expense | Three Months Ended March 31, 2022 2021 (in thousands) Operating lease cost $ 3,742 $ 3,991 Short-term lease cost 70 84 Variable lease cost 1,134 1,131 Total $ 4,946 $ 5,206 |
Schedule of weighted average remaining lease term and discount rate | March 31, March 31, 2022 2021 Weighted-average remaining lease term (in years): Operating leases 10.5 11.2 Weighted-average discount rate: Operating leases 4.7 % 4.6 % |
Schedule of supplemental cashflow information | Three Months Ended March 31, 2022 2021 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3,969 $ 4,164 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 852 $ 7 |
Schedule of maturities of the lease liabilities | Operating Year Leases (in thousands) 2022 (excluding the three months ended March 31, 2022) $ 10,683 2023 14,122 2024 13,262 2025 12,909 2026 12,540 Thereafter 77,013 Total undiscounted lease liabilities 140,529 Less: Amount representing interest (30,693) Total present value of minimum lease payments $ 109,836 Amounts recognized in the March 31, 2022 consolidated balance sheet: Current operating lease liabilities $ 9,414 Long-term operating lease liabilities 100,422 Total $ 109,836 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
INTANGIBLE ASSETS AND GOODWILL | |
Schedule of Intangible assets | March 31, 2022 Gross Accumulated Assets Amortization Net Amortization Life and Method (in thousands) Tradenames $ 31,430 $ (28,701) $ 2,729 8‑15 years—straight line Total intangible assets $ 31,430 $ (28,701) $ 2,729 December 31, 2021 Gross Accumulated Assets Amortization Net Amortization Life and Method (in thousands) Tradenames $ 32,289 $ (29,194) $ 3,095 8‑15 years—straight line Collector database 55,397 (55,397) — 5 years—straight line Total intangible assets $ 87,686 $ (84,591) $ 3,095 |
Schedule of estimated amortization expense related to intangible assets | For the Years Ending December 31, (in thousands) 2022 (excluding the three months ended March 31, 2022) $ 852 2023 1,136 2024 583 2025 30 2026 30 Thereafter 98 |
Schedule of changes in the carrying amount of goodwill | AIR MILES Reward Program BrandLoyalty (1) Total (in thousands) Balance at January 1, 2022 $ 194,767 $ 455,191 $ 649,958 Effects of foreign currency translation 2,103 (12,114) (10,011) Balance at March 31, 2022 $ 196,870 $ 443,077 $ 639,947 (1) Amount of goodwill as of March 31, 2022 and December 31, 2021 is net of an accumulated goodwill impairment charge of $50.0 million within the BrandLoyalty segment incurred as of December 31, 2021. As of December 31, 2021, Management’s estimated fair value of its BrandLoyalty reporting unit exceeded its carrying value by less than 10%. |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
DEBT | |
Schedule of debt | March 31, December 31, Description 2022 2021 Maturity (in thousands) Revolving credit facility (1) $ — $ — November 2026 Term loan A 171,719 175,000 November 2026 Term loan B 490,625 500,000 November 2027 Total long-term debt $ 662,344 $ 675,000 Less: unamortized debt issuance costs 20,005 20,887 Less: current portion 50,625 50,625 Long-term portion $ 591,714 $ 603,488 (1) As of March 31, 2022, availability under the revolving credit facility was $133.9 million as a result of $16.1 million in letters of credit outstanding under the Credit Agreement. As of December 31, 2021, availability under the revolving credit facility was $137.5 million as a result of $12.5 million in letters of credit outstanding under the Credit Agreement. |
SHARE-BASED PAYMENTS (Tables)
SHARE-BASED PAYMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
SHARE-BASED PAYMENTS | |
Stock-based compensation expense recognized in statements of income | Three Months Ended March 31, 2022 2021 (in thousands) Cost of operations $ 1,499 $ 1,448 General and administrative 829 405 Total $ 2,328 $ 1,853 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |
Schedule of changes in components of accumulated other comprehensive income (loss) | Net Net Unrealized Foreign Accumulated Unrealized Gains (Losses) Currency Other Gains (Losses) on Cash Translation Comprehensive Three Months Ended March 31, 2022 on Securities Flow Hedges Adjustments (1) Loss (in thousands) Balance at January 1, 2022 $ 2,141 $ 1,270 $ (68,485) $ (65,074) Changes in other comprehensive income (loss) (20,801) 36 (17,223) (37,988) Balance at March 31, 2022 $ (18,660) $ 1,306 $ (85,708) $ (103,062) Net Net Unrealized Foreign Accumulated Unrealized Gains (Losses) Currency Other Gains (Losses) on Cash Translation Comprehensive Three Months Ended March 31, 2021 on Securities Flow Hedges Adjustments (1) Income (Loss) (in thousands) Balance at January 1, 2021 $ 18,267 $ (700) $ (17,186) $ 381 Changes in other comprehensive income (loss) (6,400) 917 (29,699) (35,182) Balance at March 31, 2021 $ 11,867 $ 217 $ (46,885) $ (34,801) (1) Primarily related to the impact of changes in the Canadian dollar and Euro foreign currency exchange rates. |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
FINANCIAL INSTRUMENTS | |
Schedule of estimated fair value of Company's financial instruments | March 31, 2022 December 31, 2021 Carrying Fair Carrying Fair Amount Value Amount Value (in thousands) Financial assets Redemption settlement assets, restricted $ 699,531 $ 699,531 $ 735,131 $ 735,131 Other investments 476 476 471 471 Derivative instruments 3,023 3,023 2,465 2,465 Financial liabilities Derivative instruments 755 755 487 487 Long-term debt 642,339 642,339 654,113 654,113 |
Schedule of assets and liabilities carried at fair value measured on recurring basis | Balance at Fair Value Measurements at March 31, March 31, 2022 Using 2022 Level 1 Level 2 Level 3 (in thousands) Mutual funds (1) $ 24,955 $ 24,955 $ — $ — Corporate bonds (1) 645,320 — 645,320 — Marketable securities (2) 476 476 — — Derivative instruments (3) 3,023 — 3,023 — Total assets measured at fair value $ 673,774 $ 25,431 $ 648,343 $ — Derivative instruments (3) $ 755 $ — $ 755 $ — Total liabilities measured at fair value $ 755 $ — $ 755 $ — Balance at Fair Value Measurements at December 31, December 31, 2021 Using 2021 Level 1 Level 2 Level 3 (in thousands) Mutual funds (1) $ 25,990 $ 25,990 $ — $ — Corporate bonds (1) 650,389 — 650,389 — Marketable securities (2) 471 471 — — Derivative instruments (3) 2,465 — 2,465 — Total assets measured at fair value $ 679,315 $ 26,461 $ 652,854 $ — Derivative instruments (3) $ 487 $ — $ 487 $ — Total liabilities measured at fair value $ 487 $ — $ 487 $ — (1) Amounts are included in redemption settlement assets, restricted in the unaudited condensed consolidated balance sheets. (2) Amounts are included in other current assets in the unaudited condensed consolidated balance sheets. (3) Amounts are included in other current assets and other current liabilities in the unaudited condensed consolidated balance sheets . |
Schedule of assets and liabilities disclosed but not carried at fair value | Balance at Fair Value Measurements at March 31, March 31, 2022 Using 2022 Level 1 Level 2 Level 3 (in thousands) Long-term debt $ 642,339 $ — $ 642,339 $ — Total liabilities measured at fair value $ 642,339 $ — $ 642,339 $ — Balance at Fair Value Measurements at December 31, December 31, 2021 Using 2021 Level 1 Level 2 Level 3 (in thousands) Long-term debt $ 654,113 $ — $ 654,113 $ — Total liabilities measured at fair value $ 654,113 $ — $ 654,113 $ — |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
SEGMENT INFORMATION | |
Schedule of segment information | AIR MILES Corporate/ Three Months Ended March 31, 2022 Reward Program BrandLoyalty Other Eliminations Total (in thousands) Revenues $ 65,708 $ 89,281 $ — $ (44) $ 154,945 Income (loss) before income taxes $ 21,722 $ (3,979) $ (15,350) $ — $ 2,393 Interest (income) expense, net (136) 47 9,141 — 9,052 Depreciation and amortization 6,813 2,600 — — 9,413 Stock compensation expense 707 792 829 — 2,328 Strategic transaction costs 299 776 438 — 1,513 Adjusted EBITDA (1) $ 29,405 $ 236 $ (4,942) $ — $ 24,699 AIR MILES Corporate/ Three Months Ended March 31, 2021 Reward Program BrandLoyalty Other Eliminations Total (in thousands) Revenues $ 70,257 $ 106,297 $ — $ — $ 176,554 Income (loss) before income taxes $ 30,162 $ 1,582 $ (3,686) $ — $ 28,058 Interest (income) expense, net (182) 113 — — (69) Depreciation and amortization 5,784 3,250 — — 9,034 Stock compensation expense 687 761 405 — 1,853 Adjusted EBITDA (1) $ 36,451 $ 5,706 $ (3,281) $ — $ 38,876 (1) Adjusted EBITDA is presented in accordance with ASC 280 as it is the primary performance metric utilized to assess performance of the segments and to determine the allocation of resources. Adjusted EBITDA is a non-GAAP financial measure equal to net income, the most directly comparable financial measure based on GAAP, plus loss from investment in unconsolidated subsidiary – related party, provision for income taxes, interest expense (income), net, depreciation and other amortization, amortization of purchased intangibles, and stock compensation expense. Adjusted EBITDA also excludes strategic transaction costs, which represent costs associated with the Separation, which were comprised of amounts associated with the Employee Matters Agreement. |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
SUPPLEMENTAL CASH FLOW INFORMATION | |
Schedule of reconciliation of cash and cash equivalents | March 31, March 31, 2022 2021 (in thousands) Cash and cash equivalents $ 139,724 $ 217,708 Restricted cash included within other current assets (1) 10,554 2,877 Restricted cash included within redemption settlement assets, restricted (2) 29,256 71,850 Total cash, cash equivalents and restricted cash $ 179,534 $ 292,435 (1) Includes cash restricted for travel deposits within the AIR MILES Reward Program. (2) See Note 5, “Redemption Settlement Assets, Restricted,” for additional information regarding the nature of restrictions on redemption settlement assets. |
REVENUE - Schedule of revenue d
REVENUE - Schedule of revenue disaggregation (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)segment | Mar. 31, 2021USD ($) | |
Disaggregation of Revenue [Line Items] | ||
Number of segments | segment | 2 | |
Revenue from contracts with customers | $ 151,679 | $ 173,042 |
Investment income | 3,266 | 3,512 |
Total | 154,945 | 176,554 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Total | 1,045 | |
Canada | ||
Disaggregation of Revenue [Line Items] | ||
Total | 71,684 | 79,942 |
Europe, Middle East and Africa | ||
Disaggregation of Revenue [Line Items] | ||
Total | 62,689 | 79,414 |
Asia Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Total | 18,278 | 14,919 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total | 2,294 | 1,234 |
Brand Loyalty | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 89,281 | 106,297 |
Total | 89,281 | 106,297 |
Brand Loyalty | United States | ||
Disaggregation of Revenue [Line Items] | ||
Total | 1,045 | |
Brand Loyalty | Canada | ||
Disaggregation of Revenue [Line Items] | ||
Total | 6,020 | 9,685 |
Brand Loyalty | Europe, Middle East and Africa | ||
Disaggregation of Revenue [Line Items] | ||
Total | 62,689 | 79,414 |
Brand Loyalty | Asia Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Total | 18,278 | 14,919 |
Brand Loyalty | Other | ||
Disaggregation of Revenue [Line Items] | ||
Total | 2,294 | 1,234 |
AIR MILES Reward Program | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 62,442 | 66,745 |
Investment income | 3,266 | 3,512 |
Total | 65,708 | 70,257 |
AIR MILES Reward Program | Canada | ||
Disaggregation of Revenue [Line Items] | ||
Total | 65,708 | 70,257 |
Operating segment | Brand Loyalty | ||
Disaggregation of Revenue [Line Items] | ||
Total | 89,281 | 106,297 |
Operating segment | AIR MILES Reward Program | ||
Disaggregation of Revenue [Line Items] | ||
Total | 65,708 | 70,257 |
Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | (44) | |
Total | (44) | |
Eliminations | Canada | ||
Disaggregation of Revenue [Line Items] | ||
Total | (44) | |
Coalition loyalty program | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 62,401 | 66,745 |
Coalition loyalty program | AIR MILES Reward Program | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 62,401 | 66,745 |
Campaign-based loyalty programs | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 87,600 | 106,297 |
Campaign-based loyalty programs | Brand Loyalty | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 87,600 | 106,297 |
Other Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 1,678 | |
Total | 6,186 | $ 5,467 |
Other Revenue | Brand Loyalty | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 1,681 | |
Other Revenue | AIR MILES Reward Program | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 41 | |
Other Revenue | Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ (44) |
REVENUE - Schedule of reconcili
REVENUE - Schedule of reconciliation of contract liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue recognized | $ 66,700 | |
Amounts recognized in the combined balance sheets: | ||
Deferred revenue (current) | 916,679 | $ 924,789 |
Deferred revenue (non-current) | 95,443 | $ 97,167 |
AIR MILES Reward Program | ||
Disaggregation of Revenue [Line Items] | ||
Beginning balance | 1,021,956 | |
Cash proceeds | 102,890 | |
Revenue recognized | (123,793) | |
Other | 306 | |
Effects of foreign currency translation | 10,763 | |
Ending balance | 1,012,122 | |
Amounts recognized in the combined balance sheets: | ||
Deferred revenue (current) | 916,679 | |
Deferred revenue (non-current) | 95,443 | |
AIR MILES Reward Program | Services | ||
Disaggregation of Revenue [Line Items] | ||
Beginning balance | 230,492 | |
Cash proceeds | 40,352 | |
Revenue recognized | (47,220) | |
Effects of foreign currency translation | 2,399 | |
Ending balance | 226,023 | |
Amounts recognized in the combined balance sheets: | ||
Deferred revenue (current) | 130,580 | |
Deferred revenue (non-current) | 95,443 | |
AIR MILES Reward Program | Redemption | ||
Disaggregation of Revenue [Line Items] | ||
Beginning balance | 791,464 | |
Cash proceeds | 62,538 | |
Revenue recognized | (76,573) | |
Other | 306 | |
Effects of foreign currency translation | 8,364 | |
Ending balance | 786,099 | |
Amounts recognized in the combined balance sheets: | ||
Deferred revenue (current) | $ 786,099 |
REVENUE - Narratives (Details)
REVENUE - Narratives (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue recognized | $ 66.7 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred revenue balance expected to be recognized | $ 107.1 | |
Deferred revenue balance expected to be recognized, period | 9 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred revenue balance expected to be recognized | $ 77.9 | |
Deferred revenue balance expected to be recognized, period | 12 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred revenue balance expected to be recognized | $ 37.2 | |
Deferred revenue balance expected to be recognized, period | 12 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred revenue balance expected to be recognized | $ 3.8 | |
Deferred revenue balance expected to be recognized, period | 12 months | |
Other current liabilities | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Contract liabilities | $ 100.7 | $ 85.4 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) | Nov. 05, 2021shares |
EARNINGS PER SHARE | |
Common stock, shares outstanding | 24,585,237 |
EARNINGS PER SHARE - Computatio
EARNINGS PER SHARE - Computation of basic and diluted earning per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net income | $ 1,018 | $ 19,038 |
Denominator: | ||
Weighted average shares, basic | 24,598,000 | 24,585,000 |
Net effect of dilutive unvested restricted stock | 28,000 | |
Denominator for diluted calculation | 24,626,000 | 24,585,000 |
Basic net income per share: | $ 0.04 | $ 0.77 |
Diluted net income per share: | $ 0.04 | $ 0.77 |
Dilutive equity instruments (in shares) | 0 | |
Equity awards (in shares) | 0 | |
Restricted Stock [Member] | ||
Denominator: | ||
Anti-dilutive restricted stock units | 200,000 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
INVENTORIES, NET | ||
Inventories, net | $ 213,183 | $ 188,577 |
REDEMPTION SETTLEMENT ASSETS,_3
REDEMPTION SETTLEMENT ASSETS, RESTRICTED - Components of redemption settlement assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule Of Redemption Settlement Assets [Line Items] | ||
Redemption settlement assets, Fair Value, Total | $ 699,531 | $ 735,131 |
Restricted cash | ||
Schedule Of Redemption Settlement Assets [Line Items] | ||
Redemption settlement assets, Fair Value, Total | 29,256 | 58,752 |
Mutual funds | ||
Schedule Of Redemption Settlement Assets [Line Items] | ||
Redemption settlement assets, Fair Value, Total | 24,955 | 25,990 |
Corporate bonds | ||
Schedule Of Redemption Settlement Assets [Line Items] | ||
Redemption settlement assets, Fair Value, Total | $ 645,320 | $ 650,389 |
REDEMPTION SETTLEMENT ASSETS,_4
REDEMPTION SETTLEMENT ASSETS, RESTRICTED - Amortized cost, unrealized gains and losses, and fair value of securities available-for-sale (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 663,980 | $ 648,248 |
Unrealized Gains | 783 | 6,389 |
Unrealized Losses | (19,443) | (4,248) |
Fair Value | 645,320 | 650,389 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 663,980 | 648,248 |
Unrealized Gains | 783 | 6,389 |
Unrealized Losses | (19,443) | (4,248) |
Fair Value | $ 645,320 | $ 650,389 |
REDEMPTION SETTLEMENT ASSETS,_5
REDEMPTION SETTLEMENT ASSETS, RESTRICTED - Unrealized losses and fair value (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | $ 347,095 | $ 104,052 |
Less than 12 months, Unrealized Losses | (11,395) | (1,341) |
12 Months or Greater, Fair Value | 112,652 | 123,382 |
12 Months or Greater, Unrealized Losses | (8,048) | (2,907) |
Fair Value | 459,747 | 227,434 |
Unrealized Losses | (19,443) | (4,248) |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | 347,095 | 104,052 |
Less than 12 months, Unrealized Losses | (11,395) | (1,341) |
12 Months or Greater, Fair Value | 112,652 | 123,382 |
12 Months or Greater, Unrealized Losses | (8,048) | (2,907) |
Fair Value | 459,747 | 227,434 |
Unrealized Losses | $ (19,443) | $ (4,248) |
REDEMPTION SETTLEMENT ASSETS,_6
REDEMPTION SETTLEMENT ASSETS, RESTRICTED - Maturity (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Amortized Cost | |
Due in one year or less | $ 131,903 |
Due after one year through five years | 515,585 |
Due after five years through ten years | 16,492 |
Total | 663,980 |
Estimated Fair Value | |
Due in one year or less | 132,384 |
Due after one year through five years | 497,130 |
Due after five years through ten years | 15,806 |
Total | $ 645,320 |
REDEMPTION SETTLEMENT ASSETS,_7
REDEMPTION SETTLEMENT ASSETS, RESTRICTED - Narratives (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
REDEMPTION SETTLEMENT ASSETS, RESTRICTED. | ||
Realized gain (loss) | $ (1,300,000) | $ (600,000) |
Realized gains or losses | $ 0 |
LEASES - Narratives (Details)
LEASES - Narratives (Details) | Mar. 31, 2022 |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 12 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
LEASES - Components of lease ex
LEASES - Components of lease expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Lessee Disclosure [Abstract] | ||
Operating lease cost | $ 3,742 | $ 3,991 |
Short-term lease cost | 70 | 84 |
Variable lease cost | 1,134 | 1,131 |
Total | 4,946 | 5,206 |
Sublease income | $ 900 | $ 500 |
LEASES - Other information rela
LEASES - Other information related to leases (Details) | Mar. 31, 2022 | Mar. 31, 2021 |
LEASES | ||
Operating leases, Weighted-average remaining lease term (in years) | 10 years 6 months | 11 years 2 months 12 days |
Operating leases, Weighted-average discount rate: | 4.70% | 4.60% |
LEASES - Supplemental cash flow
LEASES - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
LEASES | ||
Operating cash flows from operating leases | $ 3,969 | $ 4,164 |
Operating leases, right-of-use assets obtained in exchange for lease obligations | $ 852 | $ 7 |
LEASES - Maturities (Details)
LEASES - Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
LEASES | ||
2022 (excluding the three months ended March 31, 2022) | $ 10,683 | |
2023 | 14,122 | |
2024 | 13,262 | |
2025 | 12,909 | |
2026 | 12,540 | |
Thereafter | 77,013 | |
Total undiscounted lease liabilities | 140,529 | |
Less: Amount representing interest | (30,693) | |
Total present value of minimum lease payments | 109,836 | |
Current operating lease liabilities | 9,414 | $ 10,055 |
Long-term operating lease liabilities | 100,422 | $ 103,242 |
Total | $ 109,836 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - Intangible assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | $ 31,430 | $ 87,686 |
Accumulated Amortization | (28,701) | (84,591) |
Net | 2,729 | 3,095 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 31,430 | 32,289 |
Accumulated Amortization | (28,701) | (29,194) |
Net | $ 2,729 | $ 3,095 |
Trade Names [Member] | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Life | 8 years | 8 years |
Trade Names [Member] | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Life | 15 years | 15 years |
Collector Database [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | $ 55,397 | |
Accumulated Amortization | $ (55,397) | |
Amortization Life | 5 years |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Intangible assets maturity (Details) $ in Thousands | Mar. 31, 2022USD ($) |
INTANGIBLE ASSETS AND GOODWILL | |
2022 (excluding the three months ended March 31, 2022) | $ 852 |
2023 | 1,136 |
2024 | 583 |
2025 | 30 |
2026 | 30 |
Thereafter | $ 98 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL - Goodwill carrying amount (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Goodwill carrying amount | ||
Balance at Beginning | $ 649,958 | |
Effects of foreign currency translation | (10,011) | |
Balance at Ending | 639,947 | $ 649,958 |
AIR MILES Reward Program | ||
Goodwill carrying amount | ||
Balance at Beginning | 194,767 | |
Effects of foreign currency translation | 2,103 | |
Balance at Ending | 196,870 | 194,767 |
Brand Loyalty | ||
Goodwill carrying amount | ||
Balance at Beginning | 455,191 | |
Effects of foreign currency translation | (12,114) | |
Balance at Ending | $ 443,077 | 455,191 |
Brand Loyalty | Operating segment | ||
Goodwill carrying amount | ||
Impairment | $ 50,000 | |
Estimated fair value of Brand Loyalty reporting unit exceeded carrying value percentage | 10.00% |
INVESTMENTS IN UNCONSOLIDATED_2
INVESTMENTS IN UNCONSOLIDATED SUBSIDIARY - RELATED PARTY (Details) - Comenity Canada L.P [Member] - USD ($) $ in Millions | 1 Months Ended | |
Mar. 31, 2021 | Feb. 28, 2021 | |
Schedule of Equity Method Investments [Line Items] | ||
Distribution | $ 0.8 | |
Ownership percentage | 98.00% | 99.90% |
DEBT (Details)
DEBT (Details) € in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2022USD ($) | Mar. 31, 2022EUR (€) | Dec. 31, 2021USD ($) | |
Debt Instrument [Line Items] | |||
Debt instrument quarterly principal amortization payments | $ 12.7 | ||
Uncommitted overdraft facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 11.1 | € 10 | |
Interest rate | 3.50% | 3.50% | |
Overdraft facility outstanding balance | $ 0 | $ 0 | |
Senior secured credit agreement | Term loan A facility | |||
Debt Instrument [Line Items] | |||
Principal amount of debt | 175 | ||
Senior secured credit agreement | Term loan B facility | |||
Debt Instrument [Line Items] | |||
Principal amount of debt | 500 | ||
Senior secured credit agreement | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 150 | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Overdraft facility outstanding balance | $ 16.1 | $ 12.5 |
DEBT - Schedule of Debt Instrum
DEBT - Schedule of Debt Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule of Debt Instruments | ||
Debt amount | $ 662,344 | $ 675,000 |
Less: unamortized debt issuance costs | 20,005 | 20,887 |
Less: current portion | 50,625 | 50,625 |
Long-term portion | 591,714 | 603,488 |
Revolving Credit Facility | ||
Schedule of Debt Instruments | ||
Availability under credit facility | 133,900 | 137,500 |
Letters of outstanding | 16,100 | 12,500 |
Senior Secured Credit Agreement | Term Loan A | ||
Schedule of Debt Instruments | ||
Debt amount | 171,719 | 175,000 |
Senior Secured Credit Agreement | Term Loan B | ||
Schedule of Debt Instruments | ||
Debt amount | $ 490,625 | $ 500,000 |
DERIVATIVE INSTRUMENTS (Details
DERIVATIVE INSTRUMENTS (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | $ 3 | $ 2.5 |
Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability | $ 0.8 | $ 0.5 |
SHARE-BASED PAYMENTS (Details)
SHARE-BASED PAYMENTS (Details) | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Performance-based restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares granted | shares | 88,033 |
Weighted average grant date fair value per share | $ / shares | $ 24.19 |
Performance-based restricted stock units | Restriction lapse on February 15 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of awards restriction lapsed | 33.00% |
Performance-based restricted stock units | Restriction lapse on February 15 2024 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of awards restriction lapsed | 33.00% |
Performance-based restricted stock units | Restriction lapse on February 15 2025 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of awards restriction lapsed | 34.00% |
Performance-based restricted stock units | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards vesting percentage | 150.00% |
Performance-based restricted stock units | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards vesting percentage | 0.00% |
Service-based restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards vesting period | 3 years |
Shares granted | shares | 511,855 |
Weighted average grant date fair value per share | $ / shares | $ 24.19 |
SHARE-BASED PAYMENTS - Stock-ba
SHARE-BASED PAYMENTS - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock compensation expense | $ 2,328 | $ 1,853 |
Cost of operations | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock compensation expense | 1,499 | 1,448 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock compensation expense | $ 829 | $ 405 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at Beginning | $ 146,564 | $ 1,094,301 |
Changes in other comprehensive income (loss) | (37,988) | (35,182) |
Balance at Ending | 112,666 | 958,426 |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at Beginning | (65,074) | 381 |
Changes in other comprehensive income (loss) | (37,988) | (35,182) |
Balance at Ending | (103,062) | (34,801) |
Net Unrealized Gains (Losses) on Securities | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at Beginning | 2,141 | 18,267 |
Changes in other comprehensive income (loss) | (20,801) | (6,400) |
Balance at Ending | (18,660) | 11,867 |
Net Unrealized Gains (Losses) on Cash Flow Hedges | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at Beginning | 1,270 | (700) |
Changes in other comprehensive income (loss) | 36 | 917 |
Balance at Ending | 1,306 | 217 |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at Beginning | (68,485) | (17,186) |
Changes in other comprehensive income (loss) | (17,223) | (29,699) |
Balance at Ending | $ (85,708) | $ (46,885) |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||
Effective income tax rate | 57.50% | 32.00% |
FINANCIAL INSTRUMENT - Estimate
FINANCIAL INSTRUMENT - Estimated fair values of the company's financial instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Financial assets | ||
Redemption settlement assets, restricted | $ 699,531 | $ 735,131 |
Financial liabilities | ||
Long-term debt | 642,339 | 654,113 |
Carrying Amount | ||
Financial assets | ||
Redemption settlement assets, restricted | 699,531 | 735,131 |
Other investments | 476 | 471 |
Derivative instruments - Assets | 3,023 | 2,465 |
Financial liabilities | ||
Derivative instruments - Liability | 755 | 487 |
Long-term debt | 642,339 | 654,113 |
Fair Value | ||
Financial assets | ||
Redemption settlement assets, restricted | 699,531 | 735,131 |
Other investments | 476 | 471 |
Derivative instruments - Assets | 3,023 | 2,465 |
Financial liabilities | ||
Derivative instruments - Liability | 755 | 487 |
Long-term debt | $ 642,339 | $ 654,113 |
FINANCIAL INSTRUMENTS - Assets
FINANCIAL INSTRUMENTS - Assets and liabilities carried at fair value measured on a recurring basis (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | $ 642,339 | $ 654,113 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 642,339 | 654,113 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mutual funds | 24,955 | 25,990 |
Corporate bonds | 645,320 | 650,389 |
Marketable securities | 476 | 471 |
Derivative instruments - Assets | 3,023 | 2,465 |
Total assets measured at fair value | 673,774 | 679,315 |
Derivative instruments - Liability | 755 | 487 |
Total liabilities measured at fair value | 755 | 487 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mutual funds | 24,955 | 25,990 |
Marketable securities | 476 | 471 |
Total assets measured at fair value | 25,431 | 26,461 |
Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate bonds | 645,320 | 650,389 |
Derivative instruments - Assets | 3,023 | 2,465 |
Total assets measured at fair value | 648,343 | 652,854 |
Derivative instruments - Liability | 755 | 487 |
Total liabilities measured at fair value | 755 | 487 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 476 | 471 |
Derivative instruments - Assets | 3,023 | 2,465 |
Derivative instruments - Liability | $ 755 | $ 487 |
FINANCIAL INSTRUMENTS - Asset_2
FINANCIAL INSTRUMENTS - Assets and Liabilities Not Carried at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Financial liabilities | ||
Long-term debt | $ 642,339 | $ 654,113 |
Total liabilities measured at fair value | 642,339 | 654,113 |
Level 2 | ||
Financial liabilities | ||
Long-term debt | 642,339 | 654,113 |
Total liabilities measured at fair value | $ 642,339 | $ 654,113 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Information | ||
Revenues | $ 154,945 | $ 176,554 |
Income (loss) before income taxes | 2,393 | 28,058 |
Interest (income) expense, net | 9,052 | (69) |
Depreciation and amortization | 9,413 | 9,034 |
Stock compensation expense | 2,328 | 1,853 |
Strategic transaction costs | 1,513 | |
Adjusted EBITDA | 24,699 | 38,876 |
Eliminations | ||
Segment Information | ||
Revenues | (44) | |
AIR MILES Reward Program | ||
Segment Information | ||
Revenues | 65,708 | 70,257 |
AIR MILES Reward Program | Operating segment | ||
Segment Information | ||
Revenues | 65,708 | 70,257 |
Income (loss) before income taxes | 21,722 | 30,162 |
Interest (income) expense, net | (136) | (182) |
Depreciation and amortization | 6,813 | 5,784 |
Stock compensation expense | 707 | 687 |
Strategic transaction costs | 299 | |
Adjusted EBITDA | 29,405 | 36,451 |
Brand Loyalty | ||
Segment Information | ||
Revenues | 89,281 | 106,297 |
Brand Loyalty | Operating segment | ||
Segment Information | ||
Revenues | 89,281 | 106,297 |
Income (loss) before income taxes | (3,979) | 1,582 |
Interest (income) expense, net | 47 | 113 |
Depreciation and amortization | 2,600 | 3,250 |
Stock compensation expense | 792 | 761 |
Strategic transaction costs | 776 | |
Adjusted EBITDA | 236 | 5,706 |
Corporate/Other | ||
Segment Information | ||
Income (loss) before income taxes | (15,350) | (3,686) |
Interest (income) expense, net | 9,141 | |
Stock compensation expense | 829 | 405 |
Strategic transaction costs | 438 | |
Adjusted EBITDA | $ (4,942) | $ (3,281) |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION - Reconciliation of cash and cash equivalents (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Cash and cash equivalents | $ 139,724 | $ 167,601 | $ 217,708 | |
Total cash, cash equivalents and restricted cash | 179,534 | $ 232,602 | 292,435 | $ 337,525 |
Other current assets | ||||
Restricted cash | 10,554 | 2,877 | ||
Redemption settlement assets | ||||
Restricted cash | $ 29,256 | $ 71,850 |
RELATED PARTY TRANSACTIONS - Ot
RELATED PARTY TRANSACTIONS - Other information (Details) - Former parent - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Related Party Transactions | ||||
Corporate overhead costs | $ 3.7 | |||
Dividends | $ 124.2 | |||
Dividend withheld for taxes | $ 4.2 | |||
Amount of expenses incurred in relation to Transition services agreement | $ 0.6 | |||
Employee matters agreement prorated bonus payment from parent | 1.6 | |||
Accounts receivable from related party | 20.1 | $ 20.1 | ||
Accrued Liabilities | ||||
Related Party Transactions | ||||
Contractual liabilities under Tax Matters Agreement | 80.3 | 80 | ||
Other Liabilities | ||||
Related Party Transactions | ||||
Contractual liabilities under Tax Matters Agreement | $ 1 | $ 1 |