[X]
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended
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December 31, 2018
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Minnesota
(State or other jurisdiction of incorporation or organization)
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41-0216800
(I.R.S. Employer Identification No.)
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3680 Victoria St. N., Shoreview, Minnesota
(Address of principal executive offices)
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55126-2966
(Zip Code)
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Common Stock, par value $1.00 per share
(Title of each class)
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New York Stock Exchange
(Name of each exchange on which registered)
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Large accelerated filer [X]
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Accelerated filer [ ]
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Non-accelerated filer [ ]
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Smaller reporting company [ ]
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Emerging growth company [ ]
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Item
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Page
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•
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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.
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•
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Web services – These service offerings include hosting and domain name services, logo and web design, search engine marketing and optimization, email marketing, payroll services and business incorporation and organization services.
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•
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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.
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•
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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.
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•
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Fraud, security, risk management and operational services – These service offerings include fraud protection and security services, electronic checks and deposits ("ePayments") and digital engagement solutions, including loyalty and rewards programs and financial management tools.
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2018
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2017
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2016
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2015
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2014
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|||||
Marketing solutions and other services:
|
|
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|||||
Small business marketing solutions
|
|
14.6
|
%
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|
13.3
|
%
|
|
13.1
|
%
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|
11.8
|
%
|
|
10.0
|
%
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Web services
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|
8.1
|
%
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6.7
|
%
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6.3
|
%
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6.3
|
%
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|
7.2
|
%
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Data-driven marketing solutions
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7.4
|
%
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|
7.7
|
%
|
|
2.7
|
%
|
|
1.2
|
%
|
|
1.1
|
%
|
Treasury management solutions
|
|
7.4
|
%
|
|
5.5
|
%
|
|
5.0
|
%
|
|
4.2
|
%
|
|
1.0
|
%
|
Fraud, security, risk management and operational services
|
|
4.5
|
%
|
|
5.2
|
%
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|
6.3
|
%
|
|
6.5
|
%
|
|
6.2
|
%
|
Total MOS
|
|
42.0
|
%
|
|
38.4
|
%
|
|
33.4
|
%
|
|
30.0
|
%
|
|
25.5
|
%
|
Checks
|
|
40.6
|
%
|
|
43.3
|
%
|
|
46.8
|
%
|
|
49.3
|
%
|
|
52.0
|
%
|
Forms, accessories and other products
|
|
17.4
|
%
|
|
18.3
|
%
|
|
19.8
|
%
|
|
20.7
|
%
|
|
22.5
|
%
|
Total revenue
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
•
|
effectively acquire and retain customers by optimizing each of our sales channels;
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•
|
expand sales of higher growth and recurring MOS offerings to offset the secular decline in check and forms usage;
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•
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increase our share of the amount small businesses spend on the types of products and services in our portfolio through increased brand awareness, channel coverage, and improved customer acquisition; and
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•
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Continue to optimize our cost and expense structure.
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1.
|
Web services:
|
*
|
Improve the digital marketing customer experience and cross-sell across all customers and channels, including through our integrated Deluxe Marketing Suite, while continuing to build partnerships and explore acquisition opportunities.
|
*
|
Accelerate our brand awareness transformation, building a clear linkage between marketing and revenue-generating capabilities.
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*
|
Focus on scaling payroll services and continue to evaluate early stage businesses and other operational annuity growth solutions.
|
2.
|
Payments and marketing solutions:
|
*
|
Optimize ePayments, with a focus on building opportunities with financial institutions, health care and insurance payment processors, accounting services and software providers, and other document management and payment solution companies.
|
*
|
Focus on core check retention and acquisition and on developing incremental retail customer acquisition channels.
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*
|
Profitably scale integrated marketing-on-demand solutions, with the largest opportunity in enterprise accounts.
|
•
|
expand sales of higher growth MOS offerings that differentiate us from our competition,
|
•
|
optimize core check revenue streams and acquire new clients, and
|
•
|
continue to optimize our cost and expense structure.
|
1.
|
Data-driven marketing solutions:
|
*
|
Leverage data-driven analytics and marketing capabilities to grow financial institution depository and lending products.
|
*
|
Assess potential acquisitions in this market space.
|
2.
|
Treasury management solutions:
|
*
|
Profitably scale our treasury management solutions.
|
*
|
Further integrate previous acquisitions to fully leverage our capabilities.
|
*
|
Assess potential acquisitions in this market space.
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•
|
Deluxe Marketing Solutions – a variety of direct marketing solutions that help financial institutions acquire new customers, deepen existing customer relationships and retain customers. These offerings leverage data and analytics to help our clients execute marketing campaigns for deposit and lending products across multiple contact channels, including direct mail, email, online and other digital media.
|
•
|
Deluxe Treasury Management – comprehensive treasury management solutions, including accounts receivable processing and remote deposit capture, available at the customer site and as software-as-a-service and business process outsourced deployment models.
|
•
|
Deluxe Rewards – a loyalty and rewards platform that offers multiple touch points that enable our clients to have ongoing engagement with their customers.
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•
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Deluxe Strategic Sourcing – a comprehensive, outsourced service that enables financial institutions to improve efficiency, financial controls and pricing compared to self-managing multiple supplier relationships.
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•
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Banker's Dashboard® – online financial management tools that provide financial institutions with comprehensive daily insights into their financial picture.
|
•
|
Provent® – a comprehensive suite of identity protection services largely complementary to our check offerings.
|
•
|
maximize the lifetime value of customers by selling new features, accessories and products;
|
•
|
continue to optimize our cost and expense structure; and
|
•
|
optimize cash flow.
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Name
|
Age
|
Present Position
|
Executive Officer Since
|
Pete Godich
|
54
|
Senior Vice President, Financial Services
|
2008
|
Julie Loosbrock
|
59
|
Senior Vice President, Human Resources
|
2008
|
Malcolm McRoberts
|
54
|
Senior Vice President, Small Business Services
|
2008
|
Tracey Engelhardt
|
54
|
Senior Vice President, Direct-to-Consumer
|
2012
|
Michael Mathews
|
46
|
Senior Vice President, Chief Information Officer
|
2013
|
Amanda Brinkman
|
39
|
Vice President, Chief Brand and Communications Officer
|
2014
|
Keith Bush
|
48
|
Senior Vice President, Chief Financial Officer
|
2017
|
Jeffrey Cotter
|
51
|
Chief Administrative Officer, Senior Vice President and General Counsel
|
2018
|
Barry McCarthy
|
55
|
President and Chief Executive Officer
|
2018
|
Amanda Parrilli
|
40
|
Vice President, Strategy
|
2019
|
•
|
our failure to generate profitable revenue growth;
|
•
|
our failure to acquire new customers, retain our current customers and sell more products and services to current and new customers;
|
•
|
our inability to implement improvements to our technology and other key assets to increase efficiency, enhance our competitive advantage and scale our operations;
|
•
|
our failure to effectively operate, integrate or leverage the businesses we acquire;
|
•
|
the failure of our digital services and products to achieve widespread customer acceptance;
|
•
|
our inability to promote, strengthen and protect our brand;
|
•
|
our failure to effectively manage the growth, expanding complexity and pace of change of our business and operations;
|
•
|
our inability to identify suitable acquisition candidates or to complete acquisitions on acceptable terms;
|
•
|
unanticipated changes in our business, markets, industry or the competitive landscape; and
|
•
|
general economic conditions.
|
•
|
difficulties and/or delays in assimilating operations, products and services, including effectively scaling revenue and ensuring a strong system of information security and controls is in place;
|
•
|
failure to realize expected synergies and savings or to achieve projected profitability levels on a sustained basis;
|
•
|
diversion of management's attention from other business concerns and risks of managing an increasingly diverse set of products and services across expanded and new industries;
|
•
|
unanticipated integration costs;
|
•
|
difficulty in maintaining controls, procedures and policies, especially when the acquired business was a non-public company and may not have employed the same rigor in these areas as required for a publicly traded company;
|
•
|
decisions by our customers or the customers of the acquired business to temporarily or permanently seek alternate suppliers;
|
•
|
difficulty in assimilating the acquired business into our corporate culture;
|
•
|
failure to address legacy distributor account protection rights;
|
•
|
increased compliance and other complexity;
|
•
|
unidentified issues not discovered during our due diligence process, including product or service quality issues, intellectual property issues and tax or legal contingencies; and
|
•
|
loss of key employees.
|
•
|
changes in our business strategies and/or the allocation of resources;
|
•
|
the failure of our acquisitions to achieve expected operating results;
|
•
|
changes in market conditions;
|
•
|
a decline in our stock price for a sustained period;
|
•
|
a downturn in economic conditions that negatively affects our actual and forecasted operating results; or
|
•
|
a material acceleration of order volume declines for checks and forms.
|
Period
|
|
Total number of shares purchased
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs
|
|
Maximum approximate dollar value of shares that may yet be purchased under the plans or programs
|
||||||
October 1, 2018 -
October 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
500,000,000
|
|
November 1, 2018 -
November 30, 2018
|
|
1,219,252
|
|
|
49.21
|
|
|
1,219,252
|
|
|
439,999,983
|
|
||
December 1, 2018 -
December 31, 2018
|
|
445,786
|
|
|
44.86
|
|
|
445,786
|
|
|
419,999,995
|
|
||
Total
|
|
1,665,038
|
|
|
48.05
|
|
|
1,665,038
|
|
|
419,999,995
|
|
(dollars and orders in thousands, except per share and per order amounts)
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Statement of Income Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
|
$
|
1,998,025
|
|
|
$
|
1,965,556
|
|
|
$
|
1,849,062
|
|
|
$
|
1,772,817
|
|
|
$
|
1,674,082
|
|
As a percentage of total revenue:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross profit
|
|
60.4
|
%
|
|
62.2
|
%
|
|
63.9
|
%
|
|
63.9
|
%
|
|
63.7
|
%
|
|||||
Selling, general and administrative expense
|
|
42.7
|
%
|
|
42.2
|
%
|
|
43.7
|
%
|
|
43.8
|
%
|
|
43.0
|
%
|
|||||
Operating income
|
|
11.6
|
%
|
|
16.7
|
%
|
|
19.8
|
%
|
|
19.8
|
%
|
|
19.7
|
%
|
|||||
Operating income
|
|
$
|
231,221
|
|
|
$
|
329,176
|
|
|
$
|
366,887
|
|
|
$
|
351,634
|
|
|
$
|
330,449
|
|
Net income:
|
|
149,630
|
|
|
230,155
|
|
|
229,382
|
|
|
218,629
|
|
|
199,794
|
|
|||||
Per share - basic
|
|
3.18
|
|
|
4.75
|
|
|
4.68
|
|
|
4.39
|
|
|
3.99
|
|
|||||
Per share - diluted
|
|
3.16
|
|
|
4.72
|
|
|
4.65
|
|
|
4.36
|
|
|
3.96
|
|
|||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
59,740
|
|
|
$
|
59,240
|
|
|
$
|
76,574
|
|
|
$
|
62,427
|
|
|
$
|
61,541
|
|
Return on average assets(1)
|
|
6.6
|
%
|
|
10.5
|
%
|
|
11.4
|
%
|
|
12.4
|
%
|
|
12.3
|
%
|
|||||
Total assets
|
|
$
|
2,305,096
|
|
|
$
|
2,208,827
|
|
|
$
|
2,184,338
|
|
|
$
|
1,842,153
|
|
|
$
|
1,683,682
|
|
Long-term obligations(2)
|
|
911,864
|
|
|
709,300
|
|
|
758,648
|
|
|
629,018
|
|
|
549,603
|
|
|||||
Statement of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
|
$
|
339,315
|
|
|
$
|
338,431
|
|
|
$
|
319,312
|
|
|
$
|
309,631
|
|
|
$
|
285,098
|
|
Net cash used by investing activities
|
|
(275,414
|
)
|
|
(180,891
|
)
|
|
(279,511
|
)
|
|
(251,140
|
)
|
|
(139,949
|
)
|
|||||
Net cash (used) provided by financing activities
|
|
(39,825
|
)
|
|
(182,956
|
)
|
|
5,998
|
|
|
(30,237
|
)
|
|
(199,290
|
)
|
|||||
Purchases of capital assets
|
|
(62,238
|
)
|
|
(47,450
|
)
|
|
(46,614
|
)
|
|
(43,261
|
)
|
|
(41,119
|
)
|
|||||
Payments for acquisitions, net of cash acquired
|
|
(214,258
|
)
|
|
(139,223
|
)
|
|
(239,664
|
)
|
|
(212,990
|
)
|
|
(105,029
|
)
|
|||||
Payments for common shares repurchased
|
|
(200,000
|
)
|
|
(65,000
|
)
|
|
(55,224
|
)
|
|
(59,952
|
)
|
|
(60,119
|
)
|
|||||
Other Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends per share
|
|
$
|
1.20
|
|
|
$
|
1.20
|
|
|
$
|
1.20
|
|
|
$
|
1.20
|
|
|
$
|
1.15
|
|
Orders(3)
|
|
47,534
|
|
|
49,981
|
|
|
52,176
|
|
|
53,138
|
|
|
52,632
|
|
|||||
Revenue per order(3)
|
|
$
|
42.03
|
|
|
$
|
39.33
|
|
|
$
|
35.44
|
|
|
$
|
33.36
|
|
|
$
|
31.81
|
|
Number of employees
|
|
6,701
|
|
|
5,886
|
|
|
6,026
|
|
|
5,874
|
|
|
5,830
|
|
|||||
Number of printing facilities(4)
|
|
11
|
|
|
11
|
|
|
12
|
|
|
11
|
|
|
11
|
|
|||||
Number of call center facilities(4)
|
|
27
|
|
|
26
|
|
|
26
|
|
|
14
|
|
|
16
|
|
•
|
Executive Overview that discusses what we do, our operating results at a high level and our financial outlook for the upcoming year;
|
•
|
Consolidated Results of Operations, Restructuring and Integration Expense, CEO Transition Costs and Segment Results that includes a more detailed discussion of our revenue and expenses;
|
•
|
Cash Flows and Liquidity, Capital Resources and Other Financial Position Information that discusses key aspects of our cash flows, capital structure and financial position;
|
•
|
Off-Balance Sheet Arrangements, Guarantees and Contractual Obligations that discusses our financial commitments; and
|
•
|
Critical Accounting Policies that discusses the policies we believe are important to understanding the assumptions and judgments underlying our financial statements.
|
|
|
|
|
|
|
|
|
Change
|
||||||||
(in thousands, except per order amounts)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||
Total revenue
|
|
$
|
1,998,025
|
|
|
$
|
1,965,556
|
|
|
$
|
1,849,062
|
|
|
1.7%
|
|
6.3%
|
Orders
|
|
47,534
|
|
|
49,981
|
|
|
52,176
|
|
|
(4.9%)
|
|
(4.2%)
|
|||
Revenue per order
|
|
$
|
42.03
|
|
|
$
|
39.33
|
|
|
$
|
35.44
|
|
|
6.9%
|
|
11.0%
|
|
|
|
|
|
|
|
|
Change
|
|||||
|
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
|||
Marketing solutions and other services:
|
|
|
|
|
|
|
|
|
|
|
|||
Small business marketing solutions
|
|
14.6
|
%
|
|
13.3
|
%
|
|
13.1
|
%
|
|
1.3 pt.
|
|
0.2 pt.
|
Web services
|
|
8.1
|
%
|
|
6.7
|
%
|
|
6.3
|
%
|
|
1.4 pt.
|
|
0.4 pt.
|
Data-driven marketing solutions
|
|
7.4
|
%
|
|
7.7
|
%
|
|
2.7
|
%
|
|
(0.3) pt.
|
|
5.0 pt.
|
Treasury management solutions
|
|
7.4
|
%
|
|
5.5
|
%
|
|
5.0
|
%
|
|
1.9 pt.
|
|
0.5 pt.
|
Fraud, security, risk management and operational services
|
|
4.5
|
%
|
|
5.2
|
%
|
|
6.3
|
%
|
|
(0.7) pt.
|
|
(1.1) pt.
|
Total MOS
|
|
42.0
|
%
|
|
38.4
|
%
|
|
33.4
|
%
|
|
3.6 pt.
|
|
5.0 pt.
|
Checks
|
|
40.6
|
%
|
|
43.3
|
%
|
|
46.8
|
%
|
|
(2.7) pt.
|
|
(3.5) pt.
|
Forms, accessories and other products
|
|
17.4
|
%
|
|
18.3
|
%
|
|
19.8
|
%
|
|
(0.9) pt.
|
|
(1.5) pt.
|
Total revenue
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
—
|
|
—
|
|
|
|
|
Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||
Total cost of revenue
|
|
$
|
791,748
|
|
|
$
|
742,707
|
|
|
$
|
667,813
|
|
|
6.6%
|
|
11.2%
|
Total cost of revenue as a percentage of total revenue
|
|
39.6
|
%
|
|
37.8
|
%
|
|
36.1
|
%
|
|
1.8 pt.
|
|
1.7 pt.
|
|
|
|
|
Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||
SG&A expense
|
|
$
|
854,000
|
|
|
$
|
830,231
|
|
|
$
|
807,238
|
|
|
2.9%
|
|
2.8%
|
SG&A expense as a percentage of total revenue
|
|
42.7
|
%
|
|
42.2
|
%
|
|
43.7
|
%
|
|
0.5 pt.
|
|
(1.5) pt.
|
|
|
|
|
Change
|
||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||
Restructuring and integration expense
|
|
$
|
19,737
|
|
|
$
|
8,562
|
|
|
$
|
7,124
|
|
|
$
|
11,175
|
|
|
$
|
1,438
|
|
|
|
|
|
Change
|
||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||
Asset impairment charges
|
|
$
|
101,319
|
|
|
$
|
54,880
|
|
|
$
|
—
|
|
|
$
|
46,439
|
|
|
$
|
54,880
|
|
|
|
|
|
Change
|
||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||
Loss on early debt extinguishment
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,858
|
|
|
$
|
—
|
|
|
$
|
(7,858
|
)
|
|
|
|
|
Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||
Interest expense
|
|
$
|
27,112
|
|
|
$
|
21,359
|
|
|
$
|
22,302
|
|
|
26.9%
|
|
(4.2%)
|
Weighted-average debt outstanding
|
|
796,667
|
|
|
754,289
|
|
|
620,357
|
|
|
5.6%
|
|
21.6%
|
|||
Weighted-average interest rate
|
|
3.21
|
%
|
|
2.55
|
%
|
|
2.85
|
%
|
|
0.66 pt.
|
|
(0.30) pt.
|
|
|
|
|
Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||
Income tax provision
|
|
$
|
63,001
|
|
|
$
|
82,672
|
|
|
$
|
111,004
|
|
|
(23.8%)
|
|
(25.5%)
|
Effective tax rate
|
|
29.6
|
%
|
|
26.4
|
%
|
|
32.6
|
%
|
|
3.2 pt.
|
|
(6.2) pt.
|
|
|
|
|
|
|
|
|
Change
|
||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||
Total revenue
|
|
$
|
1,283,620
|
|
|
$
|
1,239,739
|
|
|
$
|
1,195,743
|
|
|
3.5%
|
|
3.7%
|
Operating income
|
|
119,808
|
|
|
181,528
|
|
|
207,581
|
|
|
(34.0%)
|
|
(12.6%)
|
|||
Operating margin
|
|
9.3
|
%
|
|
14.6
|
%
|
|
17.4
|
%
|
|
(5.3) pt.
|
|
(2.8) pt.
|
|
|
|
|
|
|
|
|
Change
|
||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||
Total revenue
|
|
$
|
586,967
|
|
|
$
|
585,275
|
|
|
$
|
499,976
|
|
|
0.3%
|
|
17.1%
|
Operating income
|
|
69,939
|
|
|
101,047
|
|
|
106,335
|
|
|
(30.8%)
|
|
(5.0%)
|
|||
Operating margin
|
|
11.9
|
%
|
|
17.3
|
%
|
|
21.3
|
%
|
|
(5.4) pt.
|
|
(4.0) pt.
|
|
|
|
|
|
|
|
|
Change
|
||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||
Total revenue
|
|
$
|
127,438
|
|
|
$
|
140,542
|
|
|
$
|
153,343
|
|
|
(9.3%)
|
|
(8.3%)
|
Operating income
|
|
41,474
|
|
|
46,601
|
|
|
52,971
|
|
|
(11.0%)
|
|
(12.0%)
|
|||
Operating margin
|
|
32.5
|
%
|
|
33.2
|
%
|
|
34.5
|
%
|
|
(0.7) pt.
|
|
(1.3) pt.
|
|
|
|
|
|
|
|
|
Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||
Net cash provided by operating activities
|
|
$
|
339,315
|
|
|
$
|
338,431
|
|
|
$
|
319,312
|
|
|
$
|
884
|
|
|
$
|
19,119
|
|
Net cash used by investing activities
|
|
(275,414
|
)
|
|
(180,891
|
)
|
|
(279,511
|
)
|
|
(94,523
|
)
|
|
98,620
|
|
|||||
Net cash (used) provided by financing activities
|
|
(39,825
|
)
|
|
(182,956
|
)
|
|
5,998
|
|
|
143,131
|
|
|
(188,954
|
)
|
|||||
Effect of exchange rate change on cash, cash equivalents, restricted cash and restricted cash equivalents
|
|
(7,636
|
)
|
|
5,370
|
|
|
2,363
|
|
|
(13,006
|
)
|
|
3,007
|
|
|||||
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents
|
|
$
|
16,440
|
|
|
$
|
(20,046
|
)
|
|
$
|
48,162
|
|
|
$
|
36,486
|
|
|
$
|
(68,208
|
)
|
|
|
|
|
|
|
|
|
Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||
Income tax payments
|
|
$
|
88,253
|
|
|
$
|
124,878
|
|
|
$
|
97,309
|
|
|
$
|
(36,625
|
)
|
|
$
|
27,569
|
|
Medical benefit payments
|
|
31,610
|
|
|
38,806
|
|
|
35,217
|
|
|
(7,196
|
)
|
|
3,589
|
|
|||||
Interest payments
|
|
25,910
|
|
|
19,465
|
|
|
20,975
|
|
|
6,445
|
|
|
(1,510
|
)
|
|||||
Prepaid product discount payments
|
|
23,814
|
|
|
27,079
|
|
|
23,068
|
|
|
(3,265
|
)
|
|
4,011
|
|
|||||
Incentive compensation payments(1)
|
|
21,780
|
|
|
21,174
|
|
|
32,792
|
|
|
606
|
|
|
(11,618
|
)
|
|||||
Severance payments
|
|
6,971
|
|
|
6,981
|
|
|
5,938
|
|
|
(10
|
)
|
|
1,043
|
|
|||||
Incentive payment related to previous acquisition
|
|
—
|
|
|
—
|
|
|
5,434
|
|
|
—
|
|
|
(5,434
|
)
|
|
|
|
|
|
|
|
|
Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||
Payments for acquisitions, net of cash acquired
|
|
$
|
(214,258
|
)
|
|
$
|
(139,223
|
)
|
|
$
|
(239,664
|
)
|
|
$
|
(75,035
|
)
|
|
$
|
100,441
|
|
Payments for common shares repurchased
|
|
(200,000
|
)
|
|
(65,000
|
)
|
|
(55,224
|
)
|
|
(135,000
|
)
|
|
(9,776
|
)
|
|||||
Purchases of capital assets
|
|
(62,238
|
)
|
|
(47,450
|
)
|
|
(46,614
|
)
|
|
(14,788
|
)
|
|
(836
|
)
|
|||||
Cash dividends paid to shareholders
|
|
(56,669
|
)
|
|
(58,098
|
)
|
|
(58,720
|
)
|
|
1,429
|
|
|
622
|
|
|||||
Employee taxes paid for shares withheld
|
|
(7,977
|
)
|
|
(9,377
|
)
|
|
(5,589
|
)
|
|
1,400
|
|
|
(3,788
|
)
|
|||||
Net change in debt
|
|
201,147
|
|
|
(51,165
|
)
|
|
116,811
|
|
|
252,312
|
|
|
(167,976
|
)
|
|||||
Net change in customer funds obligations
|
|
20,279
|
|
|
(6,007
|
)
|
|
1,723
|
|
|
26,286
|
|
|
(7,730
|
)
|
|||||
Proceeds from issuing shares under employee plans
|
|
7,523
|
|
|
9,033
|
|
|
9,114
|
|
|
(1,510
|
)
|
|
(81
|
)
|
|
|
December 31, 2018
|
|
December 31, 2017
|
|
|
||||||||||||
(in thousands)
|
|
Amount
|
|
Weighted-
average interest rate
|
|
Amount
|
|
Weighted-
average interest rate
|
|
Change
|
||||||||
Fixed interest rate
|
|
$
|
1,864
|
|
|
2.0
|
%
|
|
$
|
1,914
|
|
|
2.0
|
%
|
|
$
|
(50
|
)
|
Floating interest rate
|
|
910,000
|
|
|
3.8
|
%
|
|
707,386
|
|
|
3.0
|
%
|
|
202,614
|
|
|||
Total debt
|
|
911,864
|
|
|
3.8
|
%
|
|
709,300
|
|
|
3.0
|
%
|
|
202,564
|
|
|||
Shareholders’ equity
|
|
915,413
|
|
|
|
|
|
1,015,013
|
|
|
|
|
|
(99,600
|
)
|
|||
Total capital
|
|
$
|
1,827,277
|
|
|
|
|
|
$
|
1,724,313
|
|
|
|
|
|
$
|
102,964
|
|
(in thousands)
|
Total available
|
||
Revolving credit facility commitment(1)
|
$
|
950,000
|
|
Amount drawn on revolving credit facility
|
(910,000
|
)
|
|
Outstanding letters of credit(2)
|
(10,221
|
)
|
|
Net available for borrowing as of December 31, 2018
|
$
|
29,779
|
|
(in thousands)
|
|
Total
|
|
2019
|
|
2020 and 2021
|
|
2022 and 2023
|
|
2024 and thereafter
|
||||||||||
Long-term debt
|
|
$
|
910,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
910,000
|
|
|
$
|
—
|
|
Lease obligations
|
|
60,746
|
|
|
17,301
|
|
|
23,243
|
|
|
9,146
|
|
|
11,056
|
|
|||||
Purchase obligations
|
|
61,679
|
|
|
30,686
|
|
|
29,929
|
|
|
1,064
|
|
|
—
|
|
|||||
Other non-current liabilities(1)
|
|
40,548
|
|
|
19,527
|
|
|
17,462
|
|
|
1,755
|
|
|
1,804
|
|
|||||
Total contractual obligations
|
|
$
|
1,072,973
|
|
|
$
|
67,514
|
|
|
$
|
70,634
|
|
|
$
|
921,965
|
|
|
$
|
12,860
|
|
•
|
Payments for uncertain tax positions – Due to the nature of the underlying liabilities and the extended time frame often needed to resolve income tax uncertainties, we cannot make reliable estimates of the amount or timing of cash payments that may be required to settle these liabilities. Our liability for uncertain tax positions, including accrued interest and penalties, was $6.0 million as of December 31, 2018, excluding tax benefits of deductible interest and the federal benefit of deductible state income tax.
|
•
|
A portion of the amount due under our deferred compensation plan – Under this plan, some employees may begin receiving payments upon the termination of employment or disability, and we cannot predict when these events will occur. As such, $3.6 million of our deferred compensation liability as of December 31, 2018 is excluded from the obligations shown in the table above.
|
•
|
Other non-current liabilities which are not settled in cash, such as deferred revenue and incentive compensation that will be settled by issuing shares of our common stock.
|
•
|
Benefit payments for our postretirement medical benefit plan – We have the option of paying benefits from the accumulated assets of the plan or from the general funds of the company. Additionally, we expect the plan assets to earn income over time. As such, we cannot predict when or if payments from our general funds will be required. We anticipate that we will utilize plan assets to pay a majority of our benefits during 2019. Our postretirement benefit plan was overfunded $41.3 million as of December 31, 2018.
|
•
|
Income tax payments, which are dependent upon our taxable income.
|
(in thousands)
|
|
Carrying amount
|
|
Fair value(1)
|
|
Weighted-average interest rate
|
|||||
Amount drawn on revolving credit facility
|
|
$
|
910,000
|
|
|
$
|
910,000
|
|
|
3.8
|
%
|
Capital lease obligations
|
|
1,864
|
|
|
1,864
|
|
|
2.0
|
%
|
||
Total debt
|
|
$
|
911,864
|
|
|
$
|
911,864
|
|
|
3.8
|
%
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
59,740
|
|
|
$
|
59,240
|
|
Trade accounts receivable, net of allowances for uncollectible accounts
|
|
173,862
|
|
|
149,844
|
|
||
Inventories and supplies
|
|
46,441
|
|
|
42,249
|
|
||
Funds held for customers
|
|
100,982
|
|
|
86,192
|
|
||
Revenue in excess of billings
|
|
30,458
|
|
|
16,379
|
|
||
Other current assets
|
|
38,563
|
|
|
39,062
|
|
||
Total current assets
|
|
450,046
|
|
|
392,966
|
|
||
Deferred income taxes
|
|
2,886
|
|
|
1,428
|
|
||
Long-term investments
|
|
43,773
|
|
|
42,607
|
|
||
Property, plant and equipment, net of accumulated depreciation
|
|
90,342
|
|
|
84,638
|
|
||
Assets held for sale
|
|
1,350
|
|
|
12,232
|
|
||
Intangibles, net of accumulated amortization
|
|
359,965
|
|
|
384,266
|
|
||
Goodwill
|
|
1,160,626
|
|
|
1,130,934
|
|
||
Other non-current assets
|
|
196,108
|
|
|
159,756
|
|
||
Total assets
|
|
$
|
2,305,096
|
|
|
$
|
2,208,827
|
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
106,978
|
|
|
$
|
104,477
|
|
Accrued liabilities
|
|
284,281
|
|
|
277,253
|
|
||
Long-term debt due within one year
|
|
791
|
|
|
44,040
|
|
||
Total current liabilities
|
|
392,050
|
|
|
425,770
|
|
||
Long-term debt
|
|
911,073
|
|
|
665,260
|
|
||
Deferred income taxes
|
|
46,680
|
|
|
50,543
|
|
||
Other non-current liabilities
|
|
39,880
|
|
|
52,241
|
|
||
Commitments and contingencies (Notes 11, 15 and 16)
|
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
|
|
|
||
Common shares $1 par value (authorized: 500,000 shares; outstanding: December 31, 2018 – 44,647; December 31, 2017 – 47,953)
|
|
44,647
|
|
|
47,953
|
|
||
Retained earnings
|
|
927,345
|
|
|
1,004,657
|
|
||
Accumulated other comprehensive loss
|
|
(56,579
|
)
|
|
(37,597
|
)
|
||
Total shareholders’ equity
|
|
915,413
|
|
|
1,015,013
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
2,305,096
|
|
|
$
|
2,208,827
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Product revenue
|
|
$
|
1,451,833
|
|
|
$
|
1,469,854
|
|
|
$
|
1,472,882
|
|
Service revenue
|
|
546,192
|
|
|
495,702
|
|
|
376,180
|
|
|||
Total revenue
|
|
1,998,025
|
|
|
1,965,556
|
|
|
1,849,062
|
|
|||
Cost of products
|
|
(547,640
|
)
|
|
(529,638
|
)
|
|
(534,906
|
)
|
|||
Cost of services
|
|
(244,108
|
)
|
|
(213,069
|
)
|
|
(132,907
|
)
|
|||
Total cost of revenue
|
|
(791,748
|
)
|
|
(742,707
|
)
|
|
(667,813
|
)
|
|||
Gross profit
|
|
1,206,277
|
|
|
1,222,849
|
|
|
1,181,249
|
|
|||
Selling, general and administrative expense
|
|
(854,000
|
)
|
|
(830,231
|
)
|
|
(807,238
|
)
|
|||
Restructuring and integration expense
|
|
(19,737
|
)
|
|
(8,562
|
)
|
|
(7,124
|
)
|
|||
Asset impairment charges
|
|
(101,319
|
)
|
|
(54,880
|
)
|
|
—
|
|
|||
Operating income
|
|
231,221
|
|
|
329,176
|
|
|
366,887
|
|
|||
Loss on early debt extinguishment
|
|
—
|
|
|
—
|
|
|
(7,858
|
)
|
|||
Interest expense
|
|
(27,112
|
)
|
|
(21,359
|
)
|
|
(22,302
|
)
|
|||
Other income
|
|
8,522
|
|
|
5,010
|
|
|
3,659
|
|
|||
Income before income taxes
|
|
212,631
|
|
|
312,827
|
|
|
340,386
|
|
|||
Income tax provision
|
|
(63,001
|
)
|
|
(82,672
|
)
|
|
(111,004
|
)
|
|||
Net income
|
|
$
|
149,630
|
|
|
$
|
230,155
|
|
|
$
|
229,382
|
|
Basic earnings per share
|
|
$
|
3.18
|
|
|
$
|
4.75
|
|
|
$
|
4.68
|
|
Diluted earnings per share
|
|
3.16
|
|
|
4.72
|
|
|
4.65
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
|
$
|
149,630
|
|
|
$
|
230,155
|
|
|
$
|
229,382
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
||||||
Postretirement benefit plans:
|
|
|
|
|
|
|
||||||
Net actuarial (loss) gain arising during the year
|
|
(3,805
|
)
|
|
7,011
|
|
|
1,486
|
|
|||
Less reclassification of amounts from other comprehensive (loss) income to net income:
|
|
|
|
|
|
|
||||||
Amortization of prior service credit
|
|
(853
|
)
|
|
(1,049
|
)
|
|
(866
|
)
|
|||
Amortization of net actuarial loss
|
|
1,825
|
|
|
2,893
|
|
|
2,518
|
|
|||
Postretirement benefit plans
|
|
(2,833
|
)
|
|
8,855
|
|
|
3,138
|
|
|||
Unrealized holding losses on debt securities arising during the year
|
|
(1
|
)
|
|
(109
|
)
|
|
(99
|
)
|
|||
Unrealized foreign currency translation adjustment
|
|
(9,281
|
)
|
|
4,028
|
|
|
1,793
|
|
|||
Other comprehensive (loss) income
|
|
(12,115
|
)
|
|
12,774
|
|
|
4,832
|
|
|||
Comprehensive income
|
|
$
|
137,515
|
|
|
$
|
242,929
|
|
|
$
|
234,214
|
|
|
|
|
|
|
|
|
||||||
Income tax benefit (expense) of other comprehensive (loss) income included in above amounts:
|
|
|
|
|
|
|
||||||
Postretirement benefit plans:
|
|
|
|
|
|
|
||||||
Net actuarial (loss) gain arising during the year
|
|
$
|
1,339
|
|
|
$
|
(2,465
|
)
|
|
$
|
(952
|
)
|
Less reclassification of amounts from other comprehensive (loss) income to net income:
|
|
|
|
|
|
|
||||||
Amortization of prior service credit
|
|
568
|
|
|
372
|
|
|
555
|
|
|||
Amortization of net actuarial loss
|
|
(1,059
|
)
|
|
(744
|
)
|
|
(1,279
|
)
|
|||
Postretirement benefit plans
|
|
848
|
|
|
(2,837
|
)
|
|
(1,676
|
)
|
|||
Unrealized holding losses on debt securities arising during the year
|
|
—
|
|
|
38
|
|
|
35
|
|
|||
Total net tax benefit (expense) included in other comprehensive (loss) income
|
|
$
|
848
|
|
|
$
|
(2,799
|
)
|
|
$
|
(1,641
|
)
|
|
|
Common shares
|
|
Common shares par value
|
|
Additional paid-in capital
|
|
Retained earnings
|
|
Accumulated other comprehensive loss
|
|
Total
|
|||||||||||
Balance, December 31, 2015
|
|
49,019
|
|
|
$
|
49,019
|
|
|
$
|
—
|
|
|
$
|
751,253
|
|
|
$
|
(55,203
|
)
|
|
$
|
745,069
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
229,382
|
|
|
—
|
|
|
229,382
|
|
|||||
Cash dividends ($1.20 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,720
|
)
|
|
—
|
|
|
(58,720
|
)
|
|||||
Common shares issued
|
|
641
|
|
|
641
|
|
|
17,144
|
|
|
—
|
|
|
—
|
|
|
17,785
|
|
|||||
Common shares repurchased
|
|
(901
|
)
|
|
(901
|
)
|
|
(15,203
|
)
|
|
(39,120
|
)
|
|
—
|
|
|
(55,224
|
)
|
|||||
Other common shares retired
|
|
(213
|
)
|
|
(213
|
)
|
|
(13,427
|
)
|
|
—
|
|
|
—
|
|
|
(13,640
|
)
|
|||||
Employee share-based compensation
|
|
—
|
|
|
—
|
|
|
11,486
|
|
|
—
|
|
|
—
|
|
|
11,486
|
|
|||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,832
|
|
|
4,832
|
|
|||||
Balance, December 31, 2016
|
|
48,546
|
|
|
48,546
|
|
|
—
|
|
|
882,795
|
|
|
(50,371
|
)
|
|
880,970
|
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
230,155
|
|
|
—
|
|
|
230,155
|
|
|||||
Cash dividends ($1.20 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,103
|
)
|
|
—
|
|
|
(58,103
|
)
|
|||||
Common shares issued
|
|
558
|
|
|
558
|
|
|
16,334
|
|
|
—
|
|
|
—
|
|
|
16,892
|
|
|||||
Common shares repurchased
|
|
(924
|
)
|
|
(924
|
)
|
|
(13,886
|
)
|
|
(50,190
|
)
|
|
—
|
|
|
(65,000
|
)
|
|||||
Other common shares retired
|
|
(227
|
)
|
|
(227
|
)
|
|
(16,369
|
)
|
|
—
|
|
|
—
|
|
|
(16,596
|
)
|
|||||
Employee share-based compensation
|
|
—
|
|
|
—
|
|
|
13,921
|
|
|
—
|
|
|
—
|
|
|
13,921
|
|
|||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,774
|
|
|
12,774
|
|
|||||
Balance, December 31, 2017
|
|
47,953
|
|
|
47,953
|
|
|
—
|
|
|
1,004,657
|
|
|
(37,597
|
)
|
|
1,015,013
|
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
149,630
|
|
|
—
|
|
|
149,630
|
|
|||||
Cash dividends ($1.20 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56,743
|
)
|
|
—
|
|
|
(56,743
|
)
|
|||||
Common shares issued
|
|
525
|
|
|
525
|
|
|
18,397
|
|
|
—
|
|
|
—
|
|
|
18,922
|
|
|||||
Common shares repurchased
|
|
(3,584
|
)
|
|
(3,584
|
)
|
|
(14,384
|
)
|
|
(182,032
|
)
|
|
—
|
|
|
(200,000
|
)
|
|||||
Other common shares retired
|
|
(247
|
)
|
|
(247
|
)
|
|
(17,609
|
)
|
|
—
|
|
|
—
|
|
|
(17,856
|
)
|
|||||
Employee share-based compensation
|
|
—
|
|
|
—
|
|
|
13,596
|
|
|
—
|
|
|
—
|
|
|
13,596
|
|
|||||
Adoption of Accounting Standards Update No. 2014-09 (Note 2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,966
|
|
|
—
|
|
|
4,966
|
|
|||||
Adoption of Accounting Standards Update No. 2018-02 (Note 2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,867
|
|
|
(6,867
|
)
|
|
—
|
|
|||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,115
|
)
|
|
(12,115
|
)
|
|||||
Balance, December 31, 2018
|
|
44,647
|
|
|
$
|
44,647
|
|
|
$
|
—
|
|
|
$
|
927,345
|
|
|
$
|
(56,579
|
)
|
|
$
|
915,413
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
149,630
|
|
|
$
|
230,155
|
|
|
$
|
229,382
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
||||
Depreciation
|
|
16,572
|
|
|
15,868
|
|
|
14,498
|
|
|||
Amortization of intangibles
|
|
114,528
|
|
|
106,784
|
|
|
77,085
|
|
|||
Asset impairment charges
|
|
101,319
|
|
|
54,880
|
|
|
—
|
|
|||
Amortization of prepaid product discounts
|
|
22,941
|
|
|
19,969
|
|
|
20,185
|
|
|||
Deferred income taxes
|
|
(11,356
|
)
|
|
(39,177
|
)
|
|
1,886
|
|
|||
Employee share-based compensation expense
|
|
13,378
|
|
|
15,109
|
|
|
12,459
|
|
|||
Gain on sales of businesses and customer lists
|
|
(15,641
|
)
|
|
(8,703
|
)
|
|
—
|
|
|||
Loss on early debt extinguishment
|
|
—
|
|
|
—
|
|
|
7,858
|
|
|||
Other non-cash items, net
|
|
8,030
|
|
|
7,708
|
|
|
7,267
|
|
|||
Changes in assets and liabilities, net of effect of acquisitions:
|
|
|
|
|
|
|
|
|
||||
Trade accounts receivable
|
|
(16,795
|
)
|
|
5,279
|
|
|
(23,414
|
)
|
|||
Inventories and supplies
|
|
(3,641
|
)
|
|
(644
|
)
|
|
2,244
|
|
|||
Other current assets
|
|
(12,032
|
)
|
|
(7,976
|
)
|
|
49
|
|
|||
Non-current assets
|
|
(6,913
|
)
|
|
(5,710
|
)
|
|
(5,054
|
)
|
|||
Accounts payable
|
|
4,366
|
|
|
(7,796
|
)
|
|
15,888
|
|
|||
Prepaid product discount payments
|
|
(23,814
|
)
|
|
(27,079
|
)
|
|
(23,068
|
)
|
|||
Other accrued and non-current liabilities
|
|
(1,257
|
)
|
|
(20,236
|
)
|
|
(17,953
|
)
|
|||
Net cash provided by operating activities
|
|
339,315
|
|
|
338,431
|
|
|
319,312
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||
Purchases of capital assets
|
|
(62,238
|
)
|
|
(47,450
|
)
|
|
(46,614
|
)
|
|||
Payments for acquisitions, net of cash acquired
|
|
(214,258
|
)
|
|
(139,223
|
)
|
|
(239,664
|
)
|
|||
Proceeds from company-owned life insurance policies
|
|
—
|
|
|
1,293
|
|
|
4,123
|
|
|||
Purchases of customer funds marketable securities
|
|
(7,807
|
)
|
|
(7,737
|
)
|
|
(7,869
|
)
|
|||
Proceeds from customer funds and corporate marketable securities
|
|
7,807
|
|
|
11,237
|
|
|
9,504
|
|
|||
Other
|
|
1,082
|
|
|
989
|
|
|
1,009
|
|
|||
Net cash used by investing activities
|
|
(275,414
|
)
|
|
(180,891
|
)
|
|
(279,511
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||
Proceeds from issuing long-term debt
|
|
1,280,000
|
|
|
403,000
|
|
|
559,000
|
|
|||
Payments on long-term debt, including costs of debt reacquisition
|
|
(1,078,853
|
)
|
|
(454,165
|
)
|
|
(442,189
|
)
|
|||
Net change in customer funds obligations
|
|
20,279
|
|
|
(6,007
|
)
|
|
1,723
|
|
|||
Proceeds from issuing shares under employee plans
|
|
7,523
|
|
|
9,033
|
|
|
9,114
|
|
|||
Employee taxes paid for shares withheld
|
|
(7,977
|
)
|
|
(9,377
|
)
|
|
(5,589
|
)
|
|||
Payments for common shares repurchased
|
|
(200,000
|
)
|
|
(65,000
|
)
|
|
(55,224
|
)
|
|||
Cash dividends paid to shareholders
|
|
(56,669
|
)
|
|
(58,098
|
)
|
|
(58,720
|
)
|
|||
Other
|
|
(4,128
|
)
|
|
(2,342
|
)
|
|
(2,117
|
)
|
|||
Net cash (used) provided by financing activities
|
|
(39,825
|
)
|
|
(182,956
|
)
|
|
5,998
|
|
|||
Effect of exchange rate change on cash, cash equivalents, restricted cash and restricted cash equivalents
|
|
(7,636
|
)
|
|
5,370
|
|
|
2,363
|
|
|||
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents
|
|
16,440
|
|
|
(20,046
|
)
|
|
48,162
|
|
|||
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of year
|
|
128,819
|
|
|
148,865
|
|
|
100,703
|
|
|||
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of year (Note 3)
|
|
$
|
145,259
|
|
|
$
|
128,819
|
|
|
$
|
148,865
|
|
•
|
The fair value of stock options is measured on the grant date using the Black-Scholes option pricing model. The related compensation expense is recognized on the straight-line basis, net of estimated forfeitures, over the options' vesting periods.
|
•
|
The fair value of restricted stock and a portion of our restricted stock unit awards is measured on the grant date based on the market value of our common stock. The related compensation expense, net of estimated forfeitures, is recognized over the applicable service period.
|
•
|
Certain of our restricted stock unit awards may be settled in cash if an employee voluntarily chooses to leave the company. These awards are included in accrued liabilities and other non-current liabilities in the consolidated balance sheets and are re-measured at fair value as of each balance sheet date.
|
•
|
Compensation expense resulting from the 15% discount provided under our employee stock purchase plan is recognized over the purchase period of 6 months.
|
•
|
The performance share awards specify certain performance and market-based conditions that must be achieved in order for the awards to vest. For the portion of the awards based on a performance condition, the performance target is not considered in determining the fair value of the awards and thus, fair value is measured on the grant date based on the market value of our common stock. The related compensation expense for this type of award is recognized, net of estimated forfeitures, over the related service period. The amount of compensation expense is dependent on our periodic assessment of the probability of the targets being achieved and our estimate, which may vary over time, of the number of shares that ultimately will be issued. For the portion of the awards based on a market condition, fair value is calculated on
|
•
|
We considered the impact of all contract modifications completed prior to January 1, 2018;
|
•
|
We disregard the effects of a financing component when the period between payment and performance is 1 year or less;
|
•
|
We account for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment cost; and
|
•
|
We expense sales commissions as incurred when the amortization period would have been 1 year or less.
|
(in thousands)
|
|
Balance as of December 31, 2017
|
|
Adjustments due to adoption of 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
|
|
(in thousands)
|
|
As reported
|
|
Effect of adoption
|
|
Amounts without adoption of ASU No. 2014-09
|
||||||
|
|
Year Ended December 31, 2018
|
||||||||||
Service revenue
|
|
$
|
546,192
|
|
|
$
|
(717
|
)
|
|
$
|
545,475
|
|
Total revenue
|
|
1,998,025
|
|
|
(717
|
)
|
|
1,997,308
|
|
|||
Cost of services
|
|
(244,108
|
)
|
|
625
|
|
|
(243,483
|
)
|
|||
Total cost of revenue
|
|
(791,748
|
)
|
|
625
|
|
|
(791,123
|
)
|
|||
Gross profit
|
|
1,206,277
|
|
|
(92
|
)
|
|
1,206,185
|
|
|||
Selling, general and administrative expense
|
|
(854,000
|
)
|
|
(749
|
)
|
|
(854,749
|
)
|
|||
Operating income
|
|
231,221
|
|
|
(841
|
)
|
|
230,380
|
|
|||
Income before income taxes
|
|
212,631
|
|
|
(841
|
)
|
|
211,790
|
|
|||
Income tax provision
|
|
(63,001
|
)
|
|
209
|
|
|
(62,792
|
)
|
|||
Net income
|
|
$
|
149,630
|
|
|
$
|
(632
|
)
|
|
$
|
148,998
|
|
|
|
|
|
|
|
|
||||||
|
|
December 31, 2018
|
||||||||||
Revenue in excess of billings
|
|
$
|
30,458
|
|
|
$
|
(1,052
|
)
|
|
$
|
29,406
|
|
Total current assets
|
|
450,046
|
|
|
(1,052
|
)
|
|
448,994
|
|
|||
Other non-current assets
|
|
196,108
|
|
|
(6,482
|
)
|
|
189,626
|
|
|||
Total assets
|
|
$
|
2,305,096
|
|
|
$
|
(7,534
|
)
|
|
$
|
2,297,562
|
|
Accrued liabilities
|
|
$
|
284,281
|
|
|
$
|
(209
|
)
|
|
$
|
284,072
|
|
Total current liabilities
|
|
392,050
|
|
|
(209
|
)
|
|
391,841
|
|
|||
Deferred income taxes
|
|
46,680
|
|
|
(1,727
|
)
|
|
44,953
|
|
|||
Retained earnings
|
|
927,345
|
|
|
(5,598
|
)
|
|
921,747
|
|
|||
Total liabilities and shareholders' equity
|
|
$
|
2,305,096
|
|
|
$
|
(7,534
|
)
|
|
$
|
2,297,562
|
|
(in thousands)
|
|
As previously reported
|
|
Effect of adoption
|
|
As revised
|
||||||
|
|
Year Ended December 31, 2017
|
||||||||||
Purchases of customer funds marketable securities
|
|
$
|
—
|
|
|
$
|
(7,737
|
)
|
|
$
|
(7,737
|
)
|
Proceeds from customer funds and corporate marketable securities
|
|
3,500
|
|
|
7,737
|
|
|
11,237
|
|
|||
Net cash used by investing activities
|
|
(180,891
|
)
|
|
—
|
|
|
(180,891
|
)
|
|||
Net change in customer funds obligations
|
|
—
|
|
|
(6,007
|
)
|
|
(6,007
|
)
|
|||
Net cash used by financing activities
|
|
(176,949
|
)
|
|
(6,007
|
)
|
|
(182,956
|
)
|
|||
Effect of exchange rate change on cash, cash equivalents, restricted cash and restricted cash equivalents
|
|
2,075
|
|
|
3,295
|
|
|
5,370
|
|
|||
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents
|
|
(17,334
|
)
|
|
(2,712
|
)
|
|
(20,046
|
)
|
|||
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of year
|
|
76,574
|
|
|
72,291
|
|
|
148,865
|
|
|||
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of year (Note 3)
|
|
$
|
59,240
|
|
|
$
|
69,579
|
|
|
$
|
128,819
|
|
|
|
|
|
|
|
|
||||||
|
|
Year Ended December 31, 2016
|
||||||||||
Payments for acquisitions, net of cash acquired
|
|
$
|
(270,939
|
)
|
|
$
|
31,275
|
|
|
$
|
(239,664
|
)
|
Purchases of customer funds marketable securities
|
|
—
|
|
|
(7,869
|
)
|
|
(7,869
|
)
|
|||
Proceeds from customer funds and corporate marketable securities
|
|
1,635
|
|
|
7,869
|
|
|
9,504
|
|
|||
Net cash used by investing activities
|
|
(310,786
|
)
|
|
31,275
|
|
|
(279,511
|
)
|
|||
Net change in customer funds obligations
|
|
—
|
|
|
1,723
|
|
|
1,723
|
|
|||
Net cash provided by financing activities
|
|
4,275
|
|
|
1,723
|
|
|
5,998
|
|
|||
Effect of exchange rate change on cash, cash equivalents, restricted cash and restricted cash equivalents
|
|
1,346
|
|
|
1,017
|
|
|
2,363
|
|
|||
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents
|
|
14,147
|
|
|
34,015
|
|
|
48,162
|
|
|||
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of year
|
|
62,427
|
|
|
38,276
|
|
|
100,703
|
|
|||
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of year (Note 3)
|
|
$
|
76,574
|
|
|
$
|
72,291
|
|
|
$
|
148,865
|
|
(in thousands)
|
|
As previously reported
|
|
Effect of adoption
|
|
As revised
|
||||||
|
|
Year Ended December 31, 2017
|
||||||||||
Cost of products
|
|
$
|
(529,088
|
)
|
|
$
|
(550
|
)
|
|
$
|
(529,638
|
)
|
Cost of services
|
|
(213,002
|
)
|
|
(67
|
)
|
|
(213,069
|
)
|
|||
Total cost of revenue
|
|
(742,090
|
)
|
|
(617
|
)
|
|
(742,707
|
)
|
|||
Gross profit
|
|
1,223,466
|
|
|
(617
|
)
|
|
1,222,849
|
|
|||
Selling, general and administrative expense
|
|
(828,832
|
)
|
|
(1,399
|
)
|
|
(830,231
|
)
|
|||
Operating income
|
|
331,192
|
|
|
(2,016
|
)
|
|
329,176
|
|
|||
Other income
|
|
2,994
|
|
|
2,016
|
|
|
5,010
|
|
|||
Net income
|
|
$
|
230,155
|
|
|
$
|
—
|
|
|
$
|
230,155
|
|
|
|
|
|
|
|
|
||||||
|
|
Year Ended December 31, 2016
|
||||||||||
Cost of products
|
|
$
|
(534,390
|
)
|
|
$
|
(516
|
)
|
|
$
|
(534,906
|
)
|
Cost of services
|
|
(132,851
|
)
|
|
(56
|
)
|
|
(132,907
|
)
|
|||
Total cost of revenue
|
|
(667,241
|
)
|
|
(572
|
)
|
|
(667,813
|
)
|
|||
Gross profit
|
|
1,181,821
|
|
|
(572
|
)
|
|
1,181,249
|
|
|||
Selling, general and administrative expense
|
|
(805,970
|
)
|
|
(1,268
|
)
|
|
(807,238
|
)
|
|||
Operating income
|
|
368,727
|
|
|
(1,840
|
)
|
|
366,887
|
|
|||
Other income
|
|
1,819
|
|
|
1,840
|
|
|
3,659
|
|
|||
Net income
|
|
$
|
229,382
|
|
|
$
|
—
|
|
|
$
|
229,382
|
|
•
|
We will exclude leases with original terms of 12 months or less from lease assets and liabilities;
|
•
|
We will separate nonlease components from the associated lease component for real estate leases; and
|
•
|
We will use the accounting lease term when determining the incremental borrowing rate for leases with renewal options.
|
(in thousands)
|
|
2018
|
|
2017
|
||||
Trade accounts receivable – gross
|
|
$
|
177,501
|
|
|
$
|
152,728
|
|
Allowances for uncollectible accounts
|
|
(3,639
|
)
|
|
(2,884
|
)
|
||
Trade accounts receivable – net
|
|
$
|
173,862
|
|
|
$
|
149,844
|
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance, beginning of year
|
|
$
|
2,884
|
|
|
$
|
2,828
|
|
|
$
|
4,816
|
|
Bad debt expense
|
|
3,622
|
|
|
3,208
|
|
|
2,539
|
|
|||
Write-offs, net of recoveries
|
|
(2,867
|
)
|
|
(3,152
|
)
|
|
(4,527
|
)
|
|||
Balance, end of year
|
|
$
|
3,639
|
|
|
$
|
2,884
|
|
|
$
|
2,828
|
|
(in thousands)
|
|
2018
|
|
2017
|
||||
Raw materials
|
|
$
|
7,543
|
|
|
$
|
7,357
|
|
Semi-finished goods
|
|
7,273
|
|
|
7,635
|
|
||
Finished goods
|
|
27,608
|
|
|
24,146
|
|
||
Supplies
|
|
4,017
|
|
|
3,111
|
|
||
Inventories and supplies
|
|
$
|
46,441
|
|
|
$
|
42,249
|
|
|
|
December 31, 2018
|
||||||||||||||
(in thousands)
|
|
Cost
|
|
Gross unrealized gains
|
|
Gross unrealized losses
|
|
Fair value
|
||||||||
Funds held for customers:(1)
|
|
|
|
|
|
|
|
|
||||||||
Domestic money market fund
|
|
$
|
16,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,000
|
|
Canadian and provincial government securities
|
|
8,485
|
|
|
—
|
|
|
(355
|
)
|
|
8,130
|
|
||||
Canadian guaranteed investment certificates
|
|
7,333
|
|
|
—
|
|
|
—
|
|
|
7,333
|
|
||||
Available-for-sale debt securities
|
|
$
|
31,818
|
|
|
$
|
—
|
|
|
$
|
(355
|
)
|
|
$
|
31,463
|
|
|
|
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
|
|
(in thousands)
|
|
Fair value
|
||
Due in one year or less
|
|
$
|
25,195
|
|
Due in two to five years
|
|
3,398
|
|
|
Due in six to ten years
|
|
2,870
|
|
|
Available-for-sale debt securities
|
|
$
|
31,463
|
|
|
|
2018
|
|
2017
|
||||||||||||||||||||
(in thousands)
|
|
Gross carrying amount
|
|
Accumulated depreciation
|
|
Net carrying amount
|
|
Gross carrying amount
|
|
Accumulated depreciation
|
|
Net carrying amount
|
||||||||||||
Land and improvements
|
|
$
|
28,199
|
|
|
$
|
(8,167
|
)
|
|
$
|
20,032
|
|
|
$
|
28,220
|
|
|
$
|
(8,064
|
)
|
|
$
|
20,156
|
|
Buildings and improvements
|
|
116,348
|
|
|
(83,317
|
)
|
|
33,031
|
|
|
114,793
|
|
|
(80,168
|
)
|
|
34,625
|
|
||||||
Machinery and equipment
|
|
313,000
|
|
|
(275,721
|
)
|
|
37,279
|
|
|
299,645
|
|
|
(269,788
|
)
|
|
29,857
|
|
||||||
Property, plant and equipment
|
|
$
|
457,547
|
|
|
$
|
(367,205
|
)
|
|
$
|
90,342
|
|
|
$
|
442,658
|
|
|
$
|
(358,020
|
)
|
|
$
|
84,638
|
|
(in thousands)
|
|
2018
|
|
2017
|
|
Balance sheet caption
|
||||
Current assets
|
|
$
|
—
|
|
|
$
|
4
|
|
|
Other current assets
|
Intangibles
|
|
1,350
|
|
|
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
|
|
$
|
1,350
|
|
|
$
|
12,236
|
|
|
|
|
|
2018
|
|
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
|
|
388,477
|
|
|
(308,313
|
)
|
|
80,164
|
|
|
359,079
|
|
|
(284,074
|
)
|
|
75,005
|
|
||||||
Customer lists/relationships(2)
|
|
379,570
|
|
|
(170,973
|
)
|
|
208,597
|
|
|
343,589
|
|
|
(121,729
|
)
|
|
221,860
|
|
||||||
Trade names
|
|
50,645
|
|
|
(26,204
|
)
|
|
24,441
|
|
|
36,931
|
|
|
(19,936
|
)
|
|
16,995
|
|
||||||
Technology-based intangibles
|
|
39,300
|
|
|
(14,007
|
)
|
|
25,293
|
|
|
31,800
|
|
|
(6,400
|
)
|
|
25,400
|
|
||||||
Software to be sold
|
|
36,900
|
|
|
(15,430
|
)
|
|
21,470
|
|
|
36,900
|
|
|
(11,204
|
)
|
|
25,696
|
|
||||||
Other
|
|
700
|
|
|
(700
|
)
|
|
—
|
|
|
1,800
|
|
|
(1,590
|
)
|
|
210
|
|
||||||
Amortizable intangibles
|
|
895,592
|
|
|
(535,627
|
)
|
|
359,965
|
|
|
810,099
|
|
|
(444,933
|
)
|
|
365,166
|
|
||||||
Intangibles
|
|
$
|
895,592
|
|
|
$
|
(535,627
|
)
|
|
$
|
359,965
|
|
|
$
|
829,199
|
|
|
$
|
(444,933
|
)
|
|
$
|
384,266
|
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Customer lists/relationships
|
|
$
|
57,243
|
|
|
$
|
54,450
|
|
|
$
|
33,233
|
|
Internal-use software
|
|
38,307
|
|
|
35,952
|
|
|
35,217
|
|
|||
Technology-based intangibles
|
|
7,607
|
|
|
6,400
|
|
|
—
|
|
|||
Trade names
|
|
6,362
|
|
|
5,789
|
|
|
4,952
|
|
|||
Other amortizable intangibles
|
|
5,009
|
|
|
4,193
|
|
|
3,683
|
|
|||
Amortization of intangibles
|
|
$
|
114,528
|
|
|
$
|
106,784
|
|
|
$
|
77,085
|
|
(in thousands)
|
|
Estimated
amortization
expense
|
||
2019
|
|
$
|
90,924
|
|
2020
|
|
71,135
|
|
|
2021
|
|
54,795
|
|
|
2022
|
|
39,571
|
|
|
2023
|
|
29,205
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
(in thousands)
|
|
Amount
|
|
Weighted-average amortization period
(in years)
|
|
Amount
|
|
Weighted-average amortization period
(in years)
|
|
Amount
|
|
Weighted-average amortization period
(in years)
|
||||||
Customer lists/relationships(1)
|
|
$
|
60,775
|
|
|
8
|
|
$
|
60,034
|
|
|
7
|
|
$
|
118,415
|
|
|
8
|
Internal-use software
|
|
42,744
|
|
|
3
|
|
38,422
|
|
|
3
|
|
45,780
|
|
|
4
|
|||
Trade names
|
|
14,700
|
|
|
7
|
|
10,000
|
|
|
6
|
|
3,800
|
|
|
4
|
|||
Technology-based intangibles
|
|
7,500
|
|
|
5
|
|
800
|
|
|
3
|
|
28,000
|
|
|
5
|
|||
Software to be sold
|
|
—
|
|
|
—
|
|
2,200
|
|
|
5
|
|
6,200
|
|
|
10
|
|||
Acquired intangibles
|
|
$
|
125,719
|
|
|
6
|
|
$
|
111,456
|
|
|
6
|
|
$
|
202,195
|
|
|
6
|
(in thousands)
|
|
Small
Business
Services
|
|
Financial
Services
|
|
Direct
Checks
|
|
Total
|
||||||||
Balance, December 31, 2016:
|
|
|
|
|
|
|
|
|
||||||||
Goodwill, gross
|
|
$
|
684,261
|
|
|
$
|
293,189
|
|
|
$
|
148,506
|
|
|
$
|
1,125,956
|
|
Accumulated impairment charges
|
|
(20,000
|
)
|
|
—
|
|
|
—
|
|
|
(20,000
|
)
|
||||
Goodwill, net of accumulated impairment charges
|
|
664,261
|
|
|
293,189
|
|
|
148,506
|
|
|
1,105,956
|
|
||||
Impairment charge (Note 8)
|
|
(28,379
|
)
|
|
—
|
|
|
—
|
|
|
(28,379
|
)
|
||||
Goodwill resulting from acquisitions (Note 6)
|
|
26,788
|
|
|
33,210
|
|
|
—
|
|
|
59,998
|
|
||||
Measurement-period adjustments for prior year acquisitions (Note 6)
|
|
30
|
|
|
(2,160
|
)
|
|
—
|
|
|
(2,130
|
)
|
||||
Sale of small business distributor
|
|
(1,000
|
)
|
|
—
|
|
|
—
|
|
|
(1,000
|
)
|
||||
Reclassification of assets held for sale
|
|
(3,970
|
)
|
|
—
|
|
|
—
|
|
|
(3,970
|
)
|
||||
Currency translation adjustment
|
|
459
|
|
|
—
|
|
|
—
|
|
|
459
|
|
||||
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 8)
|
|
(78,188
|
)
|
|
—
|
|
|
—
|
|
|
(78,188
|
)
|
||||
Goodwill resulting from acquisitions (Note 6)
|
|
59,488
|
|
|
46,419
|
|
|
—
|
|
|
105,907
|
|
||||
Measurement-period adjustments for prior year acquisitions (Note 6)
|
|
1,420
|
|
|
2,763
|
|
|
—
|
|
|
4,183
|
|
||||
Adjustment of assets held for sale
|
|
635
|
|
|
—
|
|
|
—
|
|
|
635
|
|
||||
Currency translation adjustment
|
|
(2,845
|
)
|
|
—
|
|
|
—
|
|
|
(2,845
|
)
|
||||
Balance, December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Goodwill, gross
|
|
765,266
|
|
|
373,421
|
|
|
148,506
|
|
|
1,287,193
|
|
||||
Accumulated impairment charges
|
|
(126,567
|
)
|
|
—
|
|
|
—
|
|
|
(126,567
|
)
|
||||
Goodwill, net of accumulated impairment charges
|
|
$
|
638,699
|
|
|
$
|
373,421
|
|
|
$
|
148,506
|
|
|
$
|
1,160,626
|
|
(in thousands)
|
|
2018
|
|
2017
|
||||
Loans and notes receivable from Safeguard distributors
|
|
$
|
78,693
|
|
|
$
|
44,276
|
|
Prepaid product discounts(1)
|
|
54,642
|
|
|
63,895
|
|
||
Postretirement benefit plan asset (Note 14)
|
|
41,259
|
|
|
39,849
|
|
||
Deferred sales commissions(2)
|
|
6,482
|
|
|
—
|
|
||
Deferred advertising costs
|
|
5,746
|
|
|
6,135
|
|
||
Other
|
|
9,286
|
|
|
5,601
|
|
||
Other non-current assets
|
|
$
|
196,108
|
|
|
$
|
159,756
|
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance, beginning of year
|
|
$
|
63,895
|
|
|
$
|
65,792
|
|
|
$
|
58,792
|
|
Additions(1)
|
|
14,023
|
|
|
18,224
|
|
|
27,506
|
|
|||
Amortization
|
|
(22,941
|
)
|
|
(19,969
|
)
|
|
(20,185
|
)
|
|||
Other
|
|
(335
|
)
|
|
(152
|
)
|
|
(321
|
)
|
|||
Balance, end of year
|
|
$
|
54,642
|
|
|
$
|
63,895
|
|
|
$
|
65,792
|
|
(in thousands)
|
|
2018
|
|
2017
|
||||
Funds held for customers
|
|
$
|
99,818
|
|
|
$
|
85,091
|
|
Deferred revenue
|
|
54,313
|
|
|
47,021
|
|
||
Employee profit sharing/cash bonus
|
|
31,286
|
|
|
31,312
|
|
||
Prepaid product discounts due within one year(1)
|
|
10,926
|
|
|
11,670
|
|
||
Customer rebates
|
|
9,555
|
|
|
11,508
|
|
||
Income tax
|
|
7,991
|
|
|
17,827
|
|
||
Acquisition-related liabilities(2)
|
|
4,850
|
|
|
23,878
|
|
||
Restructuring and integration (Note 9)
|
|
3,320
|
|
|
4,380
|
|
||
Other
|
|
62,222
|
|
|
44,566
|
|
||
Accrued liabilities
|
|
$
|
284,281
|
|
|
$
|
277,253
|
|
(in thousands)
|
|
2018
|
|
2017
|
||||
Prepaid product discounts(1)
|
|
$
|
12,513
|
|
|
$
|
21,658
|
|
Other
|
|
27,367
|
|
|
30,583
|
|
||
Other non-current liabilities
|
|
$
|
39,880
|
|
|
$
|
52,241
|
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the consolidated balance sheets:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
59,740
|
|
|
$
|
59,240
|
|
|
$
|
76,574
|
|
Restricted cash and restricted cash equivalents included in funds held for customers
|
|
85,519
|
|
|
69,579
|
|
|
72,291
|
|
|||
Total cash, cash equivalents, restricted cash and restricted cash equivalents
|
|
$
|
145,259
|
|
|
$
|
128,819
|
|
|
$
|
148,865
|
|
Income taxes paid
|
|
$
|
88,253
|
|
|
$
|
124,878
|
|
|
$
|
97,309
|
|
Interest paid
|
|
25,910
|
|
|
19,465
|
|
|
20,975
|
|
|||
Non-cash investing activities:
|
|
|
|
|
|
|
||||||
Proceeds from sales of assets – notes receivable
|
|
35,616
|
|
|
24,497
|
|
|
—
|
|
|||
Acquisition-related liabilities(1)
|
|
3,011
|
|
|
5,855
|
|
|
27,441
|
|
(in thousands, except per share amounts)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Earnings per share – basic:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
149,630
|
|
|
$
|
230,155
|
|
|
$
|
229,382
|
|
Income allocated to participating securities
|
|
(617
|
)
|
|
(1,457
|
)
|
|
(1,870
|
)
|
|||
Income available to common shareholders
|
|
$
|
149,013
|
|
|
$
|
228,698
|
|
|
$
|
227,512
|
|
Weighted-average shares outstanding
|
|
46,842
|
|
|
48,127
|
|
|
48,562
|
|
|||
Earnings per share – basic
|
|
$
|
3.18
|
|
|
$
|
4.75
|
|
|
$
|
4.68
|
|
|
|
|
|
|
|
|
||||||
Earnings per share – diluted:
|
|
|
|
|
|
|
|
|
||||
Net income
|
|
$
|
149,630
|
|
|
$
|
230,155
|
|
|
$
|
229,382
|
|
Income allocated to participating securities
|
|
(616
|
)
|
|
(1,450
|
)
|
|
(1,858
|
)
|
|||
Re-measurement of share-based awards classified as liabilities
|
|
(471
|
)
|
|
59
|
|
|
296
|
|
|||
Income available to common shareholders
|
|
$
|
148,543
|
|
|
$
|
228,764
|
|
|
$
|
227,820
|
|
Weighted-average shares outstanding
|
|
46,842
|
|
|
48,127
|
|
|
48,562
|
|
|||
Dilutive impact of potential common shares
|
|
149
|
|
|
321
|
|
|
413
|
|
|||
Weighted-average shares and potential common shares outstanding
|
|
46,991
|
|
|
48,448
|
|
|
48,975
|
|
|||
Earnings per share – diluted
|
|
$
|
3.16
|
|
|
$
|
4.72
|
|
|
$
|
4.65
|
|
Antidilutive options excluded from calculation
|
|
1,209
|
|
|
262
|
|
|
214
|
|
Accumulated other comprehensive loss components
|
|
Amounts reclassified from accumulated other comprehensive loss
|
|
Affected line item in consolidated statements of income
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
|
||||||
Amortization of postretirement benefit plan items:
|
|
|
|
|
|
|
|
|
||||||
Prior service credit
|
|
$
|
1,421
|
|
|
$
|
1,421
|
|
|
$
|
1,421
|
|
|
Other income
|
Net actuarial loss
|
|
(2,884
|
)
|
|
(3,637
|
)
|
|
(3,797
|
)
|
|
Other income
|
|||
Total amortization
|
|
(1,463
|
)
|
|
(2,216
|
)
|
|
(2,376
|
)
|
|
Other income
|
|||
Tax benefit
|
|
491
|
|
|
372
|
|
|
724
|
|
|
Income tax provision
|
|||
Total reclassifications, net of tax
|
|
$
|
(972
|
)
|
|
$
|
(1,844
|
)
|
|
$
|
(1,652
|
)
|
|
Net income
|
(in thousands)
|
|
Postretirement benefit plans, net of tax
|
|
Net unrealized loss on marketable debt securities, net of tax
|
|
Currency translation adjustment
|
|
Accumulated other comprehensive loss
|
||||||||
Balance, December 31, 2015
|
|
$
|
(38,822
|
)
|
|
$
|
(114
|
)
|
|
$
|
(16,267
|
)
|
|
$
|
(55,203
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
1,486
|
|
|
(99
|
)
|
|
1,793
|
|
|
3,180
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
|
1,652
|
|
|
—
|
|
|
—
|
|
|
1,652
|
|
||||
Net current-period other comprehensive income (loss)
|
|
3,138
|
|
|
(99
|
)
|
|
1,793
|
|
|
4,832
|
|
||||
Balance, December 31, 2016
|
|
(35,684
|
)
|
|
(213
|
)
|
|
(14,474
|
)
|
|
(50,371
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
|
7,011
|
|
|
(109
|
)
|
|
4,028
|
|
|
10,930
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
|
1,844
|
|
|
—
|
|
|
—
|
|
|
1,844
|
|
||||
Net current-period other comprehensive income (loss)
|
|
8,855
|
|
|
(109
|
)
|
|
4,028
|
|
|
12,774
|
|
||||
Balance, December 31, 2017
|
|
(26,829
|
)
|
|
(322
|
)
|
|
(10,446
|
)
|
|
(37,597
|
)
|
||||
Other comprehensive loss before reclassifications
|
|
(3,805
|
)
|
|
(1
|
)
|
|
(9,281
|
)
|
|
(13,087
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
|
972
|
|
|
—
|
|
|
—
|
|
|
972
|
|
||||
Net current-period other comprehensive loss
|
|
(2,833
|
)
|
|
(1
|
)
|
|
(9,281
|
)
|
|
(12,115
|
)
|
||||
Adoption of ASU No. 2018-02 (Note 2)
|
|
(6,867
|
)
|
|
—
|
|
|
—
|
|
|
(6,867
|
)
|
||||
Balance, December 31, 2018
|
|
$
|
(36,529
|
)
|
|
$
|
(323
|
)
|
|
$
|
(19,727
|
)
|
|
$
|
(56,579
|
)
|
•
|
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 allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in nondeductible goodwill of $29,451. The acquisition resulted in goodwill as we expect to accelerate revenue growth by combining our capabilities with Logomix's platform.
|
•
|
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 $9,689. The acquisition resulted in goodwill as we expect to accelerate revenue growth by bringing colocation services into our portfolio of hosting services. 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 complete.
|
•
|
In December 2018, we acquired selected assets of My Corporation Business Services, Inc., a provider of business incorporation and organization 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 $20,348. The acquisition resulted in goodwill as we expect to accelerate revenue growth by bringing these services into our portfolio of web services. We expect to finalize the allocation of the purchase price in 2019, when our valuation of the acquired intangible assets, as well as various other assets acquired and liabilities assumed, is complete.
|
•
|
During 2018, we acquired the operations of 3 small business distributors. The assets acquired consisted primarily of customer list intangible assets. As these small business distributors were previously part of our Safeguard distributor network, our revenue was not impacted by these acquisitions, and the impact to our costs was not significant.
|
•
|
In February 2017, we acquired selected assets of Panthur Pty Ltd (Panthur), an Australian web hosting and domain registration service provider. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in nondeductible goodwill of $1,198. The acquisition resulted in goodwill as we used Panthur's platform to selectively expand into foreign markets.
|
•
|
In July 2017, we acquired all of the equity of Digital Pacific Group Pty Ltd (Digital Pacific), an Australian web hosting and domain registration service provider. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in nondeductible goodwill of $23,773. The acquisition resulted in goodwill as we acquired enhanced web hosting capabilities that we used to selectively expand into foreign markets.
|
•
|
In September 2017, we acquired all of the equity of j2 Global Australia Pty Ltd, doing business as Web24, an Australian web hosting and domain registration service provider. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in nondeductible goodwill of $2,731. The acquisition resulted in goodwill as we used Web24's platform to selectively expand into foreign markets.
|
•
|
In November 2017, we acquired selected assets of Impact Marketing Specialists, Inc., which provides marketing solutions to real estate agents.
|
•
|
In December 2017, we acquired selected assets of SY Holdings, LLC, doing business as managed.com, a web hosting services provider. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in tax-deductible goodwill of $266. The acquisition resulted in goodwill as the expertise we acquired improved our customer mix and enhanced our portfolio of web services.
|
•
|
During 2017, we acquired the operations of several small business distributors. The assets acquired consisted primarily of customer list intangible assets. All but 1 of these distributors were previously part of our Safeguard distributor network. As such, our results of operations were not significantly impacted by these acquisitions.
|
•
|
In February 2016, we acquired selected assets of Category 99, Inc., doing business as MacHighway®, a web hosting and domain registration service provider.
|
•
|
In March 2016, we acquired selected assets of New England Art Publishers, Inc., doing business as Birchcraft Studios, a supplier of personalized invitations, holiday cards, all-occasion cards and social announcements.
|
•
|
In April 2016, we acquired selected assets of 180 Fusion LLC, a digital marketing services provider. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in tax-deductible goodwill of $800. The acquisition resulted in goodwill as it enhanced our Small Business Services product set by providing valuable marketing tools to our customers, thus, enhancing customer acquisition and loyalty.
|
•
|
In June 2016, we acquired selected assets of L.A.M. Enterprises, Inc., a provider of printed and promotional products.
|
•
|
In June 2016, we acquired selected assets of National Document Solutions, LLC, a provider of printing, promotional products, office products, scanning and document management solutions.
|
•
|
In June 2016, we acquired selected assets of Liquid Web, LLC, a web hosting services provider.
|
•
|
In July 2016, we acquired selected assets of Inkhead, Inc., a provider of customized promotional products. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in tax-deductible goodwill of $4,421. The acquisition resulted in goodwill as it enabled us to diversify our promotional product offerings and bring these offerings to our customer base.
|
•
|
In August 2016, we acquired selected assets of BNBS, Inc., doing business as B&B Solutions, a provider of printing, promotional and office products and services. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in tax-deductible goodwill of $850. The acquisition resulted in goodwill as it enabled us to diversify our product offerings and bring these offerings to our customer base.
|
•
|
In September 2016, we acquired all of the outstanding capital stock of Payce, Inc., a provider of payroll processing, payroll tax filing and related payroll services. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in tax-deductible goodwill of $6,882. The acquisition resulted in goodwill as Payce's expertise, customer mix and operational strength enhanced our existing portfolio of web services.
|
•
|
In October 2016, we acquired selected assets of Excel Graphic Services, Inc., a provider of printing, promotional products and document management services.
|
•
|
In October 2016, we acquired selected assets of PTM Document Systems, Inc., the exclusive source of the Print to Mail™ systems used in schools, hospitals and businesses.
|
•
|
In December 2016, we acquired selected assets of Digihost Ltd., a web services provider located in Ireland.
|
•
|
During 2016, we acquired the operations of several small business distributors. The assets acquired consisted primarily of customer list intangible assets. As these distributors were previously part of our Safeguard distributor network, our results of operations were not significantly impacted by these acquisitions.
|
•
|
In October 2016, we acquired selected assets of Data Support Systems, Inc., a provider of image-based software for payment-related back-office case management. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in tax-deductible goodwill of $4,025. The acquisition resulted in goodwill as Data Support Systems' solutions were complementary to those of our Wausau Financial Services business, which created significant cross-sell opportunities.
|
•
|
In December 2016, we acquired all of the equity of First Manhattan Consulting Group, LLC (FMCG), a provider of data-driven marketing solutions for financial institutions. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in tax-deductible goodwill of $110,219. The acquisition resulted in goodwill due to revenue synergies with our Datamyx business, cost synergies such as leveraging common data sources, and the ability to bring FMCG's solutions to our client base.
|
(in thousands)
|
|
FMCG
|
||
Net tangible assets acquired and liabilities assumed(1)
|
|
$
|
4,334
|
|
Identifiable intangible assets:
|
|
|
||
Customer list/relationships
|
|
53,000
|
|
|
Technology-based intangible
|
|
31,000
|
|
|
Trade name
|
|
3,000
|
|
|
Total intangible assets(2)
|
|
87,000
|
|
|
Goodwill
|
|
110,219
|
|
|
Total aggregate purchase price
|
|
201,553
|
|
|
Liability for holdback payments
|
|
(16,000
|
)
|
|
Payment for acquisition, net of cash acquired
|
|
$
|
185,553
|
|
(in thousands)
|
|
2018 acquisitions(1)
|
|
2017 acquisitions(2)
|
|
2016 acquisitions(3)
|
||||||
Net tangible assets acquired and liabilities assumed(4)
|
|
$
|
9,366
|
|
|
$
|
(1,956
|
)
|
|
$
|
(8,804
|
)
|
Identifiable intangible assets:
|
|
|
|
|
|
|
||||||
Customer lists/relationships
|
|
59,587
|
|
|
58,620
|
|
|
116,491
|
|
|||
Trade names
|
|
14,700
|
|
|
10,000
|
|
|
3,800
|
|
|||
Software to be sold
|
|
—
|
|
|
2,200
|
|
|
6,200
|
|
|||
Technology-based intangibles
|
|
7,500
|
|
|
800
|
|
|
31,000
|
|
|||
Internal-use software
|
|
—
|
|
|
1,445
|
|
|
10,450
|
|
|||
Total intangible assets
|
|
81,787
|
|
|
73,065
|
|
|
167,941
|
|
|||
Goodwill
|
|
105,907
|
|
|
63,941
|
|
|
127,197
|
|
|||
Total aggregate purchase price
|
|
197,060
|
|
|
135,050
|
|
|
286,334
|
|
|||
Liabilities for holdback payments and contingent consideration(5)
|
|
(3,011
|
)
|
|
(5,980
|
)
|
|
(27,441
|
)
|
|||
Non-cash consideration(6)
|
|
(1,060
|
)
|
|
—
|
|
|
(2,020
|
)
|
|||
Net cash paid for current year acquisitions
|
|
192,989
|
|
|
129,070
|
|
|
256,873
|
|
|||
Measurement-period adjustment for 2015 acquisition(7)
|
|
—
|
|
|
—
|
|
|
(18,743
|
)
|
|||
Holdback payments for prior year acquisitions
|
|
21,269
|
|
|
10,153
|
|
|
1,534
|
|
|||
Payments for acquisitions, net of cash acquired(8)
|
|
$
|
214,258
|
|
|
$
|
139,223
|
|
|
$
|
239,664
|
|
•
|
2018 impairment analyses – 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, payroll services and business incorporation and organization services. Small Business Services Indirect consists primarily of our Safeguard distributor channel, former Safeguard distributors that we have purchased, and our independent dealer channel.
|
•
|
2017 impairment analyses – In conjunction with our annual strategic planning process during the third quarter of 2017, we made various changes to our internal reporting structure. As a result, we reassessed our operating segments and determined that no changes were required in our reportable operating segments. We also reassessed our previously determined reporting units and concluded that a realignment of a portion of our reporting units was required. As such, we reallocated the carrying value of goodwill to our revised reporting units based on their relative fair values. We analyzed goodwill for impairment immediately prior to this realignment by performing qualitative analyses for our Small Business Services reporting units and quantitative analyses for our Financial Services and Direct Checks reporting units. 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 last quantitative analysis we completed. 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, with the exception of our Small Business Services Safeguard reporting unit. The analysis of this reporting unit, which incorporated the results of the annual strategic planning process, indicated lowered projected long-term revenue growth and profitability levels resulting from changes in market trends and the mix of products and services sold, including the continuing secular decline in check and forms usage. As a result, we completed impairment analyses of the long-term assets of this reporting unit, excluding goodwill, and concluded that these assets were not impaired. We then completed the quantitative analysis of the reporting unit, utilizing the income approach outlined in Note 1. This quantitative analysis indicated that this reporting unit's goodwill was fully impaired and resulted in a non-cash pre-tax goodwill impairment charge of $28,379 during the quarter ended September 30, 2017. 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. Immediately subsequent to the realignment of our reporting unit structure, we completed a quantitative analysis for all of our reporting units. This quantitative analysis as of July 31, 2017 indicated that the estimated fair values of our reporting units exceeded their carrying values by approximate amounts between $64,000 and $1,405,000, or by amounts between 36% and 314% above the carrying values of their net assets.
|
•
|
2016 impairment analyses – In completing the 2016 annual goodwill impairment analyses, we elected to perform qualitative assessments for all of our reporting units to which goodwill was assigned, with one exception. We elected to perform a quantitative analysis for our Financial Services Commercial reporting unit. This reporting unit was acquired subsequent to our 2014 annual impairment analysis and the quantitative analysis completed as of July 31, 2015 indicated that the estimated fair value of this reporting unit exceeded its carrying value by approximately 13%. The quantitative assessment completed for this reporting unit as of July 31, 2016 indicated that its estimated fair value exceeded its carrying value by approximately 49%. Total goodwill for this reporting unit was approximately $45,000 as of the date of the 2016 assessment. Our qualitative analyses completed during 2016 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 we completed as of July 31, 2014. In completing these assessments, we noted no changes in events or circumstances which indicated that it was more likely than not that the fair value of any reporting unit was less than its carrying amount.
|
|
|
|
|
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
|
|
Asset 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
|
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance, beginning of year
|
|
$
|
3,623
|
|
|
$
|
4,682
|
|
|
$
|
5,861
|
|
Acquisition date fair value
|
|
100
|
|
|
—
|
|
|
1,132
|
|
|||
Change in fair value
|
|
610
|
|
|
1,190
|
|
|
(1,174
|
)
|
|||
Payments
|
|
(1,937
|
)
|
|
(2,249
|
)
|
|
(1,137
|
)
|
|||
Balance, end of year
|
|
$
|
2,396
|
|
|
$
|
3,623
|
|
|
$
|
4,682
|
|
(in thousands)
|
|
2016
|
||
Gain from derivatives
|
|
$
|
1,200
|
|
Loss from change in fair value of hedged debt
|
|
(1,200
|
)
|
|
Net effect on interest expense
|
|
$
|
—
|
|
|
|
|
|
|
|
Fair value measurements using
|
||||||||||||||
|
|
December 31, 2018
|
|
Quoted prices in active markets for identical assets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
||||||||||||
(in thousands)
|
|
Carrying value
|
|
Fair value
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||||
Measured at fair value through net income:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accrued contingent consideration
|
|
$
|
(2,396
|
)
|
|
$
|
(2,396
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2,396
|
)
|
Measured at fair value through comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash equivalents (funds held for customers)
|
|
16,000
|
|
|
16,000
|
|
|
16,000
|
|
|
—
|
|
|
—
|
|
|||||
Available-for-sale debt securities (funds held for customers)
|
|
15,463
|
|
|
15,463
|
|
|
—
|
|
|
15,463
|
|
|
—
|
|
|||||
Amortized cost:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash
|
|
59,740
|
|
|
59,740
|
|
|
59,740
|
|
|
—
|
|
|
—
|
|
|||||
Cash (funds held for customers)
|
|
69,519
|
|
|
69,519
|
|
|
69,519
|
|
|
—
|
|
|
—
|
|
|||||
Loans and notes receivable from Safeguard distributors
|
|
81,560
|
|
|
60,795
|
|
|
—
|
|
|
—
|
|
|
60,795
|
|
|||||
Long-term debt(1)
|
|
910,000
|
|
|
910,000
|
|
|
—
|
|
|
910,000
|
|
|
—
|
|
|
|
|
|
|
|
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
|
|
|
—
|
|
(dollars in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Severance accruals
|
|
$
|
7,672
|
|
|
$
|
7,843
|
|
|
$
|
7,217
|
|
Severance reversals
|
|
(1,898
|
)
|
|
(667
|
)
|
|
(864
|
)
|
|||
Operating lease obligations
|
|
597
|
|
|
23
|
|
|
59
|
|
|||
Operating lease reversals
|
|
(71
|
)
|
|
—
|
|
|
—
|
|
|||
Net accruals
|
|
6,300
|
|
|
7,199
|
|
|
6,412
|
|
|||
Other costs
|
|
14,903
|
|
|
1,931
|
|
|
1,359
|
|
|||
Restructuring and integration expense
|
|
$
|
21,203
|
|
|
$
|
9,130
|
|
|
$
|
7,771
|
|
Number of employees included in severance accruals
|
|
205
|
|
|
200
|
|
|
265
|
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Total cost of revenue
|
|
$
|
1,466
|
|
|
$
|
568
|
|
|
$
|
647
|
|
Operating expenses
|
|
19,737
|
|
|
8,562
|
|
|
7,124
|
|
|||
Restructuring and integration expense
|
|
$
|
21,203
|
|
|
$
|
9,130
|
|
|
$
|
7,771
|
|
(in thousands)
|
|
2018
initiatives
|
|
2017
initiatives
|
|
2016
initiatives
|
|
2014 & 2015
initiatives
|
|
Total
|
||||||||||
Balance, December 31, 2015
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,864
|
|
|
$
|
3,864
|
|
Charges
|
|
—
|
|
|
—
|
|
|
7,198
|
|
|
78
|
|
|
7,276
|
|
|||||
Reversals
|
|
—
|
|
|
—
|
|
|
(281
|
)
|
|
(583
|
)
|
|
(864
|
)
|
|||||
Payments
|
|
—
|
|
|
—
|
|
|
(2,816
|
)
|
|
(3,279
|
)
|
|
(6,095
|
)
|
|||||
Balance, December 31, 2016
|
|
—
|
|
|
—
|
|
|
4,101
|
|
|
80
|
|
|
4,181
|
|
|||||
Charges
|
|
—
|
|
|
7,222
|
|
|
603
|
|
|
41
|
|
|
7,866
|
|
|||||
Reversals
|
|
—
|
|
|
(161
|
)
|
|
(464
|
)
|
|
(42
|
)
|
|
(667
|
)
|
|||||
Payments
|
|
—
|
|
|
(2,713
|
)
|
|
(4,208
|
)
|
|
(79
|
)
|
|
(7,000
|
)
|
|||||
Balance, December 31, 2017
|
|
—
|
|
|
4,348
|
|
|
32
|
|
|
—
|
|
|
4,380
|
|
|||||
Charges
|
|
8,136
|
|
|
133
|
|
|
—
|
|
|
—
|
|
|
8,269
|
|
|||||
Reversals
|
|
(1,412
|
)
|
|
(552
|
)
|
|
(5
|
)
|
|
—
|
|
|
(1,969
|
)
|
|||||
Payments
|
|
(3,276
|
)
|
|
(3,916
|
)
|
|
(27
|
)
|
|
—
|
|
|
(7,219
|
)
|
|||||
Balance, December 31, 2018
|
|
$
|
3,448
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,461
|
|
Cumulative amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Charges
|
|
$
|
8,136
|
|
|
$
|
7,355
|
|
|
$
|
7,801
|
|
|
$
|
14,488
|
|
|
$
|
37,780
|
|
Reversals
|
|
(1,412
|
)
|
|
(713
|
)
|
|
(750
|
)
|
|
(2,416
|
)
|
|
(5,291
|
)
|
|||||
Payments
|
|
(3,276
|
)
|
|
(6,629
|
)
|
|
(7,051
|
)
|
|
(12,072
|
)
|
|
(29,028
|
)
|
|||||
Balance, December 31, 2018
|
|
$
|
3,448
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,461
|
|
|
|
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, 2015
|
|
$
|
1,023
|
|
|
$
|
884
|
|
|
$
|
—
|
|
|
$
|
1,859
|
|
|
$
|
56
|
|
|
$
|
42
|
|
|
$
|
3,864
|
|
Charges
|
|
2,634
|
|
|
1,937
|
|
|
143
|
|
|
2,503
|
|
|
59
|
|
|
—
|
|
|
7,276
|
|
|||||||
Reversals
|
|
(369
|
)
|
|
(64
|
)
|
|
(2
|
)
|
|
(429
|
)
|
|
—
|
|
|
—
|
|
|
(864
|
)
|
|||||||
Payments
|
|
(2,105
|
)
|
|
(1,416
|
)
|
|
(134
|
)
|
|
(2,283
|
)
|
|
(115
|
)
|
|
(42
|
)
|
|
(6,095
|
)
|
|||||||
Balance, December 31, 2016
|
|
1,183
|
|
|
1,341
|
|
|
7
|
|
|
1,650
|
|
|
—
|
|
|
—
|
|
|
4,181
|
|
|||||||
Charges
|
|
2,032
|
|
|
2,168
|
|
|
143
|
|
|
3,500
|
|
|
23
|
|
|
—
|
|
|
7,866
|
|
|||||||
Reversals
|
|
(214
|
)
|
|
(93
|
)
|
|
(4
|
)
|
|
(356
|
)
|
|
—
|
|
|
—
|
|
|
(667
|
)
|
|||||||
Payments
|
|
(2,212
|
)
|
|
(2,018
|
)
|
|
(6
|
)
|
|
(2,745
|
)
|
|
(19
|
)
|
|
—
|
|
|
(7,000
|
)
|
|||||||
Balance, December 31, 2017
|
|
789
|
|
|
1,398
|
|
|
140
|
|
|
2,049
|
|
|
4
|
|
|
—
|
|
|
4,380
|
|
|||||||
Charges
|
|
2,682
|
|
|
4,148
|
|
|
—
|
|
|
842
|
|
|
306
|
|
|
291
|
|
|
8,269
|
|
|||||||
Reversals
|
|
(530
|
)
|
|
(1,200
|
)
|
|
(5
|
)
|
|
(163
|
)
|
|
—
|
|
|
(71
|
)
|
|
(1,969
|
)
|
|||||||
Payments
|
|
(1,615
|
)
|
|
(2,949
|
)
|
|
(135
|
)
|
|
(2,272
|
)
|
|
(28
|
)
|
|
(220
|
)
|
|
(7,219
|
)
|
|||||||
Balance, December 31, 2018
|
|
$
|
1,326
|
|
|
$
|
1,397
|
|
|
$
|
—
|
|
|
$
|
456
|
|
|
$
|
282
|
|
|
$
|
—
|
|
|
$
|
3,461
|
|
Cumulative amounts(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Charges
|
|
$
|
13,073
|
|
|
$
|
12,512
|
|
|
$
|
322
|
|
|
$
|
10,856
|
|
|
$
|
673
|
|
|
$
|
344
|
|
|
$
|
37,780
|
|
Reversals
|
|
(2,313
|
)
|
|
(1,668
|
)
|
|
(13
|
)
|
|
(1,226
|
)
|
|
—
|
|
|
(71
|
)
|
|
(5,291
|
)
|
|||||||
Inter-segment transfer
|
|
41
|
|
|
(14
|
)
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Payments
|
|
(9,475
|
)
|
|
(9,433
|
)
|
|
(309
|
)
|
|
(9,147
|
)
|
|
(391
|
)
|
|
(273
|
)
|
|
(29,028
|
)
|
|||||||
Balance, December 31, 2018
|
|
$
|
1,326
|
|
|
$
|
1,397
|
|
|
$
|
—
|
|
|
$
|
456
|
|
|
$
|
282
|
|
|
$
|
—
|
|
|
$
|
3,461
|
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
United States
|
|
$
|
198,727
|
|
|
$
|
299,424
|
|
|
$
|
325,396
|
|
Foreign
|
|
13,904
|
|
|
13,403
|
|
|
14,990
|
|
|||
Income before income taxes
|
|
$
|
212,631
|
|
|
$
|
312,827
|
|
|
$
|
340,386
|
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Current tax provision:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
57,117
|
|
|
$
|
104,079
|
|
|
$
|
93,261
|
|
State
|
|
11,319
|
|
|
12,996
|
|
|
12,006
|
|
|||
Foreign
|
|
5,921
|
|
|
4,774
|
|
|
3,851
|
|
|||
Total current tax provision
|
|
74,357
|
|
|
121,849
|
|
|
109,118
|
|
|||
Deferred tax provision:
|
|
|
|
|
|
|
||||||
Federal
|
|
(7,220
|
)
|
|
(37,471
|
)
|
|
1,752
|
|
|||
State
|
|
(1,701
|
)
|
|
(491
|
)
|
|
462
|
|
|||
Foreign
|
|
(2,435
|
)
|
|
(1,215
|
)
|
|
(328
|
)
|
|||
Total deferred tax provision
|
|
(11,356
|
)
|
|
(39,177
|
)
|
|
1,886
|
|
|||
Income tax provision
|
|
$
|
63,001
|
|
|
$
|
82,672
|
|
|
$
|
111,004
|
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Income tax at federal statutory rate
|
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Goodwill impairment charge
|
|
7.1
|
%
|
|
1.5
|
%
|
|
—
|
|
State income tax expense, net of federal income tax benefit
|
|
3.0
|
%
|
|
2.7
|
%
|
|
2.4
|
%
|
Impact of Tax Cuts and Jobs Act
|
|
(0.8
|
%)
|
|
(6.6
|
%)
|
|
—
|
|
Qualified production activities deduction
|
|
—
|
|
|
(3.2
|
%)
|
|
(2.8
|
%)
|
Net tax benefit of share-based compensation
|
|
(0.8
|
%)
|
|
(1.6
|
%)
|
|
(1.2
|
%)
|
Other
|
|
0.1
|
%
|
|
(1.4
|
%)
|
|
(0.8
|
%)
|
Effective tax rate
|
|
29.6
|
%
|
|
26.4
|
%
|
|
32.6
|
%
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance, beginning of year
|
|
$
|
3,795
|
|
|
$
|
7,373
|
|
|
$
|
5,743
|
|
Additions for tax positions of current year
|
|
315
|
|
|
378
|
|
|
521
|
|
|||
Additions for tax positions of prior years
|
|
1,177
|
|
|
659
|
|
|
1,428
|
|
|||
Reductions for tax positions of prior years
|
|
(108
|
)
|
|
(4,389
|
)
|
|
(177
|
)
|
|||
Lapse of statutes of limitations
|
|
(378
|
)
|
|
(226
|
)
|
|
(142
|
)
|
|||
Balance, end of year
|
|
$
|
4,801
|
|
|
$
|
3,795
|
|
|
$
|
7,373
|
|
|
|
2018
|
|
2017
|
||||||||||||
(in thousands)
|
|
Deferred tax assets
|
|
Deferred tax liabilities
|
|
Deferred tax assets
|
|
Deferred tax liabilities
|
||||||||
Goodwill
|
|
$
|
—
|
|
|
$
|
47,993
|
|
|
$
|
—
|
|
|
$
|
45,317
|
|
Intangible assets
|
|
—
|
|
|
3,780
|
|
|
—
|
|
|
7,490
|
|
||||
Prepaid assets
|
|
—
|
|
|
3,469
|
|
|
—
|
|
|
3,137
|
|
||||
Installment sales treatment of notes receivable
|
|
—
|
|
|
3,054
|
|
|
—
|
|
|
2,450
|
|
||||
Deferred advertising costs
|
|
—
|
|
|
1,948
|
|
|
—
|
|
|
1,920
|
|
||||
Property, plant and equipment
|
|
—
|
|
|
1,739
|
|
|
—
|
|
|
8,122
|
|
||||
Net operating loss, capital loss and tax credit carryforwards
|
|
9,380
|
|
|
—
|
|
|
11,802
|
|
|
—
|
|
||||
Reserves and accruals
|
|
8,893
|
|
|
—
|
|
|
6,151
|
|
|
—
|
|
||||
Inventories
|
|
2,043
|
|
|
—
|
|
|
2,110
|
|
|
—
|
|
||||
All other
|
|
4,657
|
|
|
5,095
|
|
|
3,895
|
|
|
3,119
|
|
||||
Total deferred taxes
|
|
24,973
|
|
|
67,078
|
|
|
23,958
|
|
|
71,555
|
|
||||
Valuation allowances
|
|
(1,689
|
)
|
|
—
|
|
|
(1,518
|
)
|
|
—
|
|
||||
Net deferred taxes
|
|
$
|
23,284
|
|
|
$
|
67,078
|
|
|
$
|
22,440
|
|
|
$
|
71,555
|
|
•
|
state net operating loss carryforwards and tax credit carryforwards of $56,713 that expire at various dates up to 2038,
|
•
|
foreign capital loss and net operating loss carryforwards of $6,733 that do not expire,
|
•
|
foreign research tax credit and net operating loss carryforwards of $6,238 that expire at various dates up to 2037, and
|
•
|
federal net operating loss and capital loss carryforwards of $1,708 that expire at various dates between 2025 and 2029.
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Restricted shares and restricted stock units
|
|
$
|
5,232
|
|
|
$
|
6,533
|
|
|
$
|
5,786
|
|
Performance share awards
|
|
4,502
|
|
|
4,782
|
|
|
2,806
|
|
|||
Stock options
|
|
3,143
|
|
|
3,270
|
|
|
3,401
|
|
|||
Employee stock purchase plan
|
|
501
|
|
|
524
|
|
|
466
|
|
|||
Total share-based compensation expense
|
|
$
|
13,378
|
|
|
$
|
15,109
|
|
|
$
|
12,459
|
|
Income tax benefit
|
|
$
|
(3,946
|
)
|
|
$
|
(5,152
|
)
|
|
$
|
(4,063
|
)
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Risk-free interest rate
|
|
2.7
|
%
|
|
1.6
|
%
|
|
1.1
|
%
|
Dividend yield
|
|
2.0
|
%
|
|
1.6
|
%
|
|
2.2
|
%
|
Expected volatility
|
|
23.0
|
%
|
|
23.7
|
%
|
|
25.5
|
%
|
Weighted-average option life (in years)
|
|
3.9
|
|
|
3.7
|
|
|
4.0
|
|
|
|
Number of options
(in thousands)
|
|
Weighted-average exercise price per option
|
|
Aggregate intrinsic value
(in thousands)
|
|
Weighted-average remaining contractual term
(in years)
|
|||||
Outstanding, December 31, 2015
|
|
1,354
|
|
|
$
|
40.11
|
|
|
|
|
|
||
Granted
|
|
458
|
|
|
54.44
|
|
|
|
|
|
|||
Exercised
|
|
(476
|
)
|
|
30.80
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(85
|
)
|
|
58.06
|
|
|
|
|
|
|||
Outstanding, December 31, 2016
|
|
1,251
|
|
|
47.68
|
|
|
|
|
|
|||
Granted
|
|
270
|
|
|
75.30
|
|
|
|
|
|
|||
Exercised
|
|
(347
|
)
|
|
38.72
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(35
|
)
|
|
62.19
|
|
|
|
|
|
|||
Outstanding, December 31, 2017
|
|
1,139
|
|
|
56.51
|
|
|
|
|
|
|||
Granted
|
|
519
|
|
|
62.12
|
|
|
|
|
|
|||
Exercised
|
|
(339
|
)
|
|
42.55
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(74
|
)
|
|
66.85
|
|
|
|
|
|
|||
Outstanding, December 31, 2018
|
|
1,245
|
|
|
62.04
|
|
|
$
|
127
|
|
|
5.0
|
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable at December 31, 2016
|
|
624
|
|
|
$
|
38.50
|
|
|
|
|
|
||
Exercisable at December 31, 2017
|
|
555
|
|
|
47.42
|
|
|
|
|
|
|||
Exercisable at December 31, 2018
|
|
472
|
|
|
59.90
|
|
|
$
|
127
|
|
|
3.5
|
|
|
Number of units
(in thousands)
|
|
Weighted-average grant date fair value per unit
|
|
Weighted-average remaining contractual term
(in years)
|
|||
Outstanding at December 31, 2015
|
|
167
|
|
|
$
|
34.74
|
|
|
|
Granted
|
|
38
|
|
|
55.39
|
|
|
|
|
Vested
|
|
(46
|
)
|
|
40.15
|
|
|
|
|
Forfeited
|
|
(20
|
)
|
|
58.69
|
|
|
|
|
Outstanding at December 31, 2016
|
|
139
|
|
|
37.99
|
|
|
|
|
Granted
|
|
16
|
|
|
73.27
|
|
|
|
|
Vested
|
|
(43
|
)
|
|
43.18
|
|
|
|
|
Forfeited
|
|
(3
|
)
|
|
57.18
|
|
|
|
|
Outstanding at December 31, 2017
|
|
109
|
|
|
38.31
|
|
|
|
|
Granted
|
|
110
|
|
|
52.32
|
|
|
|
|
Vested
|
|
(22
|
)
|
|
48.14
|
|
|
|
|
Forfeited
|
|
(2
|
)
|
|
74.96
|
|
|
|
|
Outstanding at December 31, 2018
|
|
195
|
|
|
45.41
|
|
|
3.3
|
|
|
Number of shares
(in thousands)
|
|
Weighted-average grant date fair value per share
|
|
Weighted-average remaining contractual term
(in years)
|
|||
Unvested at December 31, 2015
|
|
170
|
|
|
$
|
56.35
|
|
|
|
Granted
|
|
97
|
|
|
56.22
|
|
|
|
|
Vested
|
|
(22
|
)
|
|
56.63
|
|
|
|
|
Forfeited
|
|
(25
|
)
|
|
56.86
|
|
|
|
|
Unvested at December 31, 2016
|
|
220
|
|
|
56.43
|
|
|
|
|
Granted
|
|
68
|
|
|
74.84
|
|
|
|
|
Vested
|
|
(99
|
)
|
|
52.41
|
|
|
|
|
Forfeited
|
|
(8
|
)
|
|
61.37
|
|
|
|
|
Unvested at December 31, 2017
|
|
181
|
|
|
65.33
|
|
|
|
|
Granted
|
|
77
|
|
|
71.29
|
|
|
|
|
Vested
|
|
(76
|
)
|
|
69.73
|
|
|
|
|
Forfeited
|
|
(14
|
)
|
|
66.24
|
|
|
|
|
Unvested at December 31, 2018
|
|
168
|
|
|
66.02
|
|
|
1.1
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Risk-free interest rate
|
|
2.4
|
%
|
|
1.4
|
%
|
|
0.9
|
%
|
Dividend yield
|
|
1.6
|
%
|
|
1.7
|
%
|
|
2.3
|
%
|
Expected volatility
|
|
21.6
|
%
|
|
21.9
|
%
|
|
22.7
|
%
|
|
|
Performance shares
(in thousands)
|
|
Weighted-average grant date fair value per share
|
|
Weighted-average remaining contractual term
(in years)
|
|||
Unvested at December 31, 2015
|
|
122
|
|
|
$
|
58.13
|
|
|
|
Granted(1)
|
|
153
|
|
|
52.75
|
|
|
|
|
Forfeited
|
|
(39
|
)
|
|
55.04
|
|
|
|
|
Unvested at December 31, 2016
|
|
236
|
|
|
55.15
|
|
|
|
|
Granted(1)
|
|
83
|
|
|
75.31
|
|
|
|
|
Forfeited
|
|
(9
|
)
|
|
64.85
|
|
|
|
|
Vested
|
|
(60
|
)
|
|
50.17
|
|
|
|
|
Adjustment for performance results achieved(2)
|
|
5
|
|
|
50.34
|
|
|
|
|
Unvested at December 31, 2017
|
|
255
|
|
|
63.42
|
|
|
|
|
Granted(1)
|
|
91
|
|
|
74.49
|
|
|
|
|
Forfeited
|
|
(48
|
)
|
|
59.32
|
|
|
|
|
Vested
|
|
(45
|
)
|
|
67.10
|
|
|
|
|
Adjustment for performance results achieved(2)
|
|
(3
|
)
|
|
67.11
|
|
|
|
|
Unvested at December 31, 2018
|
|
250
|
|
|
67.54
|
|
|
1.1
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Performance-based compensation plans(1)
|
|
$
|
20,297
|
|
|
$
|
22,085
|
|
|
$
|
19,730
|
|
401(k) expense
|
|
9,686
|
|
|
9,023
|
|
|
8,309
|
|
(in thousands)
|
|
Postretirement benefit plan
|
|
Pension plan(1)
|
||||
Change in benefit obligation:
|
|
|
|
|
||||
Benefit obligation, December 31, 2016
|
|
$
|
94,188
|
|
|
$
|
3,447
|
|
Interest cost
|
|
2,794
|
|
|
101
|
|
||
Net actuarial (gain) loss
|
|
(1,469
|
)
|
|
174
|
|
||
Benefits paid from plan assets and company funds
|
|
(7,919
|
)
|
|
(324
|
)
|
||
Benefit obligation, December 31, 2017
|
|
87,594
|
|
|
3,398
|
|
||
Interest cost
|
|
2,529
|
|
|
97
|
|
||
Net actuarial gain
|
|
(9,231
|
)
|
|
(23
|
)
|
||
Benefits paid from plan assets and company funds
|
|
(7,175
|
)
|
|
(324
|
)
|
||
Benefit obligation, December 31, 2018
|
|
$
|
73,717
|
|
|
$
|
3,148
|
|
Change in plan assets:
|
|
|
|
|
||||
Fair value of plan assets, December 31, 2016
|
|
$
|
118,128
|
|
|
$
|
—
|
|
Return on plan assets
|
|
15,309
|
|
|
—
|
|
||
Benefits paid
|
|
(5,994
|
)
|
|
—
|
|
||
Fair value of plan assets, December 31, 2017
|
|
127,443
|
|
|
—
|
|
||
Return on plan assets
|
|
(6,663
|
)
|
|
—
|
|
||
Benefits paid
|
|
(5,804
|
)
|
|
—
|
|
||
Fair value of plan assets, December 31, 2018
|
|
$
|
114,976
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Funded status, December 31, 2017
|
|
$
|
39,849
|
|
|
$
|
(3,398
|
)
|
Funded status, December 31, 2018
|
|
$
|
41,259
|
|
|
$
|
(3,148
|
)
|
|
|
Postretirement benefit plan
|
|
Pension plan
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Other non-current assets
|
|
$
|
41,259
|
|
|
$
|
39,849
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accrued liabilities
|
|
—
|
|
|
—
|
|
|
324
|
|
|
324
|
|
||||
Other non-current liabilities
|
|
—
|
|
|
—
|
|
|
2,824
|
|
|
3,074
|
|
(in thousands)
|
|
2018
|
|
2017
|
||||
Unrecognized prior service credit
|
|
$
|
14,178
|
|
|
$
|
15,599
|
|
Unrecognized net actuarial loss
|
|
(57,436
|
)
|
|
(55,174
|
)
|
||
Tax effect
|
|
6,729
|
|
|
12,746
|
|
||
Amount recognized in accumulated other comprehensive loss, net of tax
|
|
$
|
(36,529
|
)
|
|
$
|
(26,829
|
)
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Interest cost
|
|
$
|
2,626
|
|
|
$
|
2,896
|
|
|
$
|
3,118
|
|
Expected return on plan assets
|
|
(7,737
|
)
|
|
(7,128
|
)
|
|
(7,335
|
)
|
|||
Amortization of prior service credit
|
|
(1,421
|
)
|
|
(1,421
|
)
|
|
(1,421
|
)
|
|||
Amortization of net actuarial losses
|
|
2,884
|
|
|
3,637
|
|
|
3,797
|
|
|||
Net periodic benefit income
|
|
$
|
(3,648
|
)
|
|
$
|
(2,016
|
)
|
|
$
|
(1,841
|
)
|
|
|
Postretirement benefit plan
|
|
Pension plan
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Discount rate
|
|
4.13
|
%
|
|
3.46
|
%
|
|
4.01
|
%
|
|
3.35
|
%
|
|
|
Postretirement benefit plan
|
|
Pension plan
|
||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||
Discount rate
|
|
3.46
|
%
|
|
3.81
|
%
|
|
4.02
|
%
|
|
3.35
|
%
|
|
3.66
|
%
|
|
3.88
|
%
|
Expected return on plan assets
|
|
6.25
|
%
|
|
6.25
|
%
|
|
6.50
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
|
|
Participants under age 65
|
|
Participants age 65 and older
|
|
Participants under age 65
|
|
Participants age 65 and older
|
|
Participants under age 65
|
|
Participants age 65 and older
|
||||||
Health care cost trend rate assumed for next year
|
|
7.70
|
%
|
|
8.70
|
%
|
|
7.90
|
%
|
|
9.10
|
%
|
|
7.50
|
%
|
|
8.75
|
%
|
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
Year that the rate reaches the ultimate trend rate
|
|
2029
|
|
|
2029
|
|
|
2025
|
|
|
2025
|
|
|
2025
|
|
|
2025
|
|
|
|
Postretirement benefit plan
|
||||
|
|
2018
|
|
2017
|
||
Mortgage-backed securities
|
|
25
|
%
|
|
23
|
%
|
U.S. large capitalization equity securities
|
|
23
|
%
|
|
24
|
%
|
U.S. corporate debt securities
|
|
20
|
%
|
|
18
|
%
|
International equity securities
|
|
18
|
%
|
|
18
|
%
|
Government debt securities
|
|
11
|
%
|
|
13
|
%
|
U.S. small and mid-capitalization equity securities
|
|
3
|
%
|
|
4
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
|
Fair value measurements using
|
|
|
|
|
||||||||||||||
|
|
Quoted prices in active markets for identical assets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
|
Investments measured at net asset value
|
|
Fair value as of
December 31,
2018
|
||||||||||
(in thousands)
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
|
||||||||||||
Mortgage-backed securities
|
|
$
|
—
|
|
|
$
|
13,593
|
|
|
$
|
—
|
|
|
$
|
15,138
|
|
|
$
|
28,731
|
|
U.S. large capitalization equity securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,240
|
|
|
26,240
|
|
|||||
U.S. corporate debt securities
|
|
6,489
|
|
|
12,468
|
|
|
—
|
|
|
3,594
|
|
|
22,551
|
|
|||||
International equity securities
|
|
20,261
|
|
|
298
|
|
|
—
|
|
|
—
|
|
|
20,559
|
|
|||||
Government debt securities
|
|
—
|
|
|
12,738
|
|
|
—
|
|
|
—
|
|
|
12,738
|
|
|||||
U.S. small and mid-capitalization equity securities
|
|
3,259
|
|
|
27
|
|
|
—
|
|
|
551
|
|
|
3,837
|
|
|||||
Other debt securities
|
|
(6
|
)
|
|
326
|
|
|
—
|
|
|
—
|
|
|
320
|
|
|||||
Plan assets
|
|
$
|
30,003
|
|
|
$
|
39,450
|
|
|
$
|
—
|
|
|
$
|
45,523
|
|
|
$
|
114,976
|
|
|
|
Fair value measurements using
|
|
|
|
|
||||||||||||||
|
|
Quoted prices in active markets for identical assets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
|
Investments measured at net asset value
|
|
Fair value as of
December 31,
2017
|
||||||||||
(in thousands)
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
|
||||||||||||
Mortgage-backed securities
|
|
$
|
—
|
|
|
$
|
13,274
|
|
|
$
|
—
|
|
|
$
|
15,388
|
|
|
$
|
28,662
|
|
U.S. large capitalization equity securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,167
|
|
|
30,167
|
|
|||||
U.S. corporate debt securities
|
|
—
|
|
|
13,032
|
|
|
—
|
|
|
10,206
|
|
|
23,238
|
|
|||||
International equity securities
|
|
23,127
|
|
|
340
|
|
|
—
|
|
|
—
|
|
|
23,467
|
|
|||||
Government debt securities
|
|
—
|
|
|
17,118
|
|
|
—
|
|
|
—
|
|
|
17,118
|
|
|||||
U.S. small and mid-capitalization equity securities
|
|
3,490
|
|
|
56
|
|
|
—
|
|
|
956
|
|
|
4,502
|
|
|||||
Other debt securities
|
|
134
|
|
|
155
|
|
|
—
|
|
|
—
|
|
|
289
|
|
|||||
Plan assets
|
|
$
|
26,751
|
|
|
$
|
43,975
|
|
|
$
|
—
|
|
|
$
|
56,717
|
|
|
$
|
127,443
|
|
(in thousands)
|
|
Postretirement benefit plan
|
Pension plan
|
|||||
2019
|
|
$
|
7,679
|
|
|
$
|
320
|
|
2020
|
|
7,906
|
|
|
320
|
|
||
2021
|
|
7,730
|
|
|
310
|
|
||
2022
|
|
7,219
|
|
|
300
|
|
||
2023
|
|
6,686
|
|
|
300
|
|
||
2024 - 2028
|
|
26,205
|
|
|
1,320
|
|
(in thousands)
|
|
2018
|
|
2017
|
||||
Amount drawn on revolving credit facility
|
|
$
|
910,000
|
|
|
$
|
413,000
|
|
Amount outstanding under term loan facility
|
|
—
|
|
|
294,938
|
|
||
Capital lease obligations
|
|
1,864
|
|
|
1,914
|
|
||
Long-term debt, principal amount
|
|
911,864
|
|
|
709,852
|
|
||
Less unamortized debt issuance costs
|
|
—
|
|
|
(471
|
)
|
||
Less current portion of long-term debt
|
|
(791
|
)
|
|
(44,121
|
)
|
||
Long-term debt
|
|
911,073
|
|
|
665,260
|
|
||
Current portion of amount drawn under term loan facility
|
|
—
|
|
|
43,313
|
|
||
Current portion of capital lease obligations
|
|
791
|
|
|
808
|
|
||
Long-term debt due within one year, principal amount
|
|
791
|
|
|
44,121
|
|
||
Less unamortized debt issuance costs
|
|
—
|
|
|
(81
|
)
|
||
Long-term debt due within one year
|
|
791
|
|
|
44,040
|
|
||
Total debt
|
|
$
|
911,864
|
|
|
$
|
709,300
|
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Revolving credit facility:
|
|
|
|
|
|
|
||||||
Daily average amount outstanding
|
|
$
|
731,110
|
|
|
$
|
436,588
|
|
|
$
|
417,219
|
|
Weighted-average interest rate
|
|
3.24
|
%
|
|
2.55
|
%
|
|
1.93
|
%
|
|||
Term loan facility:
|
|
|
|
|
|
|
||||||
Daily average amount outstanding
|
|
$
|
63,638
|
|
|
$
|
315,862
|
|
|
$
|
52,381
|
|
Weighted-average interest rate
|
|
2.97
|
%
|
|
2.57
|
%
|
|
1.52
|
%
|
(in thousands)
|
|
Total available
|
||
Revolving credit facility commitment(1)
|
|
$
|
950,000
|
|
Amount drawn on revolving credit facility
|
|
(910,000
|
)
|
|
Outstanding letters of credit(2)
|
|
(10,221
|
)
|
|
Net available for borrowing as of December 31, 2018
|
|
$
|
29,779
|
|
(in thousands)
|
|
2018
|
|
2017
|
||||
Machinery and equipment
|
|
$
|
6,413
|
|
|
$
|
4,676
|
|
Accumulated depreciation
|
|
(4,673
|
)
|
|
(3,522
|
)
|
||
Net assets under capital leases
|
|
$
|
1,740
|
|
|
$
|
1,154
|
|
(in thousands)
|
|
Capital lease obligations
|
|
Operating lease obligations
|
||||
2019
|
|
$
|
822
|
|
|
$
|
16,479
|
|
2020
|
|
637
|
|
|
13,240
|
|
||
2021
|
|
365
|
|
|
9,001
|
|
||
2022
|
|
91
|
|
|
5,792
|
|
||
2023
|
|
—
|
|
|
3,263
|
|
||
Thereafter
|
|
—
|
|
|
11,056
|
|
||
Total minimum lease payments
|
|
1,915
|
|
|
$
|
58,831
|
|
|
Less portion representing interest
|
|
(51
|
)
|
|
|
|||
Present value of minimum lease payments
|
|
$
|
1,864
|
|
|
|
•
|
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 include hosting and domain name services, logo and web design, search engine marketing and optimization, email marketing, payroll services and business incorporation and organization 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 and deposits ("ePayments") and digital engagement solutions, including loyalty and rewards programs and financial management tools.
|
|
|
Year Ended December 31, 2018
|
|||||||||||||||
(in thousands)
|
|
Small Business Services
|
|
Financial Services
|
|
Direct Checks
|
|
Consolidated
|
|||||||||
Marketing solutions and other services:
|
|
|
|
|
|
|
|
|
|||||||||
Small business marketing solutions
|
|
$
|
292,245
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
292,245
|
|
|
Web services
|
|
161,646
|
|
|
—
|
|
|
—
|
|
|
161,646
|
|
|||||
Data-driven marketing solutions
|
|
—
|
|
|
147,893
|
|
|
—
|
|
|
147,893
|
|
|||||
Treasury management solutions
|
|
—
|
|
|
148,011
|
|
|
—
|
|
|
148,011
|
|
|||||
Fraud, security, risk management and operational services
|
|
25,460
|
|
|
50,499
|
|
|
14,146
|
|
|
90,105
|
|
|||||
Total MOS
|
|
479,351
|
|
|
346,403
|
|
|
14,146
|
|
|
839,900
|
|
|||||
Checks
|
|
476,751
|
|
—
|
|
226,554
|
|
|
107,084
|
|
|
810,389
|
|
||||
Forms, accessories and other products
|
|
327,518
|
|
|
14,010
|
|
|
6,208
|
|
|
347,736
|
|
|||||
Total revenue
|
|
$
|
1,283,620
|
|
|
$
|
586,967
|
|
|
$
|
127,438
|
|
|
$
|
1,998,025
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Year Ended December 31, 2017
|
|||||||||||||||
(in thousands)
|
|
Small Business Services
|
|
Financial Services
|
|
Direct Checks
|
|
Consolidated
|
|||||||||
Marketing solutions and other services:
|
|
|
|
|
|
|
|
|
|||||||||
Small business marketing solutions
|
|
$
|
262,192
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
262,192
|
|
|
Web services
|
|
131,644
|
|
|
—
|
|
|
—
|
|
|
131,644
|
|
|||||
Data-driven marketing solutions
|
|
—
|
|
|
150,572
|
|
|
—
|
|
|
150,572
|
|
|||||
Treasury management solutions
|
|
—
|
|
|
109,240
|
|
|
—
|
|
|
109,240
|
|
|||||
Fraud, security, risk management and operational services
|
|
25,491
|
|
|
61,185
|
|
|
15,354
|
|
|
102,030
|
|
|||||
Total MOS
|
|
419,327
|
|
|
320,997
|
|
|
15,354
|
|
|
755,678
|
|
|||||
Checks
|
|
482,928
|
|
|
249,716
|
|
|
118,392
|
|
|
851,036
|
|
|||||
Forms, accessories and other products
|
|
337,484
|
|
|
14,562
|
|
|
6,796
|
|
|
358,842
|
|
|||||
Total revenue
|
|
$
|
1,239,739
|
|
|
$
|
585,275
|
|
|
$
|
140,542
|
|
|
$
|
1,965,556
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Year Ended December 31, 2016
|
|||||||||||||||
(in thousands)
|
|
Small Business Services
|
|
Financial Services
|
|
Direct Checks
|
|
Consolidated
|
|||||||||
Marketing solutions and other services:
|
|
|
|
|
|
|
|
|
|||||||||
Small business marketing solutions
|
|
$
|
242,710
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
242,710
|
|
|
Web services
|
|
115,226
|
|
|
—
|
|
|
—
|
|
|
115,226
|
|
|||||
Data-driven marketing solutions
|
|
—
|
|
|
50,022
|
|
|
—
|
|
|
50,022
|
|
|||||
Treasury management solutions
|
|
—
|
|
|
92,259
|
|
|
—
|
|
|
92,259
|
|
|||||
Fraud, security, risk management and operational services
|
|
26,948
|
|
|
72,940
|
|
|
16,812
|
|
|
116,700
|
|
|||||
Total MOS
|
|
384,884
|
|
|
215,221
|
|
|
16,812
|
|
|
616,917
|
|
|||||
Checks
|
|
467,386
|
|
|
268,926
|
|
|
128,973
|
|
|
865,285
|
|
|||||
Forms, accessories and other products
|
|
343,473
|
|
|
15,829
|
|
|
7,558
|
|
|
366,860
|
|
|||||
Total revenue
|
|
$
|
1,195,743
|
|
|
$
|
499,976
|
|
|
$
|
153,343
|
|
|
$
|
1,849,062
|
|
(in thousands)
|
|
Small Business Services
|
|
Financial Services
|
|
Direct Checks
|
|
Total
|
||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
United States
|
|
$
|
1,180,019
|
|
|
$
|
563,918
|
|
|
$
|
127,438
|
|
|
$
|
1,871,375
|
|
Foreign, primarily Canada and Australia
|
|
103,601
|
|
|
23,049
|
|
|
—
|
|
|
126,650
|
|
||||
Total revenue
|
|
$
|
1,283,620
|
|
|
$
|
586,967
|
|
|
$
|
127,438
|
|
|
$
|
1,998,025
|
|
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
United States
|
|
$
|
1,150,055
|
|
|
$
|
568,801
|
|
|
$
|
140,542
|
|
|
$
|
1,859,398
|
|
Foreign, primarily Canada and Australia
|
|
89,684
|
|
|
16,474
|
|
|
—
|
|
|
106,158
|
|
||||
Total revenue
|
|
$
|
1,239,739
|
|
|
$
|
585,275
|
|
|
$
|
140,542
|
|
|
$
|
1,965,556
|
|
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
United States
|
|
$
|
1,123,382
|
|
|
$
|
499,976
|
|
|
$
|
153,343
|
|
|
$
|
1,776,701
|
|
Foreign, primarily Canada and Australia
|
|
72,361
|
|
|
—
|
|
|
—
|
|
|
72,361
|
|
||||
Total revenue
|
|
$
|
1,195,743
|
|
|
$
|
499,976
|
|
|
$
|
153,343
|
|
|
$
|
1,849,062
|
|
|
|
|
|
Reportable Business Segments
|
|
|
|
|
||||||||||||||
(in thousands)
|
|
|
|
Small Business Services
|
|
Financial Services
|
|
Direct Checks
|
|
Corporate
|
|
Consolidated
|
||||||||||
Total revenue from external
|
|
2018
|
|
$
|
1,283,620
|
|
|
$
|
586,967
|
|
|
$
|
127,438
|
|
|
$
|
—
|
|
|
$
|
1,998,025
|
|
customers:
|
|
2017
|
|
1,239,739
|
|
|
585,275
|
|
|
140,542
|
|
|
—
|
|
|
1,965,556
|
|
|||||
|
|
2016
|
|
1,195,743
|
|
|
499,976
|
|
|
153,343
|
|
|
—
|
|
|
1,849,062
|
|
|||||
Operating income:
|
|
2018
|
|
119,808
|
|
|
69,939
|
|
|
41,474
|
|
|
—
|
|
|
231,221
|
|
|||||
|
|
2017
|
|
181,528
|
|
|
101,047
|
|
|
46,601
|
|
|
—
|
|
|
329,176
|
|
|||||
|
|
2016
|
|
207,581
|
|
|
106,335
|
|
|
52,971
|
|
|
—
|
|
|
366,887
|
|
|||||
Depreciation and amortization
|
|
2018
|
|
66,031
|
|
|
61,843
|
|
|
3,226
|
|
|
—
|
|
|
131,100
|
|
|||||
expense:
|
|
2017
|
|
56,834
|
|
|
62,592
|
|
|
3,226
|
|
|
—
|
|
|
122,652
|
|
|||||
|
|
2016
|
|
52,195
|
|
|
35,850
|
|
|
3,538
|
|
|
—
|
|
|
91,583
|
|
|||||
Asset impairment charges:
|
|
2018
|
|
99,437
|
|
|
1,882
|
|
|
—
|
|
|
—
|
|
|
101,319
|
|
|||||
|
|
2017
|
|
54,880
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54,880
|
|
|||||
|
|
2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total assets:
|
|
2018
|
|
1,094,262
|
|
|
751,242
|
|
|
157,802
|
|
|
301,790
|
|
|
2,305,096
|
|
|||||
|
|
2017
|
|
1,081,098
|
|
|
679,547
|
|
|
158,827
|
|
|
289,355
|
|
|
2,208,827
|
|
|||||
|
|
2016
|
|
1,086,500
|
|
|
631,353
|
|
|
161,039
|
|
|
305,446
|
|
|
2,184,338
|
|
|||||
Capital asset purchases:
|
|
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62,238
|
|
|
62,238
|
|
|||||
|
|
2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47,450
|
|
|
47,450
|
|
|||||
|
|
2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,614
|
|
|
46,614
|
|
|
|
2018 Quarter Ended
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Total revenue
|
|
$
|
491,914
|
|
|
$
|
488,244
|
|
|
$
|
493,190
|
|
|
$
|
524,677
|
|
Gross profit
|
|
303,156
|
|
|
298,043
|
|
|
295,556
|
|
|
309,522
|
|
||||
Net income (loss)
|
|
63,336
|
|
|
60,207
|
|
|
(31,083
|
)
|
|
57,170
|
|
||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
1.32
|
|
|
1.26
|
|
|
(0.67
|
)
|
|
1.25
|
|
||||
Diluted
|
|
1.31
|
|
|
1.25
|
|
|
(0.67
|
)
|
|
1.25
|
|
||||
Cash dividends per share
|
|
0.30
|
|
|
0.30
|
|
|
0.30
|
|
|
0.30
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
2017 Quarter Ended
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Total revenue
|
|
$
|
487,766
|
|
|
$
|
485,232
|
|
|
$
|
497,669
|
|
|
$
|
494,889
|
|
Gross profit
|
|
308,452
|
|
|
305,864
|
|
|
304,598
|
|
|
303,935
|
|
||||
Net income
|
|
57,066
|
|
|
59,579
|
|
|
28,801
|
|
|
84,709
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
1.17
|
|
|
1.23
|
|
|
0.60
|
|
|
1.76
|
|
||||
Diluted
|
|
1.16
|
|
|
1.22
|
|
|
0.59
|
|
|
1.75
|
|
||||
Cash dividends per share
|
|
0.30
|
|
|
0.30
|
|
|
0.30
|
|
|
0.30
|
|
|
2018 Quarter Ended
|
|||||||||||||||
(in thousands)
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Asset impairment charges
|
|
$
|
2,149
|
|
|
$
|
—
|
|
|
$
|
99,170
|
|
|
$
|
—
|
|
Restructuring and integration expense
|
|
2,322
|
|
|
6,371
|
|
|
5,104
|
|
|
7,406
|
|
||||
Gain on sales of businesses and customer lists
|
|
7,228
|
|
|
3,862
|
|
|
1,765
|
|
|
2,786
|
|
||||
Certain litigation
|
|
297
|
|
|
631
|
|
|
1,805
|
|
|
7,769
|
|
||||
CEO transition costs
|
|
—
|
|
|
1,530
|
|
|
2,622
|
|
|
3,058
|
|
||||
Impact of the Tax Cuts and Jobs Act
|
|
(310
|
)
|
|
441
|
|
|
(1,249
|
)
|
|
(582
|
)
|
||||
Other discrete income tax (benefit) expense(1)
|
|
(579
|
)
|
|
(1,167
|
)
|
|
15,634
|
|
|
(1,987
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
2017 Quarter Ended
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Asset impairment charges
|
|
$
|
5,296
|
|
|
$
|
2,954
|
|
|
$
|
46,630
|
|
|
$
|
—
|
|
Restructuring and integration expense
|
|
993
|
|
|
1,457
|
|
|
1,242
|
|
|
5,438
|
|
||||
Gain on sales of businesses and customer lists
|
|
6,779
|
|
|
—
|
|
|
1,924
|
|
|
—
|
|
||||
Impact of the Tax Cuts and Jobs Act
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,500
|
)
|
||||
Other discrete income tax (benefit) expense(1)
|
|
(3,664
|
)
|
|
(1,276
|
)
|
|
4,555
|
|
|
(1,843
|
)
|
(in thousands)
|
|
Cash, cash equivalents, restricted cash and restricted cash equivalents (unaudited)
|
||
September 30, 2018
|
|
$
|
126,114
|
|
June 30, 2018
|
|
145,303
|
|
|
March 31, 2018
|
|
146,479
|
|
|
September 30, 2017
|
|
115,172
|
|
|
June 30, 2017
|
|
105,479
|
|
|
March 31, 2017
|
|
160,000
|
|
Plan category
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
Weighted-average exercise price of outstanding options, warrants and rights
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column)
|
|
||||
Equity compensation plans approved by shareholders
|
|
1,689,279
|
|
(1)
|
$
|
62.04
|
|
(1)
|
8,903,638
|
|
(2)
|
Equity compensation plans not approved by shareholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total
|
|
1,689,279
|
|
|
$
|
62.04
|
|
|
8,903,638
|
|
|
Exhibit Number
|
|
Description
|
|
Method of Filing
|
3.1
|
|
|
|
*
|
3.2
|
|
|
|
*
|
4.1
|
|
|
|
*
|
10.1
|
|
|
*
|
|
10.2
|
|
|
*
|
|
10.3
|
|
|
Filed
herewith
|
|
10.4
|
|
|
*
|
|
10.5
|
|
|
*
|
|
10.6
|
|
|
*
|
|
10.7
|
|
|
*
|
|
10.8
|
|
|
Filed
herewith
|
|
10.9
|
|
|
*
|
|
10.10
|
|
|
*
|
Exhibit Number
|
|
Description
|
|
Method of Filing
|
10.11
|
|
|
Filed
herewith
|
|
10.12
|
|
|
*
|
|
10.13
|
|
|
*
|
|
10.14
|
|
|
*
|
|
10.15
|
|
|
*
|
|
10.16
|
|
|
Filed
herewith
|
|
10.17
|
|
|
*
|
|
10.18
|
|
|
*
|
|
10.19
|
|
|
Filed
herewith
|
|
10.20
|
|
|
*
|
|
10.21
|
|
|
*
|
|
10.22
|
|
|
*
|
|
10.23
|
|
|
*
|
|
10.24
|
|
|
*
|
|
10.25
|
|
|
*
|
|
10.26
|
|
|
*
|
Exhibit Number
|
|
Description
|
|
Method of Filing
|
10.27
|
|
|
*
|
|
10.28
|
|
|
*
|
|
10.29
|
|
|
*
|
|
10.30
|
|
|
*
|
|
10.31
|
|
|
*
|
|
10.32
|
|
|
*
|
|
10.33
|
|
|
|
*
|
21.1
|
|
|
Filed
herewith
|
|
23.1
|
|
|
Filed
herewith
|
|
24.1
|
|
|
Filed
herewith
|
|
31.1
|
|
|
|
Filed
herewith
|
31.2
|
|
|
|
Filed
herewith
|
32.1
|
|
|
Furnished
herewith
|
|
101
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of December 31, 2018 and December 31, 2017, (ii) Consolidated Statements of Income for the years ended December 31, 2018, 2017 and 2016, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 2017 and 2016, (iv) Consolidated Statements of Shareholders' Equity for the years ended December 31, 2018, 2017 and 2016 (v) Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016, and (vi) Notes to Consolidated Financial Statements
|
|
Filed
herewith
|
|
DELUXE CORPORATION
|
Date: February 26, 2019
|
/s/ Barry C. McCarthy
|
|
Barry C. McCarthy, President and Chief Executive Officer
|
Signature
|
Title
|
|
|
/s/ Barry C. McCarthy
|
President and Chief Executive Officer
|
Barry C. McCarthy
|
(Principal Executive Officer)
|
|
|
/s/ Keith A. Bush
|
Chief Financial Officer
|
Keith A. Bush
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
*
|
|
Ronald C. Baldwin
|
Director
|
|
|
*
|
|
Cheryl Mayberry McKissack
|
Director
|
|
|
*
|
|
Don J. McGrath
|
Director
|
|
|
*
|
|
Neil J. Metviner
|
Director
|
|
|
*
|
|
Stephen P. Nachtsheim
|
Director
|
|
|
*
|
|
Thomas J. Reddin
|
Director
|
|
|
*
|
|
Martyn R. Redgrave
|
Director
|
|
|
*
|
|
John L. Stauch
|
Director
|
|
|
*
|
|
Victoria A. Treyger
|
Director
|
|
|
|
|
* By: /s/ Keith A. Bush
|
|
Keith A. Bush, Attorney-in-Fact
|
|
(i)
|
such employee, immediately after such a right to purchase is granted, would own, directly or indirectly, within the meaning of Section 423(b)(3) and Section 424(d) of the Code, Shares possessing five percent (5%) or more of the total combined voting power or value of all the classes of the capital stock of the Company or of its parent, as defined in Section 424(e) of the Code, or a Subsidiary, or
|
(ii)
|
such employee’s rights to purchase stock under all employee stock purchase plans (within the meaning of Section 423 of the Code) of the Company and its Subsidiaries accrues at a rate that exceeds $25,000 worth of stock (determined at the Fair Market Value of the Shares at the time such rights are granted) for each calendar year during which the rights to purchase such stock are outstanding at any time.
|
A.
|
Twelve (12) months of severance pay at your then-current level of base monthly salary in accordance with regular Deluxe Corporation (Deluxe) payroll practices;
|
B.
|
For a period of six (6) months commencing on the first anniversary of the initial payment in paragraph A, a monthly payment during each month in such six (6) month period equal to the amount, if any, that your monthly base salary at the time of your termination exceeds your monthly compensation during that month in such six (6) month period. In order to be eligible to receive any such payment, you agree to provide Deluxe a copy of documentation concerning your monthly compensation, such as your payroll statement or, if applicable, your written statement that you are not then employed, and within thirty (30) days thereafter, Deluxe will make such differential payment to you;
|
C.
|
Executive-level outplacement counseling and support services for a period of up to twelve (12) months, to be provided through the Company’s then current preferred provider of such services; and
|
D.
|
To assist you with other costs and expenses you may incur in connection with your employment transition, an additional lump sum payment of Thirteen Thousand Dollars ($13,000), which shall be paid to you within thirty (30) days of the effective date of the separation agreement and release referenced above.
|
[CEO Name]
|
[Executive Signature]
|
Chief Executive Officer
|
|
|
|
|
Date:
|
•
|
You remain an active employee through December 31, 2019.
|
•
|
You continue to exhibit professionalism and leadership in support of the Company’s goals among your fellow employees, our customers, vendors, and your acquaintances.
|
•
|
You maintain expected conditions of employment and satisfactory job performance as evaluated by the CEO and the Company’s Board of Directors.
|
•
|
If you voluntarily terminate your employment during the Retention Period, are involuntarily terminated for Cause (as defined below), or if you fail to meet the objectives and conditions of this letter agreement, then no Retention Bonus will be earned or paid.
|
•
|
You do not disclose Confidential Information of the Company. “Confidential Information” means all confidential or proprietary information of the Company, including, without limitation, financial data, trade secrets, technology developments, customer and mailing lists, business, sales and marketing plans, data processing systems, pricing and credit policies, books and records, research and development activities relating to the conduct of the Company’s
|
•
|
You do not make any remarks knowingly or intentionally disparaging the Company or any Company affiliate, or their respective products, services, officers, directors or employees, whether past or current, including any present, former or future director, officer, employee or agent of the Company or any affiliate.
|
Dated: February 7, 2019
|
/s/ John D. Filby
|
|
John Filby
|
Dated: February 12, 2019
|
Deluxe Corporation
|
|
|
|
By /s/ Jeffrey L. Cotter
|
|
|
|
Its SVP, GC
|
DELUXE
|
RESTRICTED STOCK UNIT
|
CORPORATION
|
AWARD AGREEMENT
|
|
(Bonus Deferral)
|
|
|
AWARDED TO
|
AWARD DATE
|
TOTAL NUMBER OF RESTRICTED STOCK
UNITS
|
|
|
|
1.
|
The Award. Deluxe Corporation, a Minnesota corporation (“Deluxe“), hereby grants to you as of the above Award Date the above number of restricted stock units (“Units”) on the terms and conditions contained in this Restricted Stock Unit Award Agreement (including the Addendum attached hereto, the “Agreement”), Deluxe’s 2017 Annual Incentive Plan (the “Annual Plan”) and Deluxe’s 2017 Long Term Incentive Plan (the “LTIP”), a copy of each of which has been provided to you. Pursuant to and in accordance with the Annual Plan, you have elected to receive all or a portion of your annual incentive award payment for the [ ] plan year (if and when declared and awarded,) in Units. Each Unit will entitle you to acquire one share of Deluxe common stock, par value $1.00 (“Common Stock”), when the restrictions applicable to each Unit expire or terminate as provided below. Any capitalized term used but not defined in this Agreement shall have the meaning given to the term in the LTIP as it currently exists or may hereafter be amended.
|
2.
|
Restricted Period and Vesting. The Units are subject to the restrictions contained in this Agreement, the Annual Plan and the LTIP for the Restricted Period (as defined below). As used herein, “Restricted Period,” shall mean a period commencing on the Award Date and, subject to Section 4, ending on the second anniversary of the Award Date (the “Expiration Date”). Subject to Sections 4 and 5 below, on the Expiration Date the restrictions will lapse and the Units will vest, so long as your service to Deluxe has not previously ended.
|
3.
|
Restrictions. The Units shall be subject to the following restrictions during the Restricted Period:
|
4.
|
Acceleration of Vesting.
|
6.
|
Delivery of Shares of Common Stock. Subject to Section 5, after any Units vest pursuant to Section 2 or Section 4, as applicable, Deluxe shall, as soon as practicable (but no later than 75 days after the applicable vesting date) cause to be issued and delivered to you (or to your personal representative or your designated beneficiary or estate in the event of your death, as applicable) one share of Common Stock in payment and settlement of each vested Unit. Delivery of shares of Common Stock shall be effected by the issuance of a stock certificate to you, by an appropriate entry in the stock register maintained by Deluxe’s transfer agent with a notice of issuance provided to you, or by the electronic delivery of the shares of Common Stock to a brokerage account for your benefit, and shall be subject to the tax withholding provisions of Section 8 and compliance with all applicable legal requirements as provided in the LTIP, and shall be in complete satisfaction and settlement of such vested Units. Deluxe will pay any original issue or transfer taxes with respect to the issue and transfer of shares of Common Stock to you pursuant to this Agreement, and all fees and expenses incurred by it in connection therewith. If the Units that vest include a fractional Unit, Deluxe shall round the number of vested Units to the nearest whole Unit prior to issuance of shares of Common Stock as provided herein.
|
7.
|
Rights. The Units subject to this award do not entitle you to any rights of a holder of Common Stock. You will not have any of the rights of a shareholder of Deluxe in connection with the grant of Units subject to this Agreement unless and until shares of Common Stock are issued to you upon settlement of the Units as provided in Section 2.
|
8.
|
Income Taxes. You are liable for any federal and state income or other taxes applicable upon the distribution to you of any shares of Common Stock in settlement of vested Units or other payments under this Agreement, and you acknowledge that you should consult with your own tax advisor regarding the applicable tax consequences. Upon the distribution of shares of Common Stock, you shall promptly pay to Deluxe the amount of all applicable taxes required by Deluxe to be withheld or collected upon the distribution of the shares of Common Stock in settlement of the vested Units, such amount to be paid in cash or in previously acquired shares of Deluxe common stock having a fair market value equal to the tax withholding amount. In the alternative, you may direct Deluxe to withhold from shares of Common Stock otherwise to be distributed the number of Deluxe shares having a fair market value equal to the amount of all applicable taxes required by Deluxe to be withheld upon the distribution of the shares of Common Stock You acknowledge that no shares of Common Stock will be distributed to you unless and until you have satisfied any obligation for withholding taxes as provided in this Agreement.
|
9.
|
Terms and Conditions. This Agreement and the award of Units and the issuance of shares of Common Stock hereunder are subject to and governed by the provisions of the LTIP and the Annual Incentive Plan. In the event there are any inconsistencies between this Agreement and those plans, the provisions of the applicable plan shall govern, as it may be amended or interpreted at Deluxe’s discretion, to meet any applicable requirements of Section 409A of the Internal Revenue Code.
|
(i)
|
You have breached your obligations of confidentiality to Deluxe or any of its Affiliates;
|
(ii)
|
You have otherwise failed to perform your employment duties and do not cure such failure within thirty (30) days after receipt of written notice thereof;
|
(iii)
|
You commit an act, or omit to take action, in bad faith which results in material detriment to Deluxe or any of its Affiliates;
|
(iv)
|
You have had excessive absences unrelated to illness or vacation (“excessive” shall be defined in accordance with local employment customs);
|
(v)
|
You have committed fraud, misappropriation, embezzlement or other act of dishonesty in connection with Deluxe or any of its Affiliates or its or their businesses;
|
(vi)
|
You have been convicted or have pleaded guilty or nolo contendere to a felony or a gross misdemeanor, which gross misdemeanor involves a breach of ethics, moral turpitude, or immoral or other conduct reflecting adversely upon the reputation or interest of Deluxe or its Affiliates;
|
(vii)
|
Your unlawful conduct or gross misconduct that is or is reasonably likely to be injurious to the business, finances or reputation of Deluxe; or
|
(viii)
|
You are in default under any agreement between you and Deluxe or any of its Affiliates following any applicable notice and cure period.
|
(i)
|
any Person becomes the Beneficial Owner, directly or indirectly, of securities of Deluxe representing 30% or more of the combined voting power of Deluxe’s then outstanding securities, excluding, at the time of their original acquisition, from the calculation of securities beneficially owned by such Person any securities acquired directly from Deluxe or its Affiliates or in connection with a transaction described in paragraph (iii) below; or
|
(ii)
|
the individuals who at the date of your award election hereunder constitute the Board and any new director (other than a director whose initial assumption of office occurs within a year of and is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of Deluxe) whose appointment or election by the Board or nomination for election by Deluxe’s shareholders was approved or recommended by a vote of a majority of the directors then still in office who either were directors at the date of your award election hereunder or whose appointment, election or nomination for election was previously so approved or recommended, cease for any reason to constitute a majority thereof; or
|
(iii)
|
the shareholders of Deluxe approve a plan of complete liquidation of Deluxe or there is consummated (A) a merger, consolidation, share exchange or similar transaction involving Deluxe, regardless of whether Deluxe is the surviving corporation or (B) the sale or disposition by Deluxe of all or substantially all Deluxe’s assets, other than a sale or disposition by Deluxe of all or substantially all of Deluxe’s assets to an entity, unless, immediately following such corporate
|
(i)
|
for purposes of Treas. Reg. §1.409A-1(h)(1)(ii), an employee shall be considered to have incurred a separation from service on the date on which it is reasonably anticipated that the level of bona fide services the employee will perform after such date (whether as an employee or as an independent contractor) will permanently decrease to less than 50 percent of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services to the employer if the employee has been providing services to the employer less than 36 months); and
|
(ii)
|
for purposes of identifying specified employees the safe harbor definition of compensation contained in Treas. Reg. §1.415(c)-2(d)(4) (compensation required to be reported on Form W-2 plus elective deferrals) shall be used, and compensation paid to a nonresident alien that is not effectively connected with the conduct of a trade or business within the United States shall be excluded.
|
|
|
Date
|
|
|
|
/s/ Barry C. McCarthy
|
|
2/20/2019
|
Barry C. McCarthy, President, Chief Executive Officer and Director (principal executive officer)
|
|
|
|
|
|
/s/ Keith A. Bush
|
|
2/20/2019
|
Keith A. Bush, Chief Financial Officer
(principal financial officer and principal accounting officer)
|
|
|
|
|
|
/s/ Ronald C. Baldwin
|
|
2/20/2019
|
Ronald C. Baldwin, Director
|
|
|
|
|
|
/s/ Don J. McGrath
|
|
2/20/2019
|
Don J. McGrath, Director
|
|
|
|
|
|
/s/ Cheryl Mayberry McKissack
|
|
2/20/2019
|
Cheryl Mayberry McKissack, Director
|
|
|
|
|
|
/s/ Neil J. Metviner
|
|
2/20/2019
|
Neil J. Metviner, Director
|
|
|
|
|
|
/s/ Stephen P. Nachtsheim
|
|
2/20/2019
|
Stephen P. Nachtsheim, Director
|
|
|
|
|
|
/s/ Thomas J. Reddin
|
|
2/20/2019
|
Thomas J. Reddin, Director
|
|
|
|
|
|
/s/ Martyn R. Redgrave
|
|
2/20/2019
|
Martyn R. Redgrave, Director
|
|
|
|
|
|
/s/ John L. Stauch
|
|
2/20/2019
|
John L. Stauch, Director
|
|
|
|
|
|
/s/ Victoria A. Treyger
|
|
2/20/2019
|
Victoria A. Treyger, Director
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: February 26, 2019
|
/s/ Barry C. McCarthy
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Barry C. McCarthy
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President and Chief Executive Officer
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: February 26, 2019
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/s/ Keith A. Bush
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Keith A. Bush
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Senior Vice President, Chief Financial Officer
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(1)
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the Annual Report on Form 10-K of the Company for the year ended December 31, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 26, 2019
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/s/ Barry C. McCarthy
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Barry C. McCarthy
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President and Chief Executive Officer
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/s/ Keith A. Bush
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Keith A. Bush
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Senior Vice President, Chief Financial Officer
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