Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 18, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | DELUXE CORP | |
Entity Central Index Key | 27,996 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 47,845,020 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 67,728 | $ 59,240 |
Trade accounts receivable, net of allowances for uncollectible accounts | 135,979 | 149,844 |
Inventories and supplies | 42,384 | 42,249 |
Funds held for customers | 94,940 | 86,192 |
Other current assets | 58,907 | 55,441 |
Total current assets | 399,938 | 392,966 |
Deferred income taxes | 5 | 1,428 |
Long-term investments | 42,858 | 42,607 |
Property, plant and equipment (net of accumulated depreciation of $360,303 and $358,020, respectively) | 82,665 | 84,638 |
Assets held for sale | 10,312 | 12,232 |
Intangibles (net of accumulated amortization of $470.466 and $444,933, respectively) | 393,890 | 384,266 |
Goodwill | 1,161,325 | 1,130,934 |
Other non-current assets | 182,823 | 159,756 |
Total assets | 2,273,816 | 2,208,827 |
Current liabilities: | ||
Accounts payable | 99,474 | 104,477 |
Accrued liabilities | 275,328 | 277,253 |
Long-term debt due within one year | 831 | 44,040 |
Total current liabilities | 375,633 | 425,770 |
Long-term debt | 741,702 | 665,260 |
Deferred income taxes | 56,699 | 50,543 |
Other non-current liabilities | 48,112 | 52,241 |
Commitments and contingencies (Notes 11 and 12) | ||
Shareholders' equity: | ||
Common shares $1 par value (authorized: 500,000 shares; outstanding: March 31, 2018 - 47,841; December 31, 2017 - 47,953) | 47,841 | 47,953 |
Retained earnings | 1,050,064 | 1,004,657 |
Accumulated other comprehensive loss | (46,235) | (37,597) |
Total shareholders' equity | 1,051,670 | 1,015,013 |
Total liabilities and shareholders' equity | $ 2,273,816 | $ 2,208,827 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Accumulated depreciation | $ 360,303 | $ 358,020 |
Accumulated amortization | $ 470,466 | $ 444,933 |
Shareholders' equity: | ||
Common stock, par value (per share) | $ 1 | $ 1 |
Common stock, shares authorized | 500,000 | 500,000 |
Common stock, shares outstanding | 47,841 | 47,953 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Product revenue | $ 363,407 | $ 372,174 |
Service revenue | 128,507 | 115,592 |
Total revenue | 491,914 | 487,766 |
Cost of products | (133,371) | (132,533) |
Cost of services | (55,387) | (46,781) |
Total cost of revenue | (188,758) | (179,314) |
Gross profit | 303,156 | 308,452 |
Selling, general and administrative expense | (211,154) | (217,144) |
Net restructuring charges | (2,145) | (1,014) |
Asset impairment charges | (2,149) | (5,296) |
Operating income | 87,708 | 84,998 |
Interest expense | (5,579) | (4,829) |
Other income | 1,289 | 1,062 |
Income before income taxes | 83,418 | 81,231 |
Income tax provision | (20,082) | (24,165) |
Net income | 63,336 | 57,066 |
Comprehensive income | $ 61,565 | $ 58,248 |
Basic earnings per share | $ 1.32 | $ 1.17 |
Diluted earnings per share | 1.31 | 1.16 |
Cash dividends per share | $ 0.30 | $ 0.30 |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited) - 3 months ended Mar. 31, 2018 - USD ($) shares in Thousands, $ in Thousands | Total | Common shares par value [Member] | Additional paid-in capital [Member] | Retained earnings [Member] | Accumulated other comprehensive loss [Member] |
Balance, beginning of year at Dec. 31, 2017 | $ 1,015,013 | $ 47,953 | $ 0 | $ 1,004,657 | $ (37,597) |
Balance (in shares) at Dec. 31, 2017 | 47,953 | ||||
Net income | $ 63,336 | 63,336 | |||
Cash dividends | (14,417) | (14,417) | |||
Common shares issued | $ 7,706 | 249 | 7,457 | ||
Common shares issued (in shares) | 249 | ||||
Common shares repurchased | $ (19,996) | (278) | (4,373) | (15,345) | |
Common shares repurchased (in shares) | (278) | ||||
Other common shares retired | $ (6,129) | (83) | (6,046) | ||
Other common shares retired (in shares) | (83) | ||||
Employee share-based compensation | $ 2,962 | 2,962 | |||
Other comprehensive loss | (1,771) | (1,771) | |||
Balance, end of period at Mar. 31, 2018 | $ 1,051,670 | $ 47,841 | $ 0 | 1,050,064 | (46,235) |
Balance (in shares) at Mar. 31, 2018 | 47,841 | ||||
Adoption of new accounting pronouncement | Adoption of Accounting Standards Update No. 2014-09 [Member] | $ 4,966 | 4,966 | |||
Adoption of new accounting pronouncement | Adoption of Accounting Standards Update No. 2018-02 [Member] | $ 0 | $ 6,867 | $ (6,867) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 63,336 | $ 57,066 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 3,675 | 4,082 |
Amortization of intangibles | 27,466 | 25,555 |
Asset impairment charges | 2,149 | 5,296 |
Amortization of prepaid product discounts | 5,408 | 4,967 |
Deferred income taxes | (233) | (5,014) |
Employee share-based compensation expense | 2,962 | 3,701 |
Other non-cash items, net | (5,867) | (4,543) |
Changes in assets and liabilities, net of effect of acquisitions: | ||
Trade accounts receivable | 12,763 | 18,955 |
Inventories and supplies | (189) | (49) |
Other current assets | (3,536) | 1,370 |
Non-current assets | (2,444) | (1,187) |
Accounts payable | (3,789) | (21,853) |
Prepaid product discount payments | 5,364 | 6,099 |
Other accrued and non-current liabilities | (15,549) | (7,903) |
Net cash provided by operating activities | 80,788 | 74,344 |
Cash flows from investing activities: | ||
Purchases of capital assets | (14,034) | (11,021) |
Payments for acquisitions, net of cash acquired | (52,369) | (5,239) |
Other | (450) | 461 |
Net cash used by investing activities | (66,853) | (15,799) |
Cash flows from financing activities: | ||
Proceeds from issuing long-term debt | 824,625 | 57,500 |
Payments on long-term debt | (792,200) | (77,061) |
Proceeds from issuing shares under employee plans | 5,169 | 5,013 |
Employee taxes paid for shares withheld | (4,557) | (5,548) |
Payments for common shares repurchased | (19,996) | (15,002) |
Cash dividends paid to shareholders | (14,393) | (14,591) |
Other | (3,205) | (332) |
Net cash used by financing activities | (4,557) | (50,021) |
Effect of exchange rate change on cash | (890) | 414 |
Net change in cash and cash equivalents | 8,488 | 8,938 |
Cash and cash equivalents, beginning of year | 59,240 | 76,574 |
Cash and cash equivalents, end of period | $ 67,728 | $ 85,512 |
Consolidated financial statemen
Consolidated financial statements | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated financial statements | Consolidated financial statements The consolidated balance sheet as of March 31, 2018 , the consolidated statements of comprehensive income for the quarters ended March 31, 2018 and 2017 , the consolidated statement of shareholders’ equity for the quarter ended March 31, 2018 , and the consolidated statements of cash flows for the quarters ended March 31, 2018 and 2017 are unaudited. The consolidated balance sheet as of December 31, 2017 was derived from audited consolidated financial statements, but does not include all disclosures required by generally accepted accounting principles (GAAP) in the United States of America. In the opinion of management, all adjustments necessary for a fair statement of the consolidated financial statements are included. Adjustments consist only of normal recurring items, except for any discussed in the notes below. Interim results are not necessarily indicative of results for a full year. The consolidated financial statements and notes are presented in accordance with instructions for Form 10-Q and do not contain certain information included in our annual consolidated financial statements and notes. The consolidated financial statements and notes appearing in this report should be read in conjunction with the consolidated audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2017 (the “ 2017 |
New accounting pronouncements
New accounting pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New accounting pronouncements | New accounting pronouncements The following discusses the impact of each accounting standards update (ASU) adopted during the first quarter of 2018: ASU No. 2014-09 – In May 2014, the Financial Accounting Standards Board (FASB) issued ASU No. 2014-09, Revenue from Contracts with Customers . The standard provides revenue recognition guidance for any entity that enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets, unless those contracts are within the scope of other accounting standards. The standard also expands the required financial statement disclosures regarding revenue recognition. In addition, the FASB subsequently issued several amendments to the standard. We adopted the standard and all the related amendments on January 1, 2018 using the modified retrospective method. We applied the new guidance to uncompleted contracts as of January 1, 2018 and recorded the cumulative effect of initially applying the standard as an adjustment to retained earnings, with the offset to other current assets, other non-current assets and deferred income tax liabilities. We have elected the practical expedient for contract modifications, allowing us to consider the impact of all contract modifications completed prior to January 1, 2018. We have also elected the practical expedient that allows us to disregard the effects of a financing component if the period between payment and performance will be 1 year or less. Election of these practical expedients did not have a significant impact on our results of operations or financial position. Prior periods have not been restated and continue to be reported under the accounting standards in effect for those periods. We do not expect the adoption of this guidance to have a material impact on our results of operations, financial position or cash flows on an ongoing basis. Information regarding the disaggregation of revenue can be found in Note 14. Our product revenue is recognized when control of the goods is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods. In most cases, control is transferred when products are shipped. We recognize the great majority of our service revenue as the services are provided. Many of our check supply contracts with financial institutions provide for rebates on certain products. We record these rebates as reductions of revenue and as accrued liabilities on our consolidated balance sheets when the related revenue is recognized. Many of our financial institution contracts also require prepaid product discounts in the form of upfront cash payments we make to our financial institution clients. These prepaid product discounts are included in other non-current assets in our consolidated balance sheets and are amortized as reductions of revenue, generally on the straight-line basis, over the contract term. Sales tax collected concurrent with revenue-producing activities is excluded from revenue. Amounts billed to customers for shipping and handling are included in revenue, while the related shipping and handling costs are reflected in cost of products. We have elected the practical expedient that allows us to account for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment cost, and we accrue costs of shipping and handling when the related revenue is recognized. As part of our Financial Services rewards, incentive and loyalty programs, we receive payments from consumers or our clients for the products and services provided, including hotel stays, gift cards and merchandise such as apparel, electronics and clothing. This revenue is recorded net of the related fulfillment costs. Certain of our contracts for data-driven marketing solutions and treasury management outsourcing services within Financial Services have variable consideration that is contingent on either the success of the marketing campaign ("pay-for-performance") or the volume of outsourcing services provided. We recognize revenue for estimated variable consideration as services are provided based on the most likely amount to be realized. Revenue is recognized to the extent that it is probable that a significant reversal of revenue will not occur when the contingency is resolved. Estimates regarding the recognition of variable consideration are updated each quarter. Typically, the amount of consideration for these contracts is finalized within 3 months, although pricing under certain of our outsourcing contracts may be based on annual volume commitments. Revenue recognized from these contracts was approximately $100,000 in 2017. Under the new standard, we have accelerated the recognition of a portion of this variable consideration. Certain of our contracts for treasury management solutions result from the sale of bundled arrangements that may include hardware, software and professional services, as well as customization and modification of software, and specify the timing of customer billings over the course of the contract. Revenue for these contracts is recognized using a cost-based input method that depicts the transfer of services to the customer. The transaction price is allocated to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or using expected cost plus margin. When the revenue recognized for uncompleted contracts exceeds the amount of customer billings, a contract asset is reflected in our consolidated balance sheets within other current assets. The amount included in other current assets was $24,521 as of March 31, 2018 and $16,379 as of December 31, 2017. When the amount of customer billings for uncompleted contracts exceeds the revenue recognized, a contract liability is reflected in our consolidated balance sheets within accrued liabilities. The amount included in accrued liabilities was $1,353 as of March 31, 2018 and $2,233 as of December 31, 2017. At times, a financial institution client may terminate its check supply contract with us prior to the end of the contract term. In many cases, the financial institution is contractually required to remit a contract termination payment. Such payments are recorded as revenue when the termination agreement is executed, provided that we have no further performance obligations and collection of the funds is assured. If we have further performance obligations following the execution of a contract termination agreement, we record the related revenue over the remaining service period. Our payment terms vary by type of customer and the products or services offered. The time period between invoicing and when payment is due is not significant. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. When a customer pays in advance for services, primarily for treasury management solutions and web hosting services, we defer the revenue and recognize it as the services are performed, generally over a period of less than 1 year. Deferred revenue is included in accrued liabilities and other non-current liabilities in our consolidated balance sheets. The increase of $1,408 in deferred revenue for the quarter ended March 31, 2018 was primarily driven by cash payments received in advance of satisfying our performance obligations, partially offset by the recognition of $20,636 of revenue that was included in deferred revenue as of December 31, 2017 . In addition to the amounts included in deferred revenue, we will recognize revenue in future periods related to remaining performance obligations for certain of our data-driven marketing and treasury management solutions. Generally, these contracts have terms of 1 year or less and many have terms of 3 months or less. The amount of revenue related to these unsatisfied performance obligations is not significant to our annual consolidated revenue. The new guidance requires that certain costs incurred to obtain contracts be recognized as assets and amortized consistent with the transfer of goods or services to the customer. As such, we are now deferring sales commissions related to obtaining check supply and treasury management solution contracts within Financial Services. These amounts are included in other non-current assets and are amortized as selling, general and administrative (SG&A) expense. Amortization of these amounts on the straight-line basis approximates the timing of the transfer of goods or services to the customer. Generally, these amounts are being amortized over periods of 3 to 6 years. We elected the practical expedient allowing us to expense sales commissions as incurred when the amortization period would have been 1 year or less. The cumulative effect of the changes made to our unaudited consolidated balance sheet as of January 1, 2018 for the adoption of the new revenue guidance was as follows: (in thousands) Balance as of December 31, 2017 Adjustments due to ASU No. 2014-09 Balance as of January 1, 2018 Other current assets $ 55,441 $ 960 $ 56,401 Total current assets 392,966 960 393,926 Other non-current assets 159,756 5,733 165,489 Total assets $ 2,208,827 $ 6,693 $ 2,215,520 Deferred income taxes $ 50,543 $ 1,727 $ 52,270 Retained earnings 1,004,657 4,966 1,009,623 Total liabilities and shareholders' equity $ 2,208,827 $ 6,693 $ 2,215,520 The impact of adoption of the new revenue guidance on our unaudited consolidated statement of comprehensive income for the quarter ended March 31, 2018 and on our unaudited consolidated balance sheet as of March 31, 2018 was as follows: Quarter Ended March 31, 2018 (in thousands) As reported Effect of adoption Balance without adoption of ASU No. 2014-09 Service revenue $ 128,507 $ (536 ) $ 127,971 Total revenue 491,914 (536 ) 491,378 Cost of services (55,387 ) 255 (55,132 ) Total cost of revenue (188,758 ) 255 (188,503 ) Gross profit 303,156 (281 ) 302,875 Selling, general and administrative expense (211,154 ) 516 (210,638 ) Operating income 87,708 235 87,943 Income before income taxes 83,418 235 83,653 Income tax provision (20,082 ) (61 ) (20,143 ) Net income $ 63,336 $ 174 $ 63,510 March 31, 2018 Other current assets $ 58,907 $ (1,242 ) $ 57,665 Total current assets 399,938 (1,242 ) 398,696 Other non-current assets 182,823 (5,216 ) 177,607 Total assets $ 2,273,816 $ (6,458 ) $ 2,267,358 Accrued liabilities 275,328 61 275,389 Total current liabilities 375,633 61 375,694 Deferred income taxes 56,699 (1,727 ) 54,972 Retained earnings 1,050,064 (4,792 ) 1,045,272 Total liabilities and shareholders' equity $ 2,273,816 $ (6,458 ) $ 2,267,358 ASU No. 2016-01 – In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities . The standard is intended to improve the recognition, measurement, presentation and disclosure of financial instruments. We adopted this standard on January 1, 2018. This standard had no impact on our results of operations or financial position. Our financial statement disclosures in Note 7 related to financial instruments have been modified to comply with the new standard. ASU No. 2016-16 – In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory . The standard requires recognition of the tax effects resulting from the intercompany sale of an asset when the transfer occurs. Previously, the tax effects were deferred until the transferred asset was sold to a third party. We adopted this standard on January 1, 2018. No adjustment was required to opening retained earnings, and we do not expect the application of this standard to have a significant impact on our results of operations or financial position going forward. ASU No. 2017-01 – In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business . The standard revises the definition of a business, which affects many areas of accounting such as business combinations and disposals and goodwill impairment. The revised definition of a business will likely result in more acquisitions being accounted for as asset acquisitions, as opposed to business combinations. We adopted this standard on January 1, 2018, applying it prospectively to transactions occurring on or after this date. ASU No. 2017-07 – In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . The standard requires that the service cost component of net periodic benefit expense be recognized in the same statement of comprehensive income caption(s) as other compensation costs, and requires that the other components of net periodic benefit expense be recognized in the non-operating section of the statement of comprehensive income. In addition, only the service cost component of net periodic benefit expense is eligible for capitalization when applicable. We adopted this standard on January 1, 2018. The reclassification of the other components of our net periodic benefit income was applied on a retrospective basis. As such, we have revised our results of operations for the previous period. We utilized the practical expedient for adoption allowing us to use the amount previously disclosed in our postretirement benefits footnote as the basis for revising the prior period. As there is no service cost associated with our plans, we reclassified the entire amount of our net periodic benefit income from cost of revenue and SG&A expense to other income in our consolidated statements of comprehensive income. In addition, we no longer include any portion of net periodic benefit income in amounts capitalized for inventory or internal-use software, as only the service cost component is eligible for capitalization. This change did not have a significant impact on our results of operations or financial position. The impact of the revision on our unaudited consolidated statement of comprehensive income for the quarter ended March 31, 2017 was as follows: Quarter Ended March 31, 2017 (in thousands) As previously reported Effect of adoption As revised Cost of products $ (132,395 ) $ (138 ) $ (132,533 ) Cost of services (46,765 ) (16 ) (46,781 ) Total cost of revenue (179,160 ) (154 ) (179,314 ) Selling, general and administrative expense (216,794 ) (350 ) (217,144 ) Operating income 85,502 (504 ) 84,998 Other income 558 504 1,062 Net income $ 57,066 $ — $ 57,066 ASU No. 2017-09 – In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting . The standard provides guidance about which changes to the terms or conditions of a share-based payment award require modification accounting, which may result in a different fair value for the award. We adopted this standard on January 1, 2018, and it is being applied prospectively to awards modified on or after this date. Historically, modifications to our share-based payment awards have been infrequent. As such, we do not expect the application of this standard to have a significant impact on our results of operations or financial position. ASU No. 2018-02 – In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The standard allows companies to make an election to reclassify from accumulated other comprehensive income to retained earnings the stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the 2017 Act). We elected to early adopt this standard on January 1, 2018, applying it in the period of adoption. As such, a reclassification from accumulated other comprehensive loss to retained earnings of $6,867 was recorded during the quarter ended March 31, 2018. This represents the effect of the change in the United States federal corporate income tax rate on the gross deferred tax amount at the date of enactment of the 2017 Act related to items remaining in accumulated other comprehensive loss. Our policy is to release stranded income tax effects from accumulated other comprehensive loss when the circumstances upon which they are premised cease to exist. In March 2018, the FASB issued ASU No. 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 118 . The standard added to the FASB Codification the guidance provided by the SEC in December 2017 regarding the accounting for the 2017 Act. We complied with SAB No. 118 when preparing our annual consolidated financial statements for the year ended December 31, 2017. Reasonable estimates were used in determining several of the components of the impact of the 2017 Act, including our 2017 deferred income tax activity and the amount of post-1986 foreign deferred earnings subject to the toll charge. We are still analyzing certain aspects of the 2017 Act and refining our calculations, which could potentially affect the measurement of our deferred tax balances and the amount of the toll charge liability, and ultimately cause us to revise our initial estimates in future periods. In addition, changes in interpretations, assumptions and guidance regarding the new tax legislation, as well as the potential for technical corrections to the 2017 Act, could have a material impact on our effective tax rate in future periods. During the quarter ended March 31, 2018, we recorded a reduction in income tax expense of $310 related to the 2017 Act. In order to complete our accounting for the 2017 Act, which we expect to finalize by the fourth quarter of 2018, the following specific items need to be completed or addressed: • Issuance of state-by-state guidance regarding conformity with or decoupling from the 2017 Act. • Finalize the calculation of post-1986 foreign deferred earnings, which are subject to the toll charge, and determine our ability to beneficially claim a foreign tax credit resulting from the income inclusion. • Where pertinent, adjust to clarifications and guidance regarding other aspects of the 2017 Act, including those related to the deductibility of executive compensation. Accounting pronouncements not yet adopted – In February 2016, the FASB issued ASU No. 2016-02, Leasing . The standard is intended to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities for virtually all leases and by requiring the disclosure of key information about leasing arrangements. The guidance is effective for us on January 1, 2019 and requires adoption using a modified retrospective approach. We are currently assessing the impact of this standard on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments . The standard introduces new guidance for the accounting for credit losses on instruments within its scope, including trade and loans receivable and available-for-sale debt securities. The guidance is effective for us on January 1, 2020 and requires adoption using a modified retrospective approach. We do not expect the application of this standard to have a significant impact on our results of operations or financial position. |
Supplemental balance sheet info
Supplemental balance sheet information | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental balance sheet information | Supplemental balance sheet information Allowance for uncollectible accounts – Changes in the allowance for uncollectible accounts for the quarters ended March 31, 2018 and 2017 was as follows: Quarter Ended (in thousands) 2018 2017 Balance, beginning of year $ 2,884 $ 2,828 Bad debt expense 875 692 Write-offs, net of recoveries (905 ) (634 ) Balance, end of period $ 2,854 $ 2,886 Inventories and supplies – Inventories and supplies were comprised of the following: (in thousands) March 31, December 31, Raw materials $ 6,949 $ 7,357 Semi-finished goods 7,633 7,635 Finished goods 24,724 24,146 Supplies 3,078 3,111 Inventories and supplies $ 42,384 $ 42,249 Available-for-sale debt securities – Available-for-sale debt securities included within funds held for customers were comprised of the following: March 31, 2018 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Funds held for customers: (1) Domestic money market fund $ 15,000 $ — $ — $ 15,000 Canadian and provincial government securities 8,867 — (430 ) 8,437 Canadian guaranteed investment certificates 7,752 — — 7,752 Available-for-sale debt securities $ 31,619 $ — $ (430 ) $ 31,189 (1) Funds held for customers, as reported on the consolidated balance sheet as of March 31, 2018 , also included cash of $63,751 . December 31, 2017 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Funds held for customers: (1) Domestic money market fund $ 17,300 $ — $ — $ 17,300 Canadian and provincial government securities 9,051 — (393 ) 8,658 Canadian guaranteed investment certificates 7,955 — — 7,955 Available-for-sale debt securities $ 34,306 $ — $ (393 ) $ 33,913 (1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2017 , also included cash of $52,279 . Expected maturities of available-for-sale debt securities as of March 31, 2018 were as follows: (in thousands) Fair value Due in one year or less $ 24,760 Due in two to five years 3,586 Due in six to ten years 2,843 Available-for-sale debt securities $ 31,189 Further information regarding the fair value of available-for-sale debt securities can be found in Note 7. Assets held for sale – Assets held for sale as of March 31, 2018 included 2 providers of printed and promotional products, a small business distributor and a small business customer list that was classified as held for sale during the first quarter of 2018. Assets held for sale as of December 31, 2017 included 2 providers of printed and promotional products and 2 small business distributors, 1 of which was sold during the first quarter of 2018. Also during the first quarter of 2018, we sold the operations of a small business distributor that previously did not meet the requirements to be reported as assets held for sale in the consolidated balance sheets. We determined that these businesses would be better positioned for long-term growth if they were managed by independent distributors. Subsequent to the sales, these businesses are owned by distributors that are part of our Safeguard ® distributor network. As such, our revenue is not impacted by these sales, and the impact to our costs is not significant. We entered into aggregate notes receivable of $10,215 in conjunction with these sales (non-cash investing activity), and we recognized aggregate net gains within SG&A expense of $7,228 during the quarter ended March 31, 2018. During the quarter ended March 31, 2017, we sold a provider of printed and promotional products and a small business distributor, realizing an aggregate net gain of $6,779 within SG&A expense in the consolidated statement of comprehensive income. The businesses sold during 2018, as well as those held for sale as of March 31, 2018 , were included in our Small Business Services segment, and their net assets consisted primarily of intangible assets. During the first quarter of 2017, we recorded a pre-tax asset impairment charge of $5,296 related to a small business distributor that was sold during the second quarter of 2017. The impairment charge reduced the carrying value of the business to its fair value less costs to sell, as we negotiated the sale of the business. We are actively marketing the remaining assets held for sale, and we expect the selling prices will equal or exceed their current carrying values. Net assets held for sale consisted of the following: (in thousands) March 31, December 31, Balance sheet caption Current assets $ 23 $ 4 Other current assets Intangibles 8,089 8,459 Assets held for sale Goodwill 2,016 3,566 Assets held for sale Other non-current assets 207 207 Assets held for sale Net assets held for sale $ 10,335 $ 12,236 Intangibles – Intangibles were comprised of the following: March 31, 2018 December 31, 2017 (in thousands) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Indefinite-lived intangibles: Trade name $ 19,100 $ — $ 19,100 $ 19,100 $ — $ 19,100 Amortizable intangibles: Internal-use software 370,408 (293,628 ) 76,780 359,079 (284,074 ) 75,005 Customer lists/relationships (1) 350,586 (133,712 ) 216,874 343,589 (121,729 ) 221,860 Trade names 46,762 (21,204 ) 25,558 36,931 (19,936 ) 16,995 Technology-based intangibles 38,800 (8,017 ) 30,783 31,800 (6,400 ) 25,400 Software to be sold 36,900 (12,260 ) 24,640 36,900 (11,204 ) 25,696 Other 1,800 (1,645 ) 155 1,800 (1,590 ) 210 Amortizable intangibles 845,256 (470,466 ) 374,790 810,099 (444,933 ) 365,166 Intangibles $ 864,356 $ (470,466 ) $ 393,890 $ 829,199 $ (444,933 ) $ 384,266 (1) During the first quarter of 2018, we recorded a pre-tax asset impairment charge of $2,149 for one of our customer lists. Further information can be found in Note 7. Amortization of intangibles was $27,466 for the quarter ended March 31, 2018 and $25,555 for the quarter ended March 31, 2017 . Based on the intangibles in service as of March 31, 2018 , estimated future amortization expense is as follows: (in thousands) Estimated amortization expense Remainder of 2018 $ 73,428 2019 81,231 2020 62,617 2021 49,222 2022 35,337 During the quarter ended March 31, 2018 , we acquired internal-use software in the normal course of business. We also acquired intangible assets in conjunction with acquisitions (Note 6). The following intangible assets were acquired during the quarter ended March 31, 2018 : (in thousands) Amount Weighted-average amortization period (in years) Internal-use software $ 10,842 3 Customer lists/relationships (1) 13,001 7 Trade names 10,000 8 Technology-based intangibles 7,000 5 Acquired intangibles $ 40,843 6 (1) Includes the purchase of a customer list for $650 that did not qualify as a business combination. Information regarding acquired intangibles does not include measurement-period adjustments recorded during the quarter ended March 31, 2018 for changes in the estimated fair values of intangibles acquired during 2017 through acquisitions. Information regarding these adjustments can be found in Note 6. Goodwill – Changes in goodwill during the quarter ended March 31, 2018 were as follows: (in thousands) Small Business Services Financial Services Direct Checks Total Balance, December 31, 2017: Goodwill, gross $ 706,568 $ 324,239 $ 148,506 $ 1,179,313 Accumulated impairment charges (48,379 ) — — (48,379 ) Goodwill, net of accumulated impairment charges 658,189 324,239 148,506 1,130,934 Goodwill resulting from acquisitions 28,293 — — 28,293 Measurement-period adjustments for previous acquisitions (Note 6) (173 ) 2,763 — 2,590 Currency translation adjustment (492 ) — — (492 ) Balance, March 31, 2018: Goodwill, gross 734,196 327,002 148,506 1,209,704 Accumulated impairment charges (48,379 ) — — (48,379 ) Goodwill, net of accumulated impairment charges $ 685,817 $ 327,002 $ 148,506 $ 1,161,325 Other non-current assets – Other non-current assets were comprised of the following: (in thousands) March 31, December 31, Prepaid product discounts (1) $ 65,954 $ 63,895 Loans and notes receivable from Safeguard distributors 55,648 44,276 Postretirement benefit plan asset 42,224 39,849 Deferred advertising costs 5,924 6,135 Deferred sales commissions (2) 5,216 — Other 7,857 5,601 Other non-current assets $ 182,823 $ 159,756 (1) In our prior period financial statements, we referred to this asset as contract acquisition costs. (2) Amortization of deferred sales commissions was $694 for the quarter ended March 31, 2018 . Changes in prepaid product discounts during the quarters ended March 31, 2018 and 2017 were as follows: Quarter Ended (in thousands) 2018 2017 Balance, beginning of year $ 63,895 $ 65,792 Additions (1) 7,492 4,043 Amortization (5,408 ) (4,967 ) Other (25 ) (76 ) Balance, end of period $ 65,954 $ 64,792 (1) Prepaid product discounts are accrued upon contract execution. Cash payments made for prepaid product discounts were $5,364 for the quarter ended March 31, 2018 and $6,099 for the quarter ended March 31, 2017 . Accrued liabilities – Accrued liabilities were comprised of the following: (in thousands) March 31, December 31, Funds held for customers $ 93,867 $ 85,091 Deferred revenue 49,630 47,021 Acquisition-related liabilities (1) 24,893 23,878 Income tax 19,204 17,827 Prepaid product discounts due within one year (2) 15,510 11,670 Employee profit sharing/cash bonus 12,358 31,312 Customer rebates 10,856 11,508 Restructuring due within one year (Note 8) 2,326 4,380 Other 46,684 44,566 Accrued liabilities $ 275,328 $ 277,253 (1) Consists of holdback payments due at future dates and liabilities for contingent consideration. Further information regarding liabilities for contingent consideration can be found in Note 7. (2) In our prior period financial statements, we referred to this liability as contract acquisition costs due within one year. Other non-current liabilities – Other non-current liabilities were comprised of the following: (in thousands) March 31, December 31, Prepaid product discounts (1) $ 19,922 $ 21,658 Other 28,190 30,583 Other non-current liabilities $ 48,112 $ 52,241 (1) |
Earnings per share
Earnings per share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share The following table reflects the calculation of basic and diluted earnings per share. During each period, certain stock options, as noted below, were excluded from the calculation of diluted earnings per share because their effect would have been antidilutive. Quarter Ended (in thousands, except per share amounts) 2018 2017 Earnings per share – basic: Net income $ 63,336 $ 57,066 Income allocated to participating securities (286 ) (406 ) Income available to common shareholders $ 63,050 $ 56,660 Weighted-average shares outstanding 47,755 48,324 Earnings per share – basic $ 1.32 $ 1.17 Earnings per share – diluted: Net income $ 63,336 $ 57,066 Income allocated to participating securities (285 ) (404 ) Re-measurement of share-based awards classified as liabilities (85 ) (4 ) Income available to common shareholders $ 62,966 $ 56,658 Weighted-average shares outstanding 47,755 48,324 Dilutive impact of potential common shares 262 374 Weighted-average shares and potential common shares outstanding 48,017 48,698 Earnings per share – diluted $ 1.31 $ 1.16 Antidilutive options excluded from calculation 521 270 |
Other comprehensive income
Other comprehensive income | 3 Months Ended |
Mar. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Other comprehensive income | Other comprehensive income Reclassification adjustments – Information regarding amounts reclassified from accumulated other comprehensive loss to net income was as follows: Accumulated other comprehensive loss components Amounts reclassified from accumulated other comprehensive loss Affected line item in consolidated statements of comprehensive income Quarter Ended (in thousands) 2018 2017 Amortization of postretirement benefit plan items: Prior service credit $ 355 $ 355 Other income Net actuarial loss (721 ) (909 ) Other income Total amortization (366 ) (554 ) Other income Tax benefit 356 165 Income tax provision Total reclassifications, net of tax $ (10 ) $ (389 ) Net income Accumulated other comprehensive loss – Changes in the components of accumulated other comprehensive loss during the quarter ended March 31, 2018 were as follows: (in thousands) Postretirement benefit plans Net unrealized loss on marketable securities, net of tax (1) Currency translation adjustment Accumulated other comprehensive loss Balance, December 31, 2017 $ (26,829 ) $ (322 ) $ (10,446 ) $ (37,597 ) Other comprehensive loss before reclassifications — (36 ) (1,745 ) (1,781 ) Amounts reclassified from accumulated other comprehensive loss 10 — — 10 Net current-period other comprehensive income (loss) 10 (36 ) (1,745 ) (1,771 ) Adoption of ASU No. 2018-02 (6,867 ) — — (6,867 ) Balance, March 31 2018 $ (33,686 ) $ (358 ) $ (12,191 ) $ (46,235 ) (1) Other comprehensive loss before reclassifications is net of income tax benefit of $13 |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions We periodically complete business combinations that align with our business strategy. The assets and liabilities acquired are recorded at their estimated fair values, and the results of operations of each acquired business are included in our consolidated statements of comprehensive income from their acquisition dates. Transaction costs related to acquisitions are expensed as incurred and are included in SG&A expense in the consolidated statements of comprehensive income. Transaction costs were not significant to our consolidated statements of comprehensive income for the quarters ended March 31, 2018 and 2017 . The acquisitions completed during the quarter ended March 31, 2018 were cash transactions, funded by use of our revolving credit facility. We completed these acquisitions to add logo and web services capabilities, to increase our mix of marketing solutions and other services revenue and to reach new customers. 2018 acquisitions – In March 2018, we acquired the equity of Logomix Inc. (Logomix), a self-service marketing and branding platform that helps small businesses create logos and custom marketing products. The preliminary allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in nondeductible goodwill of $28,293 . The acquisition resulted in goodwill as we expect to accelerate revenue growth by combining our capabilities with Logomix's platform. The operations of this business from its acquisition date are included in our Small Business Services segment. Also during the quarter ended March 31, 2018 , we acquired the operations of 2 small business distributors that are included in our Small Business Services segment. The assets acquired consisted primarily of customer list intangible assets. As these small business distributors were previously part of our Safeguard distributor network, our revenue was not impacted by these acquisitions, and the impact to our costs was not significant. We expect to finalize the allocations of the purchase price for these acquisitions by the end of 2018 when our valuation of the acquired intangible assets is completed, as well as the valuation of various other assets acquired and liabilities assumed related to the Logomix acquisition. Information regarding the useful lives of acquired intangibles and goodwill by reportable segment can be found in Note 3. Information regarding the calculation of the estimated fair values of the acquired intangibles can be found in Note 7. As our acquisitions were immaterial to our reported operating results both individually and in the aggregate, pro forma results of operations are not provided. The following illustrates the preliminary allocation, as of March 31, 2018 , of the aggregate purchase price for the above acquisitions to the assets acquired and liabilities assumed: (in thousands) 2018 acquisitions Net tangible assets acquired and liabilities assumed (1) $ (4,244 ) Identifiable intangible assets: Customer lists/relationships 12,351 Trade name 10,000 Technology-based intangible 7,000 Total intangible assets 29,351 Goodwill 28,293 Total aggregate purchase price 53,400 Liabilities for holdback payments and contingent consideration (1,585 ) Net cash paid for 2018 acquisitions 51,815 Holdback payments for prior year acquisitions 554 Payments for acquisitions, net of cash acquired of $1,500 $ 52,369 (1) Net liabilities acquired consisted primarily of Logomix deferred income taxes. During the quarter ended March 31, 2018 , we finalized the purchase accounting for the acquisition of RDM Corporation, which was acquired in April 2017, and we recorded adjustments related to the purchase accounting for Digital Pacific Group Pty Ltd and Impact Marketing Specialists, Inc., which were also acquired during 2017. We expect to finalize the purchase accounting for these acquisitions by mid-2018 when our valuation of property, plant and equipment, as well as the acquired customer list intangible assets, is finalized. Further information regarding these acquisitions can be found under the caption “Note 5: Acquisitions” in the Notes to Consolidated Financial Statements appearing in the 2017 Form 10-K. These measurement-period adjustments resulted in an increase in goodwill of $2,590 during the quarter ended March 31, 2018 , with the offset to various assets and liabilities, including deferred income taxes and other long-term liabilities, as well as a decrease of $1,041 in customer list intangibles and an increase in internal-use software of $1,000 . 2017 acquisitions – During the quarter ended March 31, 2017 , we completed the following acquisitions: • In February 2017, we acquired selected assets of Panthur Pty Ltd, an Australian web hosting and domain registration service provider. • We acquired the operations of several small business distributors, all of which were previously part of our Safeguard distributor network. Payments for acquisitions, net of cash acquired, as presented on the consolidated statement of cash flows for the quarter ended March 31, 2017 , included payments of $3,087 for these acquisitions and $2,152 for holdback payments for prior |
Fair value measurements
Fair value measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Fair value measurements Non-recurring asset impairment analyses – During the first quarter of 2018, we recorded a pre-tax asset impairment charge of $2,149 related to a Small Business Services customer list intangible asset. As a result of changes in market trends, including the continuing decline in check and forms usage, we determined that this customer list asset was impaired and had a fair market value of $0 (level 3 fair value measurement) as of March 31, 2018. During the first quarter of 2017, we recorded a pre-tax asset impairment charge of $5,296 related to a small business distributor classified as held for sale in the consolidated balance sheets. Based on ongoing negotiations for the sale of the business, including multiple offers, we determined that the business's carrying value exceeded its estimated fair value less costs to sell of $5,000 (level 3 fair value measurement), and we reduced the carrying value of the related customer list intangible asset. 2018 acquisitions – For all acquisitions, we are required to measure the fair value of the net identifiable tangible and intangible assets and liabilities acquired. Information regarding the acquisitions completed during the quarter ended March 31, 2018 can be found in Note 6. The identifiable net assets acquired during the quarter ended March 31, 2018 were comprised primarily of customer list intangible assets, a trade name and a technology-related intangible asset. The estimated fair value of the Logomix customer list was calculated using the multi-period excess earnings method. This valuation model estimates revenues and cash flows derived from the asset and then deducts portions of the cash flow that can be attributed to supporting assets, such as a brand name or fixed assets, that contributed to the generation of the cash flows. The resulting cash flow, which is attributable solely to the customer list asset, is then discounted at a rate of return commensurate with the risk of the asset to calculate a present value. The estimated fair value of the other acquired customer lists was calculated by discounting the estimated cash flows expected to be generated by the assets. Key assumptions used in the calculations included same-customer revenue growth rates and estimated customer retention rates based on the acquirees' historical information. The estimated fair values of the trade name and technology-related asset were calculated using the relief from royalty method, which calculates the cost savings associated with owning rather than licensing the trade name or the technology. Assumed royalty rates were applied to projected revenue for the estimated remaining useful lives of the assets to estimate the royalty savings. Recurring fair value measurements – Funds held for customers included cash equivalents and available-for-sale debt securities (Note 3). The cash equivalents consisted of a money market fund investment that is traded in an active market. Because of the short-term nature of the underlying investments, the cost of this investment approximates its fair value. Available-for-sale debt securities consisted of a mutual fund investment that invests in Canadian and provincial government securities and investments in Canadian guaranteed investment certificates (GICs) with maturities of 1 year. The mutual fund is not traded in an active market and its fair value is determined by obtaining quoted prices in active markets for the underlying securities held by the fund. The fair value of the GICs approximated cost due to their relatively short duration. Unrealized gains and losses, net of tax, are included in accumulated other comprehensive loss in the consolidated balance sheets. The cost of securities sold is determined using the average cost method. Realized gains and losses are included in revenue in the consolidated statements of comprehensive income and were not significant for the quarters ended March 31, 2018 and 2017 . The fair value of accrued contingent consideration is remeasured each reporting period. Increases or decreases in projected revenue, gross profit or operating income, as appropriate, and the related probabilities of achieving the forecasted results, may result in a higher or lower fair value measurement. Changes in fair value resulting from changes in the timing, amount of, or likelihood of contingent payments are included in SG&A expense in the consolidated statements of comprehensive income. Changes in fair value resulting from accretion for the passage of time are included in interest expense in the consolidated statements of comprehensive income. Changes in accrued contingent consideration during the quarter ended March 31, 2018 were as follows: (in thousands) Quarter Ended March 31, 2018 Balance, December 31, 2017 $ 3,623 Acquisition date fair value 100 Change in fair value (54 ) Payments (363 ) Balance, March 31, 2018 $ 3,306 Information regarding the fair values of our financial instruments was as follows: Fair value measurements using March 31, 2018 Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (in thousands) Carrying value Fair value (Level 1) (Level 2) (Level 3) Measured at fair value through net income: Accrued contingent consideration $ (3,306 ) $ (3,306 ) $ — $ — $ (3,306 ) Measured at fair value through comprehensive income: Cash equivalents (funds held for customers) 15,000 15,000 15,000 — — Available-for-sale debt securities (funds held for customers) 16,189 16,189 — 16,189 — Amortized cost: Cash 67,728 67,728 67,728 — — Cash (funds held for customers) 63,751 63,751 63,751 — — Loans and notes receivable from Safeguard distributors 57,579 53,647 — — 53,647 Long-term debt (1) 740,625 740,625 — 740,625 — (1) Amounts exclude capital lease obligations. Fair value measurements using December 31, 2017 Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (in thousands) Carrying value Fair value (Level 1) (Level 2) (Level 3) Measured at fair value through net income: Accrued contingent consideration $ (3,623 ) $ (3,623 ) $ — $ — $ (3,623 ) Measured at fair value through comprehensive income: Cash equivalents (funds held for customers) 17,300 17,300 17,300 — — Available-for-sale debt securities (funds held for customers) 16,613 16,613 — 16,613 — Amortized cost: Cash 59,240 59,240 59,240 — — Cash (funds held for customers) 52,279 52,279 52,279 — — Loans and notes receivable from Safeguard distributors 46,409 44,650 — — 44,650 Long-term debt (1) 707,386 707,938 — 707,938 — (1) Amounts exclude capital lease obligations. Our policy is to recognize transfers between fair value levels as of the end of the reporting period in which the transfer occurred. There were no transfers between fair value levels during the quarter ended March 31, 2018 |
Restructuring charges
Restructuring charges | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring charges | Restructuring charges Net restructuring charges for each period consisted of the following components: Quarter Ended (in thousands, except number of employees) 2018 2017 Severance accruals $ 844 $ 1,108 Severance reversals (135 ) (399 ) Net restructuring accruals 709 709 Other costs 1,613 284 Net restructuring charges $ 2,322 $ 993 Number of employees included in severance accruals 25 30 The net restructuring charges are reflected in the consolidated statements of comprehensive income as follows: Quarter Ended (in thousands) 2018 2017 Total cost of revenue $ 177 $ (21 ) Operating expenses 2,145 1,014 Net restructuring charges $ 2,322 $ 993 During the quarters ended March 31, 2018 and 2017 , the net restructuring accruals included severance charges related to employee reductions across functional areas as we continued to reduce costs, primarily within our sales, marketing and fulfillment functions. These charges were reduced by the reversal of restructuring accruals recorded in previous periods, as fewer employees received severance benefits than originally estimated. Other restructuring costs, which were expensed as incurred, included items such as information technology costs, employee and equipment moves, training and travel related to our restructuring and integration activities. Restructuring accruals of $2,326 as of March 31, 2018 and $4,380 as of December 31, 2017 are reflected in the consolidated balance sheets as accrued liabilities. The majority of the employee reductions are expected to be completed by mid-2018, and we expect most of the related severance payments to be paid by the end of 2018, utilizing cash from operations. As of March 31, 2018 , approximately 10 employees had not yet started to receive severance benefits. Accruals for our restructuring initiatives, summarized by year, were as follows: (in thousands) 2018 initiatives 2017 initiatives 2016 initiatives Total Balance, December 31, 2017 $ — $ 4,348 $ 32 $ 4,380 Restructuring charges 746 98 — 844 Restructuring reversals — (130 ) (5 ) (135 ) Payments (97 ) (2,639 ) (27 ) (2,763 ) Balance, March 31, 2018 $ 649 $ 1,677 $ — $ 2,326 Cumulative amounts: Restructuring charges $ 746 $ 7,320 $ 7,801 $ 15,867 Restructuring reversals — (291 ) (750 ) (1,041 ) Payments (97 ) (5,352 ) (7,051 ) (12,500 ) Balance, March 31, 2018 $ 649 $ 1,677 $ — $ 2,326 The components of our restructuring accruals, by segment, were as follows: Employee severance benefits Operating lease obligations (in thousands) Small Business Services Financial Services Direct Checks Corporate (1) Small Business Services Total Balance, December 31, 2017 $ 789 $ 1,398 $ 140 $ 2,049 $ 4 $ 4,380 Restructuring charges 522 174 — 148 — 844 Restructuring reversals (22 ) (23 ) (1 ) (89 ) — (135 ) Payments (432 ) (936 ) (89 ) (1,302 ) (4 ) (2,763 ) Balance, March 31, 2018 $ 857 $ 613 $ 50 $ 806 $ — $ 2,326 Cumulative amounts: (2) Restructuring charges $ 5,158 $ 4,276 $ 286 $ 6,065 $ 82 $ 15,867 Restructuring reversals (376 ) (98 ) (7 ) (560 ) — (1,041 ) Payments (3,925 ) (3,565 ) (229 ) (4,699 ) (82 ) (12,500 ) Balance, March 31, 2018 $ 857 $ 613 $ 50 $ 806 $ — $ 2,326 (1) As discussed in Note 14, corporate costs are allocated to our business segments. As such, the net corporate restructuring charges are reflected in the business segment operating income presented in Note 14 in accordance with our allocation methodology. (2) |
Income tax provision
Income tax provision | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income tax provision | Income tax provision The effective tax rate on pre-tax income reconciles to the United States federal statutory tax rate of 21% for 2018 and 35% for 2017 as follows: Quarter Ended March 31, 2018 Year Ended December 31, 2017 Income tax at federal statutory rate 21.0 % 35.0 % State income tax expense, net of federal benefit 3.3 % 2.7 % Goodwill impairment charge — 1.5 % Impact of the Tax Cuts and Jobs Act of 2017 (0.4 %) (6.6 %) Qualified production activities deduction — (3.2 %) Net tax benefit of share-based compensation (0.8 %) (1.6 %) Other 1.0 % (1.4 %) Effective tax rate 24.1 % 26.4 % |
Postretirement benefits
Postretirement benefits | 3 Months Ended |
Mar. 31, 2018 | |
Defined Benefit Plan [Abstract] | |
Postretirement benefits | Postretirement benefits We have historically provided certain health care benefits for a portion of our retired United States employees. In addition to our retiree health care plan, we also have a supplemental executive retirement plan in the United States. Further information regarding our postretirement benefit plans can be found under the caption “Note 12: Postretirement benefits” of the Notes to Consolidated Financial Statements appearing in the 2017 Form 10-K. Postretirement benefit income for each period consisted of the following components: Quarter Ended (in thousands) 2018 2017 Interest cost $ 656 $ 724 Expected return on plan assets (1,934 ) (1,782 ) Amortization of prior service credit (355 ) (355 ) Amortization of net actuarial losses 721 909 Net periodic benefit income $ (912 ) $ (504 ) Effective January 1, 2018, we adopted ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which required us to reclassify postretirement benefit income from cost of revenue and SG&A expense to other income in our consolidated statements of comprehensive income. Further information can be found in Note 2. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt outstanding was comprised of the following: (in thousands) March 31, December 31, Amount drawn on revolving credit facility $ 740,625 $ 413,000 Amount outstanding under term loan facility — 294,938 Capital lease obligations 1,908 1,914 Long-term debt, principal amount 742,533 709,852 Less unamortized debt issuance costs — (471 ) Less current portion of long-term debt (831 ) (44,121 ) Long-term debt 741,702 665,260 Current portion of amount drawn under term loan facility — 43,313 Current portion of capital lease obligations 831 808 Long-term debt due within one year, principal amount 831 44,121 Less unamortized debt issuance costs — (81 ) Long-term debt due within one year 831 44,040 Total debt $ 742,533 $ 709,300 In March 2018, we entered into a new revolving credit facility in the amount of $950,000 , subject to increase under the credit agreement to an aggregate amount not exceeding $1,425,000 . The credit facility matures in March 2023 . Our previous credit facility agreement was terminated contemporaneously with our entry into the new credit facility and was repaid utilizing proceeds from the new revolving credit facility. Our quarterly commitment fee ranges from 0.175% to 0.35% based on our leverage ratio. As of March 31, 2018 , $740,625 was drawn on our revolving credit facility at a weighted-average interest rate of 2.99% . As of December 31, 2017 , $413,000 was drawn on our previous revolving credit facility at a weighted-average interest rate of 2.98% . Our previous credit facility agreement also included a term loan facility. As of December 31, 2017 , $294,938 was outstanding under the term loan facility at a weighted-average interest rate of 2.99% . This amount was repaid in March 2018, utilizing proceeds from the new revolving credit facility. There are currently no limitations on the amount of dividends and share repurchases under the terms of our credit agreement. However, if our leverage ratio, defined as total debt less unrestricted cash to EBITDA, should exceed 2.75 to one, there would be an annual limitation on the amount of dividends and share repurchases under the terms of this agreement. Borrowings under the credit agreement are collateralized by substantially all of our personal and intangible property. The credit agreement governing our credit facility contains customary covenants regarding limits on levels of subsidiary indebtedness and capital expenditures, liens, investments, acquisitions, certain mergers, certain asset sales outside the ordinary course of business, and change in control as defined in the agreement. The agreement also requires us to maintain certain financial ratios, including a maximum leverage ratio and a minimum ratio of consolidated earnings before interest and taxes to consolidated interest expense, as defined in the credit agreement. Daily average amounts outstanding under our current and previous credit facility were as follows: (in thousands) Quarter Ended March 31, 2018 Year Ended December 31, 2017 Revolving credit facility: Daily average amount outstanding $ 451,682 $ 436,588 Weighted-average interest rate 2.97 % 2.55 % Term loan facility: Daily average amount outstanding $ 258,088 $ 315,862 Weighted-average interest rate 2.97 % 2.57 % As of March 31, 2018 , amounts were available for borrowing under our revolving credit facility as follows: (in thousands) Total available Revolving credit facility commitment $ 950,000 Amount drawn on revolving credit facility (740,625 ) Outstanding letters of credit (1) (10,229 ) Net available for borrowing as of March 31, 2018 $ 199,146 (1) We use standby letters of credit to collateralize certain obligations related primarily to our self-insured workers’ compensation claims, as well as claims for environmental matters, as required by certain states. These letters of credit reduce the amount available for borrowing under our revolving credit facility. In addition to amounts outstanding under our credit facility, we had capital lease obligations of $1,908 as of March 31, 2018 and $1,914 as of December 31, 2017 related to information technology hardware. The lease obligations will be paid through November 2021 |
Other commitments and contingen
Other commitments and contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Other commitments and contingencies | Other commitments and contingencies Indemnifications – In the normal course of business, we periodically enter into agreements that incorporate general indemnification language. These indemnifications encompass third-party claims arising from our products and services, including, without limitation, service failures, breach of security, intellectual property rights, governmental regulations and/or employment-related matters. Performance under these indemnities would generally be triggered by our breach of the terms of the contract. In disposing of assets or businesses, we often provide representations, warranties and/or indemnities to cover various risks, including, for example, unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal matters related to periods prior to disposition. We do not have the ability to estimate the potential liability from such indemnities because they relate to unknown conditions. However, we do not believe that any liability under these indemnities would have a material adverse effect on our financial position, annual results of operations or annual cash flows. We have recorded liabilities for known indemnifications related to environmental matters. Environmental matters – We are currently involved in environmental compliance, investigation and remediation activities at some of our former sites, primarily printing facilities of our Financial Services and Small Business Services segments that have been sold. Remediation costs are accrued on an undiscounted basis when the obligations are either known or considered probable and can be reasonably estimated. Remediation or testing costs that result directly from the sale of an asset and that we would not have otherwise incurred are considered direct costs of the sale of the asset. As such, they are included in our measurement of the carrying value of the asset sold. Accruals for environmental matters were $2,517 as of March 31, 2018 and $2,646 as of December 31, 2017 , primarily related to facilities that have been sold. These accruals are included in accrued liabilities and other non-current liabilities in the consolidated balance sheets. Accrued costs consist of direct costs of the remediation activities, primarily fees that will be paid to outside engineering and consulting firms. Although recorded accruals include our best estimates, our total costs cannot be predicted with certainty due to various factors such as the extent of corrective action that may be required, evolving environmental laws and regulations and advances in environmental technology. Where the available information is sufficient to estimate the amount of the liability, that estimate is used. Where the information is only sufficient to establish a range of probable liability and no point within the range is more likely than any other, the lower end of the range is recorded. We do not believe that the range of possible outcomes could have a material effect on our financial condition, results of operations or liquidity. Environmental expense was not significant for the quarters ended March 31, 2018 and 2017 . We purchased an insurance policy during 2002 that covers up to $10,000 of third-party pollution claims through 2032 at certain owned, leased and divested sites. We also purchased an insurance policy during 2009 that covers up to $15,000 of third-party pollution claims through April 2019 at certain other sites. These policies cover liability for claims of bodily injury or property damage arising from pollution events at the covered facilities, as well as remediation coverage should we be required by a governing authority to perform remediation activities at the covered sites. No accruals have been recorded in our consolidated financial statements for any of the events contemplated in these insurance policies. We do not anticipate significant net cash outlays for environmental matters during 2018. Self-insurance – We are self-insured for certain costs, primarily workers' compensation claims and medical and dental benefits for active employees and those employees on long-term disability. The liabilities associated with these items represent our best estimate of the ultimate obligations for reported claims plus those incurred, but not reported, and totaled $7,597 as of March 31, 2018 and $7,679 as of December 31, 2017 . These accruals are included in accrued liabilities and other non-current liabilities in the consolidated balance sheets. Our workers' compensation liability is recorded at present value. The difference between the discounted and undiscounted liability was not significant as of March 31, 2018 or December 31, 2017 . Our self-insurance liabilities are estimated, in part, by considering historical claims experience, demographic factors and other actuarial assumptions. The estimated accruals for these liabilities could be significantly affected if future events and claims differ from these assumptions and historical trends. Litigation – Recorded liabilities for legal matters were not material to our financial position, results of operations or liquidity during the quarters ended March 31, 2018 and 2017 , and we do not believe that any of the currently identified claims or litigation will materially affect our financial position, results of operations or liquidity upon resolution. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, it may cause a material adverse impact on our financial position, results of operations or liquidity in the period in which the ruling occurs or in future periods. |
Shareholders' equity
Shareholders' equity | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' equity | Shareholders’ equity During the quarter ended March 31, 2018 , we repurchased 278 thousand shares for $19,996 . These share repurchases were completed under an authorization from our board of directors for the repurchase of up to $300,000 of our common stock. This authorization has no expiration date, and $219,731 remained available for purchase under this authorization as of March 31, 2018 |
Business segment information
Business segment information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Business segment information | Business segment information We operate 3 reportable business segments: Small Business Services, Financial Services and Direct Checks. Our business segments are generally organized by type of customer served and reflect the way we manage the company. Small Business Services promotes and sells products and services to small businesses via direct response mail and internet advertising; referrals from financial institutions, telecommunications clients and other partners; networks of Safeguard distributors and independent dealers; a direct sales force that focuses on selling to and through major accounts; and an outbound telemarketing group. Financial Services' products and services are sold primarily through a direct sales force that executes product and service supply contracts with our financial institution clients, including banks, credit unions and financial services companies. Direct Checks sells products and services directly to consumers using direct marketing, including print advertising and search engine marketing and optimization strategies. All 3 segments operate primarily in the United States. Small Business Services also has operations in Canada, Australia and portions of Europe, while Financial Services also has operations in Canada. Our product and service offerings are comprised of the following: Checks – We remain one of the largest providers of checks in the United States. During 2017 , checks represented 39% of our Small Business Services segment's revenue, 43% of our Financial Services segment's revenue and 84% of our Direct Checks segment's revenue. Marketing solutions and other services (MOS) – We offer products and services designed to meet our customers' sales and marketing needs, as well as various other service offerings. During 2017, MOS represented 34% of our Small Business Services segment's revenue, 55% of our Financial Services segment's revenue and 11% of our Direct Checks segment's revenue. Our MOS offerings consist of the following: • Small business marketing solutions – Our marketing products utilize digital printing and web-to-print solutions to provide printed marketing materials and promotional solutions such as postcards, brochures, retail packaging supplies, apparel, greeting cards and business cards. • Web services – These service offerings for small businesses include logo and web design; hosting, domain name and web design services; search engine marketing and optimization; and payroll services. • Data-driven marketing solutions – These Financial Services offerings include outsourced marketing campaign targeting and execution and marketing analytics solutions that help our customers grow revenue through strategic targeting, lead optimization, retention and cross-selling services. • Treasury management solutions – These Financial Services solutions include remote deposit capture, receivables management, payment processing, and paperless treasury management, as well as software, hardware and digital imaging solutions. • Fraud, security, risk management and operational services – These service offerings include fraud protection and security services, electronic checks ("eChecks") and digital engagement solutions, including loyalty and rewards programs. Forms, accessories and other products – Our Small Business Services segment provides printed forms to small businesses, including deposit tickets, billing forms, work orders, job proposals, purchase orders, invoices and personnel forms, as well as computer forms compatible with accounting software packages commonly used by small businesses. Small Business Services also offers other customized products, including envelopes, office supplies, ink stamps and labels. Our Financial Services and Direct Checks segments offer deposit tickets, check registers, checkbook covers, labels and ink stamps. The following table presents revenue disaggregated by our product and service offerings: Quarter Ended March 31, 2018 (in thousands) Small Business Services Financial Services Direct Checks Consolidated Checks $ 122,932 $ 58,051 $ 29,355 $ 210,338 Marketing solutions and other services: Small business marketing solutions 66,762 — — 66,762 Web services 37,376 — — 37,376 Data-driven marketing solutions — 37,140 — 37,140 Treasury management solutions — 29,200 — 29,200 Fraud, security, risk management and operational services 6,516 12,307 3,857 22,680 Total MOS 110,654 78,647 3,857 193,158 Forms, accessories and other products 82,727 3,943 1,748 88,418 Total revenue $ 316,313 $ 140,641 $ 34,960 $ 491,914 Quarter Ended March 31, 2017 (in thousands) Small Business Services Financial Services Direct Checks Consolidated Checks $ 124,137 $ 65,375 $ 32,661 $ 222,173 Marketing solutions and other services: Small business marketing solutions 59,509 — — 59,509 Web services 30,244 — — 30,244 Data-driven marketing solutions — 32,074 — 32,074 Treasury management solutions — 22,774 — 22,774 Fraud, security, risk management and operational services 6,633 16,611 4,256 27,500 Total MOS 96,386 71,459 4,256 172,101 Forms, accessories and other products 87,600 3,960 1,932 93,492 Total revenue $ 308,123 $ 140,794 $ 38,849 $ 487,766 Product revenue is recognized at a point in time. Total MOS revenue included product revenue of $64,651 and service revenue of $128,507 for the quarter ended March 31, 2018. The majority of our service revenue is recognized over time as services are provided. The following table presents our revenue for the quarter ended March 31, 2018 disaggregated by geography, based on where items are shipped or services are performed. (in thousands) Small Business Services Financial Services Direct Checks Total United States $ 289,598 $ 135,166 $ 34,960 $ 459,724 Foreign, primarily Canada and Australia 26,715 5,475 — 32,190 Total revenue $ 316,313 $ 140,641 $ 34,960 $ 491,914 Foreign revenue for the quarter ended March 31, 2017 was $18,979 , all within Small Business Services. The accounting policies of the segments are the same as those described in the Notes to Consolidated Financial Statements included in the 2017 Form 10-K. We allocate corporate costs for our shared services functions to our business segments, including costs of our executive management, human resources, supply chain, finance, information technology and legal functions. Where costs incurred are directly attributable to a business segment, those costs are charged directly to that segment. During 2017, costs that were not directly attributable to a business segment were allocated to the segments based on segment revenue. Effective January 1, 2018, we completed a more detailed analysis of our corporate costs and were able to allocate substantially all of the costs directly to our business segments. The costs that were not directly attributable to a business segment, primarily certain human resources costs, were allocated to the segments based on the number of employees in each segment. This change in our allocation methodology did not have a significant impact on the operating results of our business segments. Corporate assets are not allocated to the segments and consisted primarily of long-term investments and assets related to our corporate shared services functions of manufacturing, information technology and real estate, including property, plant and equipment; internal-use software; and inventories and supplies. We are an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations and the sharing of assets. Therefore, we do not represent that these segments, if operated independently, would report the operating income and other financial information shown. The following is our segment information as of and for the quarters ended March 31, 2018 and 2017 : Reportable Business Segments (in thousands) Small Business Services Financial Services Direct Checks Corporate Consolidated Total revenue from external customers: 2018 $ 316,313 $ 140,641 $ 34,960 $ — $ 491,914 2017 308,123 140,794 38,849 — 487,766 Operating income: 2018 58,900 17,973 10,835 — 87,708 2017 52,261 20,245 12,492 — 84,998 Depreciation and amortization expense: 2018 15,439 14,893 809 — 31,141 2017 14,216 14,614 807 — 29,637 Asset impairment charges: 2018 2,149 — — — 2,149 2017 5,296 — — — 5,296 Total assets: 2018 1,141,551 672,718 158,683 300,864 2,273,816 2017 1,038,659 648,066 160,105 315,459 2,162,289 Capital asset purchases: 2018 — — — 14,034 14,034 2017 — — — 11,021 11,021 |
New accounting pronouncements (
New accounting pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Revenue recognition | Our product revenue is recognized when control of the goods is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods. In most cases, control is transferred when products are shipped. We recognize the great majority of our service revenue as the services are provided. Many of our check supply contracts with financial institutions provide for rebates on certain products. We record these rebates as reductions of revenue and as accrued liabilities on our consolidated balance sheets when the related revenue is recognized. Many of our financial institution contracts also require prepaid product discounts in the form of upfront cash payments we make to our financial institution clients. These prepaid product discounts are included in other non-current assets in our consolidated balance sheets and are amortized as reductions of revenue, generally on the straight-line basis, over the contract term. Sales tax collected concurrent with revenue-producing activities is excluded from revenue. Amounts billed to customers for shipping and handling are included in revenue, while the related shipping and handling costs are reflected in cost of products. We have elected the practical expedient that allows us to account for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment cost, and we accrue costs of shipping and handling when the related revenue is recognized. As part of our Financial Services rewards, incentive and loyalty programs, we receive payments from consumers or our clients for the products and services provided, including hotel stays, gift cards and merchandise such as apparel, electronics and clothing. This revenue is recorded net of the related fulfillment costs. Certain of our contracts for data-driven marketing solutions and treasury management outsourcing services within Financial Services have variable consideration that is contingent on either the success of the marketing campaign ("pay-for-performance") or the volume of outsourcing services provided. We recognize revenue for estimated variable consideration as services are provided based on the most likely amount to be realized. Revenue is recognized to the extent that it is probable that a significant reversal of revenue will not occur when the contingency is resolved. Estimates regarding the recognition of variable consideration are updated each quarter. Typically, the amount of consideration for these contracts is finalized within 3 months, although pricing under certain of our outsourcing contracts may be based on annual volume commitments. Revenue recognized from these contracts was approximately $100,000 in 2017. Under the new standard, we have accelerated the recognition of a portion of this variable consideration. Certain of our contracts for treasury management solutions result from the sale of bundled arrangements that may include hardware, software and professional services, as well as customization and modification of software, and specify the timing of customer billings over the course of the contract. Revenue for these contracts is recognized using a cost-based input method that depicts the transfer of services to the customer. The transaction price is allocated to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or using expected cost plus margin. When the revenue recognized for uncompleted contracts exceeds the amount of customer billings, a contract asset is reflected in our consolidated balance sheets within other current assets. The amount included in other current assets was $24,521 as of March 31, 2018 and $16,379 as of December 31, 2017. When the amount of customer billings for uncompleted contracts exceeds the revenue recognized, a contract liability is reflected in our consolidated balance sheets within accrued liabilities. The amount included in accrued liabilities was $1,353 as of March 31, 2018 and $2,233 as of December 31, 2017. At times, a financial institution client may terminate its check supply contract with us prior to the end of the contract term. In many cases, the financial institution is contractually required to remit a contract termination payment. Such payments are recorded as revenue when the termination agreement is executed, provided that we have no further performance obligations and collection of the funds is assured. If we have further performance obligations following the execution of a contract termination agreement, we record the related revenue over the remaining service period. Our payment terms vary by type of customer and the products or services offered. The time period between invoicing and when payment is due is not significant. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. When a customer pays in advance for services, primarily for treasury management solutions and web hosting services, we defer the revenue and recognize it as the services are performed, generally over a period of less than 1 year. Deferred revenue is included in accrued liabilities and other non-current liabilities in our consolidated balance sheets. The increase of $1,408 in deferred revenue for the quarter ended March 31, 2018 was primarily driven by cash payments received in advance of satisfying our performance obligations, partially offset by the recognition of $20,636 of revenue that was included in deferred revenue as of December 31, 2017 . In addition to the amounts included in deferred revenue, we will recognize revenue in future periods related to remaining performance obligations for certain of our data-driven marketing and treasury management solutions. Generally, these contracts have terms of 1 year or less and many have terms of 3 months or less. The amount of revenue related to these unsatisfied performance obligations is not significant to our annual consolidated revenue. The new guidance requires that certain costs incurred to obtain contracts be recognized as assets and amortized consistent with the transfer of goods or services to the customer. As such, we are now deferring sales commissions related to obtaining check supply and treasury management solution contracts within Financial Services. These amounts are included in other non-current assets and are amortized as selling, general and administrative (SG&A) expense. Amortization of these amounts on the straight-line basis approximates the timing of the transfer of goods or services to the customer. Generally, these amounts are being amortized over periods of 3 to 6 |
Comprehensive income | Our policy is to release stranded income tax effects from accumulated other comprehensive loss when the circumstances upon which they are premised cease to exist. |
New accounting pronouncements | New accounting pronouncements The following discusses the impact of each accounting standards update (ASU) adopted during the first quarter of 2018: ASU No. 2014-09 – In May 2014, the Financial Accounting Standards Board (FASB) issued ASU No. 2014-09, Revenue from Contracts with Customers . The standard provides revenue recognition guidance for any entity that enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets, unless those contracts are within the scope of other accounting standards. The standard also expands the required financial statement disclosures regarding revenue recognition. In addition, the FASB subsequently issued several amendments to the standard. We adopted the standard and all the related amendments on January 1, 2018 using the modified retrospective method. We applied the new guidance to uncompleted contracts as of January 1, 2018 and recorded the cumulative effect of initially applying the standard as an adjustment to retained earnings, with the offset to other current assets, other non-current assets and deferred income tax liabilities. We have elected the practical expedient for contract modifications, allowing us to consider the impact of all contract modifications completed prior to January 1, 2018. We have also elected the practical expedient that allows us to disregard the effects of a financing component if the period between payment and performance will be 1 year or less. Election of these practical expedients did not have a significant impact on our results of operations or financial position. Prior periods have not been restated and continue to be reported under the accounting standards in effect for those periods. We do not expect the adoption of this guidance to have a material impact on our results of operations, financial position or cash flows on an ongoing basis. Information regarding the disaggregation of revenue can be found in Note 14. Our product revenue is recognized when control of the goods is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods. In most cases, control is transferred when products are shipped. We recognize the great majority of our service revenue as the services are provided. Many of our check supply contracts with financial institutions provide for rebates on certain products. We record these rebates as reductions of revenue and as accrued liabilities on our consolidated balance sheets when the related revenue is recognized. Many of our financial institution contracts also require prepaid product discounts in the form of upfront cash payments we make to our financial institution clients. These prepaid product discounts are included in other non-current assets in our consolidated balance sheets and are amortized as reductions of revenue, generally on the straight-line basis, over the contract term. Sales tax collected concurrent with revenue-producing activities is excluded from revenue. Amounts billed to customers for shipping and handling are included in revenue, while the related shipping and handling costs are reflected in cost of products. We have elected the practical expedient that allows us to account for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment cost, and we accrue costs of shipping and handling when the related revenue is recognized. As part of our Financial Services rewards, incentive and loyalty programs, we receive payments from consumers or our clients for the products and services provided, including hotel stays, gift cards and merchandise such as apparel, electronics and clothing. This revenue is recorded net of the related fulfillment costs. Certain of our contracts for data-driven marketing solutions and treasury management outsourcing services within Financial Services have variable consideration that is contingent on either the success of the marketing campaign ("pay-for-performance") or the volume of outsourcing services provided. We recognize revenue for estimated variable consideration as services are provided based on the most likely amount to be realized. Revenue is recognized to the extent that it is probable that a significant reversal of revenue will not occur when the contingency is resolved. Estimates regarding the recognition of variable consideration are updated each quarter. Typically, the amount of consideration for these contracts is finalized within 3 months, although pricing under certain of our outsourcing contracts may be based on annual volume commitments. Revenue recognized from these contracts was approximately $100,000 in 2017. Under the new standard, we have accelerated the recognition of a portion of this variable consideration. Certain of our contracts for treasury management solutions result from the sale of bundled arrangements that may include hardware, software and professional services, as well as customization and modification of software, and specify the timing of customer billings over the course of the contract. Revenue for these contracts is recognized using a cost-based input method that depicts the transfer of services to the customer. The transaction price is allocated to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or using expected cost plus margin. When the revenue recognized for uncompleted contracts exceeds the amount of customer billings, a contract asset is reflected in our consolidated balance sheets within other current assets. The amount included in other current assets was $24,521 as of March 31, 2018 and $16,379 as of December 31, 2017. When the amount of customer billings for uncompleted contracts exceeds the revenue recognized, a contract liability is reflected in our consolidated balance sheets within accrued liabilities. The amount included in accrued liabilities was $1,353 as of March 31, 2018 and $2,233 as of December 31, 2017. At times, a financial institution client may terminate its check supply contract with us prior to the end of the contract term. In many cases, the financial institution is contractually required to remit a contract termination payment. Such payments are recorded as revenue when the termination agreement is executed, provided that we have no further performance obligations and collection of the funds is assured. If we have further performance obligations following the execution of a contract termination agreement, we record the related revenue over the remaining service period. Our payment terms vary by type of customer and the products or services offered. The time period between invoicing and when payment is due is not significant. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. When a customer pays in advance for services, primarily for treasury management solutions and web hosting services, we defer the revenue and recognize it as the services are performed, generally over a period of less than 1 year. Deferred revenue is included in accrued liabilities and other non-current liabilities in our consolidated balance sheets. The increase of $1,408 in deferred revenue for the quarter ended March 31, 2018 was primarily driven by cash payments received in advance of satisfying our performance obligations, partially offset by the recognition of $20,636 of revenue that was included in deferred revenue as of December 31, 2017 . In addition to the amounts included in deferred revenue, we will recognize revenue in future periods related to remaining performance obligations for certain of our data-driven marketing and treasury management solutions. Generally, these contracts have terms of 1 year or less and many have terms of 3 months or less. The amount of revenue related to these unsatisfied performance obligations is not significant to our annual consolidated revenue. The new guidance requires that certain costs incurred to obtain contracts be recognized as assets and amortized consistent with the transfer of goods or services to the customer. As such, we are now deferring sales commissions related to obtaining check supply and treasury management solution contracts within Financial Services. These amounts are included in other non-current assets and are amortized as selling, general and administrative (SG&A) expense. Amortization of these amounts on the straight-line basis approximates the timing of the transfer of goods or services to the customer. Generally, these amounts are being amortized over periods of 3 to 6 years. We elected the practical expedient allowing us to expense sales commissions as incurred when the amortization period would have been 1 year or less. The cumulative effect of the changes made to our unaudited consolidated balance sheet as of January 1, 2018 for the adoption of the new revenue guidance was as follows: (in thousands) Balance as of December 31, 2017 Adjustments due to ASU No. 2014-09 Balance as of January 1, 2018 Other current assets $ 55,441 $ 960 $ 56,401 Total current assets 392,966 960 393,926 Other non-current assets 159,756 5,733 165,489 Total assets $ 2,208,827 $ 6,693 $ 2,215,520 Deferred income taxes $ 50,543 $ 1,727 $ 52,270 Retained earnings 1,004,657 4,966 1,009,623 Total liabilities and shareholders' equity $ 2,208,827 $ 6,693 $ 2,215,520 The impact of adoption of the new revenue guidance on our unaudited consolidated statement of comprehensive income for the quarter ended March 31, 2018 and on our unaudited consolidated balance sheet as of March 31, 2018 was as follows: Quarter Ended March 31, 2018 (in thousands) As reported Effect of adoption Balance without adoption of ASU No. 2014-09 Service revenue $ 128,507 $ (536 ) $ 127,971 Total revenue 491,914 (536 ) 491,378 Cost of services (55,387 ) 255 (55,132 ) Total cost of revenue (188,758 ) 255 (188,503 ) Gross profit 303,156 (281 ) 302,875 Selling, general and administrative expense (211,154 ) 516 (210,638 ) Operating income 87,708 235 87,943 Income before income taxes 83,418 235 83,653 Income tax provision (20,082 ) (61 ) (20,143 ) Net income $ 63,336 $ 174 $ 63,510 March 31, 2018 Other current assets $ 58,907 $ (1,242 ) $ 57,665 Total current assets 399,938 (1,242 ) 398,696 Other non-current assets 182,823 (5,216 ) 177,607 Total assets $ 2,273,816 $ (6,458 ) $ 2,267,358 Accrued liabilities 275,328 61 275,389 Total current liabilities 375,633 61 375,694 Deferred income taxes 56,699 (1,727 ) 54,972 Retained earnings 1,050,064 (4,792 ) 1,045,272 Total liabilities and shareholders' equity $ 2,273,816 $ (6,458 ) $ 2,267,358 ASU No. 2016-01 – In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities . The standard is intended to improve the recognition, measurement, presentation and disclosure of financial instruments. We adopted this standard on January 1, 2018. This standard had no impact on our results of operations or financial position. Our financial statement disclosures in Note 7 related to financial instruments have been modified to comply with the new standard. ASU No. 2016-16 – In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory . The standard requires recognition of the tax effects resulting from the intercompany sale of an asset when the transfer occurs. Previously, the tax effects were deferred until the transferred asset was sold to a third party. We adopted this standard on January 1, 2018. No adjustment was required to opening retained earnings, and we do not expect the application of this standard to have a significant impact on our results of operations or financial position going forward. ASU No. 2017-01 – In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business . The standard revises the definition of a business, which affects many areas of accounting such as business combinations and disposals and goodwill impairment. The revised definition of a business will likely result in more acquisitions being accounted for as asset acquisitions, as opposed to business combinations. We adopted this standard on January 1, 2018, applying it prospectively to transactions occurring on or after this date. ASU No. 2017-07 – In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . The standard requires that the service cost component of net periodic benefit expense be recognized in the same statement of comprehensive income caption(s) as other compensation costs, and requires that the other components of net periodic benefit expense be recognized in the non-operating section of the statement of comprehensive income. In addition, only the service cost component of net periodic benefit expense is eligible for capitalization when applicable. We adopted this standard on January 1, 2018. The reclassification of the other components of our net periodic benefit income was applied on a retrospective basis. As such, we have revised our results of operations for the previous period. We utilized the practical expedient for adoption allowing us to use the amount previously disclosed in our postretirement benefits footnote as the basis for revising the prior period. As there is no service cost associated with our plans, we reclassified the entire amount of our net periodic benefit income from cost of revenue and SG&A expense to other income in our consolidated statements of comprehensive income. In addition, we no longer include any portion of net periodic benefit income in amounts capitalized for inventory or internal-use software, as only the service cost component is eligible for capitalization. This change did not have a significant impact on our results of operations or financial position. The impact of the revision on our unaudited consolidated statement of comprehensive income for the quarter ended March 31, 2017 was as follows: Quarter Ended March 31, 2017 (in thousands) As previously reported Effect of adoption As revised Cost of products $ (132,395 ) $ (138 ) $ (132,533 ) Cost of services (46,765 ) (16 ) (46,781 ) Total cost of revenue (179,160 ) (154 ) (179,314 ) Selling, general and administrative expense (216,794 ) (350 ) (217,144 ) Operating income 85,502 (504 ) 84,998 Other income 558 504 1,062 Net income $ 57,066 $ — $ 57,066 ASU No. 2017-09 – In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting . The standard provides guidance about which changes to the terms or conditions of a share-based payment award require modification accounting, which may result in a different fair value for the award. We adopted this standard on January 1, 2018, and it is being applied prospectively to awards modified on or after this date. Historically, modifications to our share-based payment awards have been infrequent. As such, we do not expect the application of this standard to have a significant impact on our results of operations or financial position. ASU No. 2018-02 – In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The standard allows companies to make an election to reclassify from accumulated other comprehensive income to retained earnings the stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the 2017 Act). We elected to early adopt this standard on January 1, 2018, applying it in the period of adoption. As such, a reclassification from accumulated other comprehensive loss to retained earnings of $6,867 was recorded during the quarter ended March 31, 2018. This represents the effect of the change in the United States federal corporate income tax rate on the gross deferred tax amount at the date of enactment of the 2017 Act related to items remaining in accumulated other comprehensive loss. Our policy is to release stranded income tax effects from accumulated other comprehensive loss when the circumstances upon which they are premised cease to exist. In March 2018, the FASB issued ASU No. 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 118 . The standard added to the FASB Codification the guidance provided by the SEC in December 2017 regarding the accounting for the 2017 Act. We complied with SAB No. 118 when preparing our annual consolidated financial statements for the year ended December 31, 2017. Reasonable estimates were used in determining several of the components of the impact of the 2017 Act, including our 2017 deferred income tax activity and the amount of post-1986 foreign deferred earnings subject to the toll charge. We are still analyzing certain aspects of the 2017 Act and refining our calculations, which could potentially affect the measurement of our deferred tax balances and the amount of the toll charge liability, and ultimately cause us to revise our initial estimates in future periods. In addition, changes in interpretations, assumptions and guidance regarding the new tax legislation, as well as the potential for technical corrections to the 2017 Act, could have a material impact on our effective tax rate in future periods. During the quarter ended March 31, 2018, we recorded a reduction in income tax expense of $310 related to the 2017 Act. In order to complete our accounting for the 2017 Act, which we expect to finalize by the fourth quarter of 2018, the following specific items need to be completed or addressed: • Issuance of state-by-state guidance regarding conformity with or decoupling from the 2017 Act. • Finalize the calculation of post-1986 foreign deferred earnings, which are subject to the toll charge, and determine our ability to beneficially claim a foreign tax credit resulting from the income inclusion. • Where pertinent, adjust to clarifications and guidance regarding other aspects of the 2017 Act, including those related to the deductibility of executive compensation. Accounting pronouncements not yet adopted – In February 2016, the FASB issued ASU No. 2016-02, Leasing . The standard is intended to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities for virtually all leases and by requiring the disclosure of key information about leasing arrangements. The guidance is effective for us on January 1, 2019 and requires adoption using a modified retrospective approach. We are currently assessing the impact of this standard on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments . The standard introduces new guidance for the accounting for credit losses on instruments within its scope, including trade and loans receivable and available-for-sale debt securities. The guidance is effective for us on January 1, 2020 and requires adoption using a modified retrospective approach. We do not expect the application of this standard to have a significant impact on our results of operations or financial position. |
Fair value measurements (Polici
Fair value measurements (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value level transfers | Our policy is to recognize transfers between fair value levels as of the end of the reporting period in which the transfer occurred. |
New accounting pronouncements23
New accounting pronouncements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Standards Update No. 2014-09 [Member] | |
New accounting pronouncements [Line Items] | |
Impact of new accounting pronouncement | The cumulative effect of the changes made to our unaudited consolidated balance sheet as of January 1, 2018 for the adoption of the new revenue guidance was as follows: (in thousands) Balance as of December 31, 2017 Adjustments due to ASU No. 2014-09 Balance as of January 1, 2018 Other current assets $ 55,441 $ 960 $ 56,401 Total current assets 392,966 960 393,926 Other non-current assets 159,756 5,733 165,489 Total assets $ 2,208,827 $ 6,693 $ 2,215,520 Deferred income taxes $ 50,543 $ 1,727 $ 52,270 Retained earnings 1,004,657 4,966 1,009,623 Total liabilities and shareholders' equity $ 2,208,827 $ 6,693 $ 2,215,520 The impact of adoption of the new revenue guidance on our unaudited consolidated statement of comprehensive income for the quarter ended March 31, 2018 and on our unaudited consolidated balance sheet as of March 31, 2018 was as follows: Quarter Ended March 31, 2018 (in thousands) As reported Effect of adoption Balance without adoption of ASU No. 2014-09 Service revenue $ 128,507 $ (536 ) $ 127,971 Total revenue 491,914 (536 ) 491,378 Cost of services (55,387 ) 255 (55,132 ) Total cost of revenue (188,758 ) 255 (188,503 ) Gross profit 303,156 (281 ) 302,875 Selling, general and administrative expense (211,154 ) 516 (210,638 ) Operating income 87,708 235 87,943 Income before income taxes 83,418 235 83,653 Income tax provision (20,082 ) (61 ) (20,143 ) Net income $ 63,336 $ 174 $ 63,510 March 31, 2018 Other current assets $ 58,907 $ (1,242 ) $ 57,665 Total current assets 399,938 (1,242 ) 398,696 Other non-current assets 182,823 (5,216 ) 177,607 Total assets $ 2,273,816 $ (6,458 ) $ 2,267,358 Accrued liabilities 275,328 61 275,389 Total current liabilities 375,633 61 375,694 Deferred income taxes 56,699 (1,727 ) 54,972 Retained earnings 1,050,064 (4,792 ) 1,045,272 Total liabilities and shareholders' equity $ 2,273,816 $ (6,458 ) $ 2,267,358 |
Accounting Standards Update No. 2017-07 [Member] | |
New accounting pronouncements [Line Items] | |
Impact of new accounting pronouncement | The impact of the revision on our unaudited consolidated statement of comprehensive income for the quarter ended March 31, 2017 was as follows: Quarter Ended March 31, 2017 (in thousands) As previously reported Effect of adoption As revised Cost of products $ (132,395 ) $ (138 ) $ (132,533 ) Cost of services (46,765 ) (16 ) (46,781 ) Total cost of revenue (179,160 ) (154 ) (179,314 ) Selling, general and administrative expense (216,794 ) (350 ) (217,144 ) Operating income 85,502 (504 ) 84,998 Other income 558 504 1,062 Net income $ 57,066 $ — $ 57,066 |
Supplemental balance sheet in24
Supplemental balance sheet information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Allowance for uncollectible accounts | Allowance for uncollectible accounts – Changes in the allowance for uncollectible accounts for the quarters ended March 31, 2018 and 2017 was as follows: Quarter Ended (in thousands) 2018 2017 Balance, beginning of year $ 2,884 $ 2,828 Bad debt expense 875 692 Write-offs, net of recoveries (905 ) (634 ) Balance, end of period $ 2,854 $ 2,886 |
Inventories and supplies | Inventories and supplies – Inventories and supplies were comprised of the following: (in thousands) March 31, December 31, Raw materials $ 6,949 $ 7,357 Semi-finished goods 7,633 7,635 Finished goods 24,724 24,146 Supplies 3,078 3,111 Inventories and supplies $ 42,384 $ 42,249 |
Available-for-sale debt securities | Available-for-sale debt securities – Available-for-sale debt securities included within funds held for customers were comprised of the following: March 31, 2018 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Funds held for customers: (1) Domestic money market fund $ 15,000 $ — $ — $ 15,000 Canadian and provincial government securities 8,867 — (430 ) 8,437 Canadian guaranteed investment certificates 7,752 — — 7,752 Available-for-sale debt securities $ 31,619 $ — $ (430 ) $ 31,189 (1) Funds held for customers, as reported on the consolidated balance sheet as of March 31, 2018 , also included cash of $63,751 . December 31, 2017 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Funds held for customers: (1) Domestic money market fund $ 17,300 $ — $ — $ 17,300 Canadian and provincial government securities 9,051 — (393 ) 8,658 Canadian guaranteed investment certificates 7,955 — — 7,955 Available-for-sale debt securities $ 34,306 $ — $ (393 ) $ 33,913 (1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2017 , also included cash of $52,279 |
Expected maturities of available-for-sale debt securities | Expected maturities of available-for-sale debt securities as of March 31, 2018 were as follows: (in thousands) Fair value Due in one year or less $ 24,760 Due in two to five years 3,586 Due in six to ten years 2,843 Available-for-sale debt securities $ 31,189 |
Assets held for sale | Net assets held for sale consisted of the following: (in thousands) March 31, December 31, Balance sheet caption Current assets $ 23 $ 4 Other current assets Intangibles 8,089 8,459 Assets held for sale Goodwill 2,016 3,566 Assets held for sale Other non-current assets 207 207 Assets held for sale Net assets held for sale $ 10,335 $ 12,236 |
Intangibles | Intangibles – Intangibles were comprised of the following: March 31, 2018 December 31, 2017 (in thousands) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Indefinite-lived intangibles: Trade name $ 19,100 $ — $ 19,100 $ 19,100 $ — $ 19,100 Amortizable intangibles: Internal-use software 370,408 (293,628 ) 76,780 359,079 (284,074 ) 75,005 Customer lists/relationships (1) 350,586 (133,712 ) 216,874 343,589 (121,729 ) 221,860 Trade names 46,762 (21,204 ) 25,558 36,931 (19,936 ) 16,995 Technology-based intangibles 38,800 (8,017 ) 30,783 31,800 (6,400 ) 25,400 Software to be sold 36,900 (12,260 ) 24,640 36,900 (11,204 ) 25,696 Other 1,800 (1,645 ) 155 1,800 (1,590 ) 210 Amortizable intangibles 845,256 (470,466 ) 374,790 810,099 (444,933 ) 365,166 Intangibles $ 864,356 $ (470,466 ) $ 393,890 $ 829,199 $ (444,933 ) $ 384,266 (1) During the first quarter of 2018, we recorded a pre-tax asset impairment charge of $2,149 |
Estimated future amortization expense | Based on the intangibles in service as of March 31, 2018 , estimated future amortization expense is as follows: (in thousands) Estimated amortization expense Remainder of 2018 $ 73,428 2019 81,231 2020 62,617 2021 49,222 2022 35,337 |
Acquired intangibles | The following intangible assets were acquired during the quarter ended March 31, 2018 : (in thousands) Amount Weighted-average amortization period (in years) Internal-use software $ 10,842 3 Customer lists/relationships (1) 13,001 7 Trade names 10,000 8 Technology-based intangibles 7,000 5 Acquired intangibles $ 40,843 6 (1) Includes the purchase of a customer list for $650 |
Goodwill | Goodwill – Changes in goodwill during the quarter ended March 31, 2018 were as follows: (in thousands) Small Business Services Financial Services Direct Checks Total Balance, December 31, 2017: Goodwill, gross $ 706,568 $ 324,239 $ 148,506 $ 1,179,313 Accumulated impairment charges (48,379 ) — — (48,379 ) Goodwill, net of accumulated impairment charges 658,189 324,239 148,506 1,130,934 Goodwill resulting from acquisitions 28,293 — — 28,293 Measurement-period adjustments for previous acquisitions (Note 6) (173 ) 2,763 — 2,590 Currency translation adjustment (492 ) — — (492 ) Balance, March 31, 2018: Goodwill, gross 734,196 327,002 148,506 1,209,704 Accumulated impairment charges (48,379 ) — — (48,379 ) Goodwill, net of accumulated impairment charges $ 685,817 $ 327,002 $ 148,506 $ 1,161,325 |
Other non-current assets | Other non-current assets – Other non-current assets were comprised of the following: (in thousands) March 31, December 31, Prepaid product discounts (1) $ 65,954 $ 63,895 Loans and notes receivable from Safeguard distributors 55,648 44,276 Postretirement benefit plan asset 42,224 39,849 Deferred advertising costs 5,924 6,135 Deferred sales commissions (2) 5,216 — Other 7,857 5,601 Other non-current assets $ 182,823 $ 159,756 (1) In our prior period financial statements, we referred to this asset as contract acquisition costs. (2) Amortization of deferred sales commissions was $694 for the quarter ended March 31, 2018 |
Changes in prepaid product discounts | Changes in prepaid product discounts during the quarters ended March 31, 2018 and 2017 were as follows: Quarter Ended (in thousands) 2018 2017 Balance, beginning of year $ 63,895 $ 65,792 Additions (1) 7,492 4,043 Amortization (5,408 ) (4,967 ) Other (25 ) (76 ) Balance, end of period $ 65,954 $ 64,792 (1) Prepaid product discounts are accrued upon contract execution. Cash payments made for prepaid product discounts were $5,364 for the quarter ended March 31, 2018 and $6,099 for the quarter ended March 31, 2017 . |
Accrued liabilities | Accrued liabilities – Accrued liabilities were comprised of the following: (in thousands) March 31, December 31, Funds held for customers $ 93,867 $ 85,091 Deferred revenue 49,630 47,021 Acquisition-related liabilities (1) 24,893 23,878 Income tax 19,204 17,827 Prepaid product discounts due within one year (2) 15,510 11,670 Employee profit sharing/cash bonus 12,358 31,312 Customer rebates 10,856 11,508 Restructuring due within one year (Note 8) 2,326 4,380 Other 46,684 44,566 Accrued liabilities $ 275,328 $ 277,253 (1) Consists of holdback payments due at future dates and liabilities for contingent consideration. Further information regarding liabilities for contingent consideration can be found in Note 7. (2) In our prior period financial statements, we referred to this liability as contract acquisition costs due within one year. |
Other non-current liabilities | Other non-current liabilities – Other non-current liabilities were comprised of the following: (in thousands) March 31, December 31, Prepaid product discounts (1) $ 19,922 $ 21,658 Other 28,190 30,583 Other non-current liabilities $ 48,112 $ 52,241 (1) |
Earnings per share (Tables)
Earnings per share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per share | The following table reflects the calculation of basic and diluted earnings per share. During each period, certain stock options, as noted below, were excluded from the calculation of diluted earnings per share because their effect would have been antidilutive. Quarter Ended (in thousands, except per share amounts) 2018 2017 Earnings per share – basic: Net income $ 63,336 $ 57,066 Income allocated to participating securities (286 ) (406 ) Income available to common shareholders $ 63,050 $ 56,660 Weighted-average shares outstanding 47,755 48,324 Earnings per share – basic $ 1.32 $ 1.17 Earnings per share – diluted: Net income $ 63,336 $ 57,066 Income allocated to participating securities (285 ) (404 ) Re-measurement of share-based awards classified as liabilities (85 ) (4 ) Income available to common shareholders $ 62,966 $ 56,658 Weighted-average shares outstanding 47,755 48,324 Dilutive impact of potential common shares 262 374 Weighted-average shares and potential common shares outstanding 48,017 48,698 Earnings per share – diluted $ 1.31 $ 1.16 Antidilutive options excluded from calculation 521 270 |
Other comprehensive income (Tab
Other comprehensive income (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Reclassification adjustments | Reclassification adjustments – Information regarding amounts reclassified from accumulated other comprehensive loss to net income was as follows: Accumulated other comprehensive loss components Amounts reclassified from accumulated other comprehensive loss Affected line item in consolidated statements of comprehensive income Quarter Ended (in thousands) 2018 2017 Amortization of postretirement benefit plan items: Prior service credit $ 355 $ 355 Other income Net actuarial loss (721 ) (909 ) Other income Total amortization (366 ) (554 ) Other income Tax benefit 356 165 Income tax provision Total reclassifications, net of tax $ (10 ) $ (389 ) Net income |
Accumulated other comprehensive loss | Accumulated other comprehensive loss – Changes in the components of accumulated other comprehensive loss during the quarter ended March 31, 2018 were as follows: (in thousands) Postretirement benefit plans Net unrealized loss on marketable securities, net of tax (1) Currency translation adjustment Accumulated other comprehensive loss Balance, December 31, 2017 $ (26,829 ) $ (322 ) $ (10,446 ) $ (37,597 ) Other comprehensive loss before reclassifications — (36 ) (1,745 ) (1,781 ) Amounts reclassified from accumulated other comprehensive loss 10 — — 10 Net current-period other comprehensive income (loss) 10 (36 ) (1,745 ) (1,771 ) Adoption of ASU No. 2018-02 (6,867 ) — — (6,867 ) Balance, March 31 2018 $ (33,686 ) $ (358 ) $ (12,191 ) $ (46,235 ) (1) Other comprehensive loss before reclassifications is net of income tax benefit of $13 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Allocation of the aggregate purchase price for acquisitions completed during the current period | The following illustrates the preliminary allocation, as of March 31, 2018 , of the aggregate purchase price for the above acquisitions to the assets acquired and liabilities assumed: (in thousands) 2018 acquisitions Net tangible assets acquired and liabilities assumed (1) $ (4,244 ) Identifiable intangible assets: Customer lists/relationships 12,351 Trade name 10,000 Technology-based intangible 7,000 Total intangible assets 29,351 Goodwill 28,293 Total aggregate purchase price 53,400 Liabilities for holdback payments and contingent consideration (1,585 ) Net cash paid for 2018 acquisitions 51,815 Holdback payments for prior year acquisitions 554 Payments for acquisitions, net of cash acquired of $1,500 $ 52,369 (1) Net liabilities acquired consisted primarily of Logomix deferred income taxes. |
Fair value measurements (Tables
Fair value measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Changes in accrued contingent consideration | Changes in accrued contingent consideration during the quarter ended March 31, 2018 were as follows: (in thousands) Quarter Ended March 31, 2018 Balance, December 31, 2017 $ 3,623 Acquisition date fair value 100 Change in fair value (54 ) Payments (363 ) Balance, March 31, 2018 $ 3,306 |
Fair value of financial instruments | Information regarding the fair values of our financial instruments was as follows: Fair value measurements using March 31, 2018 Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (in thousands) Carrying value Fair value (Level 1) (Level 2) (Level 3) Measured at fair value through net income: Accrued contingent consideration $ (3,306 ) $ (3,306 ) $ — $ — $ (3,306 ) Measured at fair value through comprehensive income: Cash equivalents (funds held for customers) 15,000 15,000 15,000 — — Available-for-sale debt securities (funds held for customers) 16,189 16,189 — 16,189 — Amortized cost: Cash 67,728 67,728 67,728 — — Cash (funds held for customers) 63,751 63,751 63,751 — — Loans and notes receivable from Safeguard distributors 57,579 53,647 — — 53,647 Long-term debt (1) 740,625 740,625 — 740,625 — (1) Amounts exclude capital lease obligations. Fair value measurements using December 31, 2017 Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (in thousands) Carrying value Fair value (Level 1) (Level 2) (Level 3) Measured at fair value through net income: Accrued contingent consideration $ (3,623 ) $ (3,623 ) $ — $ — $ (3,623 ) Measured at fair value through comprehensive income: Cash equivalents (funds held for customers) 17,300 17,300 17,300 — — Available-for-sale debt securities (funds held for customers) 16,613 16,613 — 16,613 — Amortized cost: Cash 59,240 59,240 59,240 — — Cash (funds held for customers) 52,279 52,279 52,279 — — Loans and notes receivable from Safeguard distributors 46,409 44,650 — — 44,650 Long-term debt (1) 707,386 707,938 — 707,938 — (1) |
Restructuring charges (Tables)
Restructuring charges (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Components of net restructuring charges | Net restructuring charges for each period consisted of the following components: Quarter Ended (in thousands, except number of employees) 2018 2017 Severance accruals $ 844 $ 1,108 Severance reversals (135 ) (399 ) Net restructuring accruals 709 709 Other costs 1,613 284 Net restructuring charges $ 2,322 $ 993 Number of employees included in severance accruals 25 30 The net restructuring charges are reflected in the consolidated statements of comprehensive income as follows: Quarter Ended (in thousands) 2018 2017 Total cost of revenue $ 177 $ (21 ) Operating expenses 2,145 1,014 Net restructuring charges $ 2,322 $ 993 |
Restructuring accruals, initiatives summarized by year | Accruals for our restructuring initiatives, summarized by year, were as follows: (in thousands) 2018 initiatives 2017 initiatives 2016 initiatives Total Balance, December 31, 2017 $ — $ 4,348 $ 32 $ 4,380 Restructuring charges 746 98 — 844 Restructuring reversals — (130 ) (5 ) (135 ) Payments (97 ) (2,639 ) (27 ) (2,763 ) Balance, March 31, 2018 $ 649 $ 1,677 $ — $ 2,326 Cumulative amounts: Restructuring charges $ 746 $ 7,320 $ 7,801 $ 15,867 Restructuring reversals — (291 ) (750 ) (1,041 ) Payments (97 ) (5,352 ) (7,051 ) (12,500 ) Balance, March 31, 2018 $ 649 $ 1,677 $ — $ 2,326 |
Restructuring accruals, by segment | The components of our restructuring accruals, by segment, were as follows: Employee severance benefits Operating lease obligations (in thousands) Small Business Services Financial Services Direct Checks Corporate (1) Small Business Services Total Balance, December 31, 2017 $ 789 $ 1,398 $ 140 $ 2,049 $ 4 $ 4,380 Restructuring charges 522 174 — 148 — 844 Restructuring reversals (22 ) (23 ) (1 ) (89 ) — (135 ) Payments (432 ) (936 ) (89 ) (1,302 ) (4 ) (2,763 ) Balance, March 31, 2018 $ 857 $ 613 $ 50 $ 806 $ — $ 2,326 Cumulative amounts: (2) Restructuring charges $ 5,158 $ 4,276 $ 286 $ 6,065 $ 82 $ 15,867 Restructuring reversals (376 ) (98 ) (7 ) (560 ) — (1,041 ) Payments (3,925 ) (3,565 ) (229 ) (4,699 ) (82 ) (12,500 ) Balance, March 31, 2018 $ 857 $ 613 $ 50 $ 806 $ — $ 2,326 (1) As discussed in Note 14, corporate costs are allocated to our business segments. As such, the net corporate restructuring charges are reflected in the business segment operating income presented in Note 14 in accordance with our allocation methodology. (2) |
Income tax provision (Tables)
Income tax provision (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Effective income tax rate reconciliation | The effective tax rate on pre-tax income reconciles to the United States federal statutory tax rate of 21% for 2018 and 35% for 2017 as follows: Quarter Ended March 31, 2018 Year Ended December 31, 2017 Income tax at federal statutory rate 21.0 % 35.0 % State income tax expense, net of federal benefit 3.3 % 2.7 % Goodwill impairment charge — 1.5 % Impact of the Tax Cuts and Jobs Act of 2017 (0.4 %) (6.6 %) Qualified production activities deduction — (3.2 %) Net tax benefit of share-based compensation (0.8 %) (1.6 %) Other 1.0 % (1.4 %) Effective tax rate 24.1 % 26.4 % |
Postretirement benefits (Tables
Postretirement benefits (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Defined Benefit Plan [Abstract] | |
Components of net periodic benefit income | Postretirement benefit income for each period consisted of the following components: Quarter Ended (in thousands) 2018 2017 Interest cost $ 656 $ 724 Expected return on plan assets (1,934 ) (1,782 ) Amortization of prior service credit (355 ) (355 ) Amortization of net actuarial losses 721 909 Net periodic benefit income $ (912 ) $ (504 ) |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt outstanding | Debt outstanding was comprised of the following: (in thousands) March 31, December 31, Amount drawn on revolving credit facility $ 740,625 $ 413,000 Amount outstanding under term loan facility — 294,938 Capital lease obligations 1,908 1,914 Long-term debt, principal amount 742,533 709,852 Less unamortized debt issuance costs — (471 ) Less current portion of long-term debt (831 ) (44,121 ) Long-term debt 741,702 665,260 Current portion of amount drawn under term loan facility — 43,313 Current portion of capital lease obligations 831 808 Long-term debt due within one year, principal amount 831 44,121 Less unamortized debt issuance costs — (81 ) Long-term debt due within one year 831 44,040 Total debt $ 742,533 $ 709,300 |
Credit facility | Daily average amounts outstanding under our current and previous credit facility were as follows: (in thousands) Quarter Ended March 31, 2018 Year Ended December 31, 2017 Revolving credit facility: Daily average amount outstanding $ 451,682 $ 436,588 Weighted-average interest rate 2.97 % 2.55 % Term loan facility: Daily average amount outstanding $ 258,088 $ 315,862 Weighted-average interest rate 2.97 % 2.57 % As of March 31, 2018 , amounts were available for borrowing under our revolving credit facility as follows: (in thousands) Total available Revolving credit facility commitment $ 950,000 Amount drawn on revolving credit facility (740,625 ) Outstanding letters of credit (1) (10,229 ) Net available for borrowing as of March 31, 2018 $ 199,146 (1) |
Business segment information (T
Business segment information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Revenue disaggregated by product and service offerings | The following table presents revenue disaggregated by our product and service offerings: Quarter Ended March 31, 2018 (in thousands) Small Business Services Financial Services Direct Checks Consolidated Checks $ 122,932 $ 58,051 $ 29,355 $ 210,338 Marketing solutions and other services: Small business marketing solutions 66,762 — — 66,762 Web services 37,376 — — 37,376 Data-driven marketing solutions — 37,140 — 37,140 Treasury management solutions — 29,200 — 29,200 Fraud, security, risk management and operational services 6,516 12,307 3,857 22,680 Total MOS 110,654 78,647 3,857 193,158 Forms, accessories and other products 82,727 3,943 1,748 88,418 Total revenue $ 316,313 $ 140,641 $ 34,960 $ 491,914 Quarter Ended March 31, 2017 (in thousands) Small Business Services Financial Services Direct Checks Consolidated Checks $ 124,137 $ 65,375 $ 32,661 $ 222,173 Marketing solutions and other services: Small business marketing solutions 59,509 — — 59,509 Web services 30,244 — — 30,244 Data-driven marketing solutions — 32,074 — 32,074 Treasury management solutions — 22,774 — 22,774 Fraud, security, risk management and operational services 6,633 16,611 4,256 27,500 Total MOS 96,386 71,459 4,256 172,101 Forms, accessories and other products 87,600 3,960 1,932 93,492 Total revenue $ 308,123 $ 140,794 $ 38,849 $ 487,766 |
Revenue disaggregated by geography | The following table presents our revenue for the quarter ended March 31, 2018 disaggregated by geography, based on where items are shipped or services are performed. (in thousands) Small Business Services Financial Services Direct Checks Total United States $ 289,598 $ 135,166 $ 34,960 $ 459,724 Foreign, primarily Canada and Australia 26,715 5,475 — 32,190 Total revenue $ 316,313 $ 140,641 $ 34,960 $ 491,914 Foreign revenue for the quarter ended March 31, 2017 was $18,979 |
Business segment information | The following is our segment information as of and for the quarters ended March 31, 2018 and 2017 : Reportable Business Segments (in thousands) Small Business Services Financial Services Direct Checks Corporate Consolidated Total revenue from external customers: 2018 $ 316,313 $ 140,641 $ 34,960 $ — $ 491,914 2017 308,123 140,794 38,849 — 487,766 Operating income: 2018 58,900 17,973 10,835 — 87,708 2017 52,261 20,245 12,492 — 84,998 Depreciation and amortization expense: 2018 15,439 14,893 809 — 31,141 2017 14,216 14,614 807 — 29,637 Asset impairment charges: 2018 2,149 — — — 2,149 2017 5,296 — — — 5,296 Total assets: 2018 1,141,551 672,718 158,683 300,864 2,273,816 2017 1,038,659 648,066 160,105 315,459 2,162,289 Capital asset purchases: 2018 — — — 14,034 14,034 2017 — — — 11,021 11,021 |
New accounting pronouncements34
New accounting pronouncements (ASU No. 2014-09) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Jan. 01, 2018 | |
New accounting pronouncements [Line Items] | ||||
Total revenue | $ 491,914 | $ 487,766 | ||
Revenue in excess of customer billings | 24,521 | $ 16,379 | ||
Billings in excess of revenue recognized | 1,353 | 2,233 | ||
Change in deferred revenue | 1,408 | |||
Deferred revenue recognized | 20,636 | |||
Balance sheet | ||||
Other current assets | 58,907 | 55,441 | ||
Total current assets | 399,938 | 392,966 | ||
Other non-current assets | 182,823 | 159,756 | ||
Total assets | 2,273,816 | $ 2,162,289 | 2,208,827 | |
Deferred income taxes | 56,699 | 50,543 | ||
Retained earnings | 1,050,064 | 1,004,657 | ||
Total liabilities and shareholders' equity | $ 2,273,816 | 2,208,827 | ||
Minimum [Member] | ||||
New accounting pronouncements [Line Items] | ||||
Remaining performance obligations, expected timing of satisfaction | 3 months | |||
Capitalized contract costs amortization period | 3 years | |||
Maximum [Member] | ||||
New accounting pronouncements [Line Items] | ||||
Deferred revenue, period over which recognized | 1 year | |||
Remaining performance obligations, expected timing of satisfaction | 1 year | |||
Capitalized contract costs amortization period | 6 years | |||
Variable consideration [Member] | ||||
New accounting pronouncements [Line Items] | ||||
Total revenue | $ 100,000 | |||
Accounting Standards Update No. 2014-09 [Member] | ||||
New accounting pronouncements [Line Items] | ||||
Practical expedient, financing component | true | |||
Practical expedient, costs of obtaining contracts | true | |||
Balance sheet | ||||
Other current assets | $ 56,401 | |||
Total current assets | 393,926 | |||
Other non-current assets | 165,489 | |||
Total assets | 2,215,520 | |||
Deferred income taxes | 52,270 | |||
Retained earnings | 1,009,623 | |||
Total liabilities and shareholders' equity | 2,215,520 | |||
Accounting Standards Update No. 2014-09 [Member] | Other current assets [Member] | ||||
Balance sheet | ||||
New accounting pronouncement, cumulative effect of adoption | 960 | |||
Accounting Standards Update No. 2014-09 [Member] | Total current assets [Member] | ||||
Balance sheet | ||||
New accounting pronouncement, cumulative effect of adoption | 960 | |||
Accounting Standards Update No. 2014-09 [Member] | Other non-current assets [Member] | ||||
Balance sheet | ||||
New accounting pronouncement, cumulative effect of adoption | 5,733 | |||
Accounting Standards Update No. 2014-09 [Member] | Total assets [Member] | ||||
Balance sheet | ||||
New accounting pronouncement, cumulative effect of adoption | 6,693 | |||
Accounting Standards Update No. 2014-09 [Member] | Deferred income taxes [Member] | ||||
Balance sheet | ||||
New accounting pronouncement, cumulative effect of adoption | 1,727 | |||
Accounting Standards Update No. 2014-09 [Member] | Retained earnings [Member] | ||||
Balance sheet | ||||
New accounting pronouncement, cumulative effect of adoption | 4,966 | |||
Accounting Standards Update No. 2014-09 [Member] | Total liabilities and shareholders' equity [Member] | ||||
Balance sheet | ||||
New accounting pronouncement, cumulative effect of adoption | $ 6,693 |
New accounting pronouncements35
New accounting pronouncements (ASU No. 2014-09 impact of adoption) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Income statement | ||||
Service revenue | $ 128,507 | $ 115,592 | ||
Total revenue | 491,914 | 487,766 | ||
Cost of services | (55,387) | (46,781) | ||
Total cost of revenue | (188,758) | (179,314) | ||
Gross profit | 303,156 | 308,452 | ||
Selling, general and administrative expense | (211,154) | (217,144) | ||
Operating income | 87,708 | 84,998 | ||
Income before income taxes | 83,418 | 81,231 | ||
Income tax provision | (20,082) | (24,165) | ||
Net income | 63,336 | 57,066 | ||
Balance sheet | ||||
Other current assets | 58,907 | $ 55,441 | ||
Total current assets | 399,938 | 392,966 | ||
Other non-current assets | 182,823 | 159,756 | ||
Total assets | 2,273,816 | $ 2,162,289 | 2,208,827 | |
Accrued liabilities | 275,328 | 277,253 | ||
Total current liabilities | 375,633 | 425,770 | ||
Deferred income taxes | 56,699 | 50,543 | ||
Retained earnings | 1,050,064 | 1,004,657 | ||
Total liabilities and shareholders' equity | 2,273,816 | $ 2,208,827 | ||
Accounting Standards Update No. 2014-09 [Member] | ||||
Balance sheet | ||||
Other current assets | $ 56,401 | |||
Total current assets | 393,926 | |||
Other non-current assets | 165,489 | |||
Total assets | 2,215,520 | |||
Deferred income taxes | 52,270 | |||
Retained earnings | 1,009,623 | |||
Total liabilities and shareholders' equity | $ 2,215,520 | |||
Effect of adoption [Member] | Accounting Standards Update No. 2014-09 [Member] | ||||
Income statement | ||||
Service revenue | (536) | |||
Total revenue | (536) | |||
Cost of services | 255 | |||
Total cost of revenue | 255 | |||
Gross profit | (281) | |||
Selling, general and administrative expense | 516 | |||
Operating income | 235 | |||
Income before income taxes | 235 | |||
Income tax provision | (61) | |||
Net income | 174 | |||
Balance sheet | ||||
Other current assets | (1,242) | |||
Total current assets | (1,242) | |||
Other non-current assets | (5,216) | |||
Total assets | (6,458) | |||
Accrued liabilities | 61 | |||
Total current liabilities | 61 | |||
Deferred income taxes | (1,727) | |||
Retained earnings | (4,792) | |||
Total liabilities and shareholders' equity | (6,458) | |||
Balance without adoption of ASU No. 2014-09 [Member] | Accounting Standards Update No. 2014-09 [Member] | ||||
Income statement | ||||
Service revenue | 127,971 | |||
Total revenue | 491,378 | |||
Cost of services | (55,132) | |||
Total cost of revenue | (188,503) | |||
Gross profit | 302,875 | |||
Selling, general and administrative expense | (210,638) | |||
Operating income | 87,943 | |||
Income before income taxes | 83,653 | |||
Income tax provision | (20,143) | |||
Net income | 63,510 | |||
Balance sheet | ||||
Other current assets | 57,665 | |||
Total current assets | 398,696 | |||
Other non-current assets | 177,607 | |||
Total assets | 2,267,358 | |||
Accrued liabilities | 275,389 | |||
Total current liabilities | 375,694 | |||
Deferred income taxes | 54,972 | |||
Retained earnings | 1,045,272 | |||
Total liabilities and shareholders' equity | $ 2,267,358 |
New accounting pronouncements36
New accounting pronouncements (impact of other adoptions) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cost of products | $ (133,371) | $ (132,533) |
Cost of services | (55,387) | (46,781) |
Total cost of revenue | (188,758) | (179,314) |
Selling, general and administrative expense | (211,154) | (217,144) |
Operating income | 87,708 | 84,998 |
Other income | 1,289 | 1,062 |
Net income | 63,336 | 57,066 |
Retained earnings [Member] | ||
Net income | 63,336 | |
Accounting Standards Update No. 2016-16 [Member] | Retained earnings [Member] | ||
Adoption of new accounting pronouncement | 0 | |
Adoption of Accounting Standards Update No. 2018-02 [Member] | ||
Adoption of new accounting pronouncement | 0 | |
Adoption of Accounting Standards Update No. 2018-02 [Member] | Retained earnings [Member] | ||
Adoption of new accounting pronouncement | 6,867 | |
Adoption of Accounting Standards Update No. 2018-02 [Member] | Accumulated other comprehensive loss [Member] | ||
Adoption of new accounting pronouncement | (6,867) | |
Accounting Standards Update No. 2018-05 [Member] | ||
Impact of Tax Cuts and Jobs Act of 2017 | $ (310) | |
As previously reported [Member] | Accounting Standards Update No. 2017-07 [Member] | ||
Cost of products | 132,395 | |
Cost of services | (46,765) | |
Total cost of revenue | (179,160) | |
Selling, general and administrative expense | (216,794) | |
Operating income | 85,502 | |
Other income | 558 | |
Net income | 57,066 | |
Effect of adoption [Member] | Accounting Standards Update No. 2017-07 [Member] | ||
Cost of products | (138) | |
Cost of services | (16) | |
Total cost of revenue | (154) | |
Selling, general and administrative expense | (350) | |
Operating income | (504) | |
Other income | 504 | |
Net income | $ 0 |
Supplemental balance sheet in37
Supplemental balance sheet information (allowances for uncollectible accounts, inventories and supplies) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Allowances for uncollectible accounts | |||
Balance, beginning of year | $ 2,884 | $ 2,828 | |
Bad debt expense | 875 | 692 | |
Write-offs, net of recoveries | (905) | (634) | |
Balance, end of period | 2,854 | $ 2,886 | |
Inventories and supplies | |||
Raw materials | 6,949 | $ 7,357 | |
Semi-finished goods | 7,633 | 7,635 | |
Finished goods | 24,724 | 24,146 | |
Supplies | 3,078 | 3,111 | |
Inventories and supplies | $ 42,384 | $ 42,249 |
Supplemental balance sheet in38
Supplemental balance sheet information (available-for-sale debt securities) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | ||
Available-for-sale debt securities [Line Items] | ||||
Cost | $ 31,619 | $ 34,306 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | (430) | (393) | ||
Fair value | 31,189 | 33,913 | ||
Cash | 67,728 | 59,240 | ||
Expected maturities of available-for-sale debt securities | ||||
Due in one year or less | 24,760 | |||
Due in two to five years | 3,586 | |||
Due in six to ten years | 2,843 | |||
Fair value | 31,189 | 33,913 | ||
Funds held for customers [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 31,619 | [1] | 34,306 | [2] |
Gross unrealized gains | 0 | [1] | 0 | [2] |
Gross unrealized losses | (430) | [1] | (393) | [2] |
Fair value | 31,189 | [1] | 33,913 | [2] |
Cash | 63,751 | 52,279 | ||
Expected maturities of available-for-sale debt securities | ||||
Fair value | 31,189 | [1] | 33,913 | [2] |
Funds held for customers [Member] | Money market securities [Member] | Domestic [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 15,000 | 17,300 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | 0 | 0 | ||
Fair value | 15,000 | 17,300 | ||
Expected maturities of available-for-sale debt securities | ||||
Fair value | 15,000 | 17,300 | ||
Funds held for customers [Member] | Canadian and provincial government securities [Member] | Canadian [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 8,867 | 9,051 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | (430) | (393) | ||
Fair value | 8,437 | 8,658 | ||
Expected maturities of available-for-sale debt securities | ||||
Fair value | 8,437 | 8,658 | ||
Funds held for customers [Member] | Canadian guaranteed investment certificates [Member] | Canadian [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 7,752 | 7,955 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | 0 | 0 | ||
Fair value | 7,752 | 7,955 | ||
Expected maturities of available-for-sale debt securities | ||||
Fair value | $ 7,752 | $ 7,955 | ||
[1] | Funds held for customers, as reported on the consolidated balance sheet as of March 31, 2018 , also included cash of $63,751 | |||
[2] | Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2017 , also included cash of $52,279 |
Supplemental balance sheet in39
Supplemental balance sheet information (assets held for sale) (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)business | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)business | |
Assets held for sale [Line Items] | |||
Consideration received for sales of businesses | $ 10,215 | ||
Net gain on sale of businesses | $ 7,228 | $ 6,779 | |
Providers of printed and promotional products [Member] | |||
Assets held for sale [Line Items] | |||
Number of businesses held for sale | 2 | 2 | |
Small business distributors [Member] | |||
Assets held for sale [Line Items] | |||
Number of businesses held for sale | business | 1 | 2 | |
Number of businesses sold | business | 1 | ||
Non-recurring fair value measurement [Member] | |||
Assets held for sale [Line Items] | |||
Asset impairment charges | 5,296 | ||
Assets held for sale [Member] | |||
Assets held for sale [Line Items] | |||
Current assets | $ 23 | $ 4 | |
Intangibles | 8,089 | 8,459 | |
Goodwill | 2,016 | 3,566 | |
Other non-current assets | 207 | 207 | |
Net assets held for sale | $ 10,335 | $ 12,236 | |
Assets held for sale [Member] | Small business distributors [Member] | |||
Assets held for sale [Line Items] | |||
Number of businesses sold | business | 1 | ||
Assets held for sale [Member] | Non-recurring fair value measurement [Member] | |||
Assets held for sale [Line Items] | |||
Asset impairment charges | $ 5,296 |
Supplemental balance sheet in40
Supplemental balance sheet information (intangibles) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | ||
Intangibles [Line Items] | ||||
Amortizable intangibles, gross carrying amount | $ 845,256 | $ 810,099 | ||
Accumulated amortization | (470,466) | (444,933) | ||
Amortizable intangibles, net carrying amount | 374,790 | 365,166 | ||
Gross carrying amount, total | 864,356 | 829,199 | ||
Net carrying amount, total | 393,890 | 384,266 | ||
Asset impairment charge | 2,149 | $ 5,296 | ||
Amortization of intangibles | 27,466 | $ 25,555 | ||
Acquired intangibles | $ 40,843 | |||
Acquired intangibles, weighted-average amortization period (in years) | 6 years | |||
Estimated future amortization expense | ||||
Remainder of 2018 | $ 73,428 | |||
2,019 | 81,231 | |||
2,020 | 62,617 | |||
2,021 | 49,222 | |||
2,022 | 35,337 | |||
2018 acquisitions [Member] | ||||
Intangibles [Line Items] | ||||
Acquired intangibles | 29,351 | |||
Trade names [Member] | ||||
Intangibles [Line Items] | ||||
Indefinite-lived intangibles, carrying amount | 19,100 | 19,100 | ||
Internal-use software [Member] | ||||
Intangibles [Line Items] | ||||
Amortizable intangibles, gross carrying amount | 370,408 | 359,079 | ||
Accumulated amortization | (293,628) | (284,074) | ||
Amortizable intangibles, net carrying amount | 76,780 | 75,005 | ||
Acquired intangibles | $ 10,842 | |||
Acquired intangibles, weighted-average amortization period (in years) | 3 years | |||
Customer lists/relationships [Member] | ||||
Intangibles [Line Items] | ||||
Amortizable intangibles, gross carrying amount | [1] | $ 350,586 | 343,589 | |
Accumulated amortization | [1] | (133,712) | (121,729) | |
Amortizable intangibles, net carrying amount | [1] | 216,874 | 221,860 | |
Asset impairment charge | 2,149 | |||
Acquired intangibles | [2] | $ 13,001 | ||
Acquired intangibles, weighted-average amortization period (in years) | 7 years | |||
Customer lists/relationships [Member] | 2018 acquisitions [Member] | ||||
Intangibles [Line Items] | ||||
Acquired intangibles | $ 12,351 | |||
Customer lists/relationships [Member] | Asset purchase [Member] | ||||
Intangibles [Line Items] | ||||
Acquired intangibles | 650 | |||
Trade names [Member] | ||||
Intangibles [Line Items] | ||||
Amortizable intangibles, gross carrying amount | 46,762 | 36,931 | ||
Accumulated amortization | (21,204) | (19,936) | ||
Amortizable intangibles, net carrying amount | 25,558 | 16,995 | ||
Trade names [Member] | 2018 acquisitions [Member] | ||||
Intangibles [Line Items] | ||||
Acquired intangibles | $ 10,000 | |||
Acquired intangibles, weighted-average amortization period (in years) | 8 years | |||
Technology-based intangible [Member] | ||||
Intangibles [Line Items] | ||||
Amortizable intangibles, gross carrying amount | $ 38,800 | 31,800 | ||
Accumulated amortization | (8,017) | (6,400) | ||
Amortizable intangibles, net carrying amount | 30,783 | 25,400 | ||
Technology-based intangible [Member] | 2018 acquisitions [Member] | ||||
Intangibles [Line Items] | ||||
Acquired intangibles | $ 7,000 | |||
Acquired intangibles, weighted-average amortization period (in years) | 5 years | |||
Software to be sold [Member] | ||||
Intangibles [Line Items] | ||||
Amortizable intangibles, gross carrying amount | $ 36,900 | 36,900 | ||
Accumulated amortization | (12,260) | (11,204) | ||
Amortizable intangibles, net carrying amount | 24,640 | 25,696 | ||
Other [Member] | ||||
Intangibles [Line Items] | ||||
Amortizable intangibles, gross carrying amount | 1,800 | 1,800 | ||
Accumulated amortization | (1,645) | (1,590) | ||
Amortizable intangibles, net carrying amount | $ 155 | $ 210 | ||
[1] | During the first quarter of 2018, we recorded a pre-tax asset impairment charge of $2,149 | |||
[2] | Includes the purchase of a customer list for $650 that did not qualify as a business combination. |
Supplemental balance sheet in41
Supplemental balance sheet information (goodwill) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning of year | $ 1,179,313 |
Accumulated impairment charges, beginning of year | (48,379) |
Goodwill, net of accumulated impairment charges, beginning of year | 1,130,934 |
Goodwill resulting from acquisitions | 28,293 |
Measurement-period adjustments for previous acquisitions (Note 6) | 2,590 |
Currency translation adjustment | (492) |
Goodwill, gross, end of period | 1,209,704 |
Accumulated impairment charges, end of period | (48,379) |
Goodwill, net of accumulated impairment charges, end of period | 1,161,325 |
2018 acquisitions [Member] | |
Goodwill [Roll Forward] | |
Goodwill resulting from acquisitions | 28,293 |
2017 acquisitions [Member] | |
Goodwill [Roll Forward] | |
Measurement-period adjustments for previous acquisitions (Note 6) | 2,590 |
Reportable business segments [Member] | Small Business Services [Member] | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning of year | 706,568 |
Accumulated impairment charges, beginning of year | (48,379) |
Goodwill, net of accumulated impairment charges, beginning of year | 658,189 |
Currency translation adjustment | (492) |
Goodwill, gross, end of period | 734,196 |
Accumulated impairment charges, end of period | (48,379) |
Goodwill, net of accumulated impairment charges, end of period | 685,817 |
Reportable business segments [Member] | Small Business Services [Member] | 2018 acquisitions [Member] | |
Goodwill [Roll Forward] | |
Goodwill resulting from acquisitions | 28,293 |
Reportable business segments [Member] | Small Business Services [Member] | 2017 acquisitions [Member] | |
Goodwill [Roll Forward] | |
Measurement-period adjustments for previous acquisitions (Note 6) | (173) |
Reportable business segments [Member] | Financial Services [Member] | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning of year | 324,239 |
Accumulated impairment charges, beginning of year | 0 |
Goodwill, net of accumulated impairment charges, beginning of year | 324,239 |
Goodwill, gross, end of period | 327,002 |
Accumulated impairment charges, end of period | 0 |
Goodwill, net of accumulated impairment charges, end of period | 327,002 |
Reportable business segments [Member] | Financial Services [Member] | 2017 acquisitions [Member] | |
Goodwill [Roll Forward] | |
Measurement-period adjustments for previous acquisitions (Note 6) | 2,763 |
Reportable business segments [Member] | Direct Checks [Member] | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning of year | 148,506 |
Accumulated impairment charges, beginning of year | 0 |
Goodwill, net of accumulated impairment charges, beginning of year | 148,506 |
Goodwill, gross, end of period | 148,506 |
Accumulated impairment charges, end of period | 0 |
Goodwill, net of accumulated impairment charges, end of period | $ 148,506 |
Supplemental balance sheet in42
Supplemental balance sheet information (other) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||||||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | |||||
Other non-current assets | ||||||||
Prepaid product discounts | $ 63,895 | [1] | $ 65,792 | $ 65,954 | [1] | $ 63,895 | [1] | |
Loans and notes receivable from Safeguard distributors | 55,648 | 44,276 | ||||||
Postretirement benefit plan asset | 42,224 | 39,849 | ||||||
Deferred advertising costs | 5,924 | 6,135 | ||||||
Deferred sales commissions | [2] | 5,216 | 0 | |||||
Other | 7,857 | 5,601 | ||||||
Other non-current assets | 182,823 | 159,756 | ||||||
Amortization of deferred sales commissions | 694 | |||||||
Prepaid product discounts [Roll Forward] | ||||||||
Balance, beginning of year | 63,895 | [1] | 65,792 | |||||
Additions | [3] | 7,492 | 4,043 | |||||
Amortization | (5,408) | (4,967) | ||||||
Other | (25) | (76) | ||||||
Balance, end of period | 65,954 | [1] | 64,792 | |||||
Prepaid product discount payments | $ 5,364 | $ 6,099 | ||||||
Accrued liabilities | ||||||||
Funds held for customers | 93,867 | 85,091 | ||||||
Deferred revenue | 49,630 | 47,021 | ||||||
Acquisition-related liabilities | [4] | 24,893 | 23,878 | |||||
Income tax | 19,204 | 17,827 | ||||||
Prepaid product discounts due within one year | [5] | 15,510 | 11,670 | |||||
Employee profit sharing/cash bonus | 12,358 | 31,312 | ||||||
Customer rebates | 10,856 | 11,508 | ||||||
Restructuring due within one year (Note 8) | 2,326 | 4,380 | ||||||
Other | 46,684 | 44,566 | ||||||
Accrued liabilities | 275,328 | 277,253 | ||||||
Other non-current liabilities | ||||||||
Prepaid product discounts | [6] | 19,922 | 21,658 | |||||
Other | 28,190 | 30,583 | ||||||
Other non-current liabilities | $ 48,112 | $ 52,241 | ||||||
[1] | In our prior period financial statements, we referred to this asset as contract acquisition costs. | |||||||
[2] | Amortization of deferred sales commissions was $694 for the quarter ended March 31, 2018 | |||||||
[3] | Prepaid product discounts are accrued upon contract execution. Cash payments made for prepaid product discounts were $5,364 for the quarter ended March 31, 2018 and $6,099 for the quarter ended March 31, 2017 | |||||||
[4] | Consists of holdback payments due at future dates and liabilities for contingent consideration. Further information regarding liabilities for contingent consideration can be found in Note 7. | |||||||
[5] | In our prior period financial statements, we referred to this liability as contract acquisition costs due within one year. | |||||||
[6] | In our prior period financial statements, we referred to this liability as contract acquisition costs. |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings per share - basic: | ||
Net income | $ 63,336 | $ 57,066 |
Income allocated to participating securities | (286) | (406) |
Income available to common shareholders | $ 63,050 | $ 56,660 |
Weighted-average shares outstanding | 47,755 | 48,324 |
Earnings per share - basic | $ 1.32 | $ 1.17 |
Earnings per share - diluted: | ||
Net income | $ 63,336 | $ 57,066 |
Income allocated to participating securities | (285) | (404) |
Re-measurement of share-based awards classified as liabilities | (85) | (4) |
Income available to common shareholders | $ 62,966 | $ 56,658 |
Weighted-average shares outstanding | 47,755 | 48,324 |
Dilutive impact of potential common shares | 262 | 374 |
Weighted-average shares and potential common shares outstanding | 48,017 | 48,698 |
Earnings per share - diluted | $ 1.31 | $ 1.16 |
Antidilutive options excluded from calculation | 521 | 270 |
Other comprehensive income (rec
Other comprehensive income (reclassification adjustments) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Prior service credit [Member] | ||
Reclassification adjustments [Line Items] | ||
Amortization of postretirement benefit plan items | $ 355 | $ 355 |
Net actuarial loss [Member] | ||
Reclassification adjustments [Line Items] | ||
Amortization of postretirement benefit plan items | (721) | (909) |
Postretirement benefit plans [Member] | ||
Reclassification adjustments [Line Items] | ||
Amortization of postretirement benefit plan items | (366) | (554) |
Tax benefit | 356 | 165 |
Total reclassifications, net of tax | $ (10) | $ (389) |
Other comprehensive income (acc
Other comprehensive income (accumulated other comprehensive loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Accumulated other comprehensive loss [Line Items] | |||
Balance, beginning of year | $ 1,015,013 | ||
Net current-period other comprehensive income (loss) | (1,771) | ||
Balance, end of period | 1,051,670 | ||
Adoption of Accounting Standards Update No. 2018-02 [Member] | |||
Accumulated other comprehensive loss [Line Items] | |||
Adoption of ASU No. 2018-02 | 0 | ||
Postretirement benefit plans [Member] | |||
Accumulated other comprehensive loss [Line Items] | |||
Balance, beginning of year | (26,829) | ||
Other comprehensive loss before reclassifications | 0 | ||
Amounts reclassified from accumulated other comprehensive loss | 10 | $ 389 | |
Net current-period other comprehensive income (loss) | 10 | ||
Balance, end of period | (33,686) | ||
Postretirement benefit plans [Member] | Adoption of Accounting Standards Update No. 2018-02 [Member] | |||
Accumulated other comprehensive loss [Line Items] | |||
Adoption of ASU No. 2018-02 | (6,867) | ||
Net unrealized loss on marketable securities, net of tax [Member] | |||
Accumulated other comprehensive loss [Line Items] | |||
Balance, beginning of year | [1] | (322) | |
Other comprehensive loss before reclassifications | [1] | (36) | |
Amounts reclassified from accumulated other comprehensive loss | [1] | 0 | |
Net current-period other comprehensive income (loss) | [1] | (36) | |
Balance, end of period | [1] | (358) | |
Unrealized holding loss on securities arising during the period, tax | 13 | ||
Currency translation adjustment [Member] | |||
Accumulated other comprehensive loss [Line Items] | |||
Balance, beginning of year | (10,446) | ||
Other comprehensive loss before reclassifications | (1,745) | ||
Amounts reclassified from accumulated other comprehensive loss | 0 | ||
Net current-period other comprehensive income (loss) | (1,745) | ||
Balance, end of period | (12,191) | ||
Accumulated other comprehensive loss [Member] | |||
Accumulated other comprehensive loss [Line Items] | |||
Balance, beginning of year | (37,597) | ||
Other comprehensive loss before reclassifications | (1,781) | ||
Amounts reclassified from accumulated other comprehensive loss | 10 | ||
Balance, end of period | (46,235) | ||
Accumulated other comprehensive loss [Member] | Adoption of Accounting Standards Update No. 2018-02 [Member] | |||
Accumulated other comprehensive loss [Line Items] | |||
Adoption of ASU No. 2018-02 | $ (6,867) | ||
[1] | Other comprehensive loss before reclassifications is net of income tax benefit of $13 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)business | Mar. 31, 2017USD ($) | ||
Acquisitions [Line Items] | |||
Identifiable intangible assets acquired | $ 40,843 | ||
Goodwill | 28,293 | ||
Payments for acquisitions, net of cash acquired | 52,369 | $ 5,239 | |
Holdback payments for prior year acquisitions | 554 | 2,152 | |
Measurement period adjustments to goodwill | 2,590 | ||
Customer lists/relationships [Member] | |||
Acquisitions [Line Items] | |||
Identifiable intangible assets acquired | [1] | 13,001 | |
Internal-use software [Member] | |||
Acquisitions [Line Items] | |||
Identifiable intangible assets acquired | 10,842 | ||
Logomix Inc. [Member] | Small Business Services [Member] | |||
Acquisitions [Line Items] | |||
Goodwill | $ 28,293 | ||
Small business distributors [Member] | Small Business Services [Member] | |||
Acquisitions [Line Items] | |||
Number of businesses acquired | business | 2 | ||
2018 acquisitions [Member] | |||
Acquisitions [Line Items] | |||
Net tangible assets acquired and liabilities assumed | [2] | $ (4,244) | |
Identifiable intangible assets acquired | 29,351 | ||
Goodwill | 28,293 | ||
Total aggregate purchase price | 53,400 | ||
Liabilities for holdback payments and contingent consideration | (1,585) | ||
Payments for acquisitions, net of cash acquired | 51,815 | ||
Cash acquired | 1,500 | ||
2018 acquisitions [Member] | Customer lists/relationships [Member] | |||
Acquisitions [Line Items] | |||
Identifiable intangible assets acquired | 12,351 | ||
2018 acquisitions [Member] | Trade names [Member] | |||
Acquisitions [Line Items] | |||
Identifiable intangible assets acquired | 10,000 | ||
2018 acquisitions [Member] | Technology-based intangible [Member] | |||
Acquisitions [Line Items] | |||
Identifiable intangible assets acquired | 7,000 | ||
2017 acquisitions [Member] | |||
Acquisitions [Line Items] | |||
Payments for acquisitions, net of cash acquired | $ 3,087 | ||
Measurement period adjustments to goodwill | 2,590 | ||
2017 acquisitions [Member] | Customer lists/relationships [Member] | |||
Acquisitions [Line Items] | |||
Measurement period adjustments to intangibles | (1,041) | ||
2017 acquisitions [Member] | Internal-use software [Member] | |||
Acquisitions [Line Items] | |||
Measurement period adjustments to intangibles | $ 1,000 | ||
[1] | Includes the purchase of a customer list for $650 that did not qualify as a business combination. | ||
[2] | Net liabilities acquired consisted primarily of Logomix deferred income taxes. |
Fair value measurements (non-re
Fair value measurements (non-recurring fair value measurements) (Details) - Non-recurring fair value measurement [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Non-recurring fair value measurements [Line Items] | ||
Asset impairment charges, assets held for sale | $ 5,296 | |
Customer lists/relationships [Member] | ||
Non-recurring fair value measurements [Line Items] | ||
Asset impairment charges, assets held-for-use | $ 2,149 | |
Significant unobservable inputs (Level 3) [Member] | ||
Non-recurring fair value measurements [Line Items] | ||
Estimated fair value of disposal group | $ 5,000 | |
Significant unobservable inputs (Level 3) [Member] | Customer lists/relationships [Member] | ||
Non-recurring fair value measurements [Line Items] | ||
Estimated fair value, intangibles | $ 0 |
Fair value measurements (recurr
Fair value measurements (recurring fair value measurements) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Accrued contingent consideration [Member] | |
Change in accrued contingent consideration | |
Balance, beginning of year | $ 3,623 |
Acquisition date fair value | 100 |
Change in fair value | (54) |
Payments | (363) |
Balance, end of period | $ 3,306 |
Funds held for customers [Member] | Guaranteed investment certificates [Member] | Canadian [Member] | |
Recurring fair value measurements [Line Items] | |
Maximum maturity period, debt securities | 1 year |
Fair value measurements (financ
Fair value measurements (financial instruments) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018 | Dec. 31, 2017 | ||||
Fair value measurements, financial instruments [Line Items] | |||||
Accrued contingent consideration | $ (3,306) | $ (3,623) | |||
Available-for-sale debt securities | 31,189 | 33,913 | |||
Cash | 67,728 | 59,240 | |||
Cash, fair value | 67,728 | 59,240 | |||
Loans and notes receivable from Safeguard distributors | 57,579 | 46,409 | |||
Loans and notes receivable from Safeguard distributors, fair value | 53,647 | 44,650 | |||
Long-term debt | [1] | 740,625 | 707,386 | ||
Long-term debt, fair value | [1] | 740,625 | 707,938 | ||
Recurring fair value measurements [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Accrued contingent consideration | (3,306) | (3,623) | |||
Transfers between fair value levels | 0 | ||||
Quoted prices in active markets for identical assets (Level 1) [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Cash, fair value | 67,728 | 59,240 | |||
Loans and notes receivable from Safeguard distributors, fair value | 0 | 0 | |||
Long-term debt, fair value | [1] | 0 | 0 | ||
Quoted prices in active markets for identical assets (Level 1) [Member] | Recurring fair value measurements [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Accrued contingent consideration | 0 | 0 | |||
Fair Value, Inputs, Level 2 [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Cash, fair value | 0 | 0 | |||
Loans and notes receivable from Safeguard distributors, fair value | 0 | 0 | |||
Long-term debt, fair value | [1] | 740,625 | 707,938 | ||
Fair Value, Inputs, Level 2 [Member] | Recurring fair value measurements [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Accrued contingent consideration | 0 | 0 | |||
Significant unobservable inputs (Level 3) [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Cash, fair value | 0 | 0 | |||
Loans and notes receivable from Safeguard distributors, fair value | 53,647 | 44,650 | |||
Long-term debt, fair value | [1] | 0 | 0 | ||
Significant unobservable inputs (Level 3) [Member] | Recurring fair value measurements [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Accrued contingent consideration | (3,306) | (3,623) | |||
Funds held for customers [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Available-for-sale debt securities | 31,189 | [2] | 33,913 | [3] | |
Cash | 63,751 | 52,279 | |||
Cash, fair value | 63,751 | 52,279 | |||
Funds held for customers [Member] | Money market securities [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Cash equivalents | 15,000 | 17,300 | |||
Funds held for customers [Member] | Foreign debt securities [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Available-for-sale debt securities | 16,189 | 16,613 | |||
Funds held for customers [Member] | Recurring fair value measurements [Member] | Money market securities [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Cash equivalents | 15,000 | 17,300 | |||
Funds held for customers [Member] | Recurring fair value measurements [Member] | Foreign debt securities [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Available-for-sale debt securities | 16,189 | 16,613 | |||
Funds held for customers [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Cash, fair value | 63,751 | 52,279 | |||
Funds held for customers [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Recurring fair value measurements [Member] | Money market securities [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Cash equivalents | 15,000 | 17,300 | |||
Funds held for customers [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Recurring fair value measurements [Member] | Foreign debt securities [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Available-for-sale debt securities | 0 | 0 | |||
Funds held for customers [Member] | Fair Value, Inputs, Level 2 [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Cash, fair value | 0 | 0 | |||
Funds held for customers [Member] | Fair Value, Inputs, Level 2 [Member] | Recurring fair value measurements [Member] | Money market securities [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Cash equivalents | 0 | 0 | |||
Funds held for customers [Member] | Fair Value, Inputs, Level 2 [Member] | Recurring fair value measurements [Member] | Foreign debt securities [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Available-for-sale debt securities | 16,189 | 16,613 | |||
Funds held for customers [Member] | Significant unobservable inputs (Level 3) [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Cash, fair value | 0 | 0 | |||
Funds held for customers [Member] | Significant unobservable inputs (Level 3) [Member] | Recurring fair value measurements [Member] | Money market securities [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Cash equivalents | 0 | 0 | |||
Funds held for customers [Member] | Significant unobservable inputs (Level 3) [Member] | Recurring fair value measurements [Member] | Foreign debt securities [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Available-for-sale debt securities | $ 0 | $ 0 | |||
[1] | Amounts exclude capital lease obligations. | ||||
[2] | Funds held for customers, as reported on the consolidated balance sheet as of March 31, 2018 , also included cash of $63,751 | ||||
[3] | Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2017 , also included cash of $52,279 |
Restructuring charges (Details)
Restructuring charges (Details) $ in Thousands | 3 Months Ended | 27 Months Ended | |||
Mar. 31, 2018USD ($)Employees | Mar. 31, 2017USD ($)Employees | Mar. 31, 2018USD ($)Employees | Dec. 31, 2017USD ($) | ||
Restructuring charges [Line Items] | |||||
Restructuring charges | $ 2,322 | $ 993 | |||
Number of employees in severance accruals | Employees | 25 | 30 | |||
Other restructuring charges disclosures | |||||
Restructuring accruals, total | $ 2,326 | $ 2,326 | $ 4,380 | ||
Number of employees that have not started to receive severance benefits | Employees | 10 | 10 | |||
Total cost of revenue [Member] | |||||
Restructuring charges [Line Items] | |||||
Net restructuring accruals | $ 177 | $ (21) | |||
Operating expenses [Member] | |||||
Restructuring charges [Line Items] | |||||
Net restructuring accruals | 2,145 | 1,014 | |||
Severance [Member] | |||||
Restructuring charges [Line Items] | |||||
Restructuring charges | 844 | 1,108 | |||
Restructuring reversals | (135) | (399) | |||
Net restructuring accruals [Member] | |||||
Restructuring charges [Line Items] | |||||
Restructuring charges | 844 | $ 15,867 | [1] | ||
Restructuring reversals | (135) | (1,041) | [1] | ||
Net restructuring accruals | 709 | 709 | |||
Other restructuring charges disclosures | |||||
Restructuring accruals, total | 2,326 | $ 2,326 | $ 4,380 | ||
Other costs [Member] | |||||
Restructuring charges [Line Items] | |||||
Restructuring charges | $ 1,613 | $ 284 | |||
[1] | Includes accruals related to our cost reduction initiatives for 2016 through 2018. |
Restructuring charges (restruct
Restructuring charges (restructuring accruals by year and by segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 15 Months Ended | 27 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2018 | |||
Restructuring accruals [Line Items] | ||||||
Balance, beginning of year | $ 4,380 | |||||
Restructuring charges | 2,322 | $ 993 | ||||
Balance, end of period | 2,326 | $ 2,326 | $ 2,326 | |||
Employee severance benefits [Member] | ||||||
Restructuring accruals [Line Items] | ||||||
Restructuring charges | 844 | 1,108 | ||||
Restructuring reversals | (135) | $ (399) | ||||
Employee severance benefits [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||
Restructuring accruals [Line Items] | ||||||
Balance, beginning of year | 789 | |||||
Restructuring charges | 522 | 5,158 | [1] | |||
Restructuring reversals | (22) | (376) | [1] | |||
Payments | (432) | (3,925) | [1] | |||
Balance, end of period | 857 | 857 | 857 | |||
Employee severance benefits [Member] | Reportable business segments [Member] | Financial Services [Member] | ||||||
Restructuring accruals [Line Items] | ||||||
Balance, beginning of year | 1,398 | |||||
Restructuring charges | 174 | 4,276 | [1] | |||
Restructuring reversals | (23) | (98) | [1] | |||
Payments | (936) | (3,565) | [1] | |||
Balance, end of period | 613 | 613 | 613 | |||
Employee severance benefits [Member] | Reportable business segments [Member] | Direct Checks [Member] | ||||||
Restructuring accruals [Line Items] | ||||||
Balance, beginning of year | 140 | |||||
Restructuring charges | 0 | 286 | [1] | |||
Restructuring reversals | (1) | (7) | [1] | |||
Payments | (89) | (229) | [1] | |||
Balance, end of period | 50 | 50 | 50 | |||
Employee severance benefits [Member] | Corporate [Member] | ||||||
Restructuring accruals [Line Items] | ||||||
Balance, beginning of year | [2] | 2,049 | ||||
Restructuring charges | [2] | 148 | 6,065 | [1] | ||
Restructuring reversals | [2] | (89) | (560) | [1] | ||
Payments | [2] | (1,302) | (4,699) | [1] | ||
Balance, end of period | [2] | 806 | 806 | 806 | ||
Operating lease obligations [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||
Restructuring accruals [Line Items] | ||||||
Balance, beginning of year | 4 | |||||
Restructuring charges | 0 | 82 | [1] | |||
Restructuring reversals | 0 | 0 | [1] | |||
Payments | (4) | (82) | [1] | |||
Balance, end of period | 0 | 0 | 0 | |||
Employee severance and operating lease obligations [Member] | ||||||
Restructuring accruals [Line Items] | ||||||
Balance, beginning of year | 4,380 | |||||
Restructuring charges | 844 | 15,867 | [1] | |||
Restructuring reversals | (135) | (1,041) | [1] | |||
Payments | (2,763) | (12,500) | [1] | |||
Balance, end of period | 2,326 | 2,326 | 2,326 | |||
Employee severance and operating lease obligations [Member] | 2018 initiatives [Member] | ||||||
Restructuring accruals [Line Items] | ||||||
Balance, beginning of year | 0 | |||||
Restructuring charges | 746 | |||||
Restructuring reversals | 0 | |||||
Payments | (97) | |||||
Balance, end of period | 649 | 649 | 649 | |||
Employee severance and operating lease obligations [Member] | 2017 initiatives [Member] | ||||||
Restructuring accruals [Line Items] | ||||||
Balance, beginning of year | 4,348 | |||||
Restructuring charges | 98 | 7,320 | ||||
Restructuring reversals | (130) | (291) | ||||
Payments | (2,639) | (5,352) | ||||
Balance, end of period | 1,677 | 1,677 | 1,677 | |||
Employee severance and operating lease obligations [Member] | 2016 initiatives [Member] | ||||||
Restructuring accruals [Line Items] | ||||||
Balance, beginning of year | 32 | |||||
Restructuring charges | 0 | 7,801 | ||||
Restructuring reversals | (5) | (750) | ||||
Payments | (27) | (7,051) | ||||
Balance, end of period | $ 0 | $ 0 | $ 0 | |||
[1] | Includes accruals related to our cost reduction initiatives for 2016 through 2018. | |||||
[2] | As discussed in Note 14, corporate costs are allocated to our business segments. As such, the net corporate restructuring charges are reflected in the business segment operating income presented in Note 14 in accordance with our allocation methodology. |
Income tax provision (Details)
Income tax provision (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of effective tax rate | ||
Income at federal statutory rate | 21.00% | 35.00% |
State income tax, net of federal benefit | 3.30% | 2.70% |
Goodwill impairment charge | 0.00% | 1.50% |
Impact of the Tax Cuts and Jobs Act of 2017 | (0.40%) | (6.60%) |
Qualified production activities deduction | 0.00% | (3.20%) |
Net tax benefit of share-based compensation | (0.80%) | (1.60%) |
Other | 1.00% | (1.40%) |
Effective tax rate | 24.10% | 26.40% |
Postretirement benefits (Detail
Postretirement benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net periodic benefit income | ||
Interest cost | $ 656 | $ 724 |
Expected return on plan assets | (1,934) | (1,782) |
Amortization of prior service credit | (355) | (355) |
Amortization of net actuarial losses | 721 | 909 |
Net periodic benefit income | $ (912) | $ (504) |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | ||
Debt instruments [Line Items] | |||
Capital lease obligations | $ 1,908 | $ 1,914 | |
Long-term debt, principal amount | 742,533 | 709,852 | |
Less unamortized debt issuance costs | 0 | (471) | |
Current portion of long-term debt | (831) | (44,121) | |
Long-term debt | 741,702 | 665,260 | |
Less unamortized debt issuance costs | 0 | (81) | |
Long-term debt due within one year | 831 | 44,040 | |
Total debt | $ 742,533 | 709,300 | |
Revolving credit facility, maturity date | Mar. 21, 2023 | ||
Ratio of total debt less unrestricted cash to EBITDA | 2.75 | ||
Capital lease obligations, maturity date | Nov. 30, 2021 | ||
Revolving credit facility [Member] | |||
Debt instruments [Line Items] | |||
Debt, principal amount | $ 740,625 | $ 413,000 | |
Revolving credit facility, current commitment | 950,000 | ||
Revolving credit facility, maximum commitment | $ 1,425,000 | ||
Interest rate at period end | 2.99% | 2.98% | |
Daily average amount outstanding | $ 451,682 | $ 436,588 | |
Weighted-average interest rate | 2.97% | 2.55% | |
Outstanding letters of credit | [1] | $ (10,229) | |
Net available for borrowing as of March 31, 2018 | $ 199,146 | ||
Revolving credit facility [Member] | Minimum [Member] | |||
Debt instruments [Line Items] | |||
Revolving credit facility, commitment fee | 0.175% | ||
Revolving credit facility [Member] | Maximum [Member] | |||
Debt instruments [Line Items] | |||
Revolving credit facility, commitment fee | 0.35% | ||
Term loan facility [Member] | |||
Debt instruments [Line Items] | |||
Debt, principal amount | $ 0 | $ 294,938 | |
Current portion of long-term debt | 0 | $ (43,313) | |
Interest rate at period end | 2.99% | ||
Daily average amount outstanding | $ 258,088 | $ 315,862 | |
Weighted-average interest rate | 2.97% | 2.57% | |
Capital lease obligations [Member] | |||
Debt instruments [Line Items] | |||
Current portion of long-term debt | $ (831) | $ (808) | |
[1] | We use standby letters of credit to collateralize certain obligations related primarily to our self-insured workers’ compensation claims, as well as claims for environmental matters, as required by certain states. These letters of credit reduce the amount available for borrowing under our revolving credit facility. |
Other commitments and conting55
Other commitments and contingencies (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Environmental matters [Line Items] | ||
Accruals for environmental matters | $ 2,517 | $ 2,646 |
Self-insurance | ||
Self-insurance liabilities | 7,597 | $ 7,679 |
Environmental insurance policy purchased during 2002 [Member] | ||
Environmental matters [Line Items] | ||
Environmental insurance coverage | 10,000 | |
Environmental insurance policy purchased during 2009 [Member] | ||
Environmental matters [Line Items] | ||
Environmental insurance coverage | 15,000 | |
Environmental insurance policies in effect [Member] | ||
Environmental matters [Line Items] | ||
Accruals for environmental matters | $ 0 |
Shareholders' equity (Details)
Shareholders' equity (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | May 04, 2016 | |
Stockholders' Equity Note [Abstract] | |||
Common shares repurchased (in shares) | 278 | ||
Payments for common shares repurchased | $ 19,996 | $ 15,002 | |
Share repurchase program, authorized amount | $ 300,000 | ||
Amount remaining under share repurchase authorization | $ 219,731 |
Business segment information (d
Business segment information (disaggregated revenue information) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017 | |
Disaggregated revenue information | |||
Number of reportable business segments | 3 | ||
Total revenue from external customers | $ 491,914 | $ 487,766 | |
Product revenue | 363,407 | 372,174 | |
Service revenue | 128,507 | 115,592 | |
United States [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 459,724 | ||
Foreign, primarily Canada and Australia [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 32,190 | ||
Small Business Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 316,313 | 308,123 | |
Small Business Services [Member] | United States [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 289,598 | ||
Small Business Services [Member] | Foreign, primarily Canada and Australia [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 26,715 | 18,979 | |
Financial Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 140,641 | 140,794 | |
Financial Services [Member] | United States [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 135,166 | ||
Financial Services [Member] | Foreign, primarily Canada and Australia [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 5,475 | ||
Direct Checks [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 34,960 | 38,849 | |
Direct Checks [Member] | United States [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 34,960 | ||
Direct Checks [Member] | Foreign, primarily Canada and Australia [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 0 | ||
Checks [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 210,338 | 222,173 | |
Checks [Member] | Small Business Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 122,932 | 124,137 | |
Checks [Member] | Financial Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 58,051 | 65,375 | |
Checks [Member] | Direct Checks [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 29,355 | 32,661 | |
Small business marketing solutions [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 66,762 | 59,509 | |
Small business marketing solutions [Member] | Small Business Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 66,762 | 59,509 | |
Small business marketing solutions [Member] | Financial Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 0 | 0 | |
Small business marketing solutions [Member] | Direct Checks [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 0 | 0 | |
Web services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 37,376 | 30,244 | |
Web services [Member] | Small Business Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 37,376 | 30,244 | |
Web services [Member] | Financial Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 0 | 0 | |
Web services [Member] | Direct Checks [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 0 | 0 | |
Data-driven marketing solutions [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 37,140 | 32,074 | |
Data-driven marketing solutions [Member] | Small Business Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 0 | 0 | |
Data-driven marketing solutions [Member] | Financial Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 37,140 | 32,074 | |
Data-driven marketing solutions [Member] | Direct Checks [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 0 | 0 | |
Treasury management solutions [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 29,200 | 22,774 | |
Treasury management solutions [Member] | Small Business Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 0 | 0 | |
Treasury management solutions [Member] | Financial Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 29,200 | 22,774 | |
Treasury management solutions [Member] | Direct Checks [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 0 | 0 | |
Fraud, security, risk management and operational services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 22,680 | 27,500 | |
Fraud, security, risk management and operational services [Member] | Small Business Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 6,516 | 6,633 | |
Fraud, security, risk management and operational services [Member] | Financial Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 12,307 | 16,611 | |
Fraud, security, risk management and operational services [Member] | Direct Checks [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 3,857 | 4,256 | |
Total MOS [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 193,158 | 172,101 | |
Product revenue | 64,651 | ||
Service revenue | 128,507 | ||
Total MOS [Member] | Small Business Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 110,654 | 96,386 | |
Total MOS [Member] | Financial Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 78,647 | 71,459 | |
Total MOS [Member] | Direct Checks [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 3,857 | 4,256 | |
Forms, accessories and other products [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 88,418 | 93,492 | |
Forms, accessories and other products [Member] | Small Business Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 82,727 | 87,600 | |
Forms, accessories and other products [Member] | Financial Services [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | 3,943 | 3,960 | |
Forms, accessories and other products [Member] | Direct Checks [Member] | |||
Disaggregated revenue information | |||
Total revenue from external customers | $ 1,748 | $ 1,932 | |
Product concentration risk [Member] | Checks [Member] | Small Business Services [Member] | |||
Disaggregated revenue information | |||
Concentration risk, percentage | 39.00% | ||
Product concentration risk [Member] | Checks [Member] | Financial Services [Member] | |||
Disaggregated revenue information | |||
Concentration risk, percentage | 43.00% | ||
Product concentration risk [Member] | Checks [Member] | Direct Checks [Member] | |||
Disaggregated revenue information | |||
Concentration risk, percentage | 84.00% | ||
Product concentration risk [Member] | Total MOS [Member] | Small Business Services [Member] | |||
Disaggregated revenue information | |||
Concentration risk, percentage | 34.00% | ||
Product concentration risk [Member] | Total MOS [Member] | Financial Services [Member] | |||
Disaggregated revenue information | |||
Concentration risk, percentage | 55.00% | ||
Product concentration risk [Member] | Total MOS [Member] | Direct Checks [Member] | |||
Disaggregated revenue information | |||
Concentration risk, percentage | 11.00% |
Business segment information 58
Business segment information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Business segment information [Line Items] | |||
Total revenue from external customers | $ 491,914 | $ 487,766 | |
Operating income: | 87,708 | 84,998 | |
Depreciation and amortization expense: | 31,141 | 29,637 | |
Asset impairment charges | 2,149 | 5,296 | |
Total assets: | 2,273,816 | 2,162,289 | $ 2,208,827 |
Capital asset purchases: | 14,034 | 11,021 | |
Small Business Services [Member] | |||
Business segment information [Line Items] | |||
Total revenue from external customers | 316,313 | 308,123 | |
Financial Services [Member] | |||
Business segment information [Line Items] | |||
Total revenue from external customers | 140,641 | 140,794 | |
Direct Checks [Member] | |||
Business segment information [Line Items] | |||
Total revenue from external customers | 34,960 | 38,849 | |
Reportable Business Segments [Member] | Small Business Services [Member] | |||
Business segment information [Line Items] | |||
Total revenue from external customers | 316,313 | 308,123 | |
Operating income: | 58,900 | 52,261 | |
Depreciation and amortization expense: | 15,439 | 14,216 | |
Asset impairment charges | 2,149 | 5,296 | |
Total assets: | 1,141,551 | 1,038,659 | |
Capital asset purchases: | 0 | 0 | |
Reportable Business Segments [Member] | Financial Services [Member] | |||
Business segment information [Line Items] | |||
Total revenue from external customers | 140,641 | 140,794 | |
Operating income: | 17,973 | 20,245 | |
Depreciation and amortization expense: | 14,893 | 14,614 | |
Asset impairment charges | 0 | 0 | |
Total assets: | 672,718 | 648,066 | |
Capital asset purchases: | 0 | 0 | |
Reportable Business Segments [Member] | Direct Checks [Member] | |||
Business segment information [Line Items] | |||
Total revenue from external customers | 34,960 | 38,849 | |
Operating income: | 10,835 | 12,492 | |
Depreciation and amortization expense: | 809 | 807 | |
Asset impairment charges | 0 | 0 | |
Total assets: | 158,683 | 160,105 | |
Capital asset purchases: | 0 | 0 | |
Corporate [Member] | |||
Business segment information [Line Items] | |||
Total revenue from external customers | 0 | 0 | |
Operating income: | 0 | 0 | |
Depreciation and amortization expense: | 0 | 0 | |
Asset impairment charges | 0 | 0 | |
Total assets: | 300,864 | 315,459 | |
Capital asset purchases: | $ 14,034 | $ 11,021 |