Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 17, 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 | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 46,306,669 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 57,851 | $ 59,240 |
Trade accounts receivable, net of allowances for uncollectible accounts | 157,139 | 149,844 |
Inventories and supplies | 45,118 | 42,249 |
Funds held for customers | 84,407 | 86,192 |
Revenue in excess of billings | 33,735 | 16,379 |
Other current assets | 39,092 | 39,062 |
Total current assets | 417,342 | 392,966 |
Deferred income taxes | 1,606 | 1,428 |
Long-term investments | 43,520 | 42,607 |
Property, plant and equipment (net of accumulated depreciation of $364,510 and $358,020, respectively) | 83,507 | 84,638 |
Assets held for sale | 3,250 | 12,232 |
Intangibles (net of accumulated amortization of $524,499 and $444,933, respectively) | 396,641 | 384,266 |
Goodwill | 1,125,954 | 1,130,934 |
Other non-current assets | 195,547 | 159,756 |
Total assets | 2,267,367 | 2,208,827 |
Current liabilities: | ||
Accounts payable | 97,991 | 104,477 |
Accrued liabilities | 234,529 | 277,253 |
Long-term debt due within one year | 785 | 44,040 |
Total current liabilities | 333,305 | 425,770 |
Long-term debt | 890,098 | 665,260 |
Deferred income taxes | 46,339 | 50,543 |
Other non-current liabilities | 42,330 | 52,241 |
Commitments and contingencies (Notes 11 and 12) | ||
Shareholders' equity: | ||
Common shares $1 par value (authorized: 500,000 shares; outstanding: September 30, 2018 - 46,305; December 31, 2017 - 47,953) | 46,305 | 47,953 |
Retained earnings | 957,979 | 1,004,657 |
Accumulated other comprehensive loss | (48,989) | (37,597) |
Total shareholders' equity | 955,295 | 1,015,013 |
Total liabilities and shareholders' equity | $ 2,267,367 | $ 2,208,827 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
ASSETS | ||
Accumulated depreciation | $ 364,510 | $ 358,020 |
Accumulated amortization | $ 524,499 | $ 444,933 |
Shareholders' equity: | ||
Common stock, par value (per share) | $ 1 | $ 1 |
Common stock, shares authorized | 500,000 | 500,000 |
Common stock, shares outstanding | 46,305 | 47,953 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Total revenue | $ 493,190 | $ 497,669 | $ 1,473,349 | $ 1,470,666 |
Cost of revenue | (197,634) | (193,071) | (576,594) | (551,752) |
Gross profit | 295,556 | 304,598 | 896,755 | 918,914 |
Selling, general and administrative expense | (208,533) | (203,349) | (629,272) | (629,150) |
Net restructuring charges | (5,104) | (1,242) | (13,797) | (3,692) |
Asset impairment charges | (99,170) | (46,630) | (101,319) | (54,880) |
Operating (loss) income | (17,282) | 53,352 | 153,249 | 231,176 |
Interest expense | (7,244) | (5,708) | (18,953) | (15,795) |
Other income | 2,356 | 1,303 | 6,081 | 3,616 |
(Loss) income before income taxes | (22,170) | 48,947 | 140,377 | 218,997 |
Income tax provision | (8,913) | (20,146) | (47,916) | (73,551) |
Net (loss) income | (31,083) | 28,801 | 92,461 | 145,446 |
Comprehensive (loss) income | $ (30,902) | $ 31,543 | $ 87,936 | $ 150,981 |
Basic (loss) earnings per share | $ (0.67) | $ 0.60 | $ 1.94 | $ 3 |
Diluted (loss) earnings per share | (0.67) | 0.59 | 1.93 | 2.98 |
Cash dividends per share | $ 0.30 | $ 0.30 | $ 0.90 | $ 0.90 |
Operating expenses [Member] | ||||
Net restructuring charges | $ (5,135) | $ (1,267) | $ (12,915) | $ (3,708) |
Product [Member] | ||||
Total revenue | 352,767 | 361,963 | 1,076,110 | 1,097,777 |
Cost of revenue | (132,996) | (129,192) | (400,700) | (392,451) |
Service [Member] | ||||
Total revenue | 140,423 | 135,706 | 397,239 | 372,889 |
Cost of revenue | $ (64,638) | $ (63,879) | $ (175,894) | $ (159,301) |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited) - 9 months ended Sep. 30, 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 | $ 92,461 | 92,461 | |||
Cash dividends | (43,012) | (43,012) | |||
Common shares issued | $ 18,699 | 518 | 18,181 | ||
Common shares issued (in shares) | 518 | ||||
Common shares repurchased | $ (120,000) | (1,919) | (10,121) | (107,960) | |
Common shares repurchased (in shares) | (1,919) | ||||
Other common shares retired | $ (17,848) | (247) | (17,601) | ||
Other common shares retired (in shares) | (247) | ||||
Employee share-based compensation | $ 9,541 | 9,541 | |||
Other comprehensive loss | (4,525) | (4,525) | |||
Balance, end of period at Sep. 30, 2018 | $ 955,295 | $ 46,305 | $ 0 | 957,979 | (48,989) |
Balance (in shares) at Sep. 30, 2018 | 46,305 | ||||
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 | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 92,461 | $ 145,446 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 12,724 | 12,013 |
Amortization of intangibles | 84,199 | 79,284 |
Asset impairment charges | 101,319 | 54,880 |
Amortization of prepaid product discounts | 16,976 | 14,685 |
Deferred income taxes | (12,157) | (20,587) |
Employee share-based compensation expense | 9,481 | 11,149 |
Gain on sales of businesses and customer lists | (12,855) | (8,703) |
Other non-cash items, net | 5,482 | 6,211 |
Changes in assets and liabilities, net of effect of acquisitions: | ||
Trade accounts receivable | 1,466 | 19,140 |
Inventories and supplies | (2,009) | 800 |
Other current assets | (13,030) | (16,692) |
Non-current assets | (5,116) | (3,748) |
Accounts payable | (5,453) | (6,750) |
Prepaid product discount payments | 19,125 | 20,003 |
Other accrued and non-current liabilities | (35,261) | (41,229) |
Net cash provided by operating activities | 219,102 | 225,896 |
Cash flows from investing activities: | ||
Purchases of capital assets | (42,566) | (34,351) |
Payments for acquisitions, net of cash acquired | (190,396) | (125,417) |
Proceeds from sales of marketable securities | 0 | 3,500 |
Other | 1,038 | 2,166 |
Net cash used by investing activities | (231,924) | (154,102) |
Cash flows from financing activities: | ||
Proceeds from issuing long-term debt | 1,189,500 | 333,000 |
Payments on long-term debt | (1,009,139) | (336,590) |
Proceeds from issuing shares under employee plans | 7,300 | 8,218 |
Employee taxes paid for shares withheld | (7,969) | (6,816) |
Payments for common shares repurchased | (120,000) | (50,070) |
Cash dividends paid to shareholders | (42,943) | (43,672) |
Other | (4,128) | (1,281) |
Net cash provided (used) by financing activities | 12,621 | (97,211) |
Effect of exchange rate change on cash | (1,188) | 2,253 |
Net change in cash and cash equivalents | (1,389) | (23,164) |
Cash and cash equivalents, beginning of year | 59,240 | 76,574 |
Cash and cash equivalents, end of period | $ 57,851 | $ 53,410 |
Consolidated financial statemen
Consolidated financial statements | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated financial statements | Consolidated financial statements The consolidated balance sheet as of September 30, 2018 , the consolidated statements of comprehensive (loss) income for the quarters and nine months ended September 30, 2018 and 2017 , the consolidated statement of shareholders’ equity for the nine months ended September 30, 2018 , and the consolidated statements of cash flows for the nine months ended September 30, 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 Form 10-K”). |
New accounting pronouncements
New accounting pronouncements | 9 Months Ended |
Sep. 30, 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 on January 1, 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. 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 revenue in excess of billings, 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. Adoption of this guidance did not have a significant impact on our results of operations, financial position or cash flows during the nine months ended September 30, 2018, and we do not expect it to have a significant impact on an ongoing basis. The new guidance also expands the required financial statement disclosures regarding revenue recognition. Those disclosures appear below, while 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 vast 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 handlin g 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 and the right to receive the consideration is conditional, a contract asset is recorded. These amounts are included in revenue in excess of billings on the consolidated balance sheets and totaled $20,508 as of September 30, 2018 and $9,665 as of January 1, 2018. Additionally, we record an asset for unbilled receivables when the revenue recognized has not been billed to customers in accordance with contractually stated billing terms and the right to receive the consideration is unconditional. These assets are also included in revenue in excess of earnings on our consolidated balance sheets and totaled $13,227 as of September 30, 2018 and $7,674 as of January 1, 2018. 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 $1,563 as of September 30, 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, services and customer types, we require payment before the products or services are delivered to the customer. When a customer pays in advance, 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 decrease of $8,263 in deferred revenue for the nine months ended September 30, 2018 was driven primarily by the recognition of $39,488 of revenue that was included in deferred revenue as of December 31, 2017 , partially offset by cash payments received in advance of satisfying our performance obligations. 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 Revenue in excess of billings $ 16,379 $ 960 $ 17,339 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 statements of comprehensive (loss) income for the quarter and nine months ended September 30, 2018 and on our unaudited consolidated balance sheet as of September 30, 2018 was as follows: (in thousands) As reported Effect of adoption Balance without adoption of ASU No. 2014-09 Quarter Ended September 30, 2018 Service revenue $ 140,423 $ 269 $ 140,692 Total revenue 493,190 269 493,459 Cost of services (64,638 ) (19 ) (64,657 ) Total cost of revenue (197,634 ) (19 ) (197,653 ) Gross profit 295,556 250 295,806 Selling, general and administrative expense (208,533 ) (253 ) (208,786 ) Operating loss (17,282 ) (3 ) (17,285 ) Loss before income taxes (22,170 ) (3 ) (22,173 ) Income tax provision (8,913 ) 1 (8,912 ) Net loss $ (31,083 ) $ (2 ) $ (31,085 ) Nine Months Ended September 30, 2018 Service revenue $ 397,239 $ (300 ) $ 396,939 Total revenue 1,473,349 (300 ) 1,473,049 Cost of services (175,894 ) 365 (175,529 ) Total cost of revenue (576,594 ) 365 (576,229 ) Gross profit 896,755 65 896,820 Selling, general and administrative expense (629,272 ) (1,304 ) (630,576 ) Operating income 153,249 (1,239 ) 152,010 Income before income taxes 140,377 (1,239 ) 139,138 Income tax provision (47,916 ) 320 (47,596 ) Net income $ 92,461 $ (919 ) $ 91,542 (in thousands) As reported Effect of adoption Balance without adoption of ASU No. 2014-09 September 30, 2018 Revenue in excess of billings $ 33,735 $ (895 ) $ 32,840 Total current assets 417,342 (895 ) 416,447 Other non-current assets 195,547 (7,037 ) 188,510 Total assets $ 2,267,367 $ (7,932 ) $ 2,259,435 Accrued liabilities $ 234,529 $ (320 ) $ 234,209 Total current liabilities 333,305 (320 ) 332,985 Deferred income taxes 46,339 (1,727 ) 44,612 Retained earnings 957,979 (5,885 ) 952,094 Total liabilities and shareholders' equity $ 2,267,367 $ (7,932 ) $ 2,259,435 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. Application of this standard has not had a significant impact on our results of operations or financial position and we do not expect it to have a significant impact on an ongoing basis. 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 the guidance to transactions occurring on or after this date. Adoption of the standard has not had a significant impact on our results of operations or financial position. 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 (loss) 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 (loss) 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 previous periods. We utilized the practical expedient for adoption allowing us to use the amounts previously disclosed in our postretirement benefits footnote as the basis for revising prior periods. 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 statements of comprehensive income for the quarter and nine months ended September 30, 2017 was as follows: (in thousands) As previously reported Effect of adoption As revised Quarter Ended September 30, 2017 Cost of products $ (129,055 ) $ (137 ) $ (129,192 ) Cost of services (63,862 ) (17 ) (63,879 ) Total cost of revenue (192,917 ) (154 ) (193,071 ) Selling, general and administrative expense (202,999 ) (350 ) (203,349 ) Operating income 53,856 (504 ) 53,352 Other income 799 504 1,303 Net income $ 28,801 $ — $ 28,801 Nine Months Ended September 30, 2017 Cost of products $ (392,040 ) $ (411 ) $ (392,451 ) Cost of services (159,250 ) (51 ) (159,301 ) Total cost of revenue (551,290 ) (462 ) (551,752 ) Selling, general and administrative expense (628,100 ) (1,050 ) (629,150 ) Operating income 232,688 (1,512 ) 231,176 Other income 2,104 1,512 3,616 Net income $ 145,446 $ — $ 145,446 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. Application of this standard has not had a significant impact on our results of operations or financial position and we do not expect it to have a significant impact on an ongoing basis. 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. ASU No. 2018-05 – 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 repatriation 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 repatriation toll charge liability, and ultimately could cause us to revise our initial estimates. In addition, changes in interpretations, assumptions and guidance regarding the 2017 Act could have a material impact on our effective tax rate. During the quarter ended September 30, 2018 , we recorded a decrease in income tax expense of $1,249 as we refined our accounting for the estimated repatriation toll charge liability, and during the nine months ended September 30, 2018 , we recorded a decrease in income tax expense of $1,118 . In order to complete our accounting for the 2017 Act, which we will finalize in 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; and • finalization of the calculation of post-1986 foreign deferred earnings, which are subject to the repatriation toll charge, including the impact on our 2017 state tax returns to be filed in the fourth quarter of 2018. Other accounting pronouncements adopted – In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurements . The standard removes, modifies and adds certain disclosures related to recurring and nonrecurring fair value measurements. On September 30, 2018, we early adopted the provisions of the standard that remove and modify disclosure requirements. This adoption had minimal impact on our fair value disclosures in Note 7. The additional disclosures required under the new guidance are effective for us on January 1, 2020. 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. In July 2018, the FASB issued two amendments to ASU No. 2016-02: ASU No. 2018-10, Codification Improvements to Topic 842, Leases , which amends narrow aspects of the guidance in ASU No. 2016-02, and ASU No. 2018-11, Targeted Improvements, which provides a new optional transition method under which comparative periods presented in financial statements in the period of adoption would not be restated. All of these standards are effective for us on January 1, 2019. They are required to be adopted using a modified retrospective approach, and we plan to elect the optional transition method under ASU No. 2018-11. We have established an implementation team to evaluate and identify the impact of these standards on our financial position, results of operations and cash flows. We are currently assessing our leasing arrangements and implementing software to meet the reporting requirements of the standard. We anticipate that we will elect the practical expedient package outlined in ASU No. 2016-02 under which we do not have to reassess whether an arrangement contains a lease, we can carryforward our previous classification of leases as either operating or capital leases, and we do not have to reassess previously recorded initial direct costs. Additionally, we anticipate that we will make the policy election allowing us to exclude leases with original terms of 12 months or less from lease assets and liabilities. We continue to assess the practical expedient allowing us to use hindsight to determine the lease term and to assess any impairment of lease assets during the lookback period, and we continue to assess certain policy elections required under the standard, including whether we will separate nonlease components from the associated lease component and how we will determine the incremental borrowing rate for leases with renewal options. Although we will recognize lease assets and liabilities for leases classified as operating leases under previous guidance, we are not able to quantify the impact of the standard at this time. 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. In August 2018, the FASB issued ASU No. 2018-14, Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans . The standard modifies certain disclosures related to defined benefit pension and other postretirement plans and requires adoption on a retrospective basis to all periods presented. We plan to early adopt this standard on December 31, 2018, including the modified disclosures in our Form 10-K for the year ending December 31, 2018. In August 2018, the FASB issued ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . The standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The accounting for the service element of a hosting arrangement that is a service contract is not affected by the new standard. The guidance is effective for us on January 1, 2020 and may be adopted retrospectively or prospectively to eligible costs incurred on or after the date the guidance is first applied. This new guidance will impact our results of operations and financial position as we currently expense these implementation costs as incurred. As we have not historically tracked these costs separately, we are not able to quantify the expected impact on our consolidated financial statements. We plan to adopt the standard prospectively. |
Supplemental balance sheet info
Supplemental balance sheet information | 9 Months Ended |
Sep. 30, 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 nine months ended September 30, 2018 and 2017 was as follows: Nine Months Ended (in thousands) 2018 2017 Balance, beginning of year $ 2,884 $ 2,828 Bad debt expense 2,275 2,384 Write-offs, net of recoveries (2,036 ) (2,404 ) Balance, end of period $ 3,123 $ 2,808 Inventories and supplies – Inventories and supplies were comprised of the following: (in thousands) September 30, December 31, Raw materials $ 7,508 $ 7,357 Semi-finished goods 7,942 7,635 Finished goods 25,343 24,146 Supplies 4,325 3,111 Inventories and supplies $ 45,118 $ 42,249 Available-for-sale debt securities – Available-for-sale debt securities included within funds held for customers were comprised of the following: September 30, 2018 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Funds held for customers: (1) Domestic money market fund $ 11,000 $ — $ — $ 11,000 Canadian and provincial government securities 8,938 — (541 ) 8,397 Canadian guaranteed investment certificates 7,747 — — 7,747 Available-for-sale debt securities $ 27,685 $ — $ (541 ) $ 27,144 (1) Funds held for customers, as reported on the consolidated balance sheet as of September 30, 2018 , also included cash of $57,263 . 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 September 30, 2018 were as follows: (in thousands) Fair value Due in one year or less $ 20,863 Due in two to five years 4,308 Due in six to ten years 1,973 Available-for-sale debt securities $ 27,144 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 September 30, 2018 included a small business distributor and 3 small business customer lists. Assets held for sale as of December 31, 2017 included 2 providers of printed and promotional products, both of which were sold during 2018, and 2 small business distributors, 1 of which was sold during the first quarter of 2018. Also during the nine months ended September 30, 2018 , we sold several small business customer lists that previously did not meet the requirements to be reported as assets held for sale in the consolidated balance sheets. We determined that the assets sold would be better positioned for long-term growth if they were managed by independent distributors. Subsequent to the sales, the businesses and customer lists 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 $28,028 in conjunction with these sales (non-cash investing activity), and we recognized aggregate net gains within SG&A expense of $1,765 during the quarter ended September 30, 2018 and $12,855 during the nine months ended September 30, 2018 . During the quarter ended September 30, 2017 , we sold the assets of 2 small business distributors and assets associated with certain custom printing activities. During the nine months ended September 30, 2017 , we also sold a provider of printed and promotional products and an additional small business distributor. These sales resulted in aggregate net gains within SG&A expense of of $1,924 for the quarter ended September 30, 2017 and $8,703 for the nine months ended September 30, 2017 . 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. This impairment charge reduced the carrying value of the business to its estimated fair value less costs to sell, as we negotiated the sale of the business. During the second quarter of 2017, we recorded an additional pre-tax asset impairment charge of $2,954 as we finalized the sale of this business, resulting in a total pre-tax asset impairment charge of $8,250 for the nine months ended September 30, 2017 . The businesses sold during 2018, as well as those held for sale as of September 30, 2018 , were included in our Small Business Services segment, and their net assets consisted primarily of intangible assets. 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) September 30, December 31, Balance sheet caption Current assets $ — $ 4 Other current assets Intangibles 3,250 8,459 Assets held for sale Goodwill — 3,566 Assets held for sale Other non-current assets — 207 Assets held for sale Net assets held for sale $ 3,250 $ 12,236 Intangibles – Intangibles were comprised of the following: September 30, 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 (1) $ — $ — $ — $ 19,100 $ — $ 19,100 Amortizable intangibles: Internal-use software 391,747 (312,268 ) 79,479 359,079 (284,074 ) 75,005 Customer lists/relationships (2) 401,821 (159,667 ) 242,154 343,589 (121,729 ) 221,860 Trade names 49,872 (24,405 ) 25,467 36,931 (19,936 ) 16,995 Technology-based intangibles 39,000 (12,030 ) 26,970 31,800 (6,400 ) 25,400 Software to be sold 36,900 (14,374 ) 22,526 36,900 (11,204 ) 25,696 Other 1,800 (1,755 ) 45 1,800 (1,590 ) 210 Amortizable intangibles 921,140 (524,499 ) 396,641 810,099 (444,933 ) 365,166 Intangibles $ 921,140 $ (524,499 ) $ 396,641 $ 829,199 $ (444,933 ) $ 384,266 (1) During the third quarter of 2018, we recorded a pre-tax asset impairment charge of $19,100 for our indefinite-lived trade name. Further information can be found in Note 7. (2) During the first nine months of 2018, we recorded pre-tax asset impairment charges of $4,031 related to amortizable customer lists. Further information can be found in Note 7. Amortization of intangibles was $28,505 for the quarter ended September 30, 2018 , $27,456 for the quarter ended September 30, 2017 , $84,199 for the nine months ended September 30, 2018 and $79,284 for the nine months ended September 30, 2017 . Based on the intangibles in service as of September 30, 2018 , estimated future amortization expense is as follows: (in thousands) Estimated amortization expense Remainder of 2018 $ 23,632 2019 94,468 2020 74,306 2021 57,593 2022 41,964 During the nine months ended September 30, 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 nine months ended September 30, 2018 : (in thousands) Amount Weighted-average amortization period (in years) Customer lists/relationships (1) $ 75,775 8 Internal-use software 33,223 3 Trade names 13,700 7 Technology-based intangibles 7,200 5 Acquired intangibles $ 129,898 6 (1) Includes customer list purchases of $1,188 that did not qualify as business combinations. Information regarding acquired intangibles does not include measurement-period adjustments recorded during the nine months ended September 30, 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 nine months ended September 30, 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 Impairment charge (Note 7) (78,188 ) — — (78,188 ) Goodwill resulting from acquisitions 41,216 29,304 — 70,520 Measurement-period adjustments for prior year acquisitions (Note 6) 1,420 2,764 — 4,184 Adjustment of assets held for sale 635 — — 635 Currency translation adjustment (2,131 ) — — (2,131 ) Balance, September 30, 2018: Goodwill, gross 747,708 356,307 148,506 1,252,521 Accumulated impairment charges (126,567 ) — — (126,567 ) Goodwill, net of accumulated impairment charges $ 621,141 $ 356,307 $ 148,506 $ 1,125,954 Other non-current assets – Other non-current assets were comprised of the following: (in thousands) September 30, December 31, Loans and notes receivable from Safeguard distributors $ 71,728 $ 44,276 Prepaid product discounts (1) 58,539 63,895 Postretirement benefit plan asset 45,435 39,849 Deferred sales commissions (2) 7,037 — Deferred advertising costs 5,089 6,135 Other 7,719 5,601 Other non-current assets $ 195,547 $ 159,756 (1) In our prior year financial statements, we referred to this asset as contract acquisition costs. (2) Net of amortization of $2,033 for the nine months ended September 30, 2018 . Changes in prepaid product discounts during the nine months ended September 30, 2018 and 2017 were as follows: Nine Months Ended (in thousands) 2018 2017 Balance, beginning of year $ 63,895 $ 65,792 Additions (1) 11,695 15,651 Amortization (16,976 ) (14,685 ) Other (75 ) (127 ) Balance, end of period $ 58,539 $ 66,631 (1) Prepaid product discounts are generally accrued upon contract execution. Cash payments made for prepaid product discounts were $19,125 for the nine months ended September 30, 2018 and $20,003 for the nine months ended September 30, 2017 . Accrued liabilities – Accrued liabilities were comprised of the following: (in thousands) September 30, December 31, Funds held for customers $ 83,370 $ 85,091 Deferred revenue 39,939 47,021 Employee profit sharing/cash bonus 25,868 31,312 Prepaid product discounts due within one year (1) 10,596 11,670 Customer rebates 9,887 11,508 Acquisition-related liabilities (2) 6,734 23,878 Restructuring due within one year (Note 8) 4,719 4,380 Income tax 2,146 17,827 Other 51,270 44,566 Accrued liabilities $ 234,529 $ 277,253 (1) In our prior year financial statements, we referred to this liability as contract acquisition costs due within one year. (2) 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. Other non-current liabilities – Other non-current liabilities were comprised of the following: (in thousands) September 30, December 31, Prepaid product discounts (1) $ 15,229 $ 21,658 Other 27,101 30,583 Other non-current liabilities $ 42,330 $ 52,241 (1) |
(Loss) earnings per share
(Loss) earnings per share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
(Loss) earnings per share | arnings per share The following table reflects the calculation of basic and diluted (loss) earnings per share. During each period, certain stock options, as noted below, were excluded from the calculation of diluted (loss) earnings per share because their effect would have been antidilutive. Quarter Ended Nine Months Ended (in thousands, except per share amounts) 2018 2017 2018 2017 (Loss) earnings per share – basic: Net (loss) income $ (31,083 ) $ 28,801 $ 92,461 $ 145,446 Income allocated to participating securities (53 ) (176 ) (396 ) (961 ) (Loss) income available to common shareholders $ (31,136 ) $ 28,625 $ 92,065 $ 144,485 Weighted-average shares outstanding 46,781 48,081 47,340 48,217 (Loss) earnings per share – basic $ (0.67 ) $ 0.60 $ 1.94 $ 3.00 (Loss) earnings per share – diluted: Net (loss) income $ (31,083 ) $ 28,801 $ 92,461 $ 145,446 Income allocated to participating securities (53 ) (175 ) (394 ) (956 ) Re-measurement of share-based awards classified as liabilities (98 ) 53 (274 ) 7 (Loss) income available to common shareholders $ (31,234 ) $ 28,679 $ 91,793 $ 144,497 Weighted-average shares outstanding 46,781 48,081 47,340 48,217 Dilutive impact of potential common shares 22 296 178 331 Weighted-average shares and potential common shares outstanding 46,803 48,377 47,518 48,548 (Loss) earnings per share – diluted $ (0.67 ) $ 0.59 $ 1.93 $ 2.98 Antidilutive options excluded from calculation 1,037 266 570 266 |
Other comprehensive income
Other comprehensive income | 9 Months Ended |
Sep. 30, 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 (loss) income Quarter Ended Nine Months Ended (in thousands) 2018 2017 2018 2017 Amortization of postretirement benefit plan items: Prior service credit $ 355 $ 355 $ 1,066 $ 1,066 Other income Net actuarial loss (721 ) (909 ) (2,163 ) (2,728 ) Other income Total amortization (366 ) (554 ) (1,097 ) (1,662 ) Other income Tax benefit 47 167 447 497 Income tax provision Total reclassifications, net of tax $ (319 ) $ (387 ) $ (650 ) $ (1,165 ) Net (loss) income Accumulated other comprehensive loss – Changes in the components of accumulated other comprehensive loss during the nine months ended September 30, 2018 were as follows: (in thousands) Postretirement benefit plans Net unrealized loss on marketable debt 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 — (119 ) (5,056 ) (5,175 ) Amounts reclassified from accumulated other comprehensive loss 650 — — 650 Net current-period other comprehensive income (loss) 650 (119 ) (5,056 ) (4,525 ) Adoption of ASU No. 2018-02 (6,867 ) — — (6,867 ) Balance, September 30, 2018 $ (33,046 ) $ (441 ) $ (15,502 ) $ (48,989 ) (1) Other comprehensive loss before reclassifications is net of income tax benefit of $42 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions We regularly 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 (loss) 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 (loss) income. Transaction costs were not significant to our consolidated statements of comprehensive income for the nine months ended September 30, 2018 and 2017 . The acquisitions completed during the nine months ended September 30, 2018 were cash transactions, funded by use of our revolving credit facility. We completed these acquisitions primarily to increase our mix of marketing solutions and other services revenue, to add financial technology, logo and web services capabilities, and to reach new customers. 2018 acquisitions – In March 2018, we acquired all of 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 $30,080 . 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. We expect to finalize the allocation of the purchase price by the end of 2018 when our valuation of the acquired capital assets is completed. In June 2018, we acquired selected assets of Velocity Servers, Inc., doing business as ColoCrossing, a data center solutions, cloud hosting and infrastructure colocation provider of dedicated hosting services. The preliminary allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in tax-deductible goodwill of $11,136 . The acquisition resulted in goodwill as we expect to accelerate revenue growth by bringing colocation services into our portfolio of hosting services. The operations of this business from its acquisition date are included in our Small Business Services segment. We expect to finalize the allocation of the purchase price in the first quarter of 2019 when our valuation of the acquired intangible assets is completed, as well as the valuation of various other assets acquired and liabilities assumed. In August 2018, we acquired selected assets of REMITCO LLC (RemitCo), the remittance processing business of First Data Corporation. The preliminary allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in tax-deductible goodwill of $29,304 . The acquisition resulted in goodwill as it expands the scale of our receivables management solutions capabilities, which allows us to take advantage of the ongoing market trend toward outsourcing technology-enabled solutions and services to trusted financial technology partners of scale. The operations of this business from its acquisition date are included in our Financial Services segment. We expect to finalize the allocation of the purchase price by mid-2019 when our valuation of the acquired intangible assets is completed, as well as the valuation of various other assets acquired and liabilities assumed. Also during the nine months ended September 30, 2018 , we acquired the operations of 3 small business distributors that are included in our Small Business Services segment. The assets acquired consisted primarily of customer list intangible assets. The allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed for 1 of the distributors is preliminary and is expected to be completed by the end of 2018 when our valuation of the acquired intangible assets is completed. 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. Information regarding goodwill by reportable segment and the useful lives of acquired intangibles 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 not significant 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 September 30, 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) $ 8,429 Identifiable intangible assets: Customer lists/relationships 74,587 Trade names 13,700 Technology-based intangible 7,200 Total intangible assets 95,487 Goodwill 70,520 Total aggregate purchase price 174,436 Liabilities for holdback payments and contingent consideration (3,365 ) Non-cash consideration (2) (1,060 ) Net cash paid for 2018 acquisitions 170,011 Holdback payments for prior year acquisitions 20,385 Payments for acquisitions, net of cash acquired of $1,645 $ 190,396 (1) Net assets acquired consisted primarily of RemitCo accounts receivable and Logomix deferred income tax liabilities. (2) Consists of pre-acquisition amounts owed to us by an acquired distributor. During the nine months ended September 30, 2018 , we finalized purchase accounting for all of the 2017 acquisitions for which purchase accounting was preliminary as of December 31, 2017. 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. The resulting measurement-period adjustments increased goodwill $4,184 during the nine months ended September 30, 2018 , with the offset to various assets and liabilities, including deferred revenue, deferred income taxes and other long-term liabilities, as well as a decrease of $1,654 in customer list intangibles and an increase in internal-use software of $1,000 . 2017 acquisitions – During the nine months ended September 30, 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. • In April 2017, we acquired all of the equity of RDM Corporation of Canada, a provider of remote deposit capture software, hardware and digital imaging solutions for financial institutions and corporate clients. • In July 2017, we acquired all of the equity of Digital Pacific Group Pty Ltd, and in September 2017, we acquired all of the equity of j2 Global Australia Pty Ltd, doing business as Web24. Both businesses are based in Australia and provide web hosting and domain registration services. • We acquired the operations of several small business distributors. All but 1 of these distributors 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 nine months ended September 30, 2017 , included payments of $117,534 for these acquisitions and $7,883 |
Fair value measurements
Fair value measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Fair value measurements Annual impairment analyses – We evaluate the carrying value of goodwill and our indefinite-lived trade name as of July 31 of each year and between annual evaluations if events occur or circumstances change that would indicate a possible impairment. Our policy on impairment of indefinite-lived intangibles and goodwill, which is included under the caption "Note 1: Significant accounting policies" in the Notes to Consolidated Financial Statements appearing in the 2017 Form 10-K, explains our methodology for assessing impairment of these assets. In completing the 2018 annual impairment analysis of goodwill, we elected to perform a qualitative assessment for 5 of our reporting units and a quantitative assessment for 2 of our reporting units: Small Business Services Web Services and Small Business Services Indirect. Small Business Services Web Services includes our businesses that provide hosting and domain name services, logo and web design, search engine marketing and optimization, and payroll services. Small Business Services Indirect consists primarily of our Safeguard distributor channel, former Safeguard distributors that we have purchased, and our independent dealer channel. The qualitative analyses evaluated factors, including, but not limited to, economic, market and industry conditions, cost factors and the overall financial performance of the reporting units. We also considered the quantitative analyses completed as of July 31, 2017, which indicated that the estimated fair values of these reporting units exceeded their carrying values by approximate amounts between $64,000 and $1,405,000 , or by amounts between 50% and 314% above the carrying values of their net assets. In completing these assessments, we noted no changes in events or circumstances that indicated that it was more likely than not that the fair value of any reporting unit was less than its carrying amount. The quantitative analysis as of July 31, 2018 for the Small Business Services Web Services reporting unit indicated that the estimated fair value of the reporting unit exceeded its carrying value by approximately $63,000 , or 22% . The carrying value of this reporting unit's goodwill was $225,383 as of July 31, 2018. The quantitative analysis of the Small Business Services Indirect reporting unit indicated that the reporting unit's goodwill was fully impaired, resulting in a pre-tax goodwill impairment charge of $78,188 during the quarter ended September 30, 2018. The impairment charge was measured as the amount by which the reporting unit's carrying value exceeded its estimated fair value, limited to the carrying amount of goodwill. The analysis of this reporting unit, which incorporated the results of the annual strategic planning process completed during the third quarter of 2018, indicated lowered projected long-term revenue growth and profitability levels resulting from changes in strategy and focus and in the mix of products and services sold, including the continuing decline in check and forms usage. Additionally, our strategic plan reflected a shift in company resources to our growing businesses. Our indefinite-lived Safeguard trade name is included in the Small Business Services Indirect reporting unit. As of July 31, 2018, we completed a quantitative analysis of this asset that indicated the asset was fully impaired (level 3 fair value measurement), resulting in a pre-tax asset impairment charge of $19,100 . This impairment charge was driven by the same factors that resulted in the goodwill impairment charge, which indicated that any royalties attributable to the asset under our relief from royalty calculation had no future value. The annual impairment analysis completed as of July 31, 2017 resulted in a pre-tax goodwill impairment charge of $28,379 related to our former Small Business Services Safeguard reporting unit. We subsequently realigned a portion of our reporting units due to changes in our internal reporting structure. As such, the assets of this reporting unit are now included in the Small Business Services Indirect reporting unit. Further information regarding the 2017 annual impairment analyses can be found under the caption "Note 7: Fair value measurements" in the Notes to Consolidated Financial Statements appearing in the 2017 Form 10-K. Other non-recurring asset impairment analyses – During the third quarter of 2018, we recorded pre-tax asset impairment charges of $1,882 for Financial Services customer list intangible assets related to 2 small distributors we acquired in 2015. Based on higher than anticipated customer attrition, we determined that the customer lists were partially impaired as of July 31, 2018. 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. Based on changes in the customer base of one of our small business distributors, we determined that the customer list asset was fully impaired as of March 31, 2018. We utilized the discounted value of estimated future cash flows to estimate the fair values of these asset groups. During the quarter ended September 30, 2017, we decided that we would no longer utilize our Small Business Services NEBS ® trade name in the marketplace, and we recorded a pre-tax asset impairment charge of $14,752 to write down the remaining book value of this trade name to a fair value of $0 . Also during the quarter ended September 30, 2017, we recorded pre-tax asset impairment charges of $3,499 related to other long-lived assets within Small Business Services, primarily internal-use software related to an order capture system. During the third quarter of 2017, we signed a contract for customer relationship management services that resulted in our decision to no longer utilize a portion of this software. As such, the remaining net book value of the assets was written down to a fair value of $0 . During the nine months ended September 30, 2017, we recorded aggregate pre-tax asset impairment charges of $8,250 related to a small business distributor that was classified as held for sale in the consolidated balance sheets prior to its sale during the second quarter of 2017. The impairment charges were calculated based on ongoing negotiations for the sale of the business and reduced its carrying value to its fair value less costs to sell by reducing the carrying value of the related customer list intangible asset. Further information regarding assets held for sale can be found in Note 3. Information regarding these other non-recurring asset impairment analyses was as follows: Fair value measurements using Fair value as of measurement date Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Impairment charge (in thousands) (Level 1) (Level 2) (Level 3) 2018 analyses: Customer list (Small Business Services) $ — $ — $ — $ — $ 2,149 Customer lists (Financial Services) (1) 4,223 — — 4,223 1,882 Total $ 4,031 2017 analyses: Trade name $ — $ — $ — $ — $ 14,752 Assets held for sale 3,500 — — 3,500 8,250 Other — — — — 3,499 Total $ 26,501 (1) The fair value presented is for the entire asset group that includes the impaired customer lists. 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 nine months ended September 30, 2018 can be found in Note 6. The identifiable net assets acquired during the nine months ended September 30, 2018 were comprised primarily of customer list intangible assets, trade names and a technology-related intangible asset. The estimated fair values of the trade names and the 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. Royalty rates are selected based on the attributes of the asset, including its recognition and reputation in the industry, and in the case of trade names, with consideration of the specific profitability of the products sold under a trade name and supporting assets. We also consider, when available, observations of negotiated royalty rates for use of similar assets. The estimated fair values of the Logomix, ColoCrossing and RemitCo customer lists were 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. 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 (loss) income and were not significant for the quarters or nine months ended September 30, 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 (loss) income. Changes in fair value resulting from accretion for the passage of time are included in interest expense in the consolidated statements of comprehensive (loss) income. Changes in accrued contingent consideration during the nine months ended September 30, 2018 were as follows: (in thousands) Nine Months Ended September 30, 2018 Balance, December 31, 2017 $ 3,623 Acquisition date fair value 100 Change in fair value 634 Payments (1,437 ) Balance, September 30, 2018 $ 2,920 Information regarding the fair values of our financial instruments was as follows: Fair value measurements using September 30, 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 $ (2,920 ) $ (2,920 ) $ — $ — $ (2,920 ) Measured at fair value through comprehensive income: Cash equivalents (funds held for customers) 11,000 11,000 11,000 — — Available-for-sale debt securities (funds held for customers) 16,144 16,144 — 16,144 — Amortized cost: Cash 57,851 57,851 57,851 — — Cash (funds held for customers) 57,263 57,263 57,263 — — Loans and notes receivable from Safeguard distributors 74,149 59,134 — — 59,134 Long-term debt (1) 889,000 889,000 — 889,000 — (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 and Chief Executi
Restructuring and Chief Executive Officer transition costs | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Chief Executive Officer transition costs | Restructuring and Chief Executive Officer transition costs Restructuring charges – Net restructuring charges for each period consisted of the following components: Quarter Ended Nine Months Ended (in thousands, except number of employees) 2018 2017 2018 2017 Severance accruals $ 2,118 $ 1,248 $ 6,766 $ 3,596 Severance reversals (1,157 ) (78 ) (1,387 ) (596 ) Operating lease obligations 291 — 291 23 Net restructuring accruals 1,252 1,170 5,670 3,023 Other costs 3,852 72 8,127 669 Net restructuring charges $ 5,104 $ 1,242 $ 13,797 $ 3,692 Number of employees included in severance accruals 75 30 180 80 The net restructuring charges are reflected in the consolidated statements of comprehensive (loss) income as follows: Quarter Ended Nine Months Ended (in thousands) 2018 2017 2018 2017 Total cost of revenue $ (31 ) $ (25 ) $ 882 $ (16 ) Operating expenses 5,135 1,267 12,915 3,708 Net restructuring charges $ 5,104 $ 1,242 $ 13,797 $ 3,692 During the quarters and nine months ended September 30, 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 $4,719 as of September 30, 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 the end of 2018, and we expect most of the related severance payments to be paid by mid-2019, utilizing cash from operations. As of September 30, 2018 , approximately 75 of the employees included in our restructuring accruals 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 6,924 133 — 7,057 Restructuring reversals (849 ) (533 ) (5 ) (1,387 ) Payments (1,484 ) (3,820 ) (27 ) (5,331 ) Balance, September 30, 2018 $ 4,591 $ 128 $ — $ 4,719 Cumulative amounts: Restructuring charges $ 6,924 $ 7,355 $ 7,801 $ 22,080 Restructuring reversals (849 ) (694 ) (750 ) (2,293 ) Payments (1,484 ) (6,533 ) (7,051 ) (15,068 ) Balance, September 30, 2018 $ 4,591 $ 128 $ — $ 4,719 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 Financial Services Total Balance, December 31, 2017 $ 789 $ 1,398 $ 140 $ 2,049 $ 4 $ — $ 4,380 Restructuring charges 2,214 3,838 — 714 — 291 7,057 Restructuring reversals (351 ) (870 ) (5 ) (161 ) — — (1,387 ) Payments (1,036 ) (2,013 ) (135 ) (2,143 ) (4 ) — (5,331 ) Balance, September 30, 2018 $ 1,616 $ 2,353 $ — $ 459 $ — $ 291 $ 4,719 Cumulative amounts: (2) Restructuring charges $ 6,850 $ 7,940 $ 286 $ 6,631 $ 82 $ 291 $ 22,080 Restructuring reversals (705 ) (945 ) (11 ) (632 ) — — (2,293 ) Payments (4,529 ) (4,642 ) (275 ) (5,540 ) (82 ) — (15,068 ) Balance, September 30, 2018 $ 1,616 $ 2,353 $ — $ 459 $ — $ 291 $ 4,719 (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) Includes accruals related to our cost reduction initiatives for 2016 through 2018. Chief Executive Officer (CEO) transition costs – In April 2018, we announced the upcoming retirement of Lee Schram, our CEO. Mr. Schram will continue to serve as CEO until his successor assumes the role, and he will remain employed under the terms of a transition agreement through March 1, 2019. Under the terms of the transition agreement, if Mr. Schram remains employed through March 1, 2019, assists with the transition, and complies with certain covenants, we will provide to Mr. Schram certain benefits, including a transition bonus in the amount of $2,000 , accelerated vesting of certain restricted stock unit awards and continued vesting and settlement of a pro-rata portion of outstanding performance share awards to the extent such awards are earned based on the attainment of certain performance goals. We anticipate the modifications to Mr. Schram's share-based payment awards will result in expense of $2,088 , which will be recognized through March 2019. In October 2018, we signed an employment agreement with Mr. Schram's successor. This individual will become president, CEO and a member of the board of directors on November 26, 2018. We have agreed to announce this appointment on November 6, 2018 as an accommodation to the individual's current employer. We also offered retention agreements to certain members of our management team under which each employee will be entitled to receive a cash bonus equal to his or her annual base salary or up to 1.5 times his or her annual base salary if he or she remains employed during the retention period, generally from July 1, 2018 to December 31, 2019, and complies with certain covenants. The retention bonus will be paid to an employee if his or her employment is terminated without cause before the end of the retention period. In addition, we are incurring costs related to the CEO transition process, such as executive search, legal, travel and board of directors fees. CEO transition costs included within SG&A expense totaled $2,622 for the quarter ended September 30, 2018 and $4,152 for the nine months ended September 30, 2018 |
Income tax provision
Income tax provision | 9 Months Ended |
Sep. 30, 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: Nine Months Ended September 30, 2018 Year Ended December 31, 2017 Income tax at federal statutory rate 21.0 % 35.0 % Goodwill impairment charge 11.3 % 1.5 % State income tax expense, net of federal benefit 3.1 % 2.7 % Net tax benefit of share-based compensation (1.2 %) (1.6 %) Impact of the 2017 Act (0.8 %) (6.6 %) Qualified production activities deduction — (3.2 %) Other 0.7 % (1.4 %) Effective tax rate 34.1 % 26.4 % |
Postretirement benefits
Postretirement benefits | 9 Months Ended |
Sep. 30, 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” in 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 Nine Months Ended (in thousands) 2018 2017 2018 2017 Interest cost $ 656 $ 724 $ 1,969 $ 2,172 Expected return on plan assets (1,934 ) (1,782 ) (5,802 ) (5,346 ) Amortization of prior service credit (355 ) (355 ) (1,066 ) (1,066 ) Amortization of net actuarial losses 721 909 2,163 2,728 Net periodic benefit income $ (912 ) $ (504 ) $ (2,736 ) $ (1,512 ) 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 (loss) income. Further information can be found in Note 2. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt outstanding was comprised of the following: (in thousands) September 30, December 31, Amount drawn on revolving credit facility $ 889,000 $ 413,000 Amount outstanding under term loan facility — 294,938 Capital lease obligations 1,883 1,914 Long-term debt, principal amount 890,883 709,852 Less unamortized debt issuance costs — (471 ) Less current portion of long-term debt (785 ) (44,121 ) Long-term debt 890,098 665,260 Current portion of amount drawn under term loan facility — 43,313 Current portion of capital lease obligations 785 808 Long-term debt due within one year, principal amount 785 44,121 Less unamortized debt issuance costs — (81 ) Long-term debt due within one year 785 44,040 Total debt $ 890,883 $ 709,300 In March 2018, we entered into a 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 credit facility. Our quarterly commitment fee ranges from 0.175% to 0.35% based on our leverage ratio. As of September 30, 2018 , $889,000 was drawn on our revolving credit facility at a weighted-average interest rate of 3.22% . 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. 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 of 3.5 and a minimum ratio of consolidated earnings before interest and taxes to consolidated interest expense, as defined in the credit agreement, of 3.0 . Daily average amounts outstanding under our current and previous credit facility were as follows: (in thousands) Nine Months Ended September 30, 2018 Year Ended December 31, 2017 Revolving credit facility: Daily average amount outstanding $ 680,064 $ 436,588 Weighted-average interest rate 3.10 % 2.55 % Term loan facility: Daily average amount outstanding $ 85,084 $ 315,862 Weighted-average interest rate 2.97 % 2.57 % As of September 30, 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 (889,000 ) Outstanding letters of credit (1) (10,221 ) Net available for borrowing as of September 30, 2018 $ 50,779 (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 $1,883 as of September 30, 2018 and $1,914 as of December 31, 2017 related to information technology hardware. The lease obligations will be paid through June 2022 |
Other commitments and contingen
Other commitments and contingencies | 9 Months Ended |
Sep. 30, 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 indemnification provisions generally 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 $2,732 as of September 30, 2018 and $2,646 as of December 31, 2017 . 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 or nine months ended September 30, 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 $6,973 as of September 30, 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 September 30, 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 nine months ended September 30, 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 | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' equity | Shareholders’ equity During the nine months ended September 30, 2018 , we repurchased 1.9 million shares for $120,000 . These share repurchases were completed under an authorization from our board of directors in May 2016 for the repurchase of up to $300,000 of our common stock. In October 2018, our board of directors increased our share repurchase authorization to $500,000 |
Business segment information
Business segment information | 9 Months Ended |
Sep. 30, 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 others; 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, although Small Business Services has operations in Canada, Australia and portions of Europe, and Financial Services 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 generally 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 hosting and domain name services, logo and web design, 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 tables present revenue disaggregated by our product and service offerings: Quarter Ended September 30, 2018 (in thousands) Small Business Services Financial Services Direct Checks Consolidated Checks $ 117,918 $ 54,800 $ 25,874 $ 198,592 Marketing solutions and other services: Small business marketing solutions 69,490 — — 69,490 Web services 41,973 — — 41,973 Data-driven marketing solutions — 39,808 — 39,808 Treasury management solutions — 35,833 — 35,833 Fraud, security, risk management and operational services 6,383 12,953 3,460 22,796 Total MOS 117,846 88,594 3,460 209,900 Forms, accessories and other products 79,835 3,377 1,486 84,698 Total revenue $ 315,599 $ 146,771 $ 30,820 $ 493,190 Nine Months Ended September 30, 2018 (in thousands) Small Business Services Financial Services Direct Checks Consolidated Checks $ 360,637 $ 170,442 $ 81,425 $ 612,504 Marketing solutions and other services: Small business marketing solutions 205,694 — — 205,694 Web services 120,199 — — 120,199 Data-driven marketing solutions — 114,275 — 114,275 Treasury management solutions — 93,591 — 93,591 Fraud, security, risk management and operational services 19,487 37,856 10,761 68,104 Total MOS 345,380 245,722 10,761 601,863 Forms, accessories and other products 243,638 10,563 4,781 258,982 Total revenue $ 949,655 $ 426,727 $ 96,967 $ 1,473,349 Quarter Ended September 30, 2017 (in thousands) Small Business Services Financial Services Direct Checks Consolidated Checks $ 119,892 $ 62,613 $ 28,521 $ 211,026 Marketing solutions and other services: Small business marketing solutions 63,286 — — 63,286 Web services 35,059 — — 35,059 Data-driven marketing solutions — 48,195 — 48,195 Treasury management solutions — 27,839 — 27,839 Fraud, security, risk management and operational services 6,552 15,224 3,716 25,492 Total MOS 104,897 91,258 3,716 199,871 Forms, accessories and other products 81,619 3,536 1,617 86,772 Total revenue $ 306,408 $ 157,407 $ 33,854 $ 497,669 Nine Months Ended September 30, 2017 (in thousands) Small Business Services Financial Services Direct Checks Consolidated Checks $ 364,202 $ 190,339 $ 90,375 $ 644,916 Marketing solutions and other services: Small business marketing solutions 185,963 — — 185,963 Web services 95,393 — — 95,393 Data-driven marketing solutions — 116,426 — 116,426 Treasury management solutions — 79,658 — 79,658 Fraud, security, risk management and operational services 19,795 48,547 11,719 80,061 Total MOS 301,151 244,631 11,719 557,501 Forms, accessories and other products 252,053 10,976 5,220 268,249 Total revenue $ 917,406 $ 445,946 $ 107,314 $ 1,470,666 Product revenue is recognized at a point in time. Total MOS revenue included product revenue of $69,477 and service revenue of $140,423 for the quarter ended September 30, 2018 and product revenue of $204,624 and service revenue of $397,239 for the nine months ended September 30, 2018 . The majority of our service revenue is recognized over time as services are provided. The following tables present our revenue disaggregated by geography, based on where items are shipped or services are performed. (in thousands) Small Business Services Financial Services Direct Checks Total Quarter Ended September 30, 2018: United States $ 290,752 $ 141,979 $ 30,820 $ 463,551 Foreign, primarily Canada and Australia 24,847 4,792 — 29,639 Total revenue $ 315,599 $ 146,771 $ 30,820 $ 493,190 Nine Months Ended September 30, 2018: United States $ 871,574 $ 411,185 $ 96,967 $ 1,379,726 Foreign, primarily Canada and Australia 78,081 15,542 — 93,623 Total revenue $ 949,655 $ 426,727 $ 96,967 $ 1,473,349 (in thousands) Small Business Services Financial Services Direct Checks Total Quarter Ended September 30, 2017: United States $ 281,573 $ 151,587 $ 33,854 $ 467,014 Foreign, primarily Canada and Australia 24,835 5,820 — 30,655 Total revenue $ 306,408 $ 157,407 $ 33,854 $ 497,669 Nine Months Ended September 30, 2017: United States $ 854,239 $ 434,921 $ 107,314 $ 1,396,474 Foreign, primarily Canada and Australia 63,167 11,025 — 74,192 Total revenue $ 917,406 $ 445,946 $ 107,314 $ 1,470,666 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 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 September 30, 2018 and 2017 : Reportable Business Segments (in thousands) Small Business Services Financial Services Direct Checks Corporate Consolidated Total revenue from external customers: 2018 $ 315,599 $ 146,771 $ 30,820 $ — $ 493,190 2017 306,408 157,407 33,854 — 497,669 Operating (loss) income: 2018 (45,254 ) 17,612 10,360 — (17,282 ) 2017 12,893 29,198 11,261 — 53,352 Depreciation and amortization expense: 2018 17,173 15,424 809 — 33,406 2017 14,502 15,935 809 — 31,246 Asset impairment charges: 2018 97,288 1,882 — — 99,170 2017 46,630 — — — 46,630 Total assets: 2018 1,056,086 753,240 157,806 300,235 2,267,367 2017 1,051,076 692,511 159,526 276,867 2,179,980 Capital asset purchases: 2018 — — — 14,526 14,526 2017 — — — 11,563 11,563 The following is our segment information as of and for the nine months ended September 30, 2018 and 2017: Reportable Business Segments (in thousands) Small Business Services Financial Services Direct Checks Corporate Consolidated Total revenue from external customers: 2018 $ 949,655 $ 426,727 $ 96,967 $ — $ 1,473,349 2017 917,406 445,946 107,314 — 1,470,666 Operating income: 2018 72,288 49,565 31,396 — 153,249 2017 119,674 76,052 35,450 — 231,176 Depreciation and amortization expense: 2018 48,765 45,740 2,418 — 96,923 2017 42,158 46,709 2,430 — 91,297 Asset impairment charges: 2018 99,437 1,882 — — 101,319 2017 54,880 — — — 54,880 Total assets: 2018 1,056,086 753,240 157,806 300,235 2,267,367 2017 1,051,076 692,511 159,526 276,867 2,179,980 Capital asset purchases: 2018 — — — 42,566 42,566 2017 — — — 34,351 34,351 |
New accounting pronouncements (
New accounting pronouncements (Policies) | 9 Months Ended |
Sep. 30, 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 vast 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 handlin g 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 and the right to receive the consideration is conditional, a contract asset is recorded. These amounts are included in revenue in excess of billings on the consolidated balance sheets and totaled $20,508 as of September 30, 2018 and $9,665 as of January 1, 2018. Additionally, we record an asset for unbilled receivables when the revenue recognized has not been billed to customers in accordance with contractually stated billing terms and the right to receive the consideration is unconditional. These assets are also included in revenue in excess of earnings on our consolidated balance sheets and totaled $13,227 as of September 30, 2018 and $7,674 as of January 1, 2018. 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 $1,563 as of September 30, 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, services and customer types, we require payment before the products or services are delivered to the customer. When a customer pays in advance, 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 decrease of $8,263 in deferred revenue for the nine months ended September 30, 2018 was driven primarily by the recognition of $39,488 of revenue that was included in deferred revenue as of December 31, 2017 , partially offset by cash payments received in advance of satisfying our performance obligations. 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. |
Short-term leases | Additionally, we anticipate that we will make the policy election allowing us to exclude leases with original terms of 12 months or less from lease assets and liabilities. |
New accounting pronouncements | New accounting pronouncements The following discusses the impact of each accounting standards update (ASU) adopted on January 1, 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. 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 revenue in excess of billings, 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. Adoption of this guidance did not have a significant impact on our results of operations, financial position or cash flows during the nine months ended September 30, 2018, and we do not expect it to have a significant impact on an ongoing basis. The new guidance also expands the required financial statement disclosures regarding revenue recognition. Those disclosures appear below, while 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 vast 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 handlin g 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 and the right to receive the consideration is conditional, a contract asset is recorded. These amounts are included in revenue in excess of billings on the consolidated balance sheets and totaled $20,508 as of September 30, 2018 and $9,665 as of January 1, 2018. Additionally, we record an asset for unbilled receivables when the revenue recognized has not been billed to customers in accordance with contractually stated billing terms and the right to receive the consideration is unconditional. These assets are also included in revenue in excess of earnings on our consolidated balance sheets and totaled $13,227 as of September 30, 2018 and $7,674 as of January 1, 2018. 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 $1,563 as of September 30, 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, services and customer types, we require payment before the products or services are delivered to the customer. When a customer pays in advance, 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 decrease of $8,263 in deferred revenue for the nine months ended September 30, 2018 was driven primarily by the recognition of $39,488 of revenue that was included in deferred revenue as of December 31, 2017 , partially offset by cash payments received in advance of satisfying our performance obligations. 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 Revenue in excess of billings $ 16,379 $ 960 $ 17,339 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 statements of comprehensive (loss) income for the quarter and nine months ended September 30, 2018 and on our unaudited consolidated balance sheet as of September 30, 2018 was as follows: (in thousands) As reported Effect of adoption Balance without adoption of ASU No. 2014-09 Quarter Ended September 30, 2018 Service revenue $ 140,423 $ 269 $ 140,692 Total revenue 493,190 269 493,459 Cost of services (64,638 ) (19 ) (64,657 ) Total cost of revenue (197,634 ) (19 ) (197,653 ) Gross profit 295,556 250 295,806 Selling, general and administrative expense (208,533 ) (253 ) (208,786 ) Operating loss (17,282 ) (3 ) (17,285 ) Loss before income taxes (22,170 ) (3 ) (22,173 ) Income tax provision (8,913 ) 1 (8,912 ) Net loss $ (31,083 ) $ (2 ) $ (31,085 ) Nine Months Ended September 30, 2018 Service revenue $ 397,239 $ (300 ) $ 396,939 Total revenue 1,473,349 (300 ) 1,473,049 Cost of services (175,894 ) 365 (175,529 ) Total cost of revenue (576,594 ) 365 (576,229 ) Gross profit 896,755 65 896,820 Selling, general and administrative expense (629,272 ) (1,304 ) (630,576 ) Operating income 153,249 (1,239 ) 152,010 Income before income taxes 140,377 (1,239 ) 139,138 Income tax provision (47,916 ) 320 (47,596 ) Net income $ 92,461 $ (919 ) $ 91,542 (in thousands) As reported Effect of adoption Balance without adoption of ASU No. 2014-09 September 30, 2018 Revenue in excess of billings $ 33,735 $ (895 ) $ 32,840 Total current assets 417,342 (895 ) 416,447 Other non-current assets 195,547 (7,037 ) 188,510 Total assets $ 2,267,367 $ (7,932 ) $ 2,259,435 Accrued liabilities $ 234,529 $ (320 ) $ 234,209 Total current liabilities 333,305 (320 ) 332,985 Deferred income taxes 46,339 (1,727 ) 44,612 Retained earnings 957,979 (5,885 ) 952,094 Total liabilities and shareholders' equity $ 2,267,367 $ (7,932 ) $ 2,259,435 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. Application of this standard has not had a significant impact on our results of operations or financial position and we do not expect it to have a significant impact on an ongoing basis. 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 the guidance to transactions occurring on or after this date. Adoption of the standard has not had a significant impact on our results of operations or financial position. 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 (loss) 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 (loss) 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 previous periods. We utilized the practical expedient for adoption allowing us to use the amounts previously disclosed in our postretirement benefits footnote as the basis for revising prior periods. 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 statements of comprehensive income for the quarter and nine months ended September 30, 2017 was as follows: (in thousands) As previously reported Effect of adoption As revised Quarter Ended September 30, 2017 Cost of products $ (129,055 ) $ (137 ) $ (129,192 ) Cost of services (63,862 ) (17 ) (63,879 ) Total cost of revenue (192,917 ) (154 ) (193,071 ) Selling, general and administrative expense (202,999 ) (350 ) (203,349 ) Operating income 53,856 (504 ) 53,352 Other income 799 504 1,303 Net income $ 28,801 $ — $ 28,801 Nine Months Ended September 30, 2017 Cost of products $ (392,040 ) $ (411 ) $ (392,451 ) Cost of services (159,250 ) (51 ) (159,301 ) Total cost of revenue (551,290 ) (462 ) (551,752 ) Selling, general and administrative expense (628,100 ) (1,050 ) (629,150 ) Operating income 232,688 (1,512 ) 231,176 Other income 2,104 1,512 3,616 Net income $ 145,446 $ — $ 145,446 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. Application of this standard has not had a significant impact on our results of operations or financial position and we do not expect it to have a significant impact on an ongoing basis. 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. ASU No. 2018-05 – 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 repatriation 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 repatriation toll charge liability, and ultimately could cause us to revise our initial estimates. In addition, changes in interpretations, assumptions and guidance regarding the 2017 Act could have a material impact on our effective tax rate. During the quarter ended September 30, 2018 , we recorded a decrease in income tax expense of $1,249 as we refined our accounting for the estimated repatriation toll charge liability, and during the nine months ended September 30, 2018 , we recorded a decrease in income tax expense of $1,118 . In order to complete our accounting for the 2017 Act, which we will finalize in 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; and • finalization of the calculation of post-1986 foreign deferred earnings, which are subject to the repatriation toll charge, including the impact on our 2017 state tax returns to be filed in the fourth quarter of 2018. Other accounting pronouncements adopted – In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurements . The standard removes, modifies and adds certain disclosures related to recurring and nonrecurring fair value measurements. On September 30, 2018, we early adopted the provisions of the standard that remove and modify disclosure requirements. This adoption had minimal impact on our fair value disclosures in Note 7. The additional disclosures required under the new guidance are effective for us on January 1, 2020. 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. In July 2018, the FASB issued two amendments to ASU No. 2016-02: ASU No. 2018-10, Codification Improvements to Topic 842, Leases , which amends narrow aspects of the guidance in ASU No. 2016-02, and ASU No. 2018-11, Targeted Improvements, which provides a new optional transition method under which comparative periods presented in financial statements in the period of adoption would not be restated. All of these standards are effective for us on January 1, 2019. They are required to be adopted using a modified retrospective approach, and we plan to elect the optional transition method under ASU No. 2018-11. We have established an implementation team to evaluate and identify the impact of these standards on our financial position, results of operations and cash flows. We are currently assessing our leasing arrangements and implementing software to meet the reporting requirements of the standard. We anticipate that we will elect the practical expedient package outlined in ASU No. 2016-02 under which we do not have to reassess whether an arrangement contains a lease, we can carryforward our previous classification of leases as either operating or capital leases, and we do not have to reassess previously recorded initial direct costs. Additionally, we anticipate that we will make the policy election allowing us to exclude leases with original terms of 12 months or less from lease assets and liabilities. We continue to assess the practical expedient allowing us to use hindsight to determine the lease term and to assess any impairment of lease assets during the lookback period, and we continue to assess certain policy elections required under the standard, including whether we will separate nonlease components from the associated lease component and how we will determine the incremental borrowing rate for leases with renewal options. Although we will recognize lease assets and liabilities for leases classified as operating leases under previous guidance, we are not able to quantify the impact of the standard at this time. 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. In August 2018, the FASB issued ASU No. 2018-14, Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans . The standard modifies certain disclosures related to defined benefit pension and other postretirement plans and requires adoption on a retrospective basis to all periods presented. We plan to early adopt this standard on December 31, 2018, including the modified disclosures in our Form 10-K for the year ending December 31, 2018. In August 2018, the FASB issued ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . The standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The accounting for the service element of a hosting arrangement that is a service contract is not affected by the new standard. The guidance is effective for us on January 1, 2020 and may be adopted retrospectively or prospectively to eligible costs incurred on or after the date the guidance is first applied. This new guidance will impact our results of operations and financial position as we currently expense these implementation costs as incurred. As we have not historically tracked these costs separately, we are not able to quantify the expected impact on our consolidated financial statements. We plan to adopt the standard prospectively. |
New accounting pronouncements_2
New accounting pronouncements (Tables) | 9 Months Ended |
Sep. 30, 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 Revenue in excess of billings $ 16,379 $ 960 $ 17,339 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 statements of comprehensive (loss) income for the quarter and nine months ended September 30, 2018 and on our unaudited consolidated balance sheet as of September 30, 2018 was as follows: (in thousands) As reported Effect of adoption Balance without adoption of ASU No. 2014-09 Quarter Ended September 30, 2018 Service revenue $ 140,423 $ 269 $ 140,692 Total revenue 493,190 269 493,459 Cost of services (64,638 ) (19 ) (64,657 ) Total cost of revenue (197,634 ) (19 ) (197,653 ) Gross profit 295,556 250 295,806 Selling, general and administrative expense (208,533 ) (253 ) (208,786 ) Operating loss (17,282 ) (3 ) (17,285 ) Loss before income taxes (22,170 ) (3 ) (22,173 ) Income tax provision (8,913 ) 1 (8,912 ) Net loss $ (31,083 ) $ (2 ) $ (31,085 ) Nine Months Ended September 30, 2018 Service revenue $ 397,239 $ (300 ) $ 396,939 Total revenue 1,473,349 (300 ) 1,473,049 Cost of services (175,894 ) 365 (175,529 ) Total cost of revenue (576,594 ) 365 (576,229 ) Gross profit 896,755 65 896,820 Selling, general and administrative expense (629,272 ) (1,304 ) (630,576 ) Operating income 153,249 (1,239 ) 152,010 Income before income taxes 140,377 (1,239 ) 139,138 Income tax provision (47,916 ) 320 (47,596 ) Net income $ 92,461 $ (919 ) $ 91,542 (in thousands) As reported Effect of adoption Balance without adoption of ASU No. 2014-09 September 30, 2018 Revenue in excess of billings $ 33,735 $ (895 ) $ 32,840 Total current assets 417,342 (895 ) 416,447 Other non-current assets 195,547 (7,037 ) 188,510 Total assets $ 2,267,367 $ (7,932 ) $ 2,259,435 Accrued liabilities $ 234,529 $ (320 ) $ 234,209 Total current liabilities 333,305 (320 ) 332,985 Deferred income taxes 46,339 (1,727 ) 44,612 Retained earnings 957,979 (5,885 ) 952,094 Total liabilities and shareholders' equity $ 2,267,367 $ (7,932 ) $ 2,259,435 |
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 statements of comprehensive income for the quarter and nine months ended September 30, 2017 was as follows: (in thousands) As previously reported Effect of adoption As revised Quarter Ended September 30, 2017 Cost of products $ (129,055 ) $ (137 ) $ (129,192 ) Cost of services (63,862 ) (17 ) (63,879 ) Total cost of revenue (192,917 ) (154 ) (193,071 ) Selling, general and administrative expense (202,999 ) (350 ) (203,349 ) Operating income 53,856 (504 ) 53,352 Other income 799 504 1,303 Net income $ 28,801 $ — $ 28,801 Nine Months Ended September 30, 2017 Cost of products $ (392,040 ) $ (411 ) $ (392,451 ) Cost of services (159,250 ) (51 ) (159,301 ) Total cost of revenue (551,290 ) (462 ) (551,752 ) Selling, general and administrative expense (628,100 ) (1,050 ) (629,150 ) Operating income 232,688 (1,512 ) 231,176 Other income 2,104 1,512 3,616 Net income $ 145,446 $ — $ 145,446 |
Supplemental balance sheet in_2
Supplemental balance sheet information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Allowance for uncollectible accounts | Allowance for uncollectible accounts – Changes in the allowance for uncollectible accounts for the nine months ended September 30, 2018 and 2017 was as follows: Nine Months Ended (in thousands) 2018 2017 Balance, beginning of year $ 2,884 $ 2,828 Bad debt expense 2,275 2,384 Write-offs, net of recoveries (2,036 ) (2,404 ) Balance, end of period $ 3,123 $ 2,808 |
Inventories and supplies | Inventories and supplies – Inventories and supplies were comprised of the following: (in thousands) September 30, December 31, Raw materials $ 7,508 $ 7,357 Semi-finished goods 7,942 7,635 Finished goods 25,343 24,146 Supplies 4,325 3,111 Inventories and supplies $ 45,118 $ 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: September 30, 2018 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Funds held for customers: (1) Domestic money market fund $ 11,000 $ — $ — $ 11,000 Canadian and provincial government securities 8,938 — (541 ) 8,397 Canadian guaranteed investment certificates 7,747 — — 7,747 Available-for-sale debt securities $ 27,685 $ — $ (541 ) $ 27,144 (1) Funds held for customers, as reported on the consolidated balance sheet as of September 30, 2018 , also included cash of $57,263 . 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 September 30, 2018 were as follows: (in thousands) Fair value Due in one year or less $ 20,863 Due in two to five years 4,308 Due in six to ten years 1,973 Available-for-sale debt securities $ 27,144 |
Assets held for sale | Net assets held for sale consisted of the following: (in thousands) September 30, December 31, Balance sheet caption Current assets $ — $ 4 Other current assets Intangibles 3,250 8,459 Assets held for sale Goodwill — 3,566 Assets held for sale Other non-current assets — 207 Assets held for sale Net assets held for sale $ 3,250 $ 12,236 |
Intangibles | Intangibles – Intangibles were comprised of the following: September 30, 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 (1) $ — $ — $ — $ 19,100 $ — $ 19,100 Amortizable intangibles: Internal-use software 391,747 (312,268 ) 79,479 359,079 (284,074 ) 75,005 Customer lists/relationships (2) 401,821 (159,667 ) 242,154 343,589 (121,729 ) 221,860 Trade names 49,872 (24,405 ) 25,467 36,931 (19,936 ) 16,995 Technology-based intangibles 39,000 (12,030 ) 26,970 31,800 (6,400 ) 25,400 Software to be sold 36,900 (14,374 ) 22,526 36,900 (11,204 ) 25,696 Other 1,800 (1,755 ) 45 1,800 (1,590 ) 210 Amortizable intangibles 921,140 (524,499 ) 396,641 810,099 (444,933 ) 365,166 Intangibles $ 921,140 $ (524,499 ) $ 396,641 $ 829,199 $ (444,933 ) $ 384,266 (1) During the third quarter of 2018, we recorded a pre-tax asset impairment charge of $19,100 for our indefinite-lived trade name. Further information can be found in Note 7. (2) During the first nine months of 2018, we recorded pre-tax asset impairment charges of $4,031 |
Estimated future amortization expense | Based on the intangibles in service as of September 30, 2018 , estimated future amortization expense is as follows: (in thousands) Estimated amortization expense Remainder of 2018 $ 23,632 2019 94,468 2020 74,306 2021 57,593 2022 41,964 |
Acquired intangibles | The following intangible assets were acquired during the nine months ended September 30, 2018 : (in thousands) Amount Weighted-average amortization period (in years) Customer lists/relationships (1) $ 75,775 8 Internal-use software 33,223 3 Trade names 13,700 7 Technology-based intangibles 7,200 5 Acquired intangibles $ 129,898 6 (1) Includes customer list purchases of $1,188 |
Goodwill | Goodwill – Changes in goodwill during the nine months ended September 30, 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 Impairment charge (Note 7) (78,188 ) — — (78,188 ) Goodwill resulting from acquisitions 41,216 29,304 — 70,520 Measurement-period adjustments for prior year acquisitions (Note 6) 1,420 2,764 — 4,184 Adjustment of assets held for sale 635 — — 635 Currency translation adjustment (2,131 ) — — (2,131 ) Balance, September 30, 2018: Goodwill, gross 747,708 356,307 148,506 1,252,521 Accumulated impairment charges (126,567 ) — — (126,567 ) Goodwill, net of accumulated impairment charges $ 621,141 $ 356,307 $ 148,506 $ 1,125,954 |
Other non-current assets | Other non-current assets – Other non-current assets were comprised of the following: (in thousands) September 30, December 31, Loans and notes receivable from Safeguard distributors $ 71,728 $ 44,276 Prepaid product discounts (1) 58,539 63,895 Postretirement benefit plan asset 45,435 39,849 Deferred sales commissions (2) 7,037 — Deferred advertising costs 5,089 6,135 Other 7,719 5,601 Other non-current assets $ 195,547 $ 159,756 (1) In our prior year financial statements, we referred to this asset as contract acquisition costs. (2) Net of amortization of $2,033 for the nine months ended September 30, 2018 |
Changes in prepaid product discounts | Changes in prepaid product discounts during the nine months ended September 30, 2018 and 2017 were as follows: Nine Months Ended (in thousands) 2018 2017 Balance, beginning of year $ 63,895 $ 65,792 Additions (1) 11,695 15,651 Amortization (16,976 ) (14,685 ) Other (75 ) (127 ) Balance, end of period $ 58,539 $ 66,631 (1) Prepaid product discounts are generally accrued upon contract execution. Cash payments made for prepaid product discounts were $19,125 for the nine months ended September 30, 2018 and $20,003 for the nine months ended September 30, 2017 . |
Accrued liabilities | Accrued liabilities – Accrued liabilities were comprised of the following: (in thousands) September 30, December 31, Funds held for customers $ 83,370 $ 85,091 Deferred revenue 39,939 47,021 Employee profit sharing/cash bonus 25,868 31,312 Prepaid product discounts due within one year (1) 10,596 11,670 Customer rebates 9,887 11,508 Acquisition-related liabilities (2) 6,734 23,878 Restructuring due within one year (Note 8) 4,719 4,380 Income tax 2,146 17,827 Other 51,270 44,566 Accrued liabilities $ 234,529 $ 277,253 (1) In our prior year financial statements, we referred to this liability as contract acquisition costs due within one year. (2) 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. |
Other non-current liabilities | Other non-current liabilities – Other non-current liabilities were comprised of the following: (in thousands) September 30, December 31, Prepaid product discounts (1) $ 15,229 $ 21,658 Other 27,101 30,583 Other non-current liabilities $ 42,330 $ 52,241 (1) |
(Loss) earnings per share (Tabl
(Loss) earnings per share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
(Loss) earnings per share | The following table reflects the calculation of basic and diluted (loss) earnings per share. During each period, certain stock options, as noted below, were excluded from the calculation of diluted (loss) earnings per share because their effect would have been antidilutive. Quarter Ended Nine Months Ended (in thousands, except per share amounts) 2018 2017 2018 2017 (Loss) earnings per share – basic: Net (loss) income $ (31,083 ) $ 28,801 $ 92,461 $ 145,446 Income allocated to participating securities (53 ) (176 ) (396 ) (961 ) (Loss) income available to common shareholders $ (31,136 ) $ 28,625 $ 92,065 $ 144,485 Weighted-average shares outstanding 46,781 48,081 47,340 48,217 (Loss) earnings per share – basic $ (0.67 ) $ 0.60 $ 1.94 $ 3.00 (Loss) earnings per share – diluted: Net (loss) income $ (31,083 ) $ 28,801 $ 92,461 $ 145,446 Income allocated to participating securities (53 ) (175 ) (394 ) (956 ) Re-measurement of share-based awards classified as liabilities (98 ) 53 (274 ) 7 (Loss) income available to common shareholders $ (31,234 ) $ 28,679 $ 91,793 $ 144,497 Weighted-average shares outstanding 46,781 48,081 47,340 48,217 Dilutive impact of potential common shares 22 296 178 331 Weighted-average shares and potential common shares outstanding 46,803 48,377 47,518 48,548 (Loss) earnings per share – diluted $ (0.67 ) $ 0.59 $ 1.93 $ 2.98 Antidilutive options excluded from calculation 1,037 266 570 266 |
Other comprehensive income (Tab
Other comprehensive income (Tables) | 9 Months Ended |
Sep. 30, 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 (loss) income Quarter Ended Nine Months Ended (in thousands) 2018 2017 2018 2017 Amortization of postretirement benefit plan items: Prior service credit $ 355 $ 355 $ 1,066 $ 1,066 Other income Net actuarial loss (721 ) (909 ) (2,163 ) (2,728 ) Other income Total amortization (366 ) (554 ) (1,097 ) (1,662 ) Other income Tax benefit 47 167 447 497 Income tax provision Total reclassifications, net of tax $ (319 ) $ (387 ) $ (650 ) $ (1,165 ) Net (loss) income |
Accumulated other comprehensive loss | Accumulated other comprehensive loss – Changes in the components of accumulated other comprehensive loss during the nine months ended September 30, 2018 were as follows: (in thousands) Postretirement benefit plans Net unrealized loss on marketable debt 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 — (119 ) (5,056 ) (5,175 ) Amounts reclassified from accumulated other comprehensive loss 650 — — 650 Net current-period other comprehensive income (loss) 650 (119 ) (5,056 ) (4,525 ) Adoption of ASU No. 2018-02 (6,867 ) — — (6,867 ) Balance, September 30, 2018 $ (33,046 ) $ (441 ) $ (15,502 ) $ (48,989 ) (1) Other comprehensive loss before reclassifications is net of income tax benefit of $42 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 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) $ 8,429 Identifiable intangible assets: Customer lists/relationships 74,587 Trade names 13,700 Technology-based intangible 7,200 Total intangible assets 95,487 Goodwill 70,520 Total aggregate purchase price 174,436 Liabilities for holdback payments and contingent consideration (3,365 ) Non-cash consideration (2) (1,060 ) Net cash paid for 2018 acquisitions 170,011 Holdback payments for prior year acquisitions 20,385 Payments for acquisitions, net of cash acquired of $1,645 $ 190,396 (1) Net assets acquired consisted primarily of RemitCo accounts receivable and Logomix deferred income tax liabilities. (2) Consists of pre-acquisition amounts owed to us by an acquired distributor. |
Fair value measurements (Tables
Fair value measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Other nonrecurring fair value measurements | Information regarding these other non-recurring asset impairment analyses was as follows: Fair value measurements using Fair value as of measurement date Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Impairment charge (in thousands) (Level 1) (Level 2) (Level 3) 2018 analyses: Customer list (Small Business Services) $ — $ — $ — $ — $ 2,149 Customer lists (Financial Services) (1) 4,223 — — 4,223 1,882 Total $ 4,031 2017 analyses: Trade name $ — $ — $ — $ — $ 14,752 Assets held for sale 3,500 — — 3,500 8,250 Other — — — — 3,499 Total $ 26,501 (1) |
Changes in accrued contingent consideration | Changes in accrued contingent consideration during the nine months ended September 30, 2018 were as follows: (in thousands) Nine Months Ended September 30, 2018 Balance, December 31, 2017 $ 3,623 Acquisition date fair value 100 Change in fair value 634 Payments (1,437 ) Balance, September 30, 2018 $ 2,920 |
Fair value of financial instruments | Information regarding the fair values of our financial instruments was as follows: Fair value measurements using September 30, 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 $ (2,920 ) $ (2,920 ) $ — $ — $ (2,920 ) Measured at fair value through comprehensive income: Cash equivalents (funds held for customers) 11,000 11,000 11,000 — — Available-for-sale debt securities (funds held for customers) 16,144 16,144 — 16,144 — Amortized cost: Cash 57,851 57,851 57,851 — — Cash (funds held for customers) 57,263 57,263 57,263 — — Loans and notes receivable from Safeguard distributors 74,149 59,134 — — 59,134 Long-term debt (1) 889,000 889,000 — 889,000 — (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 and Chief Execu_2
Restructuring and Chief Executive Officer transition costs (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Components of net restructuring charges | Net restructuring charges for each period consisted of the following components: Quarter Ended Nine Months Ended (in thousands, except number of employees) 2018 2017 2018 2017 Severance accruals $ 2,118 $ 1,248 $ 6,766 $ 3,596 Severance reversals (1,157 ) (78 ) (1,387 ) (596 ) Operating lease obligations 291 — 291 23 Net restructuring accruals 1,252 1,170 5,670 3,023 Other costs 3,852 72 8,127 669 Net restructuring charges $ 5,104 $ 1,242 $ 13,797 $ 3,692 Number of employees included in severance accruals 75 30 180 80 The net restructuring charges are reflected in the consolidated statements of comprehensive (loss) income as follows: Quarter Ended Nine Months Ended (in thousands) 2018 2017 2018 2017 Total cost of revenue $ (31 ) $ (25 ) $ 882 $ (16 ) Operating expenses 5,135 1,267 12,915 3,708 Net restructuring charges $ 5,104 $ 1,242 $ 13,797 $ 3,692 |
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 6,924 133 — 7,057 Restructuring reversals (849 ) (533 ) (5 ) (1,387 ) Payments (1,484 ) (3,820 ) (27 ) (5,331 ) Balance, September 30, 2018 $ 4,591 $ 128 $ — $ 4,719 Cumulative amounts: Restructuring charges $ 6,924 $ 7,355 $ 7,801 $ 22,080 Restructuring reversals (849 ) (694 ) (750 ) (2,293 ) Payments (1,484 ) (6,533 ) (7,051 ) (15,068 ) Balance, September 30, 2018 $ 4,591 $ 128 $ — $ 4,719 |
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 Financial Services Total Balance, December 31, 2017 $ 789 $ 1,398 $ 140 $ 2,049 $ 4 $ — $ 4,380 Restructuring charges 2,214 3,838 — 714 — 291 7,057 Restructuring reversals (351 ) (870 ) (5 ) (161 ) — — (1,387 ) Payments (1,036 ) (2,013 ) (135 ) (2,143 ) (4 ) — (5,331 ) Balance, September 30, 2018 $ 1,616 $ 2,353 $ — $ 459 $ — $ 291 $ 4,719 Cumulative amounts: (2) Restructuring charges $ 6,850 $ 7,940 $ 286 $ 6,631 $ 82 $ 291 $ 22,080 Restructuring reversals (705 ) (945 ) (11 ) (632 ) — — (2,293 ) Payments (4,529 ) (4,642 ) (275 ) (5,540 ) (82 ) — (15,068 ) Balance, September 30, 2018 $ 1,616 $ 2,353 $ — $ 459 $ — $ 291 $ 4,719 (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) | 9 Months Ended |
Sep. 30, 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: Nine Months Ended September 30, 2018 Year Ended December 31, 2017 Income tax at federal statutory rate 21.0 % 35.0 % Goodwill impairment charge 11.3 % 1.5 % State income tax expense, net of federal benefit 3.1 % 2.7 % Net tax benefit of share-based compensation (1.2 %) (1.6 %) Impact of the 2017 Act (0.8 %) (6.6 %) Qualified production activities deduction — (3.2 %) Other 0.7 % (1.4 %) Effective tax rate 34.1 % 26.4 % |
Postretirement benefits (Tables
Postretirement benefits (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Defined Benefit Plan [Abstract] | |
Components of net periodic benefit income | Postretirement benefit income for each period consisted of the following components: Quarter Ended Nine Months Ended (in thousands) 2018 2017 2018 2017 Interest cost $ 656 $ 724 $ 1,969 $ 2,172 Expected return on plan assets (1,934 ) (1,782 ) (5,802 ) (5,346 ) Amortization of prior service credit (355 ) (355 ) (1,066 ) (1,066 ) Amortization of net actuarial losses 721 909 2,163 2,728 Net periodic benefit income $ (912 ) $ (504 ) $ (2,736 ) $ (1,512 ) |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt outstanding | Debt outstanding was comprised of the following: (in thousands) September 30, December 31, Amount drawn on revolving credit facility $ 889,000 $ 413,000 Amount outstanding under term loan facility — 294,938 Capital lease obligations 1,883 1,914 Long-term debt, principal amount 890,883 709,852 Less unamortized debt issuance costs — (471 ) Less current portion of long-term debt (785 ) (44,121 ) Long-term debt 890,098 665,260 Current portion of amount drawn under term loan facility — 43,313 Current portion of capital lease obligations 785 808 Long-term debt due within one year, principal amount 785 44,121 Less unamortized debt issuance costs — (81 ) Long-term debt due within one year 785 44,040 Total debt $ 890,883 $ 709,300 |
Credit facility | Daily average amounts outstanding under our current and previous credit facility were as follows: (in thousands) Nine Months Ended September 30, 2018 Year Ended December 31, 2017 Revolving credit facility: Daily average amount outstanding $ 680,064 $ 436,588 Weighted-average interest rate 3.10 % 2.55 % Term loan facility: Daily average amount outstanding $ 85,084 $ 315,862 Weighted-average interest rate 2.97 % 2.57 % As of September 30, 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 (889,000 ) Outstanding letters of credit (1) (10,221 ) Net available for borrowing as of September 30, 2018 $ 50,779 (1) |
Business segment information (T
Business segment information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Revenue disaggregated by product and service offerings | The following tables present revenue disaggregated by our product and service offerings: Quarter Ended September 30, 2018 (in thousands) Small Business Services Financial Services Direct Checks Consolidated Checks $ 117,918 $ 54,800 $ 25,874 $ 198,592 Marketing solutions and other services: Small business marketing solutions 69,490 — — 69,490 Web services 41,973 — — 41,973 Data-driven marketing solutions — 39,808 — 39,808 Treasury management solutions — 35,833 — 35,833 Fraud, security, risk management and operational services 6,383 12,953 3,460 22,796 Total MOS 117,846 88,594 3,460 209,900 Forms, accessories and other products 79,835 3,377 1,486 84,698 Total revenue $ 315,599 $ 146,771 $ 30,820 $ 493,190 Nine Months Ended September 30, 2018 (in thousands) Small Business Services Financial Services Direct Checks Consolidated Checks $ 360,637 $ 170,442 $ 81,425 $ 612,504 Marketing solutions and other services: Small business marketing solutions 205,694 — — 205,694 Web services 120,199 — — 120,199 Data-driven marketing solutions — 114,275 — 114,275 Treasury management solutions — 93,591 — 93,591 Fraud, security, risk management and operational services 19,487 37,856 10,761 68,104 Total MOS 345,380 245,722 10,761 601,863 Forms, accessories and other products 243,638 10,563 4,781 258,982 Total revenue $ 949,655 $ 426,727 $ 96,967 $ 1,473,349 Quarter Ended September 30, 2017 (in thousands) Small Business Services Financial Services Direct Checks Consolidated Checks $ 119,892 $ 62,613 $ 28,521 $ 211,026 Marketing solutions and other services: Small business marketing solutions 63,286 — — 63,286 Web services 35,059 — — 35,059 Data-driven marketing solutions — 48,195 — 48,195 Treasury management solutions — 27,839 — 27,839 Fraud, security, risk management and operational services 6,552 15,224 3,716 25,492 Total MOS 104,897 91,258 3,716 199,871 Forms, accessories and other products 81,619 3,536 1,617 86,772 Total revenue $ 306,408 $ 157,407 $ 33,854 $ 497,669 Nine Months Ended September 30, 2017 (in thousands) Small Business Services Financial Services Direct Checks Consolidated Checks $ 364,202 $ 190,339 $ 90,375 $ 644,916 Marketing solutions and other services: Small business marketing solutions 185,963 — — 185,963 Web services 95,393 — — 95,393 Data-driven marketing solutions — 116,426 — 116,426 Treasury management solutions — 79,658 — 79,658 Fraud, security, risk management and operational services 19,795 48,547 11,719 80,061 Total MOS 301,151 244,631 11,719 557,501 Forms, accessories and other products 252,053 10,976 5,220 268,249 Total revenue $ 917,406 $ 445,946 $ 107,314 $ 1,470,666 |
Revenue disaggregated by geography | The following tables present our revenue disaggregated by geography, based on where items are shipped or services are performed. (in thousands) Small Business Services Financial Services Direct Checks Total Quarter Ended September 30, 2018: United States $ 290,752 $ 141,979 $ 30,820 $ 463,551 Foreign, primarily Canada and Australia 24,847 4,792 — 29,639 Total revenue $ 315,599 $ 146,771 $ 30,820 $ 493,190 Nine Months Ended September 30, 2018: United States $ 871,574 $ 411,185 $ 96,967 $ 1,379,726 Foreign, primarily Canada and Australia 78,081 15,542 — 93,623 Total revenue $ 949,655 $ 426,727 $ 96,967 $ 1,473,349 (in thousands) Small Business Services Financial Services Direct Checks Total Quarter Ended September 30, 2017: United States $ 281,573 $ 151,587 $ 33,854 $ 467,014 Foreign, primarily Canada and Australia 24,835 5,820 — 30,655 Total revenue $ 306,408 $ 157,407 $ 33,854 $ 497,669 Nine Months Ended September 30, 2017: United States $ 854,239 $ 434,921 $ 107,314 $ 1,396,474 Foreign, primarily Canada and Australia 63,167 11,025 — 74,192 Total revenue $ 917,406 $ 445,946 $ 107,314 $ 1,470,666 |
Business segment information | The following is our segment information as of and for the quarters ended September 30, 2018 and 2017 : Reportable Business Segments (in thousands) Small Business Services Financial Services Direct Checks Corporate Consolidated Total revenue from external customers: 2018 $ 315,599 $ 146,771 $ 30,820 $ — $ 493,190 2017 306,408 157,407 33,854 — 497,669 Operating (loss) income: 2018 (45,254 ) 17,612 10,360 — (17,282 ) 2017 12,893 29,198 11,261 — 53,352 Depreciation and amortization expense: 2018 17,173 15,424 809 — 33,406 2017 14,502 15,935 809 — 31,246 Asset impairment charges: 2018 97,288 1,882 — — 99,170 2017 46,630 — — — 46,630 Total assets: 2018 1,056,086 753,240 157,806 300,235 2,267,367 2017 1,051,076 692,511 159,526 276,867 2,179,980 Capital asset purchases: 2018 — — — 14,526 14,526 2017 — — — 11,563 11,563 The following is our segment information as of and for the nine months ended September 30, 2018 and 2017: Reportable Business Segments (in thousands) Small Business Services Financial Services Direct Checks Corporate Consolidated Total revenue from external customers: 2018 $ 949,655 $ 426,727 $ 96,967 $ — $ 1,473,349 2017 917,406 445,946 107,314 — 1,470,666 Operating income: 2018 72,288 49,565 31,396 — 153,249 2017 119,674 76,052 35,450 — 231,176 Depreciation and amortization expense: 2018 48,765 45,740 2,418 — 96,923 2017 42,158 46,709 2,430 — 91,297 Asset impairment charges: 2018 99,437 1,882 — — 101,319 2017 54,880 — — — 54,880 Total assets: 2018 1,056,086 753,240 157,806 300,235 2,267,367 2017 1,051,076 692,511 159,526 276,867 2,179,980 Capital asset purchases: 2018 — — — 42,566 42,566 2017 — — — 34,351 34,351 |
New accounting pronouncements_3
New accounting pronouncements (ASU No. 2014-09) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Jan. 01, 2018 | |
New accounting pronouncements [Line Items] | ||||||
Total revenue | $ 493,190 | $ 497,669 | $ 1,473,349 | $ 1,470,666 | ||
Contract asset | 20,508 | 20,508 | $ 9,665 | |||
Unbilled receivables | 13,227 | 13,227 | 7,674 | |||
Billings in excess of revenue | 1,563 | 1,563 | $ 2,233 | |||
Change in deferred revenue | (8,263) | |||||
Deferred revenue recognized | 39,488 | |||||
Balance sheet | ||||||
Revenue in excess of billings | 33,735 | 33,735 | 16,379 | |||
Total current assets | 417,342 | 417,342 | 392,966 | |||
Other non-current assets | 195,547 | 195,547 | 159,756 | |||
Total assets | 2,267,367 | $ 2,179,980 | 2,267,367 | $ 2,179,980 | 2,208,827 | |
Deferred income taxes | 46,339 | 46,339 | 50,543 | |||
Retained earnings | 957,979 | 957,979 | 1,004,657 | |||
Total liabilities and shareholders' equity | $ 2,267,367 | $ 2,267,367 | 2,208,827 | |||
Minimum [Member] | ||||||
New accounting pronouncements [Line Items] | ||||||
Remaining performance obligations, expected timing of satisfaction | 3 months | 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 | 1 year | ||||
Capitalized contract costs amortization period | 6 years | |||||
Variable consideration [Member] | ||||||
New accounting pronouncements [Line Items] | ||||||
Total revenue | $ 100,000 | |||||
Variable consideration, period over which finalized | 3 months | |||||
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 | ||||||
Revenue in excess of billings | 17,339 | |||||
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] | Revenue in excess of billings [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 pronouncements_4
New accounting pronouncements (ASU No. 2014-09 impact of adoption) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Income statement | ||||||
Total revenue | $ 493,190 | $ 497,669 | $ 1,473,349 | $ 1,470,666 | ||
Total cost of revenue | (197,634) | (193,071) | (576,594) | (551,752) | ||
Gross profit | 295,556 | 304,598 | 896,755 | 918,914 | ||
Selling, general and administrative expense | (208,533) | (203,349) | (629,272) | (629,150) | ||
Operating (loss) income | (17,282) | 53,352 | 153,249 | 231,176 | ||
(Loss) income before income taxes | (22,170) | 48,947 | 140,377 | 218,997 | ||
Income tax provision | (8,913) | (20,146) | (47,916) | (73,551) | ||
Net (loss) income | (31,083) | 28,801 | 92,461 | 145,446 | ||
Balance sheet | ||||||
Revenue in excess of billings | 33,735 | 33,735 | $ 16,379 | |||
Total current assets | 417,342 | 417,342 | 392,966 | |||
Other non-current assets | 195,547 | 195,547 | 159,756 | |||
Total assets | 2,267,367 | 2,179,980 | 2,267,367 | 2,179,980 | 2,208,827 | |
Accrued liabilities | 234,529 | 234,529 | 277,253 | |||
Total current liabilities | 333,305 | 333,305 | 425,770 | |||
Deferred income taxes | 46,339 | 46,339 | 50,543 | |||
Retained earnings | 957,979 | 957,979 | 1,004,657 | |||
Total liabilities and shareholders' equity | 2,267,367 | 2,267,367 | $ 2,208,827 | |||
Service [Member] | ||||||
Income statement | ||||||
Total revenue | 140,423 | 135,706 | 397,239 | 372,889 | ||
Total cost of revenue | (64,638) | $ (63,879) | (175,894) | $ (159,301) | ||
Accounting Standards Update No. 2014-09 [Member] | ||||||
Balance sheet | ||||||
Revenue in excess of billings | $ 17,339 | |||||
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 | ||||||
Total revenue | 269 | (300) | ||||
Total cost of revenue | (19) | 365 | ||||
Gross profit | 250 | 65 | ||||
Selling, general and administrative expense | (253) | (1,304) | ||||
Operating (loss) income | (3) | (1,239) | ||||
(Loss) income before income taxes | (3) | (1,239) | ||||
Income tax provision | 1 | 320 | ||||
Net (loss) income | (2) | (919) | ||||
Balance sheet | ||||||
Revenue in excess of billings | (895) | (895) | ||||
Total current assets | (895) | (895) | ||||
Other non-current assets | (7,037) | (7,037) | ||||
Total assets | (7,932) | (7,932) | ||||
Accrued liabilities | (320) | (320) | ||||
Total current liabilities | (320) | (320) | ||||
Deferred income taxes | (1,727) | (1,727) | ||||
Retained earnings | (5,885) | (5,885) | ||||
Total liabilities and shareholders' equity | (7,932) | (7,932) | ||||
Effect of adoption [Member] | Accounting Standards Update No. 2014-09 [Member] | Service [Member] | ||||||
Income statement | ||||||
Total revenue | 269 | (300) | ||||
Total cost of revenue | (19) | 365 | ||||
Balance without adoption of ASU No. 2014-09 [Member] | Accounting Standards Update No. 2014-09 [Member] | ||||||
Income statement | ||||||
Total revenue | 493,459 | 1,473,049 | ||||
Total cost of revenue | (197,653) | (576,229) | ||||
Gross profit | 295,806 | 896,820 | ||||
Selling, general and administrative expense | (208,786) | (630,576) | ||||
Operating (loss) income | (17,285) | 152,010 | ||||
(Loss) income before income taxes | (22,173) | 139,138 | ||||
Income tax provision | (8,912) | (47,596) | ||||
Net (loss) income | (31,085) | 91,542 | ||||
Balance sheet | ||||||
Revenue in excess of billings | 32,840 | 32,840 | ||||
Total current assets | 416,447 | 416,447 | ||||
Other non-current assets | 188,510 | 188,510 | ||||
Total assets | 2,259,435 | 2,259,435 | ||||
Accrued liabilities | 234,209 | 234,209 | ||||
Total current liabilities | 332,985 | 332,985 | ||||
Deferred income taxes | 44,612 | 44,612 | ||||
Retained earnings | 952,094 | 952,094 | ||||
Total liabilities and shareholders' equity | 2,259,435 | 2,259,435 | ||||
Balance without adoption of ASU No. 2014-09 [Member] | Accounting Standards Update No. 2014-09 [Member] | Service [Member] | ||||||
Income statement | ||||||
Total revenue | 140,692 | 396,939 | ||||
Total cost of revenue | $ (64,657) | $ (175,529) |
New accounting pronouncements_5
New accounting pronouncements (impact of other adoptions) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | Jan. 01, 2018 | |
Total cost of revenue | $ (197,634) | $ (193,071) | $ (576,594) | $ (551,752) | ||
Selling, general and administrative expense | (208,533) | (203,349) | (629,272) | (629,150) | ||
Operating (loss) income | (17,282) | 53,352 | 153,249 | 231,176 | ||
Other income | 2,356 | 1,303 | 6,081 | 3,616 | ||
Net (loss) income | (31,083) | 28,801 | 92,461 | 145,446 | ||
Product [Member] | ||||||
Total cost of revenue | (132,996) | (129,192) | (400,700) | (392,451) | ||
Service [Member] | ||||||
Total cost of revenue | (64,638) | (63,879) | (175,894) | (159,301) | ||
Retained earnings [Member] | ||||||
Net (loss) income | 92,461 | |||||
Accounting Standards Update No. 2016-01 [Member] | ||||||
Adoption of new accounting pronouncement | 0 | |||||
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 | 0 | ||||
Adoption of Accounting Standards Update No. 2018-02 [Member] | Retained earnings [Member] | ||||||
Adoption of new accounting pronouncement | 6,867 | 6,867 | $ 6,867 | |||
Adoption of Accounting Standards Update No. 2018-02 [Member] | Accumulated other comprehensive loss [Member] | ||||||
Adoption of new accounting pronouncement | (6,867) | (6,867) | $ (6,867) | |||
Accounting Standards Update No. 2018-05 [Member] | ||||||
Impact of Tax Cuts and Jobs Act of 2017 | $ (1,249) | $ (1,118) | ||||
As previously reported [Member] | Accounting Standards Update No. 2017-07 [Member] | ||||||
Total cost of revenue | (192,917) | (551,290) | ||||
Selling, general and administrative expense | (202,999) | (628,100) | ||||
Operating (loss) income | 53,856 | 232,688 | ||||
Other income | 799 | 2,104 | ||||
Net (loss) income | 28,801 | 145,446 | ||||
As previously reported [Member] | Accounting Standards Update No. 2017-07 [Member] | Product [Member] | ||||||
Total cost of revenue | (129,055) | (392,040) | ||||
As previously reported [Member] | Accounting Standards Update No. 2017-07 [Member] | Service [Member] | ||||||
Total cost of revenue | (63,862) | (159,250) | ||||
Effect of adoption [Member] | Accounting Standards Update No. 2017-07 [Member] | ||||||
Total cost of revenue | (154) | (462) | ||||
Selling, general and administrative expense | (350) | (1,050) | ||||
Operating (loss) income | (504) | (1,512) | ||||
Other income | 504 | 1,512 | ||||
Net (loss) income | 0 | 0 | ||||
Effect of adoption [Member] | Accounting Standards Update No. 2017-07 [Member] | Product [Member] | ||||||
Total cost of revenue | (137) | (411) | ||||
Effect of adoption [Member] | Accounting Standards Update No. 2017-07 [Member] | Service [Member] | ||||||
Total cost of revenue | $ (17) | $ (51) |
Supplemental balance sheet in_3
Supplemental balance sheet information (allowances for uncollectible accounts, inventories and supplies) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Allowances for uncollectible accounts | |||
Balance, beginning of year | $ 2,884 | $ 2,828 | |
Bad debt expense | 2,275 | 2,384 | |
Write-offs, net of recoveries | (2,036) | (2,404) | |
Balance, end of period | 3,123 | $ 2,808 | |
Inventories and supplies | |||
Raw materials | 7,508 | $ 7,357 | |
Semi-finished goods | 7,942 | 7,635 | |
Finished goods | 25,343 | 24,146 | |
Supplies | 4,325 | 3,111 | |
Inventories and supplies | $ 45,118 | $ 42,249 |
Supplemental balance sheet in_4
Supplemental balance sheet information (available-for-sale debt securities) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | ||
Available-for-sale debt securities [Line Items] | ||||
Cost | $ 27,685 | $ 34,306 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | (541) | (393) | ||
Fair value | 27,144 | 33,913 | ||
Cash | 57,851 | 59,240 | ||
Expected maturities of available-for-sale debt securities | ||||
Due in one year or less | 20,863 | |||
Due in two to five years | 4,308 | |||
Due in six to ten years | 1,973 | |||
Fair value | 27,144 | 33,913 | ||
Funds held for customers [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 27,685 | [1] | 34,306 | [2] |
Gross unrealized gains | 0 | [1] | 0 | [2] |
Gross unrealized losses | (541) | [1] | (393) | [2] |
Fair value | 27,144 | [1] | 33,913 | [2] |
Cash | 57,263 | 52,279 | ||
Expected maturities of available-for-sale debt securities | ||||
Fair value | 27,144 | [1] | 33,913 | [2] |
Funds held for customers [Member] | Money market securities [Member] | Domestic [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 11,000 | 17,300 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | 0 | 0 | ||
Fair value | 11,000 | 17,300 | ||
Expected maturities of available-for-sale debt securities | ||||
Fair value | 11,000 | 17,300 | ||
Funds held for customers [Member] | Canadian and provincial government securities [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 8,938 | 9,051 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | (541) | (393) | ||
Fair value | 8,397 | 8,658 | ||
Expected maturities of available-for-sale debt securities | ||||
Fair value | 8,397 | 8,658 | ||
Funds held for customers [Member] | Canadian guaranteed investment certificates [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 7,747 | 7,955 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | 0 | 0 | ||
Fair value | 7,747 | 7,955 | ||
Expected maturities of available-for-sale debt securities | ||||
Fair value | $ 7,747 | $ 7,955 | ||
[1] | Funds held for customers, as reported on the consolidated balance sheet as of September 30, 2018 , also included cash of $57,263 | |||
[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 in_5
Supplemental balance sheet information (assets held for sale) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2018USD ($)disposal_groups | Mar. 31, 2018disposal_groups | Sep. 30, 2017USD ($)disposal_groups | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2018USD ($)disposal_groups | Sep. 30, 2017USD ($)disposal_groups | Dec. 31, 2017USD ($)disposal_groups | |
Assets held for sale [Line Items] | ||||||||
Consideration received for sales of businesses | $ 28,028 | $ 28,028 | ||||||
Net gain on sales of assets | 1,765 | $ 1,924 | 12,855 | $ 8,703 | ||||
Small business distributors [Member] | ||||||||
Assets held for sale [Line Items] | ||||||||
Number of businesses sold | disposal_groups | 2 | 3 | ||||||
Non-recurring fair value measurement [Member] | ||||||||
Assets held for sale [Line Items] | ||||||||
Asset impairment charges | $ 2,954 | $ 5,296 | $ 8,250 | |||||
Assets held for sale [Member] | ||||||||
Assets held for sale [Line Items] | ||||||||
Current assets | 0 | 0 | $ 4 | |||||
Intangibles | 3,250 | 3,250 | 8,459 | |||||
Goodwill | 0 | 0 | 3,566 | |||||
Other non-current assets | 0 | 0 | 207 | |||||
Net assets held for sale | $ 3,250 | $ 3,250 | $ 12,236 | |||||
Assets held for sale [Member] | Providers of printed and promotional products [Member] | ||||||||
Assets held for sale [Line Items] | ||||||||
Number of disposal groups held for sale | disposal_groups | 2 | |||||||
Number of businesses sold | disposal_groups | 2 | 1 | ||||||
Assets held for sale [Member] | Small business distributors [Member] | ||||||||
Assets held for sale [Line Items] | ||||||||
Number of disposal groups held for sale | disposal_groups | 1 | 1 | 2 | |||||
Number of businesses sold | disposal_groups | 1 | |||||||
Assets held for sale [Member] | Customer lists/relationships [Member] | ||||||||
Assets held for sale [Line Items] | ||||||||
Number of disposal groups held for sale | disposal_groups | 3 | 3 |
Supplemental balance sheet in_6
Supplemental balance sheet information (intangibles) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | ||
Intangibles [Line Items] | ||||||
Amortizable intangibles, gross carrying amount | $ 921,140 | $ 921,140 | $ 810,099 | |||
Accumulated amortization | (524,499) | (524,499) | (444,933) | |||
Amortizable intangibles, net carrying amount | 396,641 | 396,641 | 365,166 | |||
Gross carrying amount, total | 921,140 | 921,140 | 829,199 | |||
Net carrying amount, total | 396,641 | 396,641 | 384,266 | |||
Amortization of intangibles | 28,505 | $ 27,456 | 84,199 | $ 79,284 | ||
Acquired intangibles | $ 129,898 | |||||
Acquired intangibles, weighted-average amortization period (in years) | 6 years | |||||
Estimated future amortization expense | ||||||
Remainder of 2018 | 23,632 | $ 23,632 | ||||
2,019 | 94,468 | 94,468 | ||||
2,020 | 74,306 | 74,306 | ||||
2,021 | 57,593 | 57,593 | ||||
2,022 | 41,964 | 41,964 | ||||
2018 acquisitions [Member] | ||||||
Intangibles [Line Items] | ||||||
Acquired intangibles | 95,487 | |||||
Trade names [Member] | ||||||
Intangibles [Line Items] | ||||||
Indefinite-lived intangibles, carrying amount | [1] | 0 | 0 | 19,100 | ||
Internal-use software [Member] | ||||||
Intangibles [Line Items] | ||||||
Amortizable intangibles, gross carrying amount | 391,747 | 391,747 | 359,079 | |||
Accumulated amortization | (312,268) | (312,268) | (284,074) | |||
Amortizable intangibles, net carrying amount | 79,479 | 79,479 | 75,005 | |||
Acquired intangibles | $ 33,223 | |||||
Acquired intangibles, weighted-average amortization period (in years) | 3 years | |||||
Customer lists/relationships [Member] | ||||||
Intangibles [Line Items] | ||||||
Asset impairment charges | $ 4,031 | |||||
Amortizable intangibles, gross carrying amount | [2] | 401,821 | 401,821 | 343,589 | ||
Accumulated amortization | [2] | (159,667) | (159,667) | (121,729) | ||
Amortizable intangibles, net carrying amount | [2] | 242,154 | 242,154 | 221,860 | ||
Acquired intangibles | [3] | $ 75,775 | ||||
Acquired intangibles, weighted-average amortization period (in years) | 8 years | |||||
Customer lists/relationships [Member] | 2018 acquisitions [Member] | ||||||
Intangibles [Line Items] | ||||||
Acquired intangibles | $ 74,587 | |||||
Customer lists/relationships [Member] | Asset purchase [Member] | ||||||
Intangibles [Line Items] | ||||||
Acquired intangibles | 1,188 | |||||
Trade names [Member] | ||||||
Intangibles [Line Items] | ||||||
Amortizable intangibles, gross carrying amount | 49,872 | 49,872 | 36,931 | |||
Accumulated amortization | (24,405) | (24,405) | (19,936) | |||
Amortizable intangibles, net carrying amount | 25,467 | 25,467 | 16,995 | |||
Trade names [Member] | 2018 acquisitions [Member] | ||||||
Intangibles [Line Items] | ||||||
Acquired intangibles | $ 13,700 | |||||
Acquired intangibles, weighted-average amortization period (in years) | 7 years | |||||
Technology-based intangible [Member] | ||||||
Intangibles [Line Items] | ||||||
Amortizable intangibles, gross carrying amount | 39,000 | $ 39,000 | 31,800 | |||
Accumulated amortization | (12,030) | (12,030) | (6,400) | |||
Amortizable intangibles, net carrying amount | 26,970 | 26,970 | 25,400 | |||
Technology-based intangible [Member] | 2018 acquisitions [Member] | ||||||
Intangibles [Line Items] | ||||||
Acquired intangibles | $ 7,200 | |||||
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 | 36,900 | |||
Accumulated amortization | (14,374) | (14,374) | (11,204) | |||
Amortizable intangibles, net carrying amount | 22,526 | 22,526 | 25,696 | |||
Other [Member] | ||||||
Intangibles [Line Items] | ||||||
Amortizable intangibles, gross carrying amount | 1,800 | 1,800 | 1,800 | |||
Accumulated amortization | (1,755) | (1,755) | (1,590) | |||
Amortizable intangibles, net carrying amount | 45 | $ 45 | $ 210 | |||
Small Business Services Indirect [Member] | Trade names [Member] | ||||||
Intangibles [Line Items] | ||||||
Asset impairment charges | $ 19,100 | |||||
[1] | During the third quarter of 2018, we recorded a pre-tax asset impairment charge of $19,100 | |||||
[2] | During the first nine months of 2018, we recorded pre-tax asset impairment charges of $4,031 | |||||
[3] | Includes customer list purchases of $1,188 that did not qualify as business combinations. |
Supplemental balance sheet in_7
Supplemental balance sheet information (goodwill) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 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 |
Impairment charge (Note 7) | (78,188) |
Goodwill resulting from acquisitions | 70,520 |
Measurement-period adjustments for prior year acquisitions (Note 6) | 4,184 |
Adjustment of assets held for sale | 635 |
Currency translation adjustment | (2,131) |
Goodwill, gross, end of period | 1,252,521 |
Accumulated impairment charges, end of period | (126,567) |
Goodwill, net of accumulated impairment charges, end of period | 1,125,954 |
2018 acquisitions [Member] | |
Goodwill [Roll Forward] | |
Goodwill resulting from acquisitions | 70,520 |
2017 acquisitions [Member] | |
Goodwill [Roll Forward] | |
Measurement-period adjustments for prior year acquisitions (Note 6) | 4,184 |
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 |
Impairment charge (Note 7) | (78,188) |
Adjustment of assets held for sale | 635 |
Currency translation adjustment | (2,131) |
Goodwill, gross, end of period | 747,708 |
Accumulated impairment charges, end of period | (126,567) |
Goodwill, net of accumulated impairment charges, end of period | 621,141 |
Reportable business segments [Member] | Small Business Services [Member] | 2018 acquisitions [Member] | |
Goodwill [Roll Forward] | |
Goodwill resulting from acquisitions | 41,216 |
Reportable business segments [Member] | Small Business Services [Member] | 2017 acquisitions [Member] | |
Goodwill [Roll Forward] | |
Measurement-period adjustments for prior year acquisitions (Note 6) | 1,420 |
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 | 356,307 |
Accumulated impairment charges, end of period | 0 |
Goodwill, net of accumulated impairment charges, end of period | 356,307 |
Reportable business segments [Member] | Financial Services [Member] | 2018 acquisitions [Member] | |
Goodwill [Roll Forward] | |
Goodwill resulting from acquisitions | 29,304 |
Reportable business segments [Member] | Financial Services [Member] | 2017 acquisitions [Member] | |
Goodwill [Roll Forward] | |
Measurement-period adjustments for prior year acquisitions (Note 6) | 2,764 |
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 in_8
Supplemental balance sheet information (other) (Details) - USD ($) $ in Thousands | 9 Months Ended | |||||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | |||||
Other non-current assets | ||||||||
Loans and notes receivable from Safeguard distributors | $ 71,728 | $ 44,276 | ||||||
Prepaid product discounts | $ 58,539 | [1] | $ 65,792 | 58,539 | [1] | 63,895 | [1] | |
Postretirement benefit plan asset | 45,435 | 39,849 | ||||||
Deferred sales commissions | [2] | 7,037 | 0 | |||||
Deferred advertising costs | 5,089 | 6,135 | ||||||
Other | 7,719 | 5,601 | ||||||
Other non-current assets | 195,547 | 159,756 | ||||||
Amortization of deferred sales commissions | 2,033 | |||||||
Prepaid product discounts [Roll Forward] | ||||||||
Balance, beginning of year | 63,895 | [1] | 65,792 | |||||
Additions | [3] | 11,695 | 15,651 | |||||
Amortization | (16,976) | (14,685) | ||||||
Other | (75) | (127) | ||||||
Balance, end of period | 58,539 | [1] | 66,631 | |||||
Prepaid product discount payments | $ 19,125 | $ 20,003 | ||||||
Accrued liabilities | ||||||||
Funds held for customers | 83,370 | 85,091 | ||||||
Deferred revenue | 39,939 | 47,021 | ||||||
Employee profit sharing/cash bonus | 25,868 | 31,312 | ||||||
Prepaid product discounts due within one year | [4] | 10,596 | 11,670 | |||||
Customer rebates | 9,887 | 11,508 | ||||||
Acquisition-related liabilities | [5] | 6,734 | 23,878 | |||||
Restructuring due within one year (Note 8) | 4,719 | 4,380 | ||||||
Income tax | 2,146 | 17,827 | ||||||
Other | 51,270 | 44,566 | ||||||
Accrued liabilities | 234,529 | 277,253 | ||||||
Other non-current liabilities | ||||||||
Prepaid product discounts | [6] | 15,229 | 21,658 | |||||
Other | 27,101 | 30,583 | ||||||
Other non-current liabilities | $ 42,330 | $ 52,241 | ||||||
[1] | In our prior year financial statements, we referred to this asset as contract acquisition costs. | |||||||
[2] | Net of amortization of $2,033 for the nine months ended September 30, 2018 | |||||||
[3] | Prepaid product discounts are generally accrued upon contract execution. Cash payments made for prepaid product discounts were $19,125 for the nine months ended September 30, 2018 and $20,003 for the nine months ended September 30, 2017 | |||||||
[4] | In our prior year financial statements, we referred to this liability as contract acquisition costs due within one year. | |||||||
[5] | Consists of holdback payments due at future dates and liabilities for contingent consideration. Further information regarding liabilities for contingent consideration can be found in Note 7. | |||||||
[6] | In our prior year financial statements, we referred to this liability as contract acquisition costs. |
(Loss) earnings per share (Deta
(Loss) earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
(Loss) earnings per share - basic: | ||||
Net (loss) income | $ (31,083) | $ 28,801 | $ 92,461 | $ 145,446 |
Income allocated to participating securities | (53) | (176) | (396) | (961) |
(Loss) income available to common shareholders | $ (31,136) | $ 28,625 | $ 92,065 | $ 144,485 |
Weighted-average shares outstanding | 46,781 | 48,081 | 47,340 | 48,217 |
(Loss) earnings per share - basic | $ (0.67) | $ 0.60 | $ 1.94 | $ 3 |
(Loss) earnings per share - diluted: | ||||
Net (loss) income | $ (31,083) | $ 28,801 | $ 92,461 | $ 145,446 |
Income allocated to participating securities | (53) | (175) | (394) | (956) |
Re-measurement of share-based awards classified as liabilities | (98) | 53 | (274) | 7 |
(Loss) income available to common shareholders | $ (31,234) | $ 28,679 | $ 91,793 | $ 144,497 |
Weighted-average shares outstanding | 46,781 | 48,081 | 47,340 | 48,217 |
Dilutive impact of potential common shares | 22 | 296 | 178 | 331 |
Weighted-average shares and potential common shares outstanding | 46,803 | 48,377 | 47,518 | 48,548 |
(Loss) earnings per share - diluted | $ (0.67) | $ 0.59 | $ 1.93 | $ 2.98 |
Antidilutive options excluded from calculation | 1,037 | 266 | 570 | 266 |
Other comprehensive income (rec
Other comprehensive income (reclassification adjustments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Prior service credit [Member] | ||||
Reclassification adjustments [Line Items] | ||||
Amortization of postretirement benefit plan items | $ 355 | $ 355 | $ 1,066 | $ 1,066 |
Net actuarial loss [Member] | ||||
Reclassification adjustments [Line Items] | ||||
Amortization of postretirement benefit plan items | (721) | (909) | (2,163) | (2,728) |
Postretirement benefit plans [Member] | ||||
Reclassification adjustments [Line Items] | ||||
Amortization of postretirement benefit plan items | (366) | (554) | (1,097) | (1,662) |
Tax benefit | 47 | 167 | 447 | 497 |
Total reclassifications, net of tax | $ (319) | $ (387) | $ (650) | $ (1,165) |
Other comprehensive income (acc
Other comprehensive income (accumulated other comprehensive loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | ||
Accumulated other comprehensive loss [Line Items] | ||||||
Balance, beginning of year | $ 1,015,013 | |||||
Net current-period other comprehensive income (loss) | (4,525) | |||||
Balance, end of period | $ 955,295 | 955,295 | ||||
Adoption of Accounting Standards Update No. 2018-02 [Member] | ||||||
Accumulated other comprehensive loss [Line Items] | ||||||
Adoption of ASU No. 2018-02 | 0 | 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 | 319 | $ 387 | 650 | $ 1,165 | ||
Net current-period other comprehensive income (loss) | 650 | |||||
Balance, end of period | (33,046) | (33,046) | ||||
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) | (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] | (119) | ||||
Amounts reclassified from accumulated other comprehensive loss | [1] | 0 | ||||
Net current-period other comprehensive income (loss) | [1] | (119) | ||||
Balance, end of period | [1] | (441) | (441) | |||
Unrealized holding loss on securities arising during the period, tax | 42 | |||||
Currency translation adjustment [Member] | ||||||
Accumulated other comprehensive loss [Line Items] | ||||||
Balance, beginning of year | (10,446) | |||||
Other comprehensive loss before reclassifications | (5,056) | |||||
Amounts reclassified from accumulated other comprehensive loss | 0 | |||||
Net current-period other comprehensive income (loss) | (5,056) | |||||
Balance, end of period | (15,502) | (15,502) | ||||
Accumulated other comprehensive loss [Member] | ||||||
Accumulated other comprehensive loss [Line Items] | ||||||
Balance, beginning of year | (37,597) | |||||
Other comprehensive loss before reclassifications | (5,175) | |||||
Amounts reclassified from accumulated other comprehensive loss | 650 | |||||
Balance, end of period | (48,989) | (48,989) | ||||
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) | $ (6,867) | $ (6,867) | |||
[1] | Other comprehensive loss before reclassifications is net of income tax benefit of $42 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($)business | Sep. 30, 2017USD ($) | Dec. 31, 2015business | ||
Acquisitions [Line Items] | ||||
Identifiable intangible assets acquired | $ 129,898 | |||
Goodwill | 70,520 | |||
Payments for acquisitions, net of cash acquired | 190,396 | $ 125,417 | ||
Holdback payments for prior year acquisitions | 20,385 | 7,883 | ||
Measurement-period adjustments to goodwill | 4,184 | |||
Customer lists/relationships [Member] | ||||
Acquisitions [Line Items] | ||||
Identifiable intangible assets acquired | [1] | 75,775 | ||
Internal-use software [Member] | ||||
Acquisitions [Line Items] | ||||
Identifiable intangible assets acquired | 33,223 | |||
Logomix Inc. [Member] | Small Business Services [Member] | ||||
Acquisitions [Line Items] | ||||
Goodwill | 30,080 | |||
ColoCrossing [Member] | Small Business Services [Member] | ||||
Acquisitions [Line Items] | ||||
Goodwill | 11,136 | |||
RemitCo [Member] | Financial Services [Member] | ||||
Acquisitions [Line Items] | ||||
Goodwill | $ 29,304 | |||
Small business distributors [Member] | ||||
Acquisitions [Line Items] | ||||
Number of acquisitions, purchase accounting preliminary | business | 1 | |||
Small business distributors [Member] | Small Business Services [Member] | ||||
Acquisitions [Line Items] | ||||
Number of businesses acquired | business | 3 | |||
Small business distributors [Member] | Financial 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] | $ 8,429 | ||
Identifiable intangible assets acquired | 95,487 | |||
Goodwill | 70,520 | |||
Total aggregate purchase price | 174,436 | |||
Liabilities for holdback payments and contingent consideration | (3,365) | |||
Non-cash consideration | [3] | (1,060) | ||
Payments for acquisitions, net of cash acquired | 170,011 | |||
Cash acquired | 1,645 | |||
2018 acquisitions [Member] | Customer lists/relationships [Member] | ||||
Acquisitions [Line Items] | ||||
Identifiable intangible assets acquired | 74,587 | |||
2018 acquisitions [Member] | Trade names [Member] | ||||
Acquisitions [Line Items] | ||||
Identifiable intangible assets acquired | 13,700 | |||
2018 acquisitions [Member] | Technology-based intangible [Member] | ||||
Acquisitions [Line Items] | ||||
Identifiable intangible assets acquired | 7,200 | |||
2017 acquisitions [Member] | ||||
Acquisitions [Line Items] | ||||
Payments for acquisitions, net of cash acquired | $ 117,534 | |||
Measurement-period adjustments to goodwill | 4,184 | |||
2017 acquisitions [Member] | Customer lists/relationships [Member] | ||||
Acquisitions [Line Items] | ||||
Measurement period adjustments to intangibles | (1,654) | |||
2017 acquisitions [Member] | Internal-use software [Member] | ||||
Acquisitions [Line Items] | ||||
Measurement period adjustments to intangibles | $ 1,000 | |||
[1] | Includes customer list purchases of $1,188 that did not qualify as business combinations. | |||
[2] | Net assets acquired consisted primarily of RemitCo accounts receivable and Logomix deferred income tax liabilities. | |||
[3] | Consists of pre-acquisition amounts owed to us by an acquired distributor. |
Fair value measurements (annual
Fair value measurements (annual impairment analyses) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018USD ($)reporting_units | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Jul. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jul. 31, 2017USD ($) | |
Schedule of goodwill and indefinite-lived intangibles [Line Items] | ||||||
Goodwill | $ 1,125,954 | $ 1,125,954 | $ 1,130,934 | |||
Goodwill impairment charge | $ 78,188 | |||||
Trade names [Member] | Significant unobservable inputs (Level 3) [Member] | Measurement input, royalty rate [Member] | Non-recurring fair value measurement [Member] | ||||||
Schedule of goodwill and indefinite-lived intangibles [Line Items] | ||||||
Intangibles fair value inputs | 0.00% | |||||
Reporting units for which qualitative analysis completed [Member] | ||||||
Schedule of goodwill and indefinite-lived intangibles [Line Items] | ||||||
Number of reporting units | reporting_units | 5 | |||||
Reporting units for which qualitative analysis completed [Member] | Minimum [Member] | ||||||
Schedule of goodwill and indefinite-lived intangibles [Line Items] | ||||||
Excess of fair value over carrying value | $ 64,000 | |||||
Excess of fair value over carrying value, percentage | 50.00% | |||||
Reporting units for which qualitative analysis completed [Member] | Maximum [Member] | ||||||
Schedule of goodwill and indefinite-lived intangibles [Line Items] | ||||||
Excess of fair value over carrying value | $ 1,405,000 | |||||
Excess of fair value over carrying value, percentage | 314.00% | |||||
Reporting units for which quantitative analysis completed [Member] | ||||||
Schedule of goodwill and indefinite-lived intangibles [Line Items] | ||||||
Number of reporting units | reporting_units | 2 | |||||
Small Business Services Web Services [Member] | ||||||
Schedule of goodwill and indefinite-lived intangibles [Line Items] | ||||||
Excess of fair value over carrying value | $ 63,000 | |||||
Excess of fair value over carrying value, percentage | 22.00% | |||||
Goodwill | $ 225,383 | |||||
Small Business Services Indirect [Member] | ||||||
Schedule of goodwill and indefinite-lived intangibles [Line Items] | ||||||
Goodwill impairment charge | $ 78,188 | |||||
Small Business Services Indirect [Member] | Trade names [Member] | ||||||
Schedule of goodwill and indefinite-lived intangibles [Line Items] | ||||||
Asset impairment charges | $ 19,100 | |||||
Small Business Services Safeguard [Member] | ||||||
Schedule of goodwill and indefinite-lived intangibles [Line Items] | ||||||
Goodwill impairment charge | $ 28,379 |
Fair value measurements (other
Fair value measurements (other non-recurring fair value measurements) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2018USD ($)business | Sep. 30, 2017USD ($) | Dec. 31, 2015business | Jul. 31, 2018USD ($) | ||
Non-recurring fair value measurements [Line Items] | ||||||||||
Asset impairment charges | $ 99,170 | $ 46,630 | $ 101,319 | $ 54,880 | ||||||
Financial Services [Member] | Small business distributors [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Number of businesses acquired | business | 2 | |||||||||
Small Business Services [Member] | Small business distributors [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Number of businesses acquired | business | 3 | |||||||||
Reportable business segments [Member] | Financial Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Asset impairment charges | 1,882 | 0 | $ 1,882 | 0 | ||||||
Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Asset impairment charges | 97,288 | 46,630 | 99,437 | 54,880 | ||||||
Non-recurring fair value measurement [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Asset impairment charges, assets held for sale | $ 2,954 | $ 5,296 | 8,250 | |||||||
Asset impairment charges | 26,501 | |||||||||
Non-recurring fair value measurement [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Asset impairment charges, assets held for sale | 8,250 | |||||||||
Estimated fair value of disposal group | 3,500 | |||||||||
Non-recurring fair value measurement [Member] | Customer lists/relationships [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Asset impairment charges | $ 4,031 | |||||||||
Non-recurring fair value measurement [Member] | Customer lists/relationships [Member] | Reportable business segments [Member] | Financial Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Asset impairment charges | [1] | $ 1,882 | ||||||||
Estimated fair value, asset group | [1] | $ 4,223 | ||||||||
Non-recurring fair value measurement [Member] | Customer lists/relationships [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Asset impairment charges | $ 2,149 | |||||||||
Estimated fair value, intangibles | 0 | |||||||||
Non-recurring fair value measurement [Member] | Trade names [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Asset impairment charges | 14,752 | |||||||||
Estimated fair value, intangibles | 0 | 0 | ||||||||
Non-recurring fair value measurement [Member] | Internal-use software [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Asset impairment charges | 3,499 | |||||||||
Estimated fair value, intangibles | 0 | 0 | ||||||||
Non-recurring fair value measurement [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Estimated fair value of disposal group | 0 | |||||||||
Non-recurring fair value measurement [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Customer lists/relationships [Member] | Reportable business segments [Member] | Financial Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Estimated fair value, asset group | [1] | 0 | ||||||||
Non-recurring fair value measurement [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Customer lists/relationships [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Estimated fair value, intangibles | 0 | |||||||||
Non-recurring fair value measurement [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Trade names [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Estimated fair value, intangibles | 0 | 0 | ||||||||
Non-recurring fair value measurement [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Internal-use software [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Estimated fair value, intangibles | 0 | 0 | ||||||||
Non-recurring fair value measurement [Member] | Significant other observable inputs (Level 2) [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Estimated fair value of disposal group | 0 | |||||||||
Non-recurring fair value measurement [Member] | Significant other observable inputs (Level 2) [Member] | Customer lists/relationships [Member] | Reportable business segments [Member] | Financial Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Estimated fair value, asset group | [1] | 0 | ||||||||
Non-recurring fair value measurement [Member] | Significant other observable inputs (Level 2) [Member] | Customer lists/relationships [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Estimated fair value, intangibles | 0 | |||||||||
Non-recurring fair value measurement [Member] | Significant other observable inputs (Level 2) [Member] | Trade names [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Estimated fair value, intangibles | 0 | 0 | ||||||||
Non-recurring fair value measurement [Member] | Significant other observable inputs (Level 2) [Member] | Internal-use software [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Estimated fair value, intangibles | 0 | 0 | ||||||||
Non-recurring fair value measurement [Member] | Significant unobservable inputs (Level 3) [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Estimated fair value of disposal group | $ 3,500 | |||||||||
Non-recurring fair value measurement [Member] | Significant unobservable inputs (Level 3) [Member] | Customer lists/relationships [Member] | Reportable business segments [Member] | Financial Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Estimated fair value, asset group | [1] | $ 4,223 | ||||||||
Non-recurring fair value measurement [Member] | Significant unobservable inputs (Level 3) [Member] | Customer lists/relationships [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Estimated fair value, intangibles | $ 0 | |||||||||
Non-recurring fair value measurement [Member] | Significant unobservable inputs (Level 3) [Member] | Trade names [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Estimated fair value, intangibles | 0 | 0 | ||||||||
Non-recurring fair value measurement [Member] | Significant unobservable inputs (Level 3) [Member] | Internal-use software [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||||
Non-recurring fair value measurements [Line Items] | ||||||||||
Estimated fair value, intangibles | $ 0 | $ 0 | ||||||||
[1] | The fair value presented is for the entire asset group that includes the impaired customer lists. |
Fair value measurements (recurr
Fair value measurements (recurring fair value measurements) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 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 | 634 |
Payments | (1,437) |
Balance, end of period | $ 2,920 |
Funds held for customers [Member] | Canadian guaranteed investment certificates [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 | Sep. 30, 2018 | Dec. 31, 2017 | |||
Fair value measurements, financial instruments [Line Items] | |||||
Accrued contingent consideration | $ (2,920) | $ (3,623) | |||
Available-for-sale debt securities | 27,144 | 33,913 | |||
Cash | 57,851 | 59,240 | |||
Cash, fair value | 57,851 | 59,240 | |||
Loans and notes receivable from Safeguard distributors | 74,149 | 46,409 | |||
Loans and notes receivable from Safeguard distributors, fair value | 59,134 | 44,650 | |||
Long-term debt | [1] | 889,000 | 707,386 | ||
Long-term debt, fair value | [1] | 889,000 | 707,938 | ||
Recurring fair value measurements [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Accrued contingent consideration | (2,920) | (3,623) | |||
Quoted prices in active markets for identical assets (Level 1) [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Cash, fair value | 57,851 | 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 | |||
Significant other observable 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] | 889,000 | 707,938 | ||
Significant other observable 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 | 59,134 | 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 | (2,920) | (3,623) | |||
Funds held for customers [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Available-for-sale debt securities | 27,144 | [2] | 33,913 | [3] | |
Cash | 57,263 | 52,279 | |||
Cash, fair value | 57,263 | 52,279 | |||
Funds held for customers [Member] | Money market securities [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Cash equivalents | 11,000 | 17,300 | |||
Funds held for customers [Member] | Foreign debt securities [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Available-for-sale debt securities | 16,144 | 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 | 11,000 | 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 | 16,144 | 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 | 57,263 | 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 | 11,000 | 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] | Significant other observable inputs (Level 2) [Member] | |||||
Fair value measurements, financial instruments [Line Items] | |||||
Cash, fair value | 0 | 0 | |||
Funds held for customers [Member] | Significant other observable 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] | Significant other observable 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 | 16,144 | 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 September 30, 2018 , also included cash of $57,263 | ||||
[3] | Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2017 , also included cash of $52,279 |
Restructuring and Chief Execu_3
Restructuring and Chief Executive Officer transition costs (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 33 Months Ended | |||||
Sep. 30, 2018USD ($)Employees | Sep. 30, 2017USD ($)Employees | Sep. 30, 2018USD ($)Employees | Sep. 30, 2017USD ($)Employees | Sep. 30, 2018USD ($)Employees | Apr. 25, 2018USD ($) | Dec. 31, 2017USD ($) | ||
Restructuring charges [Line Items] | ||||||||
Restructuring charges | $ 5,104 | $ 1,242 | $ 13,797 | $ 3,692 | ||||
Number of employees in severance accruals | Employees | 75 | 30 | 180 | 80 | ||||
Other disclosures | ||||||||
Restructuring accruals, total | $ 4,719 | $ 4,719 | $ 4,719 | $ 4,380 | ||||
Number of employees that have not started to receive severance benefits | Employees | 75 | 75 | 75 | |||||
CEO transition costs | ||||||||
Retention bonus, amount | $ 2,000 | |||||||
Impact of modification of share-based payment award | $ 2,088 | |||||||
CEO transition costs | $ 2,622 | $ 4,152 | ||||||
Total cost of revenue [Member] | ||||||||
Restructuring charges [Line Items] | ||||||||
Restructuring charges | (31) | $ (25) | 882 | $ (16) | ||||
Operating expenses [Member] | ||||||||
Restructuring charges [Line Items] | ||||||||
Restructuring charges | 5,135 | 1,267 | 12,915 | 3,708 | ||||
Severance [Member] | ||||||||
Restructuring charges [Line Items] | ||||||||
Restructuring charges | 2,118 | 1,248 | 6,766 | 3,596 | ||||
Restructuring reversals | (1,157) | (78) | (1,387) | (596) | ||||
Operating lease obligations [Member] | ||||||||
Restructuring charges [Line Items] | ||||||||
Restructuring charges | 291 | 0 | 291 | 23 | ||||
Net restructuring accruals [Member] | ||||||||
Restructuring charges [Line Items] | ||||||||
Restructuring charges | 7,057 | $ 22,080 | [1] | |||||
Net restructuring accruals | 1,252 | 1,170 | 5,670 | 3,023 | ||||
Restructuring reversals | (1,387) | (2,293) | [1] | |||||
Other disclosures | ||||||||
Restructuring accruals, total | 4,719 | 4,719 | $ 4,719 | $ 4,380 | ||||
Other costs [Member] | ||||||||
Restructuring charges [Line Items] | ||||||||
Restructuring charges | $ 3,852 | $ 72 | $ 8,127 | $ 669 | ||||
Maximum [Member] | ||||||||
CEO transition costs | ||||||||
Retention bonus, percentage | 150.00% | |||||||
[1] | Includes accruals related to our cost reduction initiatives for 2016 through 2018. |
Restructuring and Chief Execu_4
Restructuring and Chief Executive Officer transition costs (restructuring accruals by year and by segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 21 Months Ended | 33 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | |||
Restructuring accruals [Line Items] | ||||||||
Balance, beginning of year | $ 4,380 | |||||||
Restructuring charges | $ 5,104 | $ 1,242 | 13,797 | $ 3,692 | ||||
Balance, end of period | 4,719 | 4,719 | $ 4,719 | $ 4,719 | ||||
Employee severance benefits [Member] | ||||||||
Restructuring accruals [Line Items] | ||||||||
Restructuring charges | 2,118 | 1,248 | 6,766 | 3,596 | ||||
Restructuring reversals | (1,157) | (78) | (1,387) | (596) | ||||
Employee severance benefits [Member] | Reportable business segments [Member] | Small Business Services [Member] | ||||||||
Restructuring accruals [Line Items] | ||||||||
Balance, beginning of year | 789 | |||||||
Restructuring charges | 2,214 | 6,850 | [1] | |||||
Restructuring reversals | (351) | (705) | [1] | |||||
Payments | (1,036) | (4,529) | [1] | |||||
Balance, end of period | 1,616 | 1,616 | 1,616 | 1,616 | ||||
Employee severance benefits [Member] | Reportable business segments [Member] | Financial Services [Member] | ||||||||
Restructuring accruals [Line Items] | ||||||||
Balance, beginning of year | 1,398 | |||||||
Restructuring charges | 3,838 | 7,940 | [1] | |||||
Restructuring reversals | (870) | (945) | [1] | |||||
Payments | (2,013) | (4,642) | [1] | |||||
Balance, end of period | 2,353 | 2,353 | 2,353 | 2,353 | ||||
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 | (5) | (11) | [1] | |||||
Payments | (135) | (275) | [1] | |||||
Balance, end of period | 0 | 0 | 0 | 0 | ||||
Employee severance benefits [Member] | Corporate [Member] | ||||||||
Restructuring accruals [Line Items] | ||||||||
Balance, beginning of year | [2] | 2,049 | ||||||
Restructuring charges | [2] | 714 | 6,631 | [1] | ||||
Restructuring reversals | [2] | (161) | (632) | [1] | ||||
Payments | [2] | (2,143) | (5,540) | [1] | ||||
Balance, end of period | [2] | 459 | 459 | 459 | 459 | |||
Operating lease obligations [Member] | ||||||||
Restructuring accruals [Line Items] | ||||||||
Restructuring charges | 291 | $ 0 | 291 | $ 23 | ||||
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 | 0 | ||||
Operating lease obligations [Member] | Reportable business segments [Member] | Financial Services [Member] | ||||||||
Restructuring accruals [Line Items] | ||||||||
Balance, beginning of year | 0 | |||||||
Restructuring charges | 291 | 291 | ||||||
Restructuring reversals | 0 | 0 | ||||||
Payments | 0 | 0 | ||||||
Balance, end of period | 291 | 291 | 291 | 291 | ||||
Employee severance and operating lease obligations [Member] | ||||||||
Restructuring accruals [Line Items] | ||||||||
Balance, beginning of year | 4,380 | |||||||
Restructuring charges | 7,057 | 22,080 | [1] | |||||
Restructuring reversals | (1,387) | (2,293) | [1] | |||||
Payments | (5,331) | (15,068) | [1] | |||||
Balance, end of period | 4,719 | 4,719 | 4,719 | 4,719 | ||||
Employee severance and operating lease obligations [Member] | 2018 initiatives [Member] | ||||||||
Restructuring accruals [Line Items] | ||||||||
Balance, beginning of year | 0 | |||||||
Restructuring charges | 6,924 | |||||||
Restructuring reversals | (849) | |||||||
Payments | (1,484) | |||||||
Balance, end of period | 4,591 | 4,591 | 4,591 | 4,591 | ||||
Employee severance and operating lease obligations [Member] | 2017 initiatives [Member] | ||||||||
Restructuring accruals [Line Items] | ||||||||
Balance, beginning of year | 4,348 | |||||||
Restructuring charges | 133 | 7,355 | ||||||
Restructuring reversals | (533) | (694) | ||||||
Payments | (3,820) | (6,533) | ||||||
Balance, end of period | 128 | 128 | 128 | 128 | ||||
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 | $ 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) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Reconciliation of effective tax rate | ||
Income at federal statutory rate | 21.00% | 35.00% |
Goodwill impairment charge | 11.30% | 1.50% |
State income tax, net of federal benefit | 3.10% | 2.70% |
Net tax benefit of share-based compensation | (1.20%) | (1.60%) |
Impact of the 2017 Act | (0.80%) | (6.60%) |
Qualified production activities deduction | 0.00% | (3.20%) |
Other | 0.70% | (1.40%) |
Effective tax rate | 34.10% | 26.40% |
Postretirement benefits (Detail
Postretirement benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net periodic benefit income | ||||
Interest cost | $ 656 | $ 724 | $ 1,969 | $ 2,172 |
Expected return on plan assets | (1,934) | (1,782) | (5,802) | (5,346) |
Amortization of prior service credit | (355) | (355) | (1,066) | (1,066) |
Amortization of net actuarial losses | 721 | 909 | 2,163 | 2,728 |
Net periodic benefit income | $ (912) | $ (504) | $ (2,736) | $ (1,512) |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | ||
Debt instruments [Line Items] | |||
Capital lease obligations | $ 1,883 | $ 1,914 | |
Long-term debt, principal amount | 890,883 | 709,852 | |
Less unamortized debt issuance costs | 0 | (471) | |
Current portion of long-term debt | 785 | 44,121 | |
Long-term debt | 890,098 | 665,260 | |
Less unamortized debt issuance costs | 0 | (81) | |
Long-term debt due within one year | 785 | 44,040 | |
Total debt | $ 890,883 | 709,300 | |
Revolving credit facility, maturity date | Mar. 21, 2023 | ||
Capital lease obligations, maturity date | Jun. 30, 2022 | ||
Revolving credit facility [Member] | |||
Debt instruments [Line Items] | |||
Debt, principal amount | $ 889,000 | $ 413,000 | |
Revolving credit facility, current commitment | 950,000 | ||
Revolving credit facility, maximum commitment | $ 1,425,000 | ||
Ratio of total debt less unrestricted cash to EBITDA | 2.75 | ||
Interest rate at period end | 3.22% | 2.98% | |
Maximum leverage ratio | 3.5 | ||
Ratio of EBIT to interest expense | 3 | ||
Daily average amount outstanding | $ 680,064 | $ 436,588 | |
Weighted-average interest rate | 3.10% | 2.55% | |
Outstanding letters of credit | [1] | $ (10,221) | |
Net available for borrowing as of September 30, 2018 | $ 50,779 | ||
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 | $ 85,084 | $ 315,862 | |
Weighted-average interest rate | 2.97% | 2.57% | |
Capital lease obligations [Member] | |||
Debt instruments [Line Items] | |||
Current portion of long-term debt | $ 785 | $ 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 conting_2
Other commitments and contingencies (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Environmental matters [Line Items] | ||
Accruals for environmental matters | $ 2,732 | $ 2,646 |
Self-insurance | ||
Self-insurance liabilities | 6,973 | $ 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 | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Oct. 24, 2018 | May 04, 2016 | |
Shareholders' equity [Line Items] | ||||
Common shares repurchased (in shares) | 1,919 | |||
Payments for common shares repurchased | $ 120,000 | $ 50,070 | ||
Share repurchase program, authorized amount | $ 300,000 | |||
Amount remaining under share repurchase authorization | $ 119,227 | |||
Subsequent Event [Member] | ||||
Shareholders' equity [Line Items] | ||||
Share repurchase program, authorized amount | $ 500,000 |
Business segment information (d
Business segment information (disaggregated revenue information) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017 | |
Disaggregated revenue information | |||||
Number of reportable business segments | 3 | ||||
Total revenue from external customers | $ 493,190 | $ 497,669 | $ 1,473,349 | $ 1,470,666 | |
United States [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 463,551 | 467,014 | 1,379,726 | 1,396,474 | |
Foreign, primarily Canada and Australia [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 29,639 | 30,655 | 93,623 | 74,192 | |
Reportable business segments [Member] | Small Business Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 315,599 | 306,408 | 949,655 | 917,406 | |
Reportable business segments [Member] | Small Business Services [Member] | United States [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 290,752 | 281,573 | 871,574 | 854,239 | |
Reportable business segments [Member] | Small Business Services [Member] | Foreign, primarily Canada and Australia [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 24,847 | 24,835 | 78,081 | 63,167 | |
Reportable business segments [Member] | Financial Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 146,771 | 157,407 | 426,727 | 445,946 | |
Reportable business segments [Member] | Financial Services [Member] | United States [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 141,979 | 151,587 | 411,185 | 434,921 | |
Reportable business segments [Member] | Financial Services [Member] | Foreign, primarily Canada and Australia [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 4,792 | 5,820 | 15,542 | 11,025 | |
Reportable business segments [Member] | Direct Checks [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 30,820 | 33,854 | 96,967 | 107,314 | |
Reportable business segments [Member] | Direct Checks [Member] | United States [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 30,820 | 33,854 | 96,967 | 107,314 | |
Reportable business segments [Member] | Direct Checks [Member] | Foreign, primarily Canada and Australia [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 0 | 0 | 0 | 0 | |
Checks [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 198,592 | 211,026 | 612,504 | 644,916 | |
Checks [Member] | Reportable business segments [Member] | Small Business Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 117,918 | 119,892 | 360,637 | 364,202 | |
Checks [Member] | Reportable business segments [Member] | Financial Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 54,800 | 62,613 | 170,442 | 190,339 | |
Checks [Member] | Reportable business segments [Member] | Direct Checks [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 25,874 | 28,521 | 81,425 | 90,375 | |
Small business marketing solutions [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 69,490 | 63,286 | 205,694 | 185,963 | |
Small business marketing solutions [Member] | Reportable business segments [Member] | Small Business Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 69,490 | 63,286 | 205,694 | 185,963 | |
Small business marketing solutions [Member] | Reportable business segments [Member] | Financial Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 0 | 0 | 0 | 0 | |
Small business marketing solutions [Member] | Reportable business segments [Member] | Direct Checks [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 0 | 0 | 0 | 0 | |
Web services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 41,973 | 35,059 | 120,199 | 95,393 | |
Web services [Member] | Reportable business segments [Member] | Small Business Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 41,973 | 35,059 | 120,199 | 95,393 | |
Web services [Member] | Reportable business segments [Member] | Financial Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 0 | 0 | 0 | 0 | |
Web services [Member] | Reportable business segments [Member] | Direct Checks [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 0 | 0 | 0 | 0 | |
Data-driven marketing solutions [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 39,808 | 48,195 | 114,275 | 116,426 | |
Data-driven marketing solutions [Member] | Reportable business segments [Member] | Small Business Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 0 | 0 | 0 | 0 | |
Data-driven marketing solutions [Member] | Reportable business segments [Member] | Financial Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 39,808 | 48,195 | 114,275 | 116,426 | |
Data-driven marketing solutions [Member] | Reportable business segments [Member] | Direct Checks [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 0 | 0 | 0 | 0 | |
Treasury management solutions [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 35,833 | 27,839 | 93,591 | 79,658 | |
Treasury management solutions [Member] | Reportable business segments [Member] | Small Business Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 0 | 0 | 0 | 0 | |
Treasury management solutions [Member] | Reportable business segments [Member] | Financial Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 35,833 | 27,839 | 93,591 | 79,658 | |
Treasury management solutions [Member] | Reportable business segments [Member] | Direct Checks [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 0 | 0 | 0 | 0 | |
Fraud, security, risk management and operational services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 22,796 | 25,492 | 68,104 | 80,061 | |
Fraud, security, risk management and operational services [Member] | Reportable business segments [Member] | Small Business Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 6,383 | 6,552 | 19,487 | 19,795 | |
Fraud, security, risk management and operational services [Member] | Reportable business segments [Member] | Financial Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 12,953 | 15,224 | 37,856 | 48,547 | |
Fraud, security, risk management and operational services [Member] | Reportable business segments [Member] | Direct Checks [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 3,460 | 3,716 | 10,761 | 11,719 | |
Total MOS [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 209,900 | 199,871 | 601,863 | 557,501 | |
Total MOS [Member] | Recognized at point in time [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 69,477 | 204,624 | |||
Total MOS [Member] | Recognized over time [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 140,423 | 397,239 | |||
Total MOS [Member] | Reportable business segments [Member] | Small Business Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 117,846 | 104,897 | 345,380 | 301,151 | |
Total MOS [Member] | Reportable business segments [Member] | Financial Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 88,594 | 91,258 | 245,722 | 244,631 | |
Total MOS [Member] | Reportable business segments [Member] | Direct Checks [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 3,460 | 3,716 | 10,761 | 11,719 | |
Forms, accessories and other products [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 84,698 | 86,772 | 258,982 | 268,249 | |
Forms, accessories and other products [Member] | Reportable business segments [Member] | Small Business Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 79,835 | 81,619 | 243,638 | 252,053 | |
Forms, accessories and other products [Member] | Reportable business segments [Member] | Financial Services [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | 3,377 | 3,536 | 10,563 | 10,976 | |
Forms, accessories and other products [Member] | Reportable business segments [Member] | Direct Checks [Member] | |||||
Disaggregated revenue information | |||||
Total revenue from external customers | $ 1,486 | $ 1,617 | $ 4,781 | $ 5,220 | |
Product concentration risk [Member] | Checks [Member] | Reportable business segments [Member] | Small Business Services [Member] | |||||
Disaggregated revenue information | |||||
Concentration risk, percentage | 39.00% | ||||
Product concentration risk [Member] | Checks [Member] | Reportable business segments [Member] | Financial Services [Member] | |||||
Disaggregated revenue information | |||||
Concentration risk, percentage | 43.00% | ||||
Product concentration risk [Member] | Checks [Member] | Reportable business segments [Member] | Direct Checks [Member] | |||||
Disaggregated revenue information | |||||
Concentration risk, percentage | 84.00% | ||||
Product concentration risk [Member] | Total MOS [Member] | Reportable business segments [Member] | Small Business Services [Member] | |||||
Disaggregated revenue information | |||||
Concentration risk, percentage | 34.00% | ||||
Product concentration risk [Member] | Total MOS [Member] | Reportable business segments [Member] | Financial Services [Member] | |||||
Disaggregated revenue information | |||||
Concentration risk, percentage | 55.00% | ||||
Product concentration risk [Member] | Total MOS [Member] | Reportable business segments [Member] | Direct Checks [Member] | |||||
Disaggregated revenue information | |||||
Concentration risk, percentage | 11.00% |
Business segment information _2
Business segment information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Business segment information [Line Items] | |||||
Total revenue from external customers | $ 493,190 | $ 497,669 | $ 1,473,349 | $ 1,470,666 | |
Operating (loss) income: | (17,282) | 53,352 | 153,249 | 231,176 | |
Depreciation and amortization expense: | 33,406 | 31,246 | 96,923 | 91,297 | |
Asset impairment charges | 99,170 | 46,630 | 101,319 | 54,880 | |
Total assets: | 2,267,367 | 2,179,980 | 2,267,367 | 2,179,980 | $ 2,208,827 |
Capital asset purchases: | 14,526 | 11,563 | 42,566 | 34,351 | |
Reportable business segments [Member] | Small Business Services [Member] | |||||
Business segment information [Line Items] | |||||
Total revenue from external customers | 315,599 | 306,408 | 949,655 | 917,406 | |
Operating (loss) income: | (45,254) | 12,893 | 72,288 | 119,674 | |
Depreciation and amortization expense: | 17,173 | 14,502 | 48,765 | 42,158 | |
Asset impairment charges | 97,288 | 46,630 | 99,437 | 54,880 | |
Total assets: | 1,056,086 | 1,051,076 | 1,056,086 | 1,051,076 | |
Capital asset purchases: | 0 | 0 | 0 | 0 | |
Reportable business segments [Member] | Financial Services [Member] | |||||
Business segment information [Line Items] | |||||
Total revenue from external customers | 146,771 | 157,407 | 426,727 | 445,946 | |
Operating (loss) income: | 17,612 | 29,198 | 49,565 | 76,052 | |
Depreciation and amortization expense: | 15,424 | 15,935 | 45,740 | 46,709 | |
Asset impairment charges | 1,882 | 0 | 1,882 | 0 | |
Total assets: | 753,240 | 692,511 | 753,240 | 692,511 | |
Capital asset purchases: | 0 | 0 | 0 | 0 | |
Reportable business segments [Member] | Direct Checks [Member] | |||||
Business segment information [Line Items] | |||||
Total revenue from external customers | 30,820 | 33,854 | 96,967 | 107,314 | |
Operating (loss) income: | 10,360 | 11,261 | 31,396 | 35,450 | |
Depreciation and amortization expense: | 809 | 809 | 2,418 | 2,430 | |
Asset impairment charges | 0 | 0 | 0 | 0 | |
Total assets: | 157,806 | 159,526 | 157,806 | 159,526 | |
Capital asset purchases: | 0 | 0 | 0 | 0 | |
Corporate [Member] | |||||
Business segment information [Line Items] | |||||
Total revenue from external customers | 0 | 0 | 0 | 0 | |
Operating (loss) income: | 0 | 0 | 0 | 0 | |
Depreciation and amortization expense: | 0 | 0 | 0 | 0 | |
Asset impairment charges | 0 | 0 | 0 | 0 | |
Total assets: | 300,235 | 276,867 | 300,235 | 276,867 | |
Capital asset purchases: | $ 14,526 | $ 11,563 | $ 42,566 | $ 34,351 |