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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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43-2099257
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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6220 Stoneridge Mall Road
Pleasanton, CA
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94588
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(Address of Principal Executive Offices)
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(Zip Code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.001 per share
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The NASDAQ Stock Market LLC
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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PART I.
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV.
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Item 15.
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Item 16.
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Products and Services
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How We Earn Fees
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Closed Loop Gift Cards
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Content providers pay us commission and fees based on transaction dollar volume. We share commissions with our retail distribution partners.
For aggregated category giftcards that are issued by Blackhawk, we earn commissions from the retail participants and also recognize revenues for unredeemed balances.
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Open Loop Gift Cards
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Consumers pay a purchase fee upon card activation depending on transaction dollar volume. We share this fee with our retail distribution partners and content providers.
Our issuing banks pay us additional program management fees and other fees for our Visa gift cards, based, in part, on unspent balances. We also earn a portion of merchant interchange fees when customers use our proprietary Visa gift card for purchases. Merchants pay us a commission on “cash-back” cards when redeemed with them. |
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Prepaid Telecom Products
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The telecom carriers pay us a commission based on transaction dollar volume. We share these commissions with our retail distribution partners.
We purchase handsets from manufacturers and sell them with a markup to our retail distribution partners. Our retail distribution partners retain the full proceeds from the sale of handsets to consumers. |
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Prepaid Financial Services
Products
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We earn a flat fee for each third-party GPR card sold by our retail distribution partners. We share this fee with our retail distribution partners. We also earn account maintenance and interchange fees from these third-party GPR content providers.
When consumers reload GPR cards on our REloadit network, we collect a fee, which we share with our retail distribution partners. For third-party GPR cards, this fee is also shared with the third-party GPR content provider.
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Loyalty, Incentive and Reward Products
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We earn fees when we sell incentive cards to our business clients.
We earn fees for processing and fulfillment of consumer rebates. Our issuing banks pay us additional program management fees and other fees for our open loop incentive cards. We earn a portion of merchant interchange fees when consumers use our open loop incentive cards for purchases. We earn additional commissions when consumer make purchases using our restricted authorization network cards. We earn revenues when employees redeem points for merchandise or prepaid cards. We earn subscription or periodic fees for use by customers of Blackhawk’s Achievers software. |
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Cardpool Exchange Services
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We earn a markup on the sale of pre-owned closed loop gift cards, which we purchase from consumers at a discount to the amount of funds remaining on a card.
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Other Fee Categories
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Content providers pay us marketing funds to support programs that we coordinate with our retail distribution partners for the in-store or online promotion of their gift cards.
We earn revenue for card production and packaging services for content providers.
We earn fees related to certain closed loop card programs. We earn a split and/or fees on merchant promotions purchased through the NimbleCommerce.com website.
We earn management fees, transaction fees and technology fees from our business clients.
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•
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federal anti-money laundering laws and regulations, including the USA PATRIOT Act (the “Patriot Act”), the Bank Secrecy Act (the “BSA”), anti-terrorist financing laws and regulations and anti-bribery and corrupt practices laws and regulations in the U.S., and similar international laws and regulations;
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•
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state unclaimed property laws and regulations and state money transmitter or similar licensing laws and regulations;
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•
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federal and state consumer protection laws, including the Credit Card Accountability Responsibility and Disclosure Act of 2009 (the “CARD Act”), and the Durbin Amendment to Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), and laws and regulations relating to privacy and data security; and
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•
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foreign jurisdiction payment services industry laws and regulations.
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•
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changes in consumer and corporate preferences and demand for the products and services that we offer;
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•
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our ability to retain and attract new retail and corporate customers;
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•
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our ability to maintain and expand our distribution network and business partners;
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•
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our ability to maintain and expand the supply and variety of products and services that we distribute and offer;
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•
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our ability to increase the productivity of our distribution partners’ stores;
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•
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our ability to anticipate and adapt to technological changes in the industry, as well as to develop new technologies to deliver our product and service offerings;
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•
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our ability to maintain our relationships with banks that issue open loop prepaid cards (card issuing banks) and other industry participants;
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•
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pricing pressure in the face of increasing competition and other market forces;
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•
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regulatory changes or uncertainties that increase compliance costs, decrease the attractiveness of the products and services we offer or make it more difficult or less attractive for us, our distribution partners or our content providers, including card issuing banks, to participate in our industry; and
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•
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consumer acceptance of our product and services offerings in international markets, and our ability to grow our international operations and manage related regulatory compliance and foreign currency fluctuations.
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•
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the addition or loss of one or more significant distribution partners or content providers;
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consumer spending patterns and preferences;
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•
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business spending patterns and preferences;
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•
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general economic conditions affecting consumer spending;
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•
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the overall business condition of our distribution partners and content providers;
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•
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the development and expansion of new product and service offerings by our competitors;
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•
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changes in pricing and fee structures, whether driven by competitive factors, issuing banks, card associations, regulatory requirements or otherwise;
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•
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changes to our product and service offerings or changes in the way our products and services are sold, whether due to regulatory requirements or otherwise;
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•
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changes in our product and service mix;
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•
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changes in regulations or changes in interpretations of existing regulations;
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•
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the institution of new, or the adverse resolution of pending, litigation or regulatory investigations applicable to us;
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•
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business and service interruptions resulting from natural disasters, fraud, security breach or cyber attack, or network infrastructure failures;
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•
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the timing of our distribution partners’ roll out of new programs and content; and
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•
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other factors discussed elsewhere in this “Risk Factors” section.
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•
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potentially increased regulatory and compliance requirements;
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•
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potential regulatory restrictions on revenue streams of acquired businesses;
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implementation or remediation of controls, procedures and policies at the acquired company;
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diversion of management time and focus from operation of our then-existing business to acquisition integration challenges;
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•
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coordination of product, sales, marketing and program and systems management functions;
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transition of the acquired company’s users and customers onto our systems;
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retention of employees from the acquired company;
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integration of employees from the acquired company into our organization;
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integration of the acquired company’s accounting, information management, human resources and other administrative systems and operations into our systems and operations;
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•
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integration of the acquired companies’ technology and platforms into our environment;
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•
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liability for activities of the acquired company prior to the acquisition, including violations of law, commercial disputes, escheat and tax and other known and unknown liabilities; and
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•
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litigation or other claims in connection with the acquired company, including claims brought by terminated employees, customers, former stockholders or other third parties.
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•
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federal anti-money laundering laws and regulations, including the USA PATRIOT Act (the “Patriot Act”), the BSA, anti-terrorist financing laws and regulations, anti-bribery and corrupt practice laws and regulations and similar international laws and regulations;
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•
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federal and state consumer protection laws and regulations;
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federal economic sanctions laws overseen by the Office of Foreign Assets Control (“OFAC”);
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state unclaimed property (escheat) laws and regulations;
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state money transmitter licensing laws and regulations;
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data protection and cyber-security laws and regulations; and
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•
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foreign jurisdiction payment services industry laws and regulations.
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•
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impair or eliminate our ability to conduct certain aspects of our business;
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•
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increase our compliance and other costs of doing business;
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•
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require significant product redesign or systems redevelopment;
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•
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prohibit or suspend our data transfer from the European Union to the United States;
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•
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render our products or services less profitable, obsolete or less attractive compared to competing products;
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•
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affect our distribution partners’ or content providers’ willingness to do business with us or operate in our industry;
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•
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affect our Cardpool exchange partners’ willingness to do business with us;
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•
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reduce the amount of revenues that we derive from unredeemed prepaid products;
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•
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cause loyalty, awards and promotional cards to be treated like other prepaid cards; and
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•
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discourage distribution partners from offering, and consumers from purchasing, our prepaid products.
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•
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challenges caused by distance, language and cultural differences;
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multiple, conflicting and changing laws and regulations, and difficulties in understanding and ensuring compliance with those laws by our employees and business partners;
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•
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foreign laws and regulations that impose greater compliance obligations and costs;
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foreign currency fluctuations;
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differing and potentially adverse tax laws and interpretations;
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•
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foreign tax authorities requiring tax collection or withholding from non-residents of the foreign jurisdiction;
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•
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higher costs associated with doing business internationally, such as costs associated with, tax planning, repatriating funds to the United States, administrative costs associated with payment settlement and other compliance costs related to doing business in foreign jurisdictions;
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•
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difficulties in staffing and managing international operations;
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•
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restrictions on the transfer of funds among countries and back to the United States;
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•
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differing levels of social and technological acceptance of prepaid products and services;
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•
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limitations on the level of intellectual property protection;
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•
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trade sanctions, political unrest, terrorism, war and epidemics or threats of any of these events;
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•
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lack of acceptance of our distributed products or of prepaid products generally;
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•
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the potential for disputes with our business partners; and
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•
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competitive environments that favor local businesses.
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•
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failure to sustain an active, liquid trading market for our shares;
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•
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changes in financial estimates or recommendations by securities analysts or failure to meet analysts’ performance expectations;
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•
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changes in market valuations of similar companies;
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•
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changes in our capital structure, such as future issuances of securities or the incurrence of debt;
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•
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sales of our capital stock by our directors or executive officers;
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•
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the gain or loss of significant distribution partners, content providers, or business clients;
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•
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actual or anticipated developments in our business or our competitors’ businesses, such as announcements by us or our competitors of significant contracts, acquisitions or strategic alliances, or in the competitive landscape generally;
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•
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litigation involving us, our industry or both;
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•
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additions or departures of key personnel;
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•
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regulatory developments in the United States and/or foreign countries;
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•
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investors’ general perception of us; and
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•
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changes in general economic, industry and market conditions.
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•
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a classified board of directors with staggered three-year terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors (however, our stockholders have approved the declassification of the board of directors effective beginning with our 2017 annual meeting of stockholders);
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•
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no cumulative voting in the election of directors, which may have an effect to prevent the minority stockholders from electing director candidates;
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•
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the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
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•
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a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
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•
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special meetings of our stockholders can be called only by the Chairman of the Board or by our corporate secretary at the direction of our board of directors;
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•
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advance notice and other requirements that stockholders, must comply with in order to nominate candidates to our board of directors and propose matters to be brought before an annual meeting of our stockholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company;
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•
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a majority stockholder vote is required for removal of a director only for cause (and a director may only be removed for cause), and a 75% stockholder vote is required for the amendment, repeal or modification of certain provisions of our certificate of incorporation and bylaws; and
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•
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our board of directors may, without stockholder approval, issue series of preferred stock, or rights to acquire preferred stock, that could dilute the interest of, or impair the voting power of, holders of our common stock or could also be used as a method of discouraging, delaying or preventing a change of control.
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High
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Low
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Fiscal Year Ended January 2, 2016
|
|
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Quarter ended March 28, 2015
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$40.57
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$32.98
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Quarter ended June 20, 2015
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$41.47
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$33.59
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Quarter ended September 12, 2015
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$46.13
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$33.59
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Quarter ended January 2, 2016
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$48.40
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$39.09
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Period
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Total Number of Shares Purchased (1)
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Average Price Paid per Share (2)
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
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Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
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||||||||||
September 11, 2016 to October 8, 2016
|
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147
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$
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30.38
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|
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—
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$
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—
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||||
October 9, 2016 to November 5, 2016
|
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208
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$
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33.90
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—
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$
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—
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November 6, 2016 to December 3, 2016
|
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964
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$
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35.52
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—
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$
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—
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||||
December 4, 2016 to December 31, 2016
|
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187
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$
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37.96
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—
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$
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—
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Total
|
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1,506
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|
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$
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35.10
|
|
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—
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$
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—
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(1)
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This table does not include shares of common stock that we withheld in order to satisfy minimum tax withholding requirements in connection with the vesting of restricted stock units or exercise of options or stock appreciation rights. The numbers represent the shares of common stock that we withheld in order to satisfy minimum tax withholding requirements in connection with the vesting of restricted stock awards.
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(2)
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Average price paid per share of common stock does not include brokerage commissions.
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2016
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2015
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2014
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2013
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2012
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(in thousands, except per share data)
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||||||||||||||||||
Total operating revenues
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$
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1,899,778
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|
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$
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1,801,078
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|
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$
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1,444,963
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$
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1,138,088
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$
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959,069
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Net income attributable to Blackhawk Network Holdings, Inc.
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$
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4,658
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$
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45,609
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$
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45,547
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$
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54,104
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$
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48,165
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Earnings per share:
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Basic
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$
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0.08
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$
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0.84
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|
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$
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0.86
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|
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$
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1.04
|
|
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$
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0.93
|
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Diluted
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$
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0.08
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|
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$
|
0.81
|
|
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$
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0.83
|
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$
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1.02
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|
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$
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0.93
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Weighted average shares outstanding—basic
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55,734
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|
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54,294
|
|
|
52,531
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|
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51,164
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|
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50,045
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|||||
Weighted average shares outstanding—diluted
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57,260
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|
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56,313
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|
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54,309
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|
|
52,402
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|
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50,045
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|
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As of Year-End
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||||||||||||||||||
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2016
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2015
|
|
2014
|
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2013
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|
2012
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||||||||||
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(in thousands, except per share data)
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||||||||||||||||||
CONSOLIDATED BALANCE SHEET DATA:
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|
||||||||||
Total assets
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$
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3,595,778
|
|
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$
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3,112,956
|
|
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$
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2,449,109
|
|
|
$
|
1,964,348
|
|
|
$
|
1,533,457
|
|
Note payable (1)
|
$
|
147,840
|
|
|
$
|
361,708
|
|
|
$
|
373,754
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Notes payable to Safeway
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$
|
3,163
|
|
|
$
|
4,129
|
|
|
$
|
27,678
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Convertible notes payable (2)
|
$
|
429,026
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Redeemable equity (3)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34,997
|
|
Cash dividends declared per common share (4)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.369
|
|
(1)
|
Includes current and long-term portion of our term loan. See
Note 4
—
Financing
in the notes to our consolidated financial statements.
|
(2)
|
On July 27, 2016, we issued $500 million aggregate principal amount of 1.50% Convertible Senior Notes due in January 2022. See
Note 4
—
Financing
in the notes to our consolidated financial statements.
|
(3)
|
Redeemable Equity
represented the redemptive value for equity instruments issued to employees and a retail distribution partner that contained provisions requiring us, at the option of the holder, to repurchase the instrument.
|
(4)
|
On December 14, 2012, our Board declared a one-time extraordinary cash dividend of $1.369 per common share for stockholders of record as of December 18, 2012, and we paid $69.9 million related to this dividend on December 21, 2012.
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(dollars in thousands, except per share amounts)
|
||||||||||
Transaction dollar volume
|
$
|
16,717,834
|
|
|
$
|
16,624,633
|
|
|
$
|
13,539,495
|
|
Prepaid and processing revenues
|
$
|
1,652,072
|
|
|
$
|
1,528,462
|
|
|
$
|
1,263,271
|
|
Prepaid and processing revenues as a % of transaction dollar volume
|
9.9
|
%
|
|
9.2
|
%
|
|
9.3
|
%
|
|||
Partner distribution expense as a % of prepaid and processing revenues
|
56.5
|
%
|
|
57.2
|
%
|
|
60.3
|
%
|
|||
Selling stores
|
244,000
|
|
|
215,000
|
|
|
198,000
|
|
|||
Prepaid and processing revenues:
|
|
|
|
|
|
||||||
Commissions and fees
|
$
|
1,315,755
|
|
|
$
|
1,259,801
|
|
|
$
|
1,107,782
|
|
Program and other fees
|
336,317
|
|
|
268,661
|
|
|
220,257
|
|
|||
Prepaid and processing revenues
|
$
|
1,652,072
|
|
|
$
|
1,528,462
|
|
|
$
|
1,328,039
|
|
Total operating revenues
|
$
|
1,899,778
|
|
|
$
|
1,801,078
|
|
|
$
|
1,444,963
|
|
Revenue adjustment from purchase accounting (2)
|
16,930
|
|
|
7,073
|
|
|
—
|
|
|||
Marketing revenue
|
(94,298
|
)
|
|
(104,871
|
)
|
|
(64,768
|
)
|
|||
Partner distribution expense
|
(933,142
|
)
|
|
(874,043
|
)
|
|
(762,245
|
)
|
|||
Adjusted operating revenues (1)
|
$
|
889,268
|
|
|
$
|
829,237
|
|
|
$
|
617,950
|
|
(1)
|
Our Adjusted operating revenues is a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. This measure, however, should be considered in addition to, and not as a substitute for or superior to, operating revenues, operating income, operating margin, cash flows, or other measures of the financial performance prepared in accordance with GAAP.
|
(2)
|
Impact on revenues recognized resulting from the step down in basis of deferred revenue from its carrying value to fair value in a business combination at the acquisition date.
|
•
|
adjusting our operating revenues for distribution commissions paid and other compensation to our retail distribution partners and business clients is useful to understanding our operating margin;
|
•
|
adjusting our operating revenues for marketing revenue, which has offsetting marketing expense, is useful for understanding our operating margin; and
|
•
|
in a business combination, a company records an adjustment to reduce the carrying value of deferred revenue to its fair value and reduces the company’s revenues from what it would have recorded otherwise, and as such we do not believe is indicative of our core operating performance.
|
|
2016
|
|
2015
|
|
2014
|
|
Change
2016 - 2015 |
|
Change
2015 - 2014 |
||||||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||
OPERATING REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commissions and fees
|
$
|
1,315,755
|
|
|
$
|
1,259,801
|
|
|
$
|
1,107,782
|
|
|
$
|
55,954
|
|
|
4.4
|
%
|
|
$
|
152,019
|
|
|
13.7
|
%
|
Program and other fees
|
336,317
|
|
|
268,661
|
|
|
155,489
|
|
|
67,656
|
|
|
25.2
|
%
|
|
113,172
|
|
|
72.8
|
%
|
|||||
Marketing
|
94,298
|
|
|
104,871
|
|
|
64,768
|
|
|
(10,573
|
)
|
|
(10.1
|
)%
|
|
40,103
|
|
|
61.9
|
%
|
|||||
Product sales
|
153,408
|
|
|
167,745
|
|
|
116,924
|
|
|
(14,337
|
)
|
|
(8.5
|
)%
|
|
50,821
|
|
|
43.5
|
%
|
|||||
Total operating revenues
|
1,899,778
|
|
|
1,801,078
|
|
|
1,444,963
|
|
|
98,700
|
|
|
5.5
|
%
|
|
356,115
|
|
|
24.6
|
%
|
|||||
Partner distribution expense
|
933,142
|
|
|
874,043
|
|
|
762,245
|
|
|
59,099
|
|
|
6.8
|
%
|
|
111,798
|
|
|
14.7
|
%
|
|||||
Operating revenues, net of Partner distribution expense
|
$
|
966,636
|
|
|
$
|
927,035
|
|
|
$
|
682,718
|
|
|
$
|
39,601
|
|
|
4.3
|
%
|
|
$
|
244,317
|
|
|
35.8
|
%
|
|
2016
|
|
2015
|
|
2014
|
|
Change
2016 - 2015 |
|
Change
2015 - 2014 |
||||||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||
Total operating revenues
|
$
|
1,125,757
|
|
|
$
|
1,165,828
|
|
|
$
|
1,027,936
|
|
|
$
|
(40,071
|
)
|
|
(3.4
|
)%
|
|
$
|
137,892
|
|
|
13.4
|
%
|
Partner distribution expense
|
595,893
|
|
|
577,661
|
|
|
526,752
|
|
|
18,232
|
|
|
3.2
|
%
|
|
50,909
|
|
|
9.7
|
%
|
|||||
Operating revenues, net of Partner distribution expense
|
$
|
529,864
|
|
|
$
|
588,167
|
|
|
$
|
501,184
|
|
|
$
|
(58,303
|
)
|
|
(9.9
|
)%
|
|
$
|
86,983
|
|
|
17.4
|
%
|
Transaction dollar volume
|
$
|
10,566,425
|
|
|
$
|
11,246,902
|
|
|
$
|
9,912,090
|
|
|
$
|
(680,477
|
)
|
|
(6.1
|
)%
|
|
$
|
1,334,812
|
|
|
13.5
|
%
|
Prepaid and processing revenues
|
$
|
977,011
|
|
|
$
|
979,106
|
|
|
$
|
882,579
|
|
|
$
|
(2,095
|
)
|
|
(0.2
|
)%
|
|
$
|
96,527
|
|
|
10.9
|
%
|
Prepaid and processing revenues as a percentage of transaction dollar volume
|
9.2
|
%
|
|
8.7
|
%
|
|
8.9
|
%
|
|
0.5
|
%
|
|
5.7
|
%
|
|
(0.2
|
)%
|
|
(2.2
|
)%
|
|||||
Partner distribution expense as a percentage of prepaid and processing revenues
|
61.0
|
%
|
|
59.0
|
%
|
|
59.7
|
%
|
|
2.0
|
%
|
|
3.4
|
%
|
|
(0.7
|
)%
|
|
(1.2
|
)%
|
•
|
Transaction dollar volume
—On October 1, 2015, the payment card industry shifted liability for certain debit and credit card transactions to retailers who do not accept EMV chip technology transactions. As a result, some of our non-EMV compliant retail distribution partners have taken restrictive measures around the sale of gift cards, in particular higher denomination open loop gift cards and some closed loop gift cards. These measures include establishing lower limits on credit card purchases of gift cards and removing higher denomination products from displays in impacted markets to mitigate their liability for fraudulent credit card activity in their stores, which decreased our transaction dollar volume during 2016. Although EMV implementation at these retail distribution partners is not under our control, based on our most current information provided by such non-EMV compliant retail distribution partners, our top U.S distribution partners for our open loop gift products have completed their EMV implementations in the vast majority of their store locations as of December 2016. We expect the negative impact of restricted sales of open loop gift cards to continue while our distribution partners take steps and message to their customers that such products are once again available for purchase. Additionally, we discontinued certain low-margin financial services programs, including certain co-branded GPR products, which also decreased transaction dollar volume. These decreases were partially offset by higher sales of other prepaid products through our retail distribution partner network as well as an increase in sales through our online distribution channels, partially as a result of our acquisitions of GiftCards and NimbleCommerce in the first quarter of 2016.
|
•
|
Prepaid and processing revenues as a percentage of transaction dollar volume
—Increased due to the discontinuation of certain low-margin financial services programs. Additionally, the prepaid and processing revenue rate for open loop gift increased due to higher commissions and fees rates, which resulted from shift in mix from higher denomination cards to lower denomination cards as a result of the restrictions at non-EMV compliant distribution partners. The increase in the prepaid and processing revenue rate for open loop gift cards was partially offset by a lower program management fee rate that will continue to decrease as a result of a contract amendment with Metabank, our primary issuing bank, based on changing redemption patterns for open loop gift products. The prepaid and processing revenue rate for closed loop gift products decreased slightly in 2016. In addition, the adoption of ASU 2016-04 in the first quarter of 2016 did not have a material impact on our prepaid and processing revenue rate for 2016.
|
•
|
Partner distribution expense as a percentage of prepaid and processing revenues
—Increased due to an increase in the proportion of sales through retail distribution partners with higher commission share rates, partially offset by a decrease in the proportion of open loop gift products sold as we share a smaller portion of our total revenues with our retail distribution partners for our program-managed Visa gift products. These impacts were partially offset by an increase in sales through our online distribution channels where we do not incur such distribution expense for sales through our proprietary websites.
|
•
|
Transaction dollar volume
—Increased due to higher sales of prepaid products through our retail distribution partner network from increased per-store productivity through most of our network and expansion of our retail network, as well as an increase in sales through our online distribution channel.
|
•
|
Prepaid and processing revenues as a percentage of transaction dollar volume
—Decreased due to increases in the proportion of program-managed Visa gift products sold and a decrease in prepaid and processing revenue rate for open loop gift products sold. The total of the consumer purchase fees and resulting program management fees, interchange and other fees that we earn from our program management services to issuing banks on these products is less than the average content provider commissions we receive on the sale of closed loop gift and telecom products. Additionally, the expanded availability of variable load Visa gift products decreased the prepaid and processing revenue rate in 2015 as these products have a fixed consumer fee and higher average transaction values.
|
•
|
Partner distribution expense as a percentage of prepaid and processing revenues
—Decreased due to increases in the proportion of program-managed Visa gift products sold. We share a smaller portion of our total revenues with our retail distribution partners for our program-managed Visa gift products as compared to the portion of content provider commissions for closed loop and telecom products that we pay to our retail distribution partners as distribution partner commissions, mainly due to the higher processing and services expenses we incur related to these products.
|
|
2016
|
|
2015
|
|
2014
|
|
Change
2016 - 2015 |
|
Change
2015 - 2014 |
||||||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||
Total operating revenues
|
$
|
484,881
|
|
|
$
|
423,285
|
|
|
$
|
339,444
|
|
|
$
|
61,596
|
|
|
14.6
|
%
|
|
$
|
83,841
|
|
|
24.7
|
%
|
Partner distribution expense
|
316,571
|
|
|
279,435
|
|
|
226,867
|
|
|
37,136
|
|
|
13.3
|
%
|
|
52,568
|
|
|
23.2
|
%
|
|||||
Operating revenues, net of Partner distribution expense
|
$
|
168,310
|
|
|
$
|
143,850
|
|
|
$
|
112,577
|
|
|
$
|
24,460
|
|
|
17.0
|
%
|
|
$
|
31,273
|
|
|
27.8
|
%
|
Transaction dollar volume
|
$
|
3,917,273
|
|
|
$
|
3,336,442
|
|
|
$
|
2,824,094
|
|
|
$
|
580,831
|
|
|
17.4
|
%
|
|
$
|
512,348
|
|
|
18.1
|
%
|
Prepaid and processing revenues
|
$
|
438,152
|
|
|
$
|
363,385
|
|
|
$
|
304,175
|
|
|
$
|
74,767
|
|
|
20.6
|
%
|
|
$
|
59,210
|
|
|
19.5
|
%
|
Prepaid and processing revenues as a percentage of transaction dollar volume
|
11.2
|
%
|
|
10.9
|
%
|
|
10.8
|
%
|
|
0.3
|
%
|
|
2.8
|
%
|
|
0.1
|
%
|
|
0.9
|
%
|
|||||
Partner distribution expense as a percentage of prepaid and processing revenues
|
72.3
|
%
|
|
76.9
|
%
|
|
74.6
|
%
|
|
(4.6
|
)%
|
|
(6.0
|
)%
|
|
2.3
|
%
|
|
3.1
|
%
|
•
|
Transaction dollar volume
—Increased primarily due to higher sales in Canada and Europe, primarily Germany, from acquisitions and from our sub-distributor relationships in Japan and South Korea, partially offset by decreases in Mexico, Australia and our sub-distributor relationship in South Africa. On a constant currency basis, transaction dollar volume increased 15.8% for 2016.
|
•
|
Prepaid and processing revenues as a percentage of transaction dollar volume
—Increased due to our adoption of ASU 2016-04 for which we recognized
$6.7 million
of increased breakage revenue. Excluding this benefit, the
Prepaid and processing revenues as a percentage of transaction dollar volume
increased in 2016 to
11.0%
.
|
•
|
Partner distribution expense as a percentage of prepaid and processing revenues
—The adoption of ASU 2016-04 decreased the partner distribution expense rate for 2016, since certain cards for which we record breakage revenue are higher margin products. Excluding this benefit of
$6.7 million
, the partner distribution expense decreased to
73.4%
due to the increased sales in the Netherlands and Germany where we have lower commission sharing arrangements, partially offset by increased sales in Japan where we have higher commission share rates with our sub-distributors.
|
•
|
Transaction dollar volume
—Increased due to higher sales of prepaid products through our sub-distribution relationships in Japan, South Korea and Singapore, as well as higher sales in Germany, Mexico, the UK and Australia, partially offset by lower sales in Canada and through our sub-distributor relationship in South Africa.
|
•
|
Prepaid and processing revenues as a percentage of transaction dollar volume
—Experienced minimal change due to a retrospective contract amendment with our issuing bank in Australia in 2014, offset by the impact of regional mix and prepaid and processing revenue rates among those regions.
|
•
|
Partner distribution expense as a percentage of prepaid and processing revenues
—Increased due to an increase in the proportion of products sold through sub-distributor relationships for which we share a larger portion of our commissions and fees revenue, but incur minimal other operating expenses and due to the retrospective contract amendment with our issuing bank in Australia in 2014, for which we do not share such revenues with our retail distribution partners.
|
•
|
Transaction dollar volume
—Increased due to our 2016 acquisitions along with the growth of our employee engagement business acquired in the third quarter of 2015. These increases are partially offset by a decrease in sales from our consumer and corporate businesses resulting partially from the loss of certain business clients with lower margin programs.
|
•
|
Prepaid and processing revenues as a percentage of transaction dollar volume
—In the first quarter of 2016, we entered into a contractual amendment with one of our issuing banks to settle our right to receive future fees for cards issued under a legacy contract between the bank and one of our acquired entities. The amendment resulted in a one-time benefit of
$4.3 million
which we recognized in
Program and other fees
. Excluding this benefit, our prepaid and processing revenue rate was
10.4%
, showing an increase in our prepaid and processing revenue rate due to our acquisition of Achievers, GiftCards and Extrameasures, which generate higher prepaid and processing revenue rates.
|
•
|
Partner distribution expense as a percentage of prepaid and processing revenue
—Changes in the partner distribution expense rate reflect changes in transaction volume sold through business clients for which we recognize net pricing discounts as an expense.
|
•
|
Transaction dollar volume
—Increased due to increases in sales of prepaid products through our incentive businesses, including increases from our existing InteliSpend business and our acquisition of Parago in the fourth quarter of 2014, increases in sales through our e-commerce channel, primarily from our acquisition of CardLab in 2014, and our acquisition of Achievers in the third quarter of 2015.
|
•
|
Prepaid and processing revenues as a percentage of transaction dollar volume
—Decreased due to lower fees earned on certain incentive card programs and mix of incentive programs, a retrospective contract amendment with our issuing bank for InteliSpend in 2014 and an adjustment in 2015 for fees related to prior periods that were paid to us by one of our issuing banks.
|
•
|
Partner distribution expense as a percentage of prepaid and processing revenues
—Decreased due to a smaller proportion of transaction volume sold through business clients for which we recognize net pricing discounts as an expense and our acquisitions of Parago and Achievers which do not incur such expenses.
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Net cash provided by operating activities
|
$
|
185,231
|
|
|
$
|
204,680
|
|
|
$
|
289,034
|
|
Net cash used in investing activities
|
(289,761
|
)
|
|
(172,383
|
)
|
|
(282,813
|
)
|
|||
Net cash provided by (used in) financing activities
|
204,121
|
|
|
(18,815
|
)
|
|
365,001
|
|
|||
Effect of exchange rates on cash
|
(6,042
|
)
|
|
(10,521
|
)
|
|
(9,987
|
)
|
|||
Net increase in cash and cash equivalents
|
$
|
93,549
|
|
|
$
|
2,961
|
|
|
$
|
361,235
|
|
•
|
a
$16.7 million
reduction in our income tax payments from
$13.9 million
payment last year to
$2.9 million
refund this year, which include refunds of
$0.9 million
and
$14.3 million
for 2016 and 2015, respectively, for overpayments for Spin-Off taxes to certain states which we repaid to Safeway and present such repayment in financing activities. Excluding these refunds, our net income tax net refunds increased by
$3.3 million
from
$0.4 million
in 2015 to
$3.7 million
in 2016, due to settlement of income tax receivables from Safeway related to periods before our initial public offering, our use of acquired net operating loss carryforwards, and a full year of Section 336(e) Election amortization deductions;
|
•
|
pre-tax income, adjusted for noncash reconciling items (excluding deferred income taxes), decreased
$8.8 million
, or
4.3%
, to
$196.5 million
from
$205.3 million
, reflecting higher operating expenses relative to our increase in operating revenues due primarily to the impact on revenue due to restrictive actions taken by non-EMV compliant retail distribution partners;
|
•
|
Year-over-year use of cash in non-settlement related operating assets and liabilities reduced from
$66.6 million
in 2015 to
$54.8 million
in 2016, reflecting a lower increase in accounts receivable and higher cash flows from deferred revenue.
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Business acquisitions, net of cash acquired
|
$
|
(220,605
|
)
|
|
$
|
(115,481
|
)
|
|
$
|
(237,605
|
)
|
Change in restricted cash
|
(7,691
|
)
|
|
1,811
|
|
|
(5,000
|
)
|
|||
Total investing activities related to business acquisitions
|
(228,296
|
)
|
|
(113,670
|
)
|
|
(242,605
|
)
|
|||
Repayment of debt assumed in business acquisitions
|
(8,964
|
)
|
|
—
|
|
|
(41,984
|
)
|
|||
Payments for acquisition liability
|
—
|
|
|
(1,811
|
)
|
|
—
|
|
|||
Total financing activities related to business acquisitions
|
(8,964
|
)
|
|
(1,811
|
)
|
|
(41,984
|
)
|
|||
Settlement payables and Consumer and customer deposits assumed, net of settlement receivables
|
(65,829
|
)
|
|
(10,079
|
)
|
|
(33,367
|
)
|
|||
Net working capital acquired (deficit assumed)
|
30,121
|
|
|
(35,621
|
)
|
|
—
|
|
|||
Total investment in business acquisitions
|
$
|
(272,968
|
)
|
|
$
|
(161,181
|
)
|
|
$
|
(317,956
|
)
|
|
Payments due by Period
|
||||||||||||||||||
|
Total
|
|
Less Than 1 Year
|
|
1 to 3 Years
|
|
3 to 5 Years
|
|
More Than 5 Years
|
||||||||||
Long-term debt
|
$
|
708,984
|
|
|
$
|
21,662
|
|
|
$
|
38,094
|
|
|
$
|
145,478
|
|
|
$
|
503,750
|
|
Distribution partner commitments
|
100,637
|
|
|
43,459
|
|
|
51,668
|
|
|
5,510
|
|
|
—
|
|
|||||
Operating leases
|
103,992
|
|
|
17,832
|
|
|
26,829
|
|
|
21,730
|
|
|
37,601
|
|
|||||
Contingent consideration
|
22,400
|
|
|
5,320
|
|
|
17,080
|
|
|
—
|
|
|
—
|
|
|||||
Other long-term liabilities
|
15,977
|
|
|
—
|
|
|
1,744
|
|
|
14,233
|
|
|
—
|
|
|||||
Total by period
|
$
|
951,990
|
|
|
$
|
88,273
|
|
|
$
|
135,415
|
|
|
$
|
186,951
|
|
|
$
|
541,351
|
|
Distribution partner commitments (uncertainty in timing of future payments)
|
13,594
|
|
|
|
|
|
|
|
|
|
|||||||||
Total
|
$
|
965,584
|
|
|
|
|
|
|
|
|
|
|
Year-end 2016
|
|
Q3 2016
|
|
Q2 2016
|
|
Q1 2016
|
|
Year-end 2015
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Cash and cash equivalents
|
$
|
1,008,125
|
|
|
$
|
300,349
|
|
|
$
|
263,988
|
|
|
$
|
212,950
|
|
|
$
|
914,576
|
|
Settlement receivables
|
641,691
|
|
|
275,471
|
|
|
340,925
|
|
|
317,585
|
|
|
626,077
|
|
|||||
Settlement payables
|
(1,626,827
|
)
|
|
(522,133
|
)
|
|
(607,463
|
)
|
|
(532,419
|
)
|
|
(1,605,021
|
)
|
|||||
Consumer and customer deposits
|
(173,344
|
)
|
|
(115,085
|
)
|
|
(132,662
|
)
|
|
(97,100
|
)
|
|
(84,761
|
)
|
|||||
Net settlement position
|
$
|
(150,355
|
)
|
|
$
|
(61,398
|
)
|
|
$
|
(135,212
|
)
|
|
$
|
(98,984
|
)
|
|
$
|
(149,129
|
)
|
|
Year-end
2016 |
|
Year-end
2015 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,008,125
|
|
|
$
|
914,576
|
|
Restricted cash
|
10,793
|
|
|
3,189
|
|
||
Settlement receivables, net
|
641,691
|
|
|
626,077
|
|
||
Accounts receivable, net
|
262,672
|
|
|
241,729
|
|
||
Other current assets
|
131,375
|
|
|
103,319
|
|
||
Total current assets
|
2,054,656
|
|
|
1,888,890
|
|
||
Property, equipment and technology, net
|
172,381
|
|
|
159,357
|
|
||
Intangible assets, net
|
350,185
|
|
|
240,898
|
|
||
Goodwill
|
570,398
|
|
|
402,489
|
|
||
Deferred income taxes
|
362,302
|
|
|
339,558
|
|
||
Other assets
|
85,856
|
|
|
81,764
|
|
||
TOTAL ASSETS
|
$
|
3,595,778
|
|
|
$
|
3,112,956
|
|
|
|
|
|
||||
|
|||||||
See accompanying notes to consolidated financial statements
|
BLACKHAWK NETWORK HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS (continued)
(In thousands, except par value)
|
|||||||
|
Year-end
2016
|
|
Year-end
2015
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Settlement payables
|
$
|
1,626,827
|
|
|
$
|
1,605,021
|
|
Consumer and customer deposits
|
173,344
|
|
|
84,761
|
|
||
Accounts payable and accrued operating expenses
|
153,885
|
|
|
119,087
|
|
||
Deferred revenue
|
150,582
|
|
|
113,458
|
|
||
Note payable, current portion
|
9,856
|
|
|
37,296
|
|
||
Notes payable to Safeway
|
3,163
|
|
|
4,129
|
|
||
Other current liabilities
|
51,176
|
|
|
57,342
|
|
||
Total current liabilities
|
2,168,833
|
|
|
2,021,094
|
|
||
Deferred income taxes
|
27,887
|
|
|
18,652
|
|
||
Note payable
|
137,984
|
|
|
324,412
|
|
||
Convertible notes payable
|
429,026
|
|
|
—
|
|
||
Other liabilities
|
39,653
|
|
|
14,700
|
|
||
Total liabilities
|
2,803,383
|
|
|
2,378,858
|
|
||
Commitments and contingencies (see Note 11)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock: $0.001 par value; 10,000 shares authorized; no shares outstanding
|
—
|
|
|
—
|
|
||
Common stock: $0.001 par value; 210,000 shares authorized; 55,667 and 55,794 shares outstanding, respectively
|
56
|
|
|
56
|
|
||
Additional paid-in capital
|
608,568
|
|
|
561,939
|
|
||
Accumulated other comprehensive loss
|
(48,877
|
)
|
|
(40,195
|
)
|
||
Retained earnings
|
228,451
|
|
|
207,973
|
|
||
Total Blackhawk Network Holdings, Inc. equity
|
788,198
|
|
|
729,773
|
|
||
Non-controlling interests
|
4,197
|
|
|
4,325
|
|
||
Total stockholders’ equity
|
792,395
|
|
|
734,098
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
3,595,778
|
|
|
$
|
3,112,956
|
|
|
52 Weeks Ended
|
|
52 Weeks Ended
|
|
53 Weeks Ended
|
||||||
|
2016
|
|
2015
|
|
2014
|
||||||
OPERATING REVENUES:
|
|
|
|
|
|
||||||
Commissions and fees
|
$
|
1,315,755
|
|
|
$
|
1,259,801
|
|
|
$
|
1,107,782
|
|
Program and other fees
|
336,317
|
|
|
268,661
|
|
|
155,489
|
|
|||
Marketing
|
94,298
|
|
|
104,871
|
|
|
64,768
|
|
|||
Product sales
|
153,408
|
|
|
167,745
|
|
|
116,924
|
|
|||
Total operating revenues
|
1,899,778
|
|
|
1,801,078
|
|
|
1,444,963
|
|
|||
OPERATING EXPENSES:
|
|
|
|
|
|
||||||
Partner distribution expense
|
933,142
|
|
|
874,043
|
|
|
762,245
|
|
|||
Processing and services
|
355,268
|
|
|
304,232
|
|
|
221,501
|
|
|||
Sales and marketing
|
274,799
|
|
|
260,638
|
|
|
189,408
|
|
|||
Costs of products sold
|
143,267
|
|
|
154,625
|
|
|
110,917
|
|
|||
General and administrative
|
99,428
|
|
|
92,172
|
|
|
64,029
|
|
|||
Transition and acquisition
|
11,465
|
|
|
7,639
|
|
|
2,134
|
|
|||
Amortization of acquisition intangibles
|
57,060
|
|
|
27,550
|
|
|
19,705
|
|
|||
Change in fair value of contingent consideration
|
2,100
|
|
|
(7,567
|
)
|
|
(3,722
|
)
|
|||
Total operating expenses
|
1,876,529
|
|
|
1,713,332
|
|
|
1,366,217
|
|
|||
OPERATING INCOME
|
23,249
|
|
|
87,746
|
|
|
78,746
|
|
|||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
||||||
Interest income and other income (expense), net
|
(449
|
)
|
|
(1,970
|
)
|
|
(184
|
)
|
|||
Interest expense
|
(21,864
|
)
|
|
(13,171
|
)
|
|
(5,647
|
)
|
|||
INCOME BEFORE INCOME TAX EXPENSE (BENEFIT)
|
936
|
|
|
72,605
|
|
|
72,915
|
|
|||
INCOME TAX EXPENSE (BENEFIT)
|
(4,102
|
)
|
|
26,796
|
|
|
27,490
|
|
|||
NET INCOME BEFORE ALLOCATION TO NON-CONTROLLING INTERESTS
|
5,038
|
|
|
45,809
|
|
|
45,425
|
|
|||
Income attributable to non-controlling interests, net of tax
|
(380
|
)
|
|
(200
|
)
|
|
122
|
|
|||
NET INCOME ATTRIBUTABLE TO BLACKHAWK NETWORK HOLDINGS, INC.
|
$
|
4,658
|
|
|
$
|
45,609
|
|
|
$
|
45,547
|
|
EARNINGS PER SHARE:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.08
|
|
|
$
|
0.84
|
|
|
$
|
0.86
|
|
Diluted
|
$
|
0.08
|
|
|
$
|
0.81
|
|
|
$
|
0.83
|
|
Weighted average shares outstanding—basic
|
55,734
|
|
|
54,294
|
|
|
52,531
|
|
|||
Weighted average shares outstanding—diluted
|
57,260
|
|
|
56,313
|
|
|
54,309
|
|
|
52 Weeks Ended
|
|
52 Weeks Ended
|
|
53 Weeks Ended
|
||||||
|
2016
|
|
2015
|
|
2014
|
||||||
NET INCOME BEFORE ALLOCATION TO NON-CONTROLLING INTERESTS
|
$
|
5,038
|
|
|
$
|
45,809
|
|
|
$
|
45,425
|
|
Other comprehensive income:
|
|
|
|
|
|
||||||
Currency translation adjustments
|
(9,034
|
)
|
|
(21,413
|
)
|
|
(16,587
|
)
|
|||
COMPREHENSIVE INCOME (LOSS) BEFORE ALLOCATION TO NON-CONTROLLING INTERESTS
|
(3,996
|
)
|
|
24,396
|
|
|
28,838
|
|
|||
Comprehensive loss (income) attributable to non-controlling interests (net of tax)
|
(28
|
)
|
|
488
|
|
|
112
|
|
|||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO BLACKHAWK NETWORK HOLDINGS, INC.
|
$
|
(4,024
|
)
|
|
$
|
24,884
|
|
|
$
|
28,950
|
|
|
52 Weeks Ended
|
|
52 Weeks Ended
|
|
53 Weeks Ended
|
||||||
|
2016
|
|
2015
|
|
2014
|
||||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income before allocation to non-controlling interests
|
$
|
5,038
|
|
|
$
|
45,809
|
|
|
$
|
45,425
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization of property, equipment and technology
|
48,379
|
|
|
40,983
|
|
|
28,548
|
|
|||
Amortization of intangibles
|
62,045
|
|
|
32,366
|
|
|
24,371
|
|
|||
Amortization of deferred program and contract costs
|
29,015
|
|
|
28,991
|
|
|
24,451
|
|
|||
Amortization of deferred financing costs and debt discount
|
6,506
|
|
|
1,187
|
|
|
533
|
|
|||
Employee stock-based compensation expense
|
32,592
|
|
|
30,130
|
|
|
15,365
|
|
|||
Distribution partner mark-to-market expense
|
—
|
|
|
—
|
|
|
1,312
|
|
|||
Change in fair value of contingent consideration
|
2,100
|
|
|
(7,567
|
)
|
|
(3,722
|
)
|
|||
Reversal of reserve for patent litigation
|
—
|
|
|
—
|
|
|
(3,852
|
)
|
|||
Loss on property, equipment and technology disposal / write-down
|
9,838
|
|
|
1,761
|
|
|
1,062
|
|
|||
Deferred income taxes
|
(8,899
|
)
|
|
29,810
|
|
|
(11,825
|
)
|
|||
Other
|
5,093
|
|
|
4,800
|
|
|
3,453
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Settlement receivables
|
6,076
|
|
|
(111,678
|
)
|
|
276,413
|
|
|||
Settlement payables
|
19,907
|
|
|
231,662
|
|
|
(86,005
|
)
|
|||
Accounts receivable, current and long-term
|
(13,012
|
)
|
|
(57,171
|
)
|
|
(33,998
|
)
|
|||
Other current assets
|
(13,891
|
)
|
|
(17,210
|
)
|
|
(2,280
|
)
|
|||
Other assets
|
(24,690
|
)
|
|
(20,434
|
)
|
|
(28,379
|
)
|
|||
Consumer and customer deposits
|
13,772
|
|
|
(54,402
|
)
|
|
35,096
|
|
|||
Accounts payable and accrued operating expenses
|
(14,835
|
)
|
|
(2,988
|
)
|
|
942
|
|
|||
Deferred revenue
|
33,362
|
|
|
14,363
|
|
|
17,574
|
|
|||
Other current and long-term liabilities
|
(21,707
|
)
|
|
16,877
|
|
|
1,402
|
|
|||
Income taxes, net
|
8,542
|
|
|
(2,609
|
)
|
|
(16,852
|
)
|
|||
Net cash provided by operating activities
|
185,231
|
|
|
204,680
|
|
|
289,034
|
|
|||
INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Expenditures for property, equipment and technology
|
(52,332
|
)
|
|
(52,738
|
)
|
|
(39,709
|
)
|
|||
Business acquisitions, net of cash acquired
|
(220,605
|
)
|
|
(115,481
|
)
|
|
(237,605
|
)
|
|||
Investments in unconsolidated entities
|
(10,541
|
)
|
|
(5,877
|
)
|
|
—
|
|
|||
Change in restricted cash
|
(7,691
|
)
|
|
1,811
|
|
|
(5,000
|
)
|
|||
Other
|
1,408
|
|
|
(98
|
)
|
|
(499
|
)
|
|||
Net cash used in investing activities
|
(289,761
|
)
|
|
(172,383
|
)
|
|
(282,813
|
)
|
|||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
See accompanying notes to consolidated financial statements
|
BLACKHAWK NETWORK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(In thousands)
|
|||||||||||
|
52 Weeks Ended
|
|
52 Weeks Ended
|
|
53 Weeks Ended
|
||||||
|
2016
|
|
2015
|
|
2014
|
||||||
FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Payments for acquisition liability
|
—
|
|
|
(1,811
|
)
|
|
—
|
|
|||
Proceeds from issuance of note payable
|
250,000
|
|
|
—
|
|
|
375,000
|
|
|||
Repayment of note payable
|
(463,750
|
)
|
|
(11,250
|
)
|
|
—
|
|
|||
Payments of financing costs
|
(16,544
|
)
|
|
(2,063
|
)
|
|
(3,783
|
)
|
|||
Borrowings under revolving bank line of credit
|
2,985,490
|
|
|
2,473,529
|
|
|
215,000
|
|
|||
Repayments on revolving bank line of credit
|
(2,985,490
|
)
|
|
(2,473,529
|
)
|
|
(215,000
|
)
|
|||
Proceeds from notes payable to Safeway
|
—
|
|
|
—
|
|
|
27,678
|
|
|||
Repayments on notes payable to Safeway
|
(890
|
)
|
|
(14,285
|
)
|
|
—
|
|
|||
Repayment of debt assumed in business acquisitions
|
(8,964
|
)
|
|
—
|
|
|
(41,984
|
)
|
|||
Proceeds from convertible debt
|
500,000
|
|
|
—
|
|
|
—
|
|
|||
Payments for note hedges
|
(75,750
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from warrants
|
47,000
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of common stock from exercise of employee stock options and employee stock purchase plans
|
10,302
|
|
|
13,817
|
|
|
9,080
|
|
|||
Other stock-based compensation related
|
(2,284
|
)
|
|
(1,729
|
)
|
|
(946
|
)
|
|||
Repurchase of common stock
|
(34,843
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
(156
|
)
|
|
(1,494
|
)
|
|
(44
|
)
|
|||
Net cash provided by (used in) financing activities
|
204,121
|
|
|
(18,815
|
)
|
|
365,001
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(6,042
|
)
|
|
(10,521
|
)
|
|
(9,987
|
)
|
|||
Increase in cash and cash equivalents
|
93,549
|
|
|
2,961
|
|
|
361,235
|
|
|||
Cash and cash equivalents—beginning of year
|
914,576
|
|
|
911,615
|
|
|
550,380
|
|
|||
Cash and cash equivalents—end of year
|
$
|
1,008,125
|
|
|
$
|
914,576
|
|
|
$
|
911,615
|
|
|
|
|
|
|
|
||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|
|
|
|
|
|
||||||
Cash payments during the year for:
|
|
|
|
|
|
||||||
Interest paid (net of amounts capitalized)
|
$
|
12,756
|
|
|
$
|
11,691
|
|
|
$
|
4,596
|
|
Income taxes paid (refunded)
|
$
|
(2,854
|
)
|
|
$
|
13,880
|
|
|
$
|
28,828
|
|
Spin-Off income taxes paid (refunds received), funded by (remitted to) Safeway (see
Note 1—Income Taxes
)
|
$
|
(890
|
)
|
|
$
|
(14,285
|
)
|
|
$
|
27,678
|
|
Noncash investing and financing activities:
|
|
|
|
|
|
||||||
Net deferred tax assets recognized for tax basis step-up with offset to
Additional paid-in capital
(see
Note 10—Income Taxes
)
|
$
|
—
|
|
|
$
|
363,889
|
|
|
$
|
—
|
|
Note payable to Safeway
contributed to
Additional paid-in capital
(see
Note 10—Income Taxes
)
|
$
|
—
|
|
|
$
|
8,229
|
|
|
$
|
—
|
|
Financing of business acquisition with stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,595
|
|
Financing of business acquisition with contingent consideration
|
$
|
21,652
|
|
|
$
|
—
|
|
|
$
|
13,100
|
|
Forgiveness of notes receivable and accrued interest as part of business acquisition
|
$
|
5,445
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Intangible assets recognized for the issuance of fully vested warrants
|
$
|
—
|
|
|
$
|
3,147
|
|
|
$
|
—
|
|
Conversion of income tax payable and deferred taxes to (from) additional paid-in capital
|
$
|
—
|
|
|
$
|
(882
|
)
|
|
$
|
1,807
|
|
BLACKHAWK NETWORK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
|
||||||||||||||||||||||||||
|
Common Stock
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Shares
|
Amount
|
Additional Paid-In Capital
|
Treasury Stock
|
Accumulated Other Comprehensive Income (loss)
|
Retained Earnings
|
Total Blackhawk Network Holdings, Inc. Equity
|
Non-Controlling Interests
|
Total
Stock-holders’ Equity
|
|||||||||||||||||
BALANCE—December 28, 2013
|
52,913
|
|
$
|
53
|
|
$
|
107,139
|
|
$
|
(126
|
)
|
$
|
(2,873
|
)
|
$
|
116,975
|
|
$
|
221,168
|
|
$
|
6,996
|
|
$
|
228,164
|
|
Comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
(16,597
|
)
|
45,547
|
|
28,950
|
|
(112
|
)
|
28,838
|
|
||||||||
Stock-based employee compensation expense
|
—
|
|
—
|
|
15,365
|
|
—
|
|
—
|
|
—
|
|
15,365
|
|
—
|
|
15,365
|
|
||||||||
Exercise of options
|
589
|
|
1
|
|
6,833
|
|
—
|
|
—
|
|
—
|
|
6,834
|
|
—
|
|
6,834
|
|
||||||||
Surrender of stock-based equity awards for taxes
|
—
|
|
—
|
|
(504
|
)
|
(384
|
)
|
—
|
|
—
|
|
(888
|
)
|
—
|
|
(888
|
)
|
||||||||
Excess tax benefit from stock-based awards, net
|
—
|
|
—
|
|
2,608
|
|
—
|
|
—
|
|
—
|
|
2,608
|
|
—
|
|
2,608
|
|
||||||||
Issuance of restricted stock awards
|
34
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Issuance of common stock upon vesting of restricted stock units
|
29
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Issuance of common stock in acquisition
|
62
|
|
—
|
|
1,595
|
|
—
|
|
—
|
|
—
|
|
1,595
|
|
—
|
|
1,595
|
|
||||||||
Shares purchased under employee stock purchase plan
|
111
|
|
—
|
|
2,271
|
|
—
|
|
—
|
|
—
|
|
2,271
|
|
|
2,271
|
|
|||||||||
Mark-to-market adjustment on warrants issued to distribution partners
|
—
|
|
—
|
|
1,312
|
|
—
|
|
—
|
|
—
|
|
1,312
|
|
—
|
|
1,312
|
|
||||||||
Reclassification of income taxes payable and deferred taxes to additional paid-in capital
|
—
|
|
—
|
|
1,807
|
|
—
|
|
—
|
|
—
|
|
1,807
|
|
—
|
|
1,807
|
|
||||||||
Exercise of warrant
|
316
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Retirement of treasury stock
|
(549
|
)
|
—
|
|
(510
|
)
|
510
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Contribution from non-controlling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
133
|
|
133
|
|
||||||||
Dividends paid
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(83
|
)
|
(83
|
)
|
(177
|
)
|
(260
|
)
|
||||||||
BALANCE—January 3, 2015
|
53,505
|
|
$
|
54
|
|
$
|
137,916
|
|
$
|
—
|
|
$
|
(19,470
|
)
|
$
|
162,439
|
|
$
|
280,939
|
|
$
|
6,840
|
|
$
|
287,779
|
|
BLACKHAWK NETWORK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
|
|||||||||||||||||||||||
|
Common Stock
|
|
|
|
|
|
|
||||||||||||||||
|
Shares
|
Amount
|
Additional Paid-In Capital
|
Accumulated Other Comprehensive Income (loss)
|
Retained Earnings
|
Total Blackhawk Network Holdings, Inc. Equity
|
Non-Controlling Interests
|
Total Stock-holders’ Equity
|
|||||||||||||||
BALANCE—January 3, 2015
|
53,505
|
|
$
|
54
|
|
$
|
137,916
|
|
$
|
(19,470
|
)
|
$
|
162,439
|
|
$
|
280,939
|
|
$
|
6,840
|
|
$
|
287,779
|
|
Comprehensive income
|
—
|
|
—
|
|
—
|
|
(20,725
|
)
|
45,609
|
|
24,884
|
|
(488
|
)
|
24,396
|
|
|||||||
Stock-based employee compensation expense
|
—
|
|
—
|
|
30,130
|
|
—
|
|
—
|
|
30,130
|
|
—
|
|
30,130
|
|
|||||||
Exercise of options
|
783
|
|
1
|
|
9,958
|
|
—
|
|
—
|
|
9,959
|
|
—
|
|
9,959
|
|
|||||||
Surrender of stock-based equity awards for taxes
|
(10
|
)
|
—
|
|
(1,654
|
)
|
—
|
|
—
|
|
(1,654
|
)
|
—
|
|
(1,654
|
)
|
|||||||
Excess tax benefit from stock-based awards, net
|
—
|
|
—
|
|
6,816
|
|
—
|
|
—
|
|
6,816
|
|
—
|
|
6,816
|
|
|||||||
Issuance of common stock upon vesting of restricted stock units
|
231
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Shares purchased under employee stock purchase plan
|
124
|
|
—
|
|
3,857
|
|
—
|
|
—
|
|
3,857
|
|
—
|
|
3,857
|
|
|||||||
Reclassification of income taxes payable and deferred taxes to additional paid-in capital
|
—
|
|
—
|
|
(882
|
)
|
—
|
|
—
|
|
(882
|
)
|
—
|
|
(882
|
)
|
|||||||
Net deferred tax assets recognized for tax basis step-up
|
—
|
|
—
|
|
372,118
|
|
—
|
|
—
|
|
372,118
|
|
—
|
|
372,118
|
|
|||||||
Exercise of warrant
|
1,161
|
|
1
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
1
|
|
|||||||
Warrants issued to distribution partners
|
—
|
|
—
|
|
3,147
|
|
—
|
|
—
|
|
3,147
|
|
—
|
|
3,147
|
|
|||||||
Repurchase of non-controlling interests
|
—
|
|
—
|
|
533
|
|
—
|
|
—
|
|
533
|
|
(1,893
|
)
|
(1,360
|
)
|
|||||||
Dividends paid
|
—
|
|
—
|
|
—
|
|
—
|
|
(75
|
)
|
(75
|
)
|
(134
|
)
|
(209
|
)
|
|||||||
BALANCE—January 2, 2016
|
55,794
|
|
$
|
56
|
|
$
|
561,939
|
|
$
|
(40,195
|
)
|
$
|
207,973
|
|
$
|
729,773
|
|
$
|
4,325
|
|
$
|
734,098
|
|
BLACKHAWK NETWORK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
|
|||||||||||||||||||||||
|
Common Stock
|
|
|
|
|
|
|
||||||||||||||||
|
Shares
|
Amount
|
Additional Paid-In Capital
|
Accumulated Other Comprehensive Income (loss)
|
Retained Earnings
|
Total Blackhawk Network Holdings, Inc. Equity
|
Non-Controlling Interests
|
Total Stock-holders’ Equity
|
|||||||||||||||
BALANCE—January 2, 2016
|
55,794
|
|
$
|
56
|
|
$
|
561,939
|
|
$
|
(40,195
|
)
|
$
|
207,973
|
|
$
|
729,773
|
|
$
|
4,325
|
|
$
|
734,098
|
|
Cumulative adjustment upon modified retrospective adoption of ASU 2016-04 and ASU 2016-09 (
Note 1—The Company and Significant Accounting Policies
)
|
—
|
|
—
|
|
650
|
|
—
|
|
15,871
|
|
16,521
|
|
—
|
|
16,521
|
|
|||||||
BALANCE —After adoption of recent accounting pronouncements
|
55,794
|
|
56
|
|
562,589
|
|
(40,195
|
)
|
223,844
|
|
746,294
|
|
4,325
|
|
750,619
|
|
|||||||
Comprehensive income / (loss)
|
—
|
|
—
|
|
—
|
|
(8,682
|
)
|
4,658
|
|
(4,024
|
)
|
28
|
|
(3,996
|
)
|
|||||||
Stock-based employee compensation expense
|
—
|
|
—
|
|
34,685
|
|
—
|
|
—
|
|
34,685
|
|
—
|
|
34,685
|
|
|||||||
Exercise of options
|
299
|
|
—
|
|
5,018
|
|
—
|
|
—
|
|
5,018
|
|
—
|
|
5,018
|
|
|||||||
Surrender of stock-based equity awards for taxes
|
(8
|
)
|
—
|
|
(2,233
|
)
|
—
|
|
—
|
|
(2,233
|
)
|
—
|
|
(2,233
|
)
|
|||||||
Issuance of common stock upon vesting of restricted stock units, net of forfeitures
|
385
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Shares purchased under employee stock purchase plan
|
193
|
|
—
|
|
5,284
|
|
—
|
|
—
|
|
5,284
|
|
—
|
|
5,284
|
|
|||||||
Equity component of convertible notes including related tax benefits, net (
Note 4
—
Financing
)
|
—
|
|
—
|
|
66,818
|
|
—
|
|
—
|
|
66,818
|
|
—
|
|
66,818
|
|
|||||||
Purchase of convertible note hedges (
Note 4
—
Financing
)
|
—
|
|
—
|
|
(75,750
|
)
|
—
|
|
—
|
|
(75,750
|
)
|
—
|
|
(75,750
|
)
|
|||||||
Issuance of warrants (
Note 4
—
Financing
)
|
—
|
|
—
|
|
47,000
|
|
—
|
|
—
|
|
47,000
|
|
—
|
|
47,000
|
|
|||||||
Repurchase of common stock (
Note 4
—
Financing
)
|
(996
|
)
|
—
|
|
(34,843
|
)
|
—
|
|
—
|
|
(34,843
|
)
|
—
|
|
(34,843
|
)
|
|||||||
Dividends paid
|
—
|
|
—
|
|
—
|
|
—
|
|
(51
|
)
|
(51
|
)
|
(156
|
)
|
(207
|
)
|
|||||||
BALANCE—December 31, 2016
|
55,667
|
|
$
|
56
|
|
$
|
608,568
|
|
$
|
(48,877
|
)
|
$
|
228,451
|
|
$
|
788,198
|
|
$
|
4,197
|
|
$
|
792,395
|
|
Level 1
|
Unadjusted quoted prices in active markets for identical assets or liabilities;
|
Level 2
|
Inputs other than quoted prices included in Level 1 that are either directly or indirectly observable;
|
Level 3
|
Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the inputs that market participants would use in pricing.
|
Cash
|
$
|
38,957
|
|
Settlement receivables, net
|
24,290
|
|
|
Accounts receivables, net
|
10,367
|
|
|
Identifiable technology and intangible assets
|
64,431
|
|
|
Goodwill
|
54,219
|
|
|
Consumer and customer deposits
|
(35,636
|
)
|
|
Accounts payable and accrued operating expenses
|
(32,753
|
)
|
|
Deferred revenue
|
(7,215
|
)
|
|
Deferred income taxes, net
|
(9,123
|
)
|
|
Other tangible assets, net
|
3,256
|
|
|
Purchase consideration excluding GREBT
|
110,793
|
|
|
Restricted cash (GREBT)
|
8,541
|
|
|
Total purchase consideration including GREBT
|
$
|
119,334
|
|
|
Fair Value
|
|
Useful Life
|
||
Technology
|
$
|
1,586
|
|
|
1 to 3 years
|
Customer relationships
|
57,239
|
|
|
10 years
|
|
Customer backlog
|
2,911
|
|
|
1 year
|
|
Trade name
|
2,695
|
|
|
10 years
|
|
Total identifiable technology and intangible assets
|
$
|
64,431
|
|
|
|
Total revenues
|
$
|
24,210
|
|
Net income (loss) attributable to Blackhawk Network Holdings, Inc.
|
$
|
(5
|
)
|
Cash
|
$
|
6,213
|
|
Accounts receivable
|
10,615
|
|
|
Other current assets
|
9,390
|
|
|
Property and equipment
|
974
|
|
|
Goodwill
|
11,151
|
|
|
Intangible assets
|
5,506
|
|
|
Deferred income taxes
|
902
|
|
|
Total assets
|
$
|
44,751
|
|
|
|
||
Settlement payables
|
$
|
3,972
|
|
Accounts payable and accrued operating expenses
|
2,924
|
|
|
Consumer and customer deposits
|
1,695
|
|
|
Other current liabilities
|
1,694
|
|
|
Deferred revenue
|
10,745
|
|
|
Total liabilities
|
$
|
21,030
|
|
Cash
|
$
|
1,032
|
|
Settlement receivables, net
|
2,182
|
|
|
Settlement payables
|
(2,273
|
)
|
|
Consumer and customer deposits
|
(24,297
|
)
|
|
Other tangible assets, net
|
5,888
|
|
|
Identifiable intangible assets
|
21,271
|
|
|
Goodwill
|
13,427
|
|
|
Deferred income taxes
|
(1,009
|
)
|
|
Total purchase consideration
|
$
|
16,221
|
|
|
Fair Value
|
|
Useful Life
|
||
Customer relationships
|
$
|
19,083
|
|
|
10 years
|
Trade name
|
2,188
|
|
|
10 years
|
|
Total identifiable intangible assets
|
$
|
21,271
|
|
|
|
Cash
|
$
|
3,985
|
|
Consumer and customer deposits
|
(5,429
|
)
|
|
Accounts payable and accrued operating expenses
|
(9,860
|
)
|
|
Other tangible assets, net
|
893
|
|
|
Debt
|
(5,807
|
)
|
|
Identifiable technology and intangible assets
|
52,460
|
|
|
Goodwill
|
67,706
|
|
|
Total purchase consideration
|
$
|
103,948
|
|
|
Fair Value
|
|
Useful Life
|
||
Customer relationships
|
$
|
27,570
|
|
|
10 years
|
Customer backlog
|
10,780
|
|
|
3 years
|
|
Domain name
|
10,520
|
|
|
10 years
|
|
Technology
|
3,590
|
|
|
5 years
|
|
Total identifiable technology and intangible assets
|
$
|
52,460
|
|
|
|
Cash
|
$
|
14,191
|
|
Settlement receivables
|
4,884
|
|
|
Settlement payables
|
(3,272
|
)
|
|
Consumer and customer deposits
|
(18,009
|
)
|
|
Other tangible liabilities, net
|
(1,155
|
)
|
|
Debt
|
(3,157
|
)
|
|
Identifiable technology and intangible assets
|
45,540
|
|
|
Deferred income taxes
|
1,926
|
|
|
Goodwill
|
37,865
|
|
|
Total purchase consideration
|
$
|
78,813
|
|
|
Fair Value
|
|
Useful Life
|
||
Customer relationships
|
$
|
39,230
|
|
|
10 years
|
Customer backlog
|
1,610
|
|
|
3 years
|
|
Technology
|
4,700
|
|
|
5 years
|
|
Total identifiable technology and intangible assets
|
$
|
45,540
|
|
|
|
|
2016 (Unaudited)
|
|
2015 (Unaudited)
|
||||
Total revenues
|
$
|
2,031,871
|
|
|
$
|
2,030,066
|
|
Net income attributable to Blackhawk Network Holdings, Inc.
|
$
|
22,745
|
|
|
$
|
23,381
|
|
Pro forma EPS—Basic
|
$
|
0.41
|
|
|
$
|
0.43
|
|
Pro forma EPS—Diluted
|
$
|
0.40
|
|
|
$
|
0.42
|
|
Cash
|
$
|
24,367
|
|
Accounts payables and accrued operating expenses
|
(11,580
|
)
|
|
Deferred revenue
|
(48,735
|
)
|
|
Deferred income taxes
|
(14,019
|
)
|
|
Identifiable technology and intangible assets
|
94,800
|
|
|
Goodwill
|
58,659
|
|
|
Total purchase consideration
|
$
|
103,492
|
|
|
Fair Value
|
|
Useful Life
|
||
Customer relationships
|
$
|
73,210
|
|
|
15 years
|
Technology
|
17,000
|
|
|
6 years
|
|
Customer backlog
|
4,590
|
|
|
4 years
|
|
Total identifiable technology and intangible assets
|
$
|
94,800
|
|
|
|
Total revenues
|
$
|
29,223
|
|
Net income (loss) attributable to Blackhawk Network Holdings, Inc.
|
$
|
(9,676
|
)
|
|
2015 (Unaudited)
|
|
2014 (Unaudited)
|
||||
Total revenues
|
$
|
1,830,848
|
|
|
$
|
1,487,695
|
|
Net income attributable to Blackhawk Network Holdings, Inc.
|
$
|
41,752
|
|
|
$
|
15,412
|
|
Pro forma EPS—Basic
|
$
|
0.77
|
|
|
$
|
0.29
|
|
Pro forma EPS—Diluted
|
$
|
0.74
|
|
|
$
|
0.28
|
|
Cash
|
$
|
4,733
|
|
Tangible assets, net
|
2,093
|
|
|
Cardholder liability
|
(6,167
|
)
|
|
Deferred income taxes
|
(6,723
|
)
|
|
Identifiable intangible and technology assets
|
26,892
|
|
|
Goodwill
|
20,385
|
|
|
Total purchase consideration
|
$
|
41,213
|
|
|
Fair Value
|
|
Useful Life
|
||
Content provider relationships
|
$
|
17,382
|
|
|
10 years
|
Distribution relationships
|
4,614
|
|
|
5 years
|
|
Trade name
|
4,106
|
|
|
10 years
|
|
Technology
|
790
|
|
|
4 years
|
|
Total identifiable technology and intangible assets
|
$
|
26,892
|
|
|
|
Cash
|
$
|
39,450
|
|
Settlement receivables, net
|
6,478
|
|
|
Consumer and customer deposits
|
(39,396
|
)
|
|
Debt assumed
|
(34,509
|
)
|
|
Other tangible assets, net
|
7,324
|
|
|
Deferred income taxes
|
(14,619
|
)
|
|
Identifiable technology and intangible assets
|
126,430
|
|
|
Goodwill
|
171,187
|
|
|
Total purchase consideration
|
$
|
262,345
|
|
|
Fair Value
|
|
Useful Life
|
||
Customer relationships
|
$
|
94,460
|
|
|
15 years
|
Customer backlog
|
4,430
|
|
|
1 year
|
|
Technology
|
26,930
|
|
|
1 to 5 years
|
|
Trade name
|
610
|
|
|
3 years
|
|
Total identifiable technology and intangible assets
|
$
|
126,430
|
|
|
|
Total revenues
|
$
|
17,711
|
|
Net income attributable to Blackhawk Network Holdings, Inc.
|
$
|
(1,090
|
)
|
|
2014 (Unaudited)
|
||
Total revenues
|
$
|
1,529,072
|
|
Net income attributable to Blackhawk Network Holdings, Inc.
|
$
|
44,765
|
|
Pro forma EPS—Basic
|
$
|
0.85
|
|
Pro forma EPS—Diluted
|
$
|
0.82
|
|
Cash paid at closing
|
$
|
18,956
|
|
Stock consideration
|
1,595
|
|
|
Contingent consideration
|
13,100
|
|
|
Total purchase consideration
|
$
|
33,651
|
|
Tangible liabilities, net
|
$
|
(1,059
|
)
|
Debt assumed
|
(7,475
|
)
|
|
Deferred taxes
|
2,258
|
|
|
Identifiable technology and intangible assets
|
10,623
|
|
|
Goodwill
|
29,304
|
|
|
Total purchase consideration
|
$
|
33,651
|
|
|
Fair Value
|
|
Useful Life
|
||
Customer relationships
|
$
|
1,260
|
|
|
5 years
|
Customer backlog
|
1,490
|
|
|
4 months
|
|
Technology
|
7,790
|
|
|
5 years
|
|
Trade name
|
83
|
|
|
3 years
|
|
Total identifiable technology and intangible assets
|
$
|
10,623
|
|
|
|
|
|
2016
|
|
2015
|
||||||||
|
|
Carrying Value
|
|
Ownership Percentage
|
|
Carrying Value
|
|
Ownership Percentage
|
||||
Equity method investments
|
|
|
|
|
|
|
|
|
||||
Investment in China entity
|
|
$
|
4,576
|
|
|
26.5%
|
|
$
|
5,473
|
|
|
26.5%
|
Investment in Australia entity
|
|
6,392
|
|
|
51.2%
|
|
NA
|
|
|
NA
|
||
Other equity method investments
|
|
—
|
|
|
—
|
|
791
|
|
|
25-50%
|
||
Total equity method investments
|
|
10,968
|
|
|
|
|
6,264
|
|
|
|
||
Cost method investments
|
|
7,954
|
|
|
|
|
250
|
|
|
|
||
Total unconsolidated entities
|
|
$
|
18,922
|
|
|
|
|
$
|
6,514
|
|
|
|
|
As of
|
||
|
December 31, 2016
|
||
2017
|
$
|
10,000
|
|
2018
|
7,500
|
|
|
2019
|
7,500
|
|
|
2020
|
15,000
|
|
|
2021
|
110,000
|
|
|
Thereafter
|
500,000
|
|
|
Total amount due
|
650,000
|
|
|
Unamortized discount and debt issuance fees
|
(73,134
|
)
|
|
Note payable, net
|
$
|
576,866
|
|
|
2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
$
|
300,015
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
300,015
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23,752
|
|
|
$
|
23,752
|
|
|
2015
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
$
|
370,070
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
370,070
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2016
|
2015
|
||||
Balance – beginning of year
|
$
|
—
|
|
$
|
7,567
|
|
Issuance of contingent consideration for acquisition of Extrameasures
|
20,300
|
|
—
|
|
||
Issuance of contingent consideration for acquisition of Spafinder
|
1,352
|
|
|
|
||
Change in fair value of contingent consideration
|
2,100
|
|
(7,567
|
)
|
||
Settlements
|
—
|
|
—
|
|
||
Balance – end of year
|
$
|
23,752
|
|
$
|
—
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Beginning balance
|
$
|
8,046
|
|
|
$
|
5,547
|
|
|
$
|
3,134
|
|
Provision
|
4,544
|
|
|
4,656
|
|
|
3,452
|
|
|||
Charges against allowances, net of recoveries
|
(3,933
|
)
|
|
(2,157
|
)
|
|
(1,039
|
)
|
|||
Ending balance
|
$
|
8,657
|
|
|
$
|
8,046
|
|
|
$
|
5,547
|
|
|
2016
|
|
2015
|
||||
Inventory
|
$
|
43,950
|
|
|
$
|
36,528
|
|
Deferred expenses
|
22,148
|
|
|
18,182
|
|
||
Income tax receivables
|
13,599
|
|
|
14,831
|
|
||
Other
|
51,678
|
|
|
33,778
|
|
||
Total other current assets
|
$
|
131,375
|
|
|
$
|
103,319
|
|
|
Useful Lives in Years
|
|
2016
|
|
2015
|
||||
Leasehold improvements
|
5
|
|
$
|
9,018
|
|
|
$
|
7,915
|
|
Computers and related equipment
|
3 - 5
|
|
45,910
|
|
|
39,574
|
|
||
Technology
|
5
|
|
291,124
|
|
|
242,593
|
|
||
Total property, equipment and technology
|
|
|
346,052
|
|
|
290,082
|
|
||
Less accumulated depreciation and amortization
|
|
|
(173,671
|
)
|
|
(130,725
|
)
|
||
Property, equipment and technology, net
|
|
|
$
|
172,381
|
|
|
$
|
159,357
|
|
|
2016
|
|
2015
|
||||
Deferred program and contract costs
|
$
|
48,066
|
|
|
$
|
50,717
|
|
Other receivables
|
2,713
|
|
|
2,281
|
|
||
Income taxes receivable
|
2,358
|
|
|
6,155
|
|
||
Deferred financing costs
|
2,688
|
|
|
2,100
|
|
||
Other
|
30,031
|
|
|
20,511
|
|
||
Total other assets
|
$
|
85,856
|
|
|
$
|
81,764
|
|
|
2016
|
|
2015
|
||||
Payroll and related liabilities
|
$
|
24,944
|
|
|
$
|
34,530
|
|
Income taxes payable
|
4,199
|
|
|
3,216
|
|
||
Acquisition liability
|
6,672
|
|
|
—
|
|
||
Other payables and accrued liabilities
|
15,361
|
|
|
19,596
|
|
||
Total other current liabilities
|
$
|
51,176
|
|
|
$
|
57,342
|
|
|
2016
|
|
2015
|
||||
Acquisition liability
|
$
|
17,080
|
|
|
$
|
—
|
|
Income taxes payable
|
6,957
|
|
|
4,249
|
|
||
Deferred income and other liabilities
|
15,616
|
|
|
10,451
|
|
||
Total other liabilities
|
$
|
39,653
|
|
|
$
|
14,700
|
|
|
2016
|
||||||||||||||
|
U.S. Retail
|
|
International
|
|
Incentives & Rewards
|
|
Total
|
||||||||
Balance, beginning of year
|
$
|
42,729
|
|
|
$
|
49,156
|
|
|
$
|
310,604
|
|
|
$
|
402,489
|
|
Re-allocation of e-commerce goodwill
|
2,671
|
|
|
—
|
|
|
(2,671
|
)
|
|
—
|
|
||||
Acquisition of GiftCards
|
34,427
|
|
|
—
|
|
|
33,279
|
|
|
67,706
|
|
||||
Acquisition of NimbleCommerce
|
10,505
|
|
|
—
|
|
|
—
|
|
|
10,505
|
|
||||
Acquisition of Extrameasures
|
—
|
|
|
—
|
|
|
27,360
|
|
|
27,360
|
|
||||
Acquisition of Grass Roots
|
—
|
|
|
54,219
|
|
|
—
|
|
|
54,219
|
|
||||
Acquisition of Samba
|
—
|
|
|
4,074
|
|
|
—
|
|
|
4,074
|
|
||||
Acquisition of Spafinder
|
9,353
|
|
|
—
|
|
|
—
|
|
|
9,353
|
|
||||
Measurement period adjustments for 2015 acquisitions
|
—
|
|
|
—
|
|
|
(1,235
|
)
|
|
(1,235
|
)
|
||||
Foreign currency translation adjustments
|
—
|
|
|
(3,244
|
)
|
|
(829
|
)
|
|
(4,073
|
)
|
||||
Balance, end of year
|
$
|
99,685
|
|
|
$
|
104,205
|
|
|
$
|
366,508
|
|
|
$
|
570,398
|
|
|
2015
|
||||||||||||||
|
U.S. Retail
|
|
International
|
|
Incentives & Rewards
|
|
Total
|
||||||||
Balance, beginning of year
|
$
|
42,729
|
|
|
$
|
32,150
|
|
|
$
|
256,386
|
|
|
$
|
331,265
|
|
Acquisition of Didix
|
—
|
|
|
20,385
|
|
|
—
|
|
|
20,385
|
|
||||
Acquisition of Achievers
|
—
|
|
|
—
|
|
|
59,893
|
|
|
59,893
|
|
||||
Measurement period adjustments for 2014 acquisitions
|
—
|
|
|
—
|
|
|
(2,716
|
)
|
|
(2,716
|
)
|
||||
Foreign currency translation adjustments
|
—
|
|
|
(3,379
|
)
|
|
(2,959
|
)
|
|
(6,338
|
)
|
||||
Balance, end of year
|
$
|
42,729
|
|
|
$
|
49,156
|
|
|
$
|
310,604
|
|
|
$
|
402,489
|
|
|
Weighted-Average Remaining Life in Years
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||
Distribution partner relationships
|
6
|
|
$
|
62,012
|
|
|
$
|
(27,421
|
)
|
|
$
|
34,591
|
|
Customer relationships, including backlog
|
10
|
|
385,653
|
|
|
(90,218
|
)
|
|
295,435
|
|
|||
Patents
|
7
|
|
6,944
|
|
|
(4,547
|
)
|
|
2,397
|
|
|||
Domain names, trade names and other intangibles
|
10
|
|
21,238
|
|
|
(3,476
|
)
|
|
17,762
|
|
|||
Total intangible assets
|
|
|
$
|
475,847
|
|
|
$
|
(125,662
|
)
|
|
$
|
350,185
|
|
|
Weighted-Average Remaining Life in Years
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||
Distribution partner relationships
|
10
|
|
$
|
63,084
|
|
|
$
|
(18,953
|
)
|
|
$
|
44,131
|
|
Customer relationships, including backlog
|
13
|
|
231,419
|
|
|
(40,990
|
)
|
|
190,429
|
|
|||
Patents
|
3
|
|
5,315
|
|
|
(3,440
|
)
|
|
1,875
|
|
|||
Domain names, trade names and other intangibles
|
9
|
|
5,981
|
|
|
(1,518
|
)
|
|
4,463
|
|
|||
Total intangible assets
|
|
|
$
|
305,799
|
|
|
$
|
(64,901
|
)
|
|
$
|
240,898
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Partner distribution expense
|
$
|
4,863
|
|
|
$
|
4,695
|
|
|
$
|
4,544
|
|
Processing and services
|
122
|
|
|
121
|
|
|
122
|
|
|||
Amortization of acquisition intangibles
|
57,060
|
|
|
27,550
|
|
|
19,705
|
|
|||
Total intangible amortization expense
|
$
|
62,045
|
|
|
$
|
32,366
|
|
|
$
|
24,371
|
|
Fiscal Year
|
Partner distribution expense
|
|
Processing and services
|
|
Amortization of acquisition intangibles
|
|
Total
|
||||||||
2017
|
$
|
4,861
|
|
|
$
|
141
|
|
|
$
|
57,499
|
|
|
$
|
62,501
|
|
2018
|
2,415
|
|
|
50
|
|
|
45,466
|
|
|
47,931
|
|
||||
2019
|
538
|
|
|
22
|
|
|
39,689
|
|
|
40,249
|
|
||||
2020
|
538
|
|
|
14
|
|
|
36,069
|
|
|
36,621
|
|
||||
2021
|
83
|
|
|
6
|
|
|
33,337
|
|
|
33,426
|
|
||||
Thereafter
|
—
|
|
|
70
|
|
|
129,387
|
|
|
129,457
|
|
||||
Total amortization
|
$
|
8,435
|
|
|
$
|
303
|
|
|
$
|
341,447
|
|
|
$
|
350,185
|
|
|
2016
|
|
2015
|
|
2014
|
Expected term (in years)
|
5
|
|
5
|
|
5
|
Expected volatility
|
34.8% - 34.9%
|
|
36.6% - 37.3%
|
|
32.6%–33.5%
|
Risk-free rate
|
1.1% - 1.9%
|
|
1.4% - 1.7%
|
|
1.5%–1.7%
|
Expected dividend yield
|
0%
|
|
0%
|
|
0%
|
|
Stock Options and Appreciation Rights
(in shares)
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Life
(in years)
|
|
Aggregate Intrinsic Value
(in thousands)
|
|||||
Outstanding, year-end 2015
|
2,937,730
|
|
|
$
|
23.68
|
|
|
3.9
|
|
$
|
60,313
|
|
2016 activity:
|
|
|
|
|
|
|
|
|||||
Granted
|
600,150
|
|
|
$
|
37.82
|
|
|
|
|
|
||
Canceled
|
(147,683
|
)
|
|
$
|
34.18
|
|
|
|
|
|
||
Exercised
|
(324,904
|
)
|
|
$
|
17.80
|
|
|
|
|
|
||
Outstanding, year-end 2016
|
3,065,293
|
|
|
$
|
26.57
|
|
|
3.6
|
|
$
|
35,381
|
|
Exercisable, year-end 2016
|
1,643,221
|
|
|
$
|
20.76
|
|
|
2.3
|
|
$
|
27,999
|
|
Vested and expected to vest, year-end 2016
|
3,065,293
|
|
|
$
|
26.57
|
|
|
3.6
|
|
$
|
35,381
|
|
|
Restricted Stock and Restricted Stock Unit Awards
|
|
Weighted Average Grant-Date Fair Value
|
|||
Nonvested, year-end 2015
|
1,631,333
|
|
|
$
|
33.10
|
|
2016 activity:
|
|
|
|
|||
Granted
|
1,210,540
|
|
|
$
|
37.08
|
|
Vested
|
(514,786
|
)
|
|
$
|
31.66
|
|
Forfeited
|
(345,433
|
)
|
|
$
|
35.55
|
|
Nonvested, year-end 2016
|
1,981,654
|
|
|
$
|
35.45
|
|
|
Performance Stock Unit Awards
|
|
Weighted Average Grant-Date Fair Value
|
|||
Nonvested, year-end 2015
|
341,445
|
|
|
$
|
31.21
|
|
2016 activity:
|
|
|
|
|||
Granted
|
172,300
|
|
|
$
|
38.85
|
|
Vested
|
(7,155
|
)
|
|
$
|
26.73
|
|
Forfeited
|
(178,484
|
)
|
|
$
|
35.34
|
|
Nonvested, year-end 2016
|
328,106
|
|
|
$
|
33.07
|
|
|
2016
|
|
2015
|
|
2014
|
Expected term (in years)
|
0.5
|
|
0.5
|
|
0.5
|
Expected volatility
|
30.12% - 36.72%
|
|
32.40% - 34.96%
|
|
30.30%–32.33%
|
Risk-free rate
|
0.4% - 0.5%
|
|
0.4% - 0.5%
|
|
0.1%–0.3%
|
Expected dividend yield
|
0%
|
|
0%
|
|
0%
|
|
2016
|
|
2015
|
|
2014
|
||||||
Processing and services
|
$
|
5,831
|
|
|
$
|
6,594
|
|
|
$
|
3,597
|
|
Sales and marketing
|
10,856
|
|
|
8,536
|
|
|
5,153
|
|
|||
Cost of products sold
|
102
|
|
|
37
|
|
|
43
|
|
|||
General and administrative
|
15,803
|
|
|
14,963
|
|
|
6,597
|
|
|||
Total stock-based compensation expense
|
$
|
32,592
|
|
|
$
|
30,130
|
|
|
$
|
15,390
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Mark-to-market expense
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,312
|
|
Amortization of intangible assets
|
4,863
|
|
|
4,695
|
|
|
4,544
|
|
|||
Total distribution partner stock-based compensation expense
|
$
|
4,863
|
|
|
$
|
4,695
|
|
|
$
|
5,856
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Domestic
|
$
|
(3,533
|
)
|
|
$
|
72,298
|
|
|
$
|
68,661
|
|
Foreign
|
4,469
|
|
|
307
|
|
|
4,254
|
|
|||
Income before income tax expense (benefit)
|
$
|
936
|
|
|
$
|
72,605
|
|
|
$
|
72,915
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
(1,215
|
)
|
|
$
|
(6,403
|
)
|
|
$
|
32,944
|
|
State
|
949
|
|
|
(942
|
)
|
|
4,374
|
|
|||
Foreign
|
5,063
|
|
|
4,331
|
|
|
1,997
|
|
|||
Total current
|
4,797
|
|
|
(3,014
|
)
|
|
39,315
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|||
Federal
|
(3,186
|
)
|
|
28,650
|
|
|
(10,080
|
)
|
|||
State
|
(1,275
|
)
|
|
6,003
|
|
|
(372
|
)
|
|||
Foreign
|
(4,438
|
)
|
|
(4,843
|
)
|
|
(1,373
|
)
|
|||
Total deferred
|
(8,899
|
)
|
|
29,810
|
|
|
(11,825
|
)
|
|||
Income tax expense (benefit)
|
$
|
(4,102
|
)
|
|
$
|
26,796
|
|
|
$
|
27,490
|
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
|||||||||
Income tax expense at federal statutory rate
|
$
|
327
|
|
|
35.0
|
%
|
|
$
|
25,412
|
|
|
35.0
|
%
|
|
$
|
25,520
|
|
|
35.0
|
%
|
State income taxes net of federal benefit
|
439
|
|
|
46.9
|
%
|
|
3,469
|
|
|
4.8
|
%
|
|
2,965
|
|
|
4.0
|
%
|
|||
Foreign rate differential
|
(939
|
)
|
|
(100.3
|
)%
|
|
(773
|
)
|
|
(1.1
|
)%
|
|
(865
|
)
|
|
(1.1
|
)%
|
|||
Mark to market on redeemable common stock
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
88
|
|
|
0.1
|
%
|
|||
Change in fair value of contingent consideration
|
—
|
|
|
—
|
%
|
|
(2,978
|
)
|
|
(4.1
|
)%
|
|
(1,479
|
)
|
|
(2.0
|
)%
|
|||
Compensation subject to certain limits
|
894
|
|
|
95.5
|
%
|
|
1,180
|
|
|
1.6
|
%
|
|
737
|
|
|
1.0
|
%
|
|||
Stock-based compensation
|
(956
|
)
|
|
(102.1
|
)%
|
|
316
|
|
|
0.4
|
%
|
|
224
|
|
|
0.3
|
%
|
|||
Acquisition related
|
(2,945
|
)
|
|
(314.6
|
)%
|
|
758
|
|
|
1.0
|
%
|
|
702
|
|
|
1.0
|
%
|
|||
R&D credits
|
(1,440
|
)
|
|
(153.9
|
)%
|
|
(1,130
|
)
|
|
(1.5
|
)%
|
|
(604
|
)
|
|
(0.8
|
)%
|
|||
Other
|
518
|
|
|
55.2
|
%
|
|
542
|
|
|
0.8
|
%
|
|
202
|
|
|
0.2
|
%
|
|||
Total income tax expense (benefit) /effective tax rate
|
$
|
(4,102
|
)
|
|
(438.3
|
)%
|
|
$
|
26,796
|
|
|
36.9
|
%
|
|
$
|
27,490
|
|
|
37.7
|
%
|
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
||||
Depreciation and amortization
|
$
|
217,497
|
|
|
$
|
239,555
|
|
Net operating loss carryforwards
|
49,473
|
|
|
42,290
|
|
||
Accrued expenses
|
4,932
|
|
|
8,705
|
|
||
Non-deductible reserves
|
9,450
|
|
|
9,509
|
|
||
Deferred revenue
|
29,803
|
|
|
11,031
|
|
||
Stock-based compensation
|
21,497
|
|
|
12,815
|
|
||
Convertible debt
|
4,636
|
|
|
—
|
|
||
Other
|
8,622
|
|
|
3,689
|
|
||
Deferred tax assets
|
345,910
|
|
|
327,594
|
|
||
Valuation allowance
|
(8,283
|
)
|
|
(3,712
|
)
|
||
Total deferred tax assets
|
337,627
|
|
|
323,882
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
||
Prepaids
|
(3,212
|
)
|
|
(2,976
|
)
|
||
Total deferred tax liabilities
|
(3,212
|
)
|
|
(2,976
|
)
|
||
Net deferred tax assets
|
$
|
334,415
|
|
|
$
|
320,906
|
|
Balance sheet presentation:
|
|
|
|
|
|
||
Long-term deferred tax assets
|
362,302
|
|
|
339,558
|
|
||
Long-term deferred tax liabilities
|
(27,887
|
)
|
|
(18,652
|
)
|
||
Net deferred tax assets
|
$
|
334,415
|
|
|
$
|
320,906
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Gross unrecognized tax benefits, beginning balance
|
$
|
12,680
|
|
|
$
|
3,808
|
|
|
$
|
3,057
|
|
Increase for tax position from prior fiscal years and current year acquisitions
|
977
|
|
|
8,633
|
|
|
—
|
|
|||
Decrease for tax position from prior fiscal years
|
(388
|
)
|
|
(446
|
)
|
|
(38
|
)
|
|||
Increases for tax positions taken during current fiscal year
|
760
|
|
|
938
|
|
|
789
|
|
|||
Lapses of statutes of limitations
|
(41
|
)
|
|
(161
|
)
|
|
—
|
|
|||
Foreign exchange rate difference
|
(111
|
)
|
|
(92
|
)
|
|
—
|
|
|||
Gross unrecognized tax benefits, ending balance
|
$
|
13,877
|
|
|
$
|
12,680
|
|
|
$
|
3,808
|
|
Fiscal Year
|
Operating Leases
|
||
2017
|
$
|
17,832
|
|
2018
|
14,857
|
|
|
2019
|
11,972
|
|
|
2020
|
11,430
|
|
|
2021
|
10,300
|
|
|
Thereafter
|
37,601
|
|
|
Total minimum lease payments
|
$
|
103,992
|
|
Fiscal Year
|
Distribution Partner Commitments
|
||
2017
|
$
|
43,459
|
|
2018
|
28,875
|
|
|
2019
|
22,793
|
|
|
2020
|
4,117
|
|
|
2021
|
1,393
|
|
|
Distribution partner commitments (uncertainty in timing of future payments)
|
13,594
|
|
|
Total
|
$
|
114,231
|
|
|
2016
|
||||||||||||||||||
|
U.S. Retail
|
|
International
|
|
Incentives & Rewards
|
|
Corporate and Unallocated
|
|
Consolidated
|
||||||||||
Total operating revenues
|
$
|
1,125,757
|
|
|
$
|
484,881
|
|
|
$
|
289,140
|
|
|
$
|
—
|
|
|
$
|
1,899,778
|
|
Partner distribution expense
|
595,893
|
|
|
316,571
|
|
|
20,678
|
|
|
—
|
|
|
933,142
|
|
|||||
Operating revenue net of distribution partner expense
|
529,864
|
|
|
168,310
|
|
|
268,462
|
|
|
—
|
|
|
966,636
|
|
|||||
Other operating expenses
|
311,311
|
|
|
132,242
|
|
|
230,911
|
|
|
268,923
|
|
|
943,387
|
|
|||||
Segment profit (loss) / Operating income
|
$
|
218,553
|
|
|
$
|
36,068
|
|
|
$
|
37,551
|
|
|
$
|
(268,923
|
)
|
|
23,249
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
(22,313
|
)
|
|||||||||
Income before income tax expense
|
|
|
|
|
|
|
|
|
$
|
936
|
|
||||||||
Significant noncash charges
|
$
|
6,822
|
|
|
$
|
2,358
|
|
|
$
|
17,496
|
|
|
|
|
|
|
2015
|
||||||||||||||||||
|
U.S. Retail
|
|
International
|
|
Incentives & Rewards
|
|
Corporate and Unallocated
|
|
Consolidated
|
||||||||||
Total operating revenues
|
$
|
1,165,828
|
|
|
$
|
423,285
|
|
|
$
|
211,965
|
|
|
$
|
—
|
|
|
$
|
1,801,078
|
|
Partner distribution expense
|
577,661
|
|
|
279,435
|
|
|
16,947
|
|
|
—
|
|
|
874,043
|
|
|||||
Operating revenue net of distribution partner expense
|
588,167
|
|
|
143,850
|
|
|
195,018
|
|
|
—
|
|
|
927,035
|
|
|||||
Other operating expenses
|
324,928
|
|
|
121,579
|
|
|
180,900
|
|
|
211,882
|
|
|
839,289
|
|
|||||
Segment profit (loss) / Operating income
|
$
|
263,239
|
|
|
$
|
22,271
|
|
|
$
|
14,118
|
|
|
$
|
(211,882
|
)
|
|
87,746
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
(15,141
|
)
|
|||||||||
Income before income tax expense
|
|
|
|
|
|
|
|
|
$
|
72,605
|
|
||||||||
Significant noncash charges
|
$
|
5,446
|
|
|
$
|
1,454
|
|
|
$
|
13,862
|
|
|
|
|
|
|
2014
|
||||||||||||||||||
|
U.S. Retail
|
|
International
|
|
Incentives & Rewards
|
|
Corporate and Unallocated
|
|
Consolidated
|
||||||||||
Total operating revenues
|
$
|
1,027,936
|
|
|
$
|
339,444
|
|
|
$
|
77,583
|
|
|
$
|
—
|
|
|
$
|
1,444,963
|
|
Partner distribution expense
|
526,752
|
|
|
226,867
|
|
|
8,626
|
|
|
—
|
|
|
762,245
|
|
|||||
Operating revenue net of distribution partner expense
|
501,184
|
|
|
112,577
|
|
|
68,957
|
|
|
—
|
|
|
682,718
|
|
|||||
Other operating expenses
|
282,587
|
|
|
94,339
|
|
|
59,679
|
|
|
167,367
|
|
|
603,972
|
|
|||||
Segment profit (loss) / Operating income
|
$
|
218,597
|
|
|
$
|
18,238
|
|
|
$
|
9,278
|
|
|
$
|
(167,367
|
)
|
|
78,746
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
(5,831
|
)
|
|||||||||
Income before income tax expense
|
|
|
|
|
|
|
|
|
$
|
72,915
|
|
||||||||
Significant noncash charges
|
$
|
5,431
|
|
|
$
|
2,110
|
|
|
$
|
3,812
|
|
|
|
|
|
•
|
Retail—
Revenues resulting from the sale of prepaid products to consumers at our retail distribution partners and online and the sale of telecom handsets to retail distribution partners for resale to consumers.
|
•
|
Incentives—
Revenues resulting from the sale of prepaid products, software and services to our business clients.
|
•
|
Other—
Revenues from our secondary card market and card production.
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
Revenue
|
|
Percent of Total Revenue
|
|
Revenue
|
|
Percent of Total Revenue
|
|
Revenue
|
|
Percent of Total Revenue
|
|||||||||
Retail
|
$
|
1,383,499
|
|
|
72.8
|
%
|
|
$
|
1,453,129
|
|
|
80.7
|
%
|
|
$
|
1,263,235
|
|
|
87.4
|
%
|
Incentives
|
289,140
|
|
|
15.2
|
%
|
|
211,964
|
|
|
11.8
|
%
|
|
77,583
|
|
|
5.4
|
%
|
|||
Other
|
227,139
|
|
|
12.0
|
%
|
|
135,985
|
|
|
7.5
|
%
|
|
104,145
|
|
|
7.2
|
%
|
|||
Total
|
$
|
1,899,778
|
|
|
100.0
|
%
|
|
$
|
1,801,078
|
|
|
100.0
|
%
|
|
$
|
1,444,963
|
|
|
100.0
|
%
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
Revenue
|
|
Percent of Total Revenue
|
|
Revenue
|
|
Percent of Total Revenue
|
|
Revenue
|
|
Percent of Total Revenue
|
|||||||||
United States
|
$
|
1,382,188
|
|
|
72.8
|
%
|
|
$
|
1,352,872
|
|
|
75.1
|
%
|
|
$
|
1,097,791
|
|
|
76.0
|
%
|
International
|
517,590
|
|
|
27.2
|
%
|
|
448,206
|
|
|
24.9
|
%
|
|
347,172
|
|
|
24.0
|
%
|
|||
Total
|
$
|
1,899,778
|
|
|
100.0
|
%
|
|
$
|
1,801,078
|
|
|
100.0
|
%
|
|
$
|
1,444,963
|
|
|
100.0
|
%
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
Long-Lived Assets
|
|
Percent of Total Long-Lived Assets
|
|
Long-Lived Assets
|
|
Percent of Total Long-Lived Assets
|
|
Long-Lived Assets
|
|
Percent of Total Long-Lived Assets
|
|||||||||
United States
|
$
|
149,042
|
|
|
86.5
|
%
|
|
$
|
136,646
|
|
|
85.7
|
%
|
|
$
|
125,331
|
|
|
96.4
|
%
|
International
|
23,339
|
|
|
13.5
|
%
|
|
22,711
|
|
|
14.3
|
%
|
|
4,677
|
|
|
3.6
|
%
|
|||
Total
|
$
|
172,381
|
|
|
100.0
|
%
|
|
$
|
159,357
|
|
|
100.0
|
%
|
|
$
|
130,008
|
|
|
100.0
|
%
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||||||
Net income attributable to Blackhawk Network Holdings, Inc.
|
$
|
4,658
|
|
|
$
|
4,658
|
|
|
$
|
45,609
|
|
|
$
|
45,609
|
|
|
$
|
45,547
|
|
|
$
|
45,547
|
|
Distributed and undistributed earnings allocated to participating securities
|
(28
|
)
|
|
(28
|
)
|
|
(151
|
)
|
|
(147
|
)
|
|
(232
|
)
|
|
(226
|
)
|
||||||
Net income attributable to common stockholders
|
$
|
4,630
|
|
|
$
|
4,630
|
|
|
$
|
45,458
|
|
|
$
|
45,462
|
|
|
$
|
45,315
|
|
|
$
|
45,321
|
|
Weighted-average common shares outstanding
|
55,734
|
|
|
55,734
|
|
|
54,294
|
|
|
54,294
|
|
|
52,531
|
|
|
52,531
|
|
||||||
Common share equivalents
|
|
|
1,526
|
|
|
|
|
2,019
|
|
|
|
|
1,778
|
|
|||||||||
Weighted-average shares outstanding
|
|
|
57,260
|
|
|
|
|
56,313
|
|
|
|
|
54,309
|
|
|||||||||
Earnings per share
|
$
|
0.08
|
|
|
$
|
0.08
|
|
|
$
|
0.84
|
|
|
$
|
0.81
|
|
|
$
|
0.86
|
|
|
$
|
0.83
|
|
|
2015
|
|
2014
|
||||
OPERATING REVENUES:
|
|
|
|
||||
Commissions and fees
|
$
|
72
|
|
|
$
|
710
|
|
Program and other fees
|
471
|
|
|
2,426
|
|
||
Product sales
|
1,323
|
|
|
4,031
|
|
||
Total operating revenues
|
1,866
|
|
|
7,167
|
|
||
OPERATING EXPENSES:
|
|
|
|
||||
Partner distribution expense
|
17,069
|
|
|
61,283
|
|
||
Processing and services
|
(288
|
)
|
|
(625
|
)
|
||
General and administrative
|
607
|
|
|
1,856
|
|
||
Total operating expenses
|
17,388
|
|
|
62,514
|
|
||
OTHER INCOME (EXPENSE):
|
|
|
|
||||
Interest expense
|
—
|
|
|
(50
|
)
|
|
Q4'16
|
|
Q3'16
|
|
Q2'16
|
|
Q1'16
|
|
Q4'15
|
|
Q3'15
|
|
Q2'15
|
|
Q1'15
|
||||||||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||||||||||||||
Operating revenues
|
$
|
780,550
|
|
|
$
|
361,560
|
|
|
$
|
391,206
|
|
|
$
|
366,462
|
|
|
$
|
756,434
|
|
|
$
|
352,665
|
|
|
$
|
372,248
|
|
|
$
|
319,731
|
|
Operating income (loss)
|
$
|
51,363
|
|
|
$
|
(10,093
|
)
|
|
$
|
(14,977
|
)
|
|
$
|
(3,044
|
)
|
|
$
|
68,875
|
|
|
$
|
(2,250
|
)
|
|
$
|
10,206
|
|
|
$
|
10,915
|
|
Net income (loss) attributable to Blackhawk Network Holdings, Inc.
|
$
|
24,650
|
|
|
$
|
(5,102
|
)
|
|
$
|
(11,337
|
)
|
|
$
|
(3,553
|
)
|
|
$
|
41,614
|
|
|
$
|
(3,615
|
)
|
|
$
|
2,904
|
|
|
$
|
4,706
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.44
|
|
|
$
|
(0.09
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
0.75
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.05
|
|
|
$
|
0.09
|
|
Diluted
|
$
|
0.43
|
|
|
$
|
(0.09
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
0.73
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.05
|
|
|
$
|
0.08
|
|
•
|
Spafinder Wellness UK, Ltd. and certain assets of Spafinder Wellness, Inc. and its subsidiaries (collectively, “Spafinder”), acquired September 23, 2016;
|
•
|
Samba Days Experience Group Ltd. and certain of its subsidiaries (collectively, “Samba”), acquired October 3, 2016; and,
|
•
|
The Grass Roots Group Holdings Limited and its subsidiaries (collectively, “Grass Roots”), acquired October 6, 2016
|
Blackhawk Network Holdings, Inc.
|
|
/s/ Jerry Ulrich
|
Jerry Ulrich
|
Chief Financial Officer and Chief Administrative Officer
|
(Principal Financial Officer and Duly Authorized Signatory)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Talbott Roche
|
|
President, Chief Executive Officer and Director
|
|
February 27, 2017
|
Talbott Roche
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Jerry Ulrich
|
|
Chief Financial Officer and Chief Administrative Officer
|
|
February 27, 2017
|
Jerry Ulrich
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Joan B. Lockie
|
|
Chief Accounting Officer
|
|
February 27, 2017
|
Joan B. Lockie
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ William Y. Tauscher
|
|
Chairman of the Board and Executive Chairman
|
|
February 27, 2017
|
William Y. Tauscher
|
|
|
|
|
|
|
|
|
|
/s/ Anil D. Aggarwal
|
|
Director
|
|
February 27, 2017
|
Anil D. Aggarwal
|
|
|
|
|
|
|
|
|
|
/s/ Richard H. Bard
|
|
Director
|
|
February 27, 2017
|
Richard H. Bard
|
|
|
|
|
|
|
|
|
|
/s/ Thomas Barnds
|
|
Director
|
|
February 27, 2017
|
Thomas Barnds
|
|
|
|
|
|
|
|
|
|
/s/ Steven A. Burd
|
|
Director
|
|
February 27, 2017
|
Steven A. Burd
|
|
|
|
|
|
|
|
|
|
/s/ Robert L. Edwards
|
|
Director
|
|
February 27, 2017
|
Robert L. Edwards
|
|
|
|
|
|
|
|
|
|
/s/ Mohan S. Gyani
|
|
Director
|
|
February 27, 2017
|
Mohan S. Gyani
|
|
|
|
|
|
|
|
|
|
/s/ Paul Hazen
|
|
Director
|
|
February 27, 2017
|
Paul Hazen
|
|
|
|
|
|
|
|
|
|
/s/ Arun Sarin
|
|
Director
|
|
February 27, 2017
|
Arun Sarin
|
|
|
|
|
|
|
|
|
|
/s/ Jane J. Thompson
|
|
Director
|
|
February 27, 2017
|
Jane J. Thompson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||||||
Exhibit No.
|
|
Description of Exhibit
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
|
Filed Herewith
|
2.1
|
|
Agreement and Plan of Merger, dated as of September
24, 2014, by and among Parago, Inc., Blackhawk Network Holdings, Inc., BH Monarch Merger Sub, Inc. and TH Lee Putnam Ventures, L.P., solely in its capacity as the seller representative.
|
|
8-K
|
|
001-35882
|
|
2.1
|
|
September 25, 2014
|
|
|
2.2
|
|
First Amendment to Agreement and Plan of Merger by and among Blackhawk Network Holdings, Inc., Parago, Inc., BH Monarch Merger Sub, Inc., and TH Lee Putnam Ventures, L.P., dated October 7, 2014.
|
|
8-K
|
|
001-35882
|
|
2.1
|
|
October 10, 2014
|
|
|
3.1
|
|
Second Amended and Restated Certificate of Incorporation of Blackhawk Network Holdings, Inc.
|
|
8-A 12B/A
|
|
001-35882
|
|
3.1
|
|
May 13, 2015
|
|
|
3.2
|
|
Amended and Restated Bylaws of Blackhawk Network Holdings, Inc.
|
|
8-K
|
|
001-35882
|
|
3.1
|
|
April 25, 2013
|
|
|
4.1
|
|
Specimen Stock Certificate.
|
|
8-A 12B/A
|
|
001-35882
|
|
4.1
|
|
May 13, 2015
|
|
|
4.2
|
|
Indenture related to the 1.50% Convertible Senior Notes due 2022, dated as of July 27, 2016, among Blackhawk Network Holdings, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee.
|
|
8-K
|
|
001-35882
|
|
4.1
|
|
July 28, 2016
|
|
|
4.3
|
|
Form of 1.50% Convertible Senior Note due 2022 (included with Exhibit 4.2).
|
|
8-K
|
|
001-35882
|
|
4.2
|
|
July 28, 2016
|
|
|
10.1
|
|
Credit Agreement dated as of March 28, 2014, by and among the lenders identified on the signature pages thereto, including Wells Fargo Bank, National Association, as both lender and as administrative agent, and the Company.
|
|
8-K
|
|
001-35882
|
|
10.1
|
|
April 1, 2014
|
|
|
10.2
|
|
First Amendment to Credit Agreement, dated as of September 24, 2014, by and among Blackhawk Network Holdings, Inc., as borrower, the financial institutions signatory thereto, as lenders, and Wells Fargo Bank, National Association, as administrative agent.
|
|
8-K
|
|
001-35882
|
|
10.1
|
|
September 30, 2014
|
|
|
10.3
|
|
Second Amendment to Credit Agreement, dated October 23, 2014, by and among the Company and Wells Fargo Bank, National Association and the other financial institutions party thereto as lenders.
|
|
8-K
|
|
001-35882
|
|
10.1
|
|
October 24, 2014
|
|
|
10.4
|
|
Third Amendment to Credit Agreement, dated June 19, 2015, by and among the Company and Wells Fargo Bank, National Association and the other financial institutions party thereto as lenders.
|
|
8-K
|
|
001-35882
|
|
10.1
|
|
June 23, 2015
|
|
|
10.5
|
|
Fourth Amendment to Credit Agreement, dated December 18, 2015, by and among the Company and Wells Fargo Bank, National Association and the other financial institutions party thereto as lenders.
|
|
8-K
|
|
001-35882
|
|
10.1
|
|
December 23, 2015
|
|
|
10.6
|
|
Amended and Restated Credit Agreement dated as of July 27, 2016, by and among the Company and the lenders identified on the signature pages thereto, including Wells Fargo Bank, National Association, as both lender and administrative agent.
|
|
8-K
|
|
001-35882
|
|
10.1
|
|
August 1, 2016
|
|
|
10.7
|
|
Reaffirmation Agreement dated as of July 27, 2016, executed by the Company and certain of its subsidiaries in favor of Wells Fargo Bank, National Association, as administrative agent.
|
|
8-K
|
|
001-35882
|
|
10.2
|
|
August 1, 2016
|
|
|
10.8
|
|
Subsidiary Guaranty Agreement dated as of March 28, 2014, made by certain of the Company’s subsidiaries in favor of Wells Fargo Bank, National Association, as administrative agent.
|
|
8-K
|
|
001-35882
|
|
10.2
|
|
April 1, 2014
|
|
|
10.9
|
|
Collateral Agreement dated as of March 28, 2014, by and among the Company and certain of its subsidiaries and Wells Fargo Bank, National Association, as administrative agent.
|
|
8-K
|
|
001-35882
|
|
10.3
|
|
April 1, 2014
|
|
|
10.10
|
|
Letter Agreement, dated July 21, 2016, between the Company and Wells Fargo Bank, National Association, regarding Note Hedge Transaction.
|
|
8-K
|
|
001-35882
|
|
10.1
|
|
July 28, 2016
|
|
|
10.11
|
|
Letter Agreement, dated July 21, 2016, between the Company and Bank of America, N.A., regarding Note Hedge Transaction.
|
|
8-K
|
|
001-35882
|
|
10.2
|
|
July 28, 2016
|
|
|
10.12
|
|
Letter Agreement, dated July 21, 2016, between the Company and Bank of Montreal, regarding Note Hedge Transaction.
|
|
8-K
|
|
001-35882
|
|
10.3
|
|
July 28, 2016
|
|
|
10.13
|
|
Letter Agreement, dated July 21, 2016, between the Company and Wells Fargo Bank, National Association, regarding Warrant Transaction.
|
|
8-K
|
|
001-35882
|
|
10.4
|
|
July 28, 2016
|
|
|
10.14
|
|
Letter Agreement, dated July 21, 2016, between the Company and Bank of America, N.A., regarding Warrant Transaction.
|
|
8-K
|
|
001-35882
|
|
10.5
|
|
July 28, 2016
|
|
|
10.15
|
|
Letter Agreement, dated July 21, 2016, between the Company and Bank of Montreal, regarding Warrant Transaction.
|
|
8-K
|
|
001-35882
|
|
10.6
|
|
July 28, 2016
|
|
|
10.16
|
|
Letter Agreement, dated July 22, 2016, between the Company and Wells Fargo Bank, National Association, regarding Note Hedge Transaction.
|
|
8-K
|
|
001-35882
|
|
10.7
|
|
July 28, 2016
|
|
|
10.17
|
|
Letter Agreement, dated July 22, 2016, between the Company and Bank of America, N.A., regarding Note Hedge Transaction.
|
|
8-K
|
|
001-35882
|
|
10.8
|
|
July 28, 2016
|
|
|
10.18
|
|
Letter Agreement, dated July 22, 2016, between the Company and Bank of Montreal, regarding Note Hedge Transaction.
|
|
8-K
|
|
001-35882
|
|
10.9
|
|
July 28, 2016
|
|
|
10.19
|
|
Letter Agreement, dated July 22, 2016, between the Company and Wells Fargo Bank, National Association, regarding Warrant Transaction.
|
|
8-K
|
|
001-35882
|
|
10.10
|
|
July 28, 2016
|
|
|
10.20
|
|
Letter Agreement, dated July 22, 2016, between the Company and Bank of America, N.A., regarding Warrant Transaction.
|
|
8-K
|
|
001-35882
|
|
10.11
|
|
July 28, 2016
|
|
|
10.21
|
|
Letter Agreement, dated July 22, 2016, between the Company and Bank of Montreal, regarding Warrant Transaction.
|
|
8-K
|
|
001-35882
|
|
10.12
|
|
July 28, 2016
|
|
|
10.22
|
|
Lease Agreement by and between 6200 Stoneridge Mall Road Investors LLC, a Delaware limited liability company, as landlord and Blackhawk Network, Inc., an Arizona corporation, as tenant, effective as of December 1, 2015.
|
|
10-K
|
|
001-35882
|
|
10.8
|
|
March 2, 2016
|
|
|
10.23
|
|
First Amendment to Lease Agreement, effective as of September 22, 2016, between Blackhawk Network, Inc. and 6200 Stoneridge Mall Road Investors LLC.
|
|
10-Q
|
|
001-35882
|
|
10.15
|
|
October 19, 2016
|
|
|
10.24
|
|
Amended and Restated Tax Sharing Agreement, dated as of April 11, 2014, by and among Safeway Inc., Blackhawk Network Holdings, Inc. and certain affiliates.
|
|
8-K
|
|
001-35882
|
|
10.1
|
|
April 14, 2014
|
|
|
10.25+
|
|
Second Amended and Restated 2006 Restricted Stock and Restricted Stock Unit Plan, and Amendment No. 1 to Second Amended and Restated 2006 Restricted Stock and Restricted Stock Unit Plan.
|
|
S-1/A
|
|
333-187325
|
|
10.19
|
|
April 3, 2013
|
|
|
10.26+
|
|
Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement for Second Amended and Restated 2006 Restricted Stock and Restricted Stock Unit Plan.
|
|
S-1
|
|
333-187325
|
|
10.20
|
|
March 18, 2013
|
|
|
10.27+
|
|
Form of Restricted Stock Award Grant Notice and Restricted Stock Agreement for Second Amended and Restated 2006 Restricted Stock and Restricted Stock Unit Plan.
|
|
S-1
|
|
333-187325
|
|
10.21
|
|
March 18, 2013
|
|
|
10.28+
|
|
Amended and Restated 2007 Stock Option and Stock Appreciation Right Plan, and Amendment No. 1 to Amended and Restated 2007 Stock Option and Stock Appreciation Right Plan.
|
|
S-1/A
|
|
333-187325
|
|
10.22
|
|
April 3, 2013
|
|
|
10.29+
|
|
Form of Non-Qualified Stock Option Grant Notice and Non-Qualified Stock Option Agreement for Amended and Restated 2007 Stock Option and Stock Appreciation Right Plan.
|
|
S-1
|
|
333-187325
|
|
10.23
|
|
March 18, 2013
|
|
|
10.30+
|
|
Form of Stock Appreciation Right Grant Notice and Stock Appreciation Right Agreement for Amended and Restated 2007 Stock Option and Stock Appreciation Right Plan.
|
|
S-1
|
|
333-187325
|
|
10.24
|
|
March 18, 2013
|
|
|
10.31+
|
|
2013 Equity Incentive Award Plan.
|
|
S-8
|
|
333-188455
|
|
10.4
|
|
May 8, 2013
|
|
|
10.32+
|
|
First Amendment to 2013 Equity Incentive Award Plan.
|
|
8-K
|
|
001-35882
|
|
10.1
|
|
May 22, 2015
|
|
|
10.33+
|
|
Deferred Compensation Plan.
|
|
8-K
|
|
001-35882
|
|
10.1
|
|
May 1, 2015
|
|
|
10.34+
|
|
Form of Stock Option Agreement for 2013 Equity Incentive Award Plan.
|
|
10-Q
|
|
001-35882
|
|
10.7
|
|
May 14, 2013
|
|
|
10.35+
|
|
Form of Restricted Stock Unit Agreement for 2013 Equity Incentive Award Plan.
|
|
10-Q
|
|
001-35882
|
|
10.8
|
|
May 14, 2013
|
|
|
10.36+
|
|
Form of Restricted Stock Award Agreement for 2013 Equity Incentive Award Plan.
|
|
10-Q
|
|
001-35882
|
|
10.9
|
|
May 14, 2013
|
|
|
10.37+
|
|
Form of Stock Appreciation Right Agreement for 2013 Equity Incentive Award Plan.
|
|
10-Q
|
|
001-35882
|
|
10.10
|
|
May 14, 2013
|
|
|
10.38+
|
|
Form of 2014 Performance Share Award Agreement for 2013 Equity Incentive Award Plan.
|
|
10-Q
|
|
001-35882
|
|
10.4
|
|
April 30, 2014
|
|
|
10.39+
|
|
Form of 2015 Performance Share Award Agreement for 2013 Equity Incentive Award Plan.
|
|
10-Q
|
|
001-35882
|
|
10.2
|
|
May 5, 2015
|
|
|
10.40+
|
|
2016 Performance Share Award Grant Notice and Form of 2016 Performance Share Award Agreement for 2013 Equity Incentive Award Plan.
|
|
8-K
|
|
001-35882
|
|
10.1
|
|
December 9, 2016
|
|
|
10.41+
|
|
2017 Performance Share Award Grant Notice and Form of 2017 Performance Share Award Agreement for 2013 Equity Incentive Award Plan.
|
|
8-K
|
|
001-35882
|
|
10.2
|
|
February 17, 2017
|
|
|
10.42+
|
|
Non-Employee Director Compensation Program (effective as of January 3, 2016).
|
|
8-K
|
|
001-35882
|
|
10.1
|
|
February 25, 2016
|
|
|
10.43+
|
|
Non-Employee Director Compensation Program (effective as of January 1, 2017).
|
|
8-K
|
|
001-35882
|
|
10.1
|
|
February 17, 2017
|
|
|
10.44+
|
|
Executive Change in Control Severance Plan.
|
|
10-Q
|
|
001-35882
|
|
10.1
|
|
July 22, 2014
|
|
|
10.45+
|
|
Form of Stock Option Grant Notice and Agreement for 2013 Equity Incentive Award Plan (RDD Version).
|
|
10-Q
|
|
001-35882
|
|
10.1
|
|
October 14, 2014
|
|
|
10.46+
|
|
Form of Restricted Stock Unit Award Grant Notice and Agreement for 2013 Equity Incentive Award Plan (RDD Version).
|
|
10-Q
|
|
001-35882
|
|
10.2
|
|
October 14, 2014
|
|
|
10.47+
|
|
Jerry Ulrich Employment Offer Letter, dated June 1, 2006.
|
|
S-1/A
|
|
333-187325
|
|
10.27
|
|
April 15, 2013
|
|
|
10.48+
|
|
Separation Agreement, dated as of October 17, 2016, by and between Blackhawk Network, Inc. and Christopher Crum.
|
|
10-Q
|
|
001-35882
|
|
10.16
|
|
October 19, 2016
|
|
|
10.49
|
|
Form of Indemnification Agreement between Blackhawk Network Holdings, Inc. and each of its directors and officers.
|
|
S-1
|
|
333-187325
|
|
10.28
|
|
March 18, 2013
|
|
|
10.50†
|
|
Servicing Agreement, effective as of March 30, 2012, between Blackhawk Network, Inc. and MetaBank, dba Meta Payment Systems, as amended by Amendment No. 1 thereto, dated as of November 5, 2012.
|
|
S-1/A
|
|
333-187325
|
|
10.29
|
|
March 27, 2013
|
|
|
10.51†
|
|
Amendment No. 2 to Servicing Agreement, dated as of October 31, 2013, between Blackhawk Network, Inc. and MetaBank, dba Meta Payment Systems.
|
|
10-K
|
|
001-35882
|
|
10.37
|
|
March 17, 2014
|
|
|
10.52†
|
|
Amendment No. 3 to Servicing Agreement, dated as of June 13, 2014, between Blackhawk Network, Inc. and MetaBank, dba Meta Payment Systems.
|
|
10-Q
|
|
001-35882
|
|
10.2
|
|
July 22, 2014
|
|
|
10.53†
|
|
First Addendum to Servicing Agreement, effective May 30, 2014, between Blackhawk Network, Inc. and MetaBank, dba Meta Payment Systems.
|
|
10-Q
|
|
001-35882
|
|
10.4
|
|
October 14, 2014
|
|
|
10.54†
|
|
Second Addendum to Servicing Agreement, effective October 1, 2015, between Blackhawk Network, Inc. and MetaBank, dba Meta Payment Systems.
|
|
10-K
|
|
001-35882
|
|
10.35
|
|
March 2, 2016
|
|
|
10.55†
|
|
Amendment No. 4 to Servicing Agreement, dated as of May 6, 2016, between Blackhawk Network, Inc. and MetaBank, dba Meta Payment Systems.
|
|
10-Q/A
|
|
001-35882
|
|
10.1
|
|
February 24, 2017
|
|
|
10.56†
|
|
Amendment No. 5 to Servicing Agreement, dated as of June 16, 2016, between Blackhawk Network, Inc. and MetaBank, dba Meta Payment Systems.
|
|
10-Q
|
|
001-35882
|
|
10.2
|
|
July 28, 2016
|
|
|
10.57†
|
|
Amendment No. 6 to Servicing Agreement, dated as of December 21, 2016, between Blackhawk Network, Inc. and MetaBank, dba Meta Payment Systems.
|
|
|
|
|
|
|
|
|
|
X
|
21.1
|
|
Subsidiaries of Blackhawk Network Holdings, Inc.
|
|
|
|
|
|
|
|
|
|
X
|
23.1
|
|
Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
|
|
|
|
|
|
|
|
|
|
X
|
31.1
|
|
Certification Required Under Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
|
|
|
|
X
|
31.2
|
|
Certification Required Under Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
|
|
|
|
X
|
32.1*
|
|
Certification Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended and 18 U.S.C. Section §1350.
|
|
|
|
|
|
|
|
|
|
X
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
|
+
|
Indicates a management contract or compensatory plan.
|
†
|
Certain portions have been omitted pursuant to a confidential treatment request. Omitted information has been filed separately with the SEC.
|
*
|
The certification attached as Exhibit 32.1 to this report is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of this report), irrespective of any general incorporation language contained in such filing.
|
Blackhawk Network, Inc.
|
|
MetaBank, dba Meta Payment Systems
|
||
|
|
|
|
|
By:
|
/s/ Jerry Ulrich
|
|
By:
|
/s/ Ian Stromberg
|
Name:
|
Jerry Ulrich
|
|
Name:
|
Ian Stromberg
|
Title:
|
CFO
|
|
Title:
|
SVP
|
Date:
|
12/19/2016
|
|
Date:
|
12/21/2016
|
Subsidiary
|
|
Jurisdiction
|
|
Blackhawk Network, Inc.
|
|
Arizona
|
|
Blackhawk Network California, Inc.
|
|
California
|
|
Cardlab, Inc.
|
|
Delaware
|
|
Blackhawk Engagement Solutions (DE), Inc.
|
|
Delaware
|
|
|
Blackhawk Engagement Solutions, Inc.
|
|
Maryland
|
/s/ Talbott Roche
|
|
Talbott Roche
|
|
President and Chief Executive Officer
|
|
Date: February 27, 2017
|
|
/s/ Jerry Ulrich
|
|
Jerry Ulrich
|
|
Chief Financial Officer and Chief Administrative Officer
|
|
Date: February 27, 2017
|
|
1.
|
The Company’s Annual Report on Form 10-K for the period ended
December 31, 2016
(the “Annual Report”), to which this Certification is attached as Exhibit 32.1, fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and
|
2.
|
The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Talbott Roche
|
|
/s/ Jerry Ulrich
|
Talbott Roche
|
|
Jerry Ulrich
|
President and Chief Executive Officer
|
|
Chief Financial Officer and Chief Administrative Officer
|
(Principal Executive Officer)
|
|
(Principal Financial Officer)
|