[August 04, 2015] |
|
Green Dot Reports Second Quarter 2015 Non-GAAP YoY Revenue Growth of 15% to $171M, Adjusted EBITDA margin of 20% and Non-GAAP EPS of $0.28
Green Dot Corporation (NYSE:GDOT), today reported financial results for
the second quarter ended June 30, 2015.
For the second quarter of 2015, Green Dot reported growth of 16% and 15%
year-over-year in consolidated GAAP and non-GAAP total operating revenues1
to $170.2 million and $170.8 million, respectively, and a decrease
of 6% in adjusted EBITDA to $34.2 million. Green Dot also reported $0.06
in GAAP diluted earnings per share and $0.28 in non-GAAP diluted
earnings per share1, representing an 81% and 32%
year-over-year decrease, respectively.
GAAP and Non-GAAP results during the second quarter of 2015 were
negatively impacted by our legacy business generating lower net revenues
year-over-year despite a similar cost base, and the fact that we
absorbed two months' worth of the new Walmart commission rates in the
quarter. Additionally, we reported an increase in depreciation and
amortization, mainly as a consequence of previously adopting an
increased capitalization rate of internal use software development,
higher net interest expense and an increase in the effective tax rate
versus last year. Furthermore, the Company had 7.9 million additional
fully diluted shares year-over-year attributable primarily to
acquisitions subsequent to the second quarter of 2014.
Net cash provided by operating activities in the quarter totaled $31.9
million. As of June 30, 2015, Green Dot's consolidated balance sheet
held total cash and investment securities of $963.0 million, which is
13% higher than at the same time last year.
"These results exceeded our stated expectations for non-GAAP total
operating revenue, adjusted EBITDA and non-GAAP EPS for the quarter. I'm
pleased with how we've navigated through Q2 and the first half of the
year in general given the larger than expected headwinds associated with
the discontinuation of the MoneyPak PIN product. Our strong consolidated
results are the result of our company now having multiple products; not
just prepaid, delivered through multiple channels; not just retail, and
having high margin businesses like processing, complementing lower
margin businesses, like bank accounts, We think these results help to
illustrate how Green Dot has evolved in recent years to become a
growing, technology-centric and diversified branchless bank with a
loyal, sticky and increasingly high-quality customer base. Of course, we
have much work left to do, but we feel good about where we are as a
company and we feel optimistic about the long-term prospects for our
business," said Steve Streit, Green Dot Chairman and Chief Executive
Officer.
Consolidated GAAP financial results for the second quarter of 2015
compared to the second quarter of 2014:
-
Total operating revenues on a generally accepted accounting principles
(GAAP) basis increased 16% to $170.2 million for the second quarter of
2015 from $147.0 million for the second quarter of 2014
-
GAAP net income decreased 76% to $3.5 million for the second quarter
of 2015 from $14.3 million for the second quarter of 2014.
-
GAAP basic and diluted earnings per common share were $0.07 and $0.06
for the second quarter of 2015 versus $0.32 and $0.31 for the second
quarter of 2014, representing a decrease of 78% and 81%, respectively
-
GAAP results during the second quarter of 2015 were negatively
impacted by amortization of $5.9 million, or $0.06 per diluted
earnings per common share associated with acquired intangible assets
from our recent acquisitions, and an impairment charge of internal-use
software of $5.0 million, or $0.05 per diluted earnings per common
share, neither of which were present in the comparable prior year
period results
Consolidated non-GAAP financial results for the second quarter of
2015 compared to the second quarter of 2014:1
-
Non-GAAP total operating revenues1 increased 15% to
$170.8 million for the second quarter of 2015 from $149.0 million for
the second quarter of 2014
-
Non-GAAP net income1 decreased 21% to $14.8 million for the
second quarter of 2015 from $18.8 million for the second quarter of
2014
-
Non-GAAP diluted earnings per share1 decreased 32% to $0.28
for the second quarter of 2015 versus $0.41 for the second quarter of
2014
-
Adjusted EBITDA1 decreased 6% to $34.2 million, or 20% of
non-GAAP total operating revenues1 for the second quarter
of 2015 from $36.4 million, or 24% of non-GAAP total operating revenues1
for the second quarter of 2014
The following table shows the Company's quarterly key business metrics
for each of the last six calendar quarters. Please refer to the
Company's latest Quarterly Report on Form 10-Q for a description of the
key business metrics described:
|
|
|
2015
|
|
|
2014
|
|
|
|
Q2
|
|
|
Q1
|
|
|
Q4
|
|
|
|
Q3
|
|
|
Q2
|
|
|
Q1
|
|
|
|
(In millions)
|
Number of cash transfers
|
|
|
9.55
|
|
|
|
10.09
|
|
|
|
12.49
|
|
|
|
12.49
|
|
|
12.55
|
|
|
12.60
|
Number of tax refunds processed
|
|
|
2.00
|
|
|
|
8.52
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
Number of active cards at quarter end
|
|
|
4.80
|
|
|
|
5.38
|
|
|
|
4.72
|
|
|
|
4.63
|
|
|
4.72
|
|
|
4.74
|
Gross dollar volume
|
|
|
$
|
5,177
|
|
|
|
$
|
6,350
|
|
|
|
$
|
5,138
|
|
|
|
$
|
4,634
|
|
|
$
|
4,668
|
|
|
$
|
5,335
|
Purchase volume
|
|
|
$
|
3,829
|
|
|
|
$
|
4,684
|
|
|
|
$
|
3,547
|
|
|
|
$
|
3,363
|
|
|
$
|
3,420
|
|
|
$
|
3,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Green Dot Acting CFO Mark Shifke stated, "Over the past 4 weeks, we have
been encouraged by the trends we are seeing in our unit sales of cash
transfers, unit sales of new cards and card retention rates. Although
future uncertainty still remains, these trends would seem to indicate
that we are beginning to see a leveling off of the MoneyPak headwinds.
Nevertheless, if these trends continue at their current level, we will
end the year below our current revenue guidance. As it relates to our
adjusted EBITDA and non-GAAP EPS forecast, we continue to perform much
better. Despite absorbing eight months of the new Walmart commission
rates and the lower than forecast revenue for the full year, we still
expect to be within our originally guided adjusted EBITDA and non-GAAP
EPS ranges, albeit at the lower end. As such, we are refining our
guidance to bring down our revenue range while narrowing our adjusted
EBITDA and non-GAAP EPS ranges to reflect our latest information."
Updated Outlook for 2015
Non-GAAP Total Operating Revenues2:
-
Green Dot now expects full-year non-GAAP total operating revenues in
the range of $700-$720 million, versus its previous guidance range of
$720-$740 million.
-
For Q3, Green Dot expects non-GAAP total operating revenues of
approximately $148 million.
Adjusted EBITDA2:
-
The Company now expects its adjusted EBITDA2 for the full
year in the range of $150-$160 million, versus its original guidance
range of $150-$170 million.
-
For Q3, Green Dot expects adjusted EBITDA2 of approximately
$18 million.
Non-GAAP EPS2:
-
Green Dot now expects its non-GAAP EPS2 for the full year
in the range of $1.24-1.35, versus its original guidance range of
$1.24-$1.47.
-
For Q3, Green Dot expects non-GAAP EPS2 of approximately
$0.07.
Green Dot's outlook is based on a number of assumptions that Green Dot
believes are reasonable at the time of this earnings release.
Information regarding potential risks that could cause the actual
results to differ from these forward-looking statements is set forth
below and in Green Dot's filings with the Securities and Exchange
Commission.
The Company's non-GAAP EPS2 range for 2015 is calculated as
follows.
|
|
|
Range
|
|
|
|
Low
|
|
|
|
High
|
|
|
|
(In millions)
|
Adjusted EBITDA
|
|
|
$
|
150
|
|
|
|
|
$
|
160
|
|
Depreciation and amortization*
|
|
|
(43
|
)
|
|
|
|
(43
|
)
|
Net interest income
|
|
|
-
|
|
|
|
|
-
|
|
Non-GAAP pre-tax income
|
|
|
$
|
107
|
|
|
|
|
$
|
117
|
|
Tax impact**
|
|
|
(39
|
)
|
|
|
|
(43
|
)
|
Non-GAAP net income
|
|
|
$
|
68
|
|
|
|
|
$
|
74
|
|
Non-GAAP diluted weighted-average shares issued and outstanding**
|
|
|
55
|
|
|
|
|
55
|
|
Non-GAAP earnings per share
|
|
|
$
|
1.24
|
|
|
|
|
$
|
1.35
|
|
*
|
|
Excludes the impact of amortization of acquired intangible assets
|
**
|
|
Assumes an effective tax rate of 36.5%
|
|
|
|
|
|
|
1
|
|
Reconciliations of total operating revenues to non-GAAP total
operating revenues, net income to non-GAAP net income, diluted
earnings per share to non-GAAP diluted earnings per share and net
income to adjusted EBITDA, respectively, are provided in the tables
immediately following the consolidated financial statements of cash
flows. Additional information about the Company's non-GAAP financial
measures can be found under the caption "About Non-GAAP Financial
Measures" below.
|
|
|
|
2
|
|
Reconciliations of forward-looking guidance for these non-GAAP
financial measures to their respective, most directly comparable
projected GAAP financial measures are provided in the tables
immediately following the reconciliation of Net Income to Adjusted
EBITDA.
|
|
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|
Conference Call
The Company will host a conference call to discuss second quarter 2015
financial results today at 5:00 p.m. ET. In addition to the conference
call, there will be a webcast presentation of accompanying slides
accessible on the Company's investor relations website. Hosting the call
will be Steve Streit, Chairman and Chief Executive Officer. The
conference call can be accessed live over the phone by dialing (888)
348-8307, or for international callers (412) 902-4242. A replay will be
available approximately two hours after the call concludes and can be
accessed by dialing (877) 870-5176, or for international callers (858)
384-5517, and entering the conference ID 10068528. The replay will be
available through Tuesday, August 11, 2015. The call will be webcast
live from the Company's investor relations website at http://ir.greendot.com.
Forward-Looking Statements
This earnings release contains forward-looking statements, which are
subject to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These statements include, among other
things, statements regarding the Company's guidance contained under
"Updated Outlook for 2015" and in the quotes of its executive officers
and other future events that involve risks and uncertainties. Actual
results may differ materially from those contained in the
forward-looking statements contained in this earnings release, and
reported results should not be considered as an indication of future
performance. The potential risks and uncertainties that could cause
actual results to differ from those projected include, among other
things, the impact of the Company's supply chain management efforts on
its revenue growth, the timing and impact of revenue growth activities,
the Company's dependence on revenues derived from Walmart and three
other retail distributors, impact of competition, the Company's reliance
on retail distributors for the promotion of its products and services,
demand for the Company's new and existing products and services,
continued and improving returns from the Company's investments in new
growth initiatives, potential difficulties in integrating operations of
acquired entities and acquired technologies, the Company's ability to
operate in a highly regulated environment, changes to existing laws or
regulations affecting the Company's operating methods or economics, the
Company's reliance on third-party vendors, changes in credit card
association or other network rules or standards, changes in card
association and debit network fees or products or interchange rates,
instances of fraud developments in the prepaid financial services
industry that impact prepaid debit card usage generally, business
interruption or systems failure, and the Company's involvement
litigation or investigations. These and other risks are discussed in
greater detail in the Company's Securities and Exchange Commission
filings, including its most recent annual report on Form 10-K and
quarterly report on Form 10-Q, which are available on the Company's
investor relations website at ir.greendot.com and on the SEC website at www.sec.gov.
All information provided in this release and in the attachments is as of
August 4, 2015, and the Company assumes no obligation to update this
information as a result of future events or developments.
About Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements presented
in accordance with accounting principles generally accepted in the
United States of America (GAAP), the Company uses measures of operating
results that are adjusted to exclude net interest income; income tax
expense; depreciation and amortization; employee stock-based
compensation expense; stock-based retailer incentive compensation
expense; acquisition-related adjustments; and other charges. This
earnings release includes non-GAAP total operating revenues, non-GAAP
net income, non-GAAP earnings per share, non-GAAP weighted-average
shares issued and outstanding and adjusted EBITDA. It also includes
full-year 2015 guidance for non-GAAP total operating revenues, adjusted
EBITDA, non-GAAP diluted earnings per share, and non-GAAP
weighted-average shares issued and outstanding. These non-GAAP financial
measures are not calculated or presented in accordance with, and are not
alternatives or substitutes for, financial measures prepared in
accordance with GAAP, and should be read only in conjunction with the
Company's financial measures prepared in accordance with GAAP. The
Company's non-GAAP financial measures may be different from
similarly-titled non-GAAP financial measures used by other companies.
The Company believes that the presentation of non-GAAP financial
measures provides useful information to management and investors
regarding underlying trends in its consolidated financial condition and
results of operations. The Company's management regularly uses these
supplemental non-GAAP financial measures internally to understand,
manage and evaluate the Company's business and make operating decisions.
For additional information regarding the Company's use of non-GAAP
financial measures and the items excluded by the Company from one or
more of its historic and projected non-GAAP financial measures,
investors are encouraged to review the reconciliations of the Company's
historic and projected non-GAAP financial measures to the comparable
GAAP financial measures, which are attached to this earnings release,
and which can be found by clicking on "Financial Information" in the
Investor Relations section of the Company's website at ir.greendot.com.
About Green Dot
Green Dot Corporation, along with its wholly owned subsidiary
bank, Green Dot Bank, is a pro-consumer financial technology innovator
with a mission to reinvent personal banking for the masses. Green Dot
invented the prepaid debit card industry and is the largest provider of
reloadable prepaid debit cards and cash reload processing services
in the United States. Green Dot is also a leader in mobile technology
and mobile banking with its award-winning GoBank mobile checking
account. Through its wholly owned subsidiary, TPG, Green Dot is
additionally the largest processor of tax refund disbursements in the
U.S. Green Dot's products and services are available to consumers
through a large-scale "branchless bank" distribution network of more
than 100,000 U.S. locations, including retailers, neighborhood financial
service center locations, and tax preparation offices, as well as
online, in the leading app stores and through leading online tax
preparation providers. Green Dot Corporation is headquartered
in Pasadena, Calif., with additional facilities throughout the United
States and in Shanghai, China.
|
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|
|
|
GREEN DOT CORPORATION
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
June 30, 2015
|
|
|
December 31, 2014
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
(In thousands, except par value)
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Unrestricted cash and cash equivalents
|
|
|
$
|
763,870
|
|
|
|
$
|
724,158
|
|
Federal funds sold
|
|
|
481
|
|
|
|
480
|
|
Restricted cash
|
|
|
4,665
|
|
|
|
2,015
|
|
Investment securities available-for-sale, at fair value
|
|
|
76,746
|
|
|
|
46,650
|
|
Settlement assets
|
|
|
46,855
|
|
|
|
148,694
|
|
Accounts receivable, net
|
|
|
26,547
|
|
|
|
48,904
|
|
Prepaid expenses and other assets
|
|
|
28,673
|
|
|
|
23,992
|
|
Income tax receivable
|
|
|
-
|
|
|
|
16,290
|
|
Total current assets
|
|
|
947,837
|
|
|
|
1,011,183
|
|
Restricted cash
|
|
|
2,182
|
|
|
|
2,152
|
|
Investment securities, available-for-sale, at fair value
|
|
|
122,433
|
|
|
|
73,781
|
|
Loans to bank customers, net of allowance for loan losses of $377
and $444 as of June 30, 2015 and December 31, 2014, respectively
|
|
|
6,451
|
|
|
|
6,550
|
|
Prepaid expenses and other assets
|
|
|
11,067
|
|
|
|
11,896
|
|
Property and equipment, net
|
|
|
76,705
|
|
|
|
77,284
|
|
Deferred expenses
|
|
|
7,805
|
|
|
|
17,326
|
|
Net deferred tax assets
|
|
|
8,557
|
|
|
|
6,268
|
|
Goodwill and intangible assets
|
|
|
484,383
|
|
|
|
417,200
|
|
Total assets
|
|
|
$
|
1,667,420
|
|
|
|
$
|
1,623,640
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
16,870
|
|
|
|
$
|
36,444
|
|
Deposits
|
|
|
609,981
|
|
|
|
565,401
|
|
Obligations to customers
|
|
|
55,321
|
|
|
|
98,052
|
|
Settlement obligations
|
|
|
4,300
|
|
|
|
4,484
|
|
Amounts due to card issuing banks for overdrawn accounts
|
|
|
1,721
|
|
|
|
1,224
|
|
Other accrued liabilities
|
|
|
72,760
|
|
|
|
79,137
|
|
Deferred revenue
|
|
|
13,749
|
|
|
|
24,418
|
|
Note payable
|
|
|
22,500
|
|
|
|
22,500
|
|
Income tax payable
|
|
|
11,213
|
|
|
|
-
|
|
Net deferred tax liabilities
|
|
|
4,253
|
|
|
|
3,995
|
|
Total current liabilities
|
|
|
812,668
|
|
|
|
835,655
|
|
Other accrued liabilities
|
|
|
40,254
|
|
|
|
31,495
|
|
Note payable
|
|
|
116,250
|
|
|
|
127,500
|
|
Total liabilities
|
|
|
969,172
|
|
|
|
994,650
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
Convertible Series A preferred stock, $0.001 par value (as
converted): 10 shares authorized as of June 30, 2015 and December
31, 2014; 2 shares issued and outstanding as of June 30, 2015 and
December 31, 2014, respectively
|
|
|
2
|
|
|
|
2
|
|
Class A common stock, $0.001 par value: 100,000 shares authorized as
of June 30, 2015 and December 31, 2014; 51,911 and 51,146 shares
issued and outstanding as of June 30, 2015 and December 31, 2014,
respectively
|
|
|
52
|
|
|
|
51
|
|
Additional paid-in capital
|
|
|
408,522
|
|
|
|
383,296
|
|
Retained earnings
|
|
|
290,002
|
|
|
|
245,693
|
|
Accumulated other comprehensive loss
|
|
|
(330
|
)
|
|
|
(52
|
)
|
Total stockholders' equity
|
|
|
698,248
|
|
|
|
628,990
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
1,667,420
|
|
|
|
$
|
1,623,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GREEN DOT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
(In thousands, except per share data)
|
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Card revenues and other fees
|
|
|
$
|
83,810
|
|
|
|
$
|
60,892
|
|
|
|
$
|
171,034
|
|
|
|
$
|
129,059
|
|
Processing and settlement service revenues
|
|
|
39,416
|
|
|
|
45,491
|
|
|
|
126,537
|
|
|
|
91,767
|
|
Interchange revenues
|
|
|
47,635
|
|
|
|
42,655
|
|
|
|
102,361
|
|
|
|
89,869
|
|
Stock-based retailer incentive compensation
|
|
|
(614
|
)
|
|
|
(2,022
|
)
|
|
|
(2,520
|
)
|
|
|
(4,410
|
)
|
Total operating revenues
|
|
|
170,247
|
|
|
|
147,016
|
|
|
|
397,412
|
|
|
|
306,285
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing expenses
|
|
|
55,845
|
|
|
|
57,200
|
|
|
|
117,124
|
|
|
|
117,443
|
|
Compensation and benefits expenses
|
|
|
41,461
|
|
|
|
30,215
|
|
|
|
82,815
|
|
|
|
57,178
|
|
Processing expenses
|
|
|
27,120
|
|
|
|
17,285
|
|
|
|
57,720
|
|
|
|
39,364
|
|
Other general and administrative expenses
|
|
|
38,903
|
|
|
|
20,584
|
|
|
|
66,939
|
|
|
|
46,908
|
|
Total operating expenses
|
|
|
163,329
|
|
|
|
125,284
|
|
|
|
324,598
|
|
|
|
260,893
|
|
Operating income
|
|
|
6,918
|
|
|
|
21,732
|
|
|
|
72,814
|
|
|
|
45,392
|
|
Interest income
|
|
|
1,118
|
|
|
|
1,039
|
|
|
|
2,496
|
|
|
|
2,016
|
|
Interest expense
|
|
|
(1,549
|
)
|
|
|
(29
|
)
|
|
|
(3,045
|
)
|
|
|
(45
|
)
|
Income before income taxes
|
|
|
6,487
|
|
|
|
22,742
|
|
|
|
72,265
|
|
|
|
47,363
|
|
Income tax expense
|
|
|
2,991
|
|
|
|
8,399
|
|
|
|
27,956
|
|
|
|
17,715
|
|
Net income
|
|
|
3,496
|
|
|
|
14,343
|
|
|
|
44,309
|
|
|
|
29,648
|
|
Income attributable to preferred stock
|
|
|
(99
|
)
|
|
|
(1,703
|
)
|
|
|
(1,263
|
)
|
|
|
(3,966
|
)
|
Net income available to common stockholders
|
|
|
$
|
3,397
|
|
|
|
$
|
12,640
|
|
|
|
$
|
43,046
|
|
|
|
$
|
25,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share:
|
|
|
$
|
0.07
|
|
|
|
$
|
0.32
|
|
|
|
$
|
0.83
|
|
|
|
$
|
0.66
|
|
Diluted earnings per common share:
|
|
|
$
|
0.06
|
|
|
|
$
|
0.31
|
|
|
|
$
|
0.83
|
|
|
|
$
|
0.64
|
|
Basic weighted-average common shares issued and outstanding:
|
|
|
51,811
|
|
|
|
39,394
|
|
|
|
51,631
|
|
|
|
38,433
|
|
Diluted weighted-average common shares issued and outstanding:
|
|
|
52,275
|
|
|
|
40,052
|
|
|
|
52,104
|
|
|
|
39,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GREEN DOT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
(In thousands)
|
Operating activities
|
|
|
|
|
|
|
Net income
|
|
|
$
|
44,309
|
|
|
|
$
|
29,648
|
|
Adjustments to reconcile net income to net cash provided by (used
in) operating activities:
|
|
|
|
|
|
|
Depreciation and amortization of property and equipment
|
|
|
18,478
|
|
|
|
15,557
|
|
Amortization of intangible assets
|
|
|
11,209
|
|
|
|
-
|
|
Provision for uncollectible overdrawn accounts
|
|
|
31,566
|
|
|
|
16,059
|
|
Employee stock-based compensation
|
|
|
11,623
|
|
|
|
8,686
|
|
Stock-based retailer incentive compensation
|
|
|
2,520
|
|
|
|
4,410
|
|
Amortization of premium on available-for-sale investment securities
|
|
|
508
|
|
|
|
538
|
|
Change in fair value of contingent consideration
|
|
|
(7,516
|
)
|
|
|
-
|
|
Impairment of capitalized software
|
|
|
4,997
|
|
|
|
-
|
|
Amortization of deferred financing costs
|
|
|
767
|
|
|
|
-
|
|
Deferred income tax expense
|
|
|
12
|
|
|
|
-
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
(7,134
|
)
|
|
|
3,458
|
|
Prepaid expenses and other assets
|
|
|
(1,948
|
)
|
|
|
1,983
|
|
Deferred expenses
|
|
|
9,521
|
|
|
|
6,372
|
|
Accounts payable and other accrued liabilities
|
|
|
(19,898
|
)
|
|
|
(16,328
|
)
|
Amounts due to card issuing banks for overdrawn accounts
|
|
|
497
|
|
|
|
(49,391
|
)
|
Deferred revenue
|
|
|
(10,719
|
)
|
|
|
(10,394
|
)
|
Income tax receivable
|
|
|
27,424
|
|
|
|
13,960
|
|
Other, net
|
|
|
56
|
|
|
|
(49
|
)
|
Net cash provided by operating activities
|
|
|
116,272
|
|
|
|
24,509
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
Purchases of available-for-sale investment securities
|
|
|
(126,036
|
)
|
|
|
(93,388
|
)
|
Proceeds from maturities of available-for-sale securities
|
|
|
33,531
|
|
|
|
83,263
|
|
Proceeds from sales of available-for-sale securities
|
|
|
12,935
|
|
|
|
38,109
|
|
Increase in restricted cash
|
|
|
(1,253
|
)
|
|
|
(601
|
)
|
Payments for acquisition of property and equipment
|
|
|
(25,042
|
)
|
|
|
(14,096
|
)
|
Net decrease in loans
|
|
|
99
|
|
|
|
222
|
|
Acquisition, net of cash acquired
|
|
|
(65,209
|
)
|
|
|
(14,860
|
)
|
Net cash used in investing activities
|
|
|
(170,975
|
)
|
|
|
(1,351
|
)
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
Repayments of borrowings from note payable
|
|
|
(11,250
|
)
|
|
|
-
|
|
Borrowings on revolving line of credit
|
|
|
30,001
|
|
|
|
-
|
|
Repayments on revolving line of credit
|
|
|
(30,001
|
)
|
|
|
-
|
|
Proceeds from exercise of options
|
|
|
798
|
|
|
|
3,348
|
|
Excess tax benefits from exercise of options
|
|
|
27
|
|
|
|
3,563
|
|
Net increase in deposits
|
|
|
44,580
|
|
|
|
240,014
|
|
Net increase (decrease) in obligations to customers
|
|
|
60,929
|
|
|
|
(13,693
|
)
|
Contingent consideration payments
|
|
|
(668
|
)
|
|
|
-
|
|
Net cash provided by financing activities
|
|
|
94,416
|
|
|
|
233,232
|
|
|
|
|
|
|
|
|
Net increase in unrestricted cash, cash equivalents, and federal
funds sold
|
|
|
39,713
|
|
|
|
256,390
|
|
Unrestricted cash, cash equivalents, and federal funds sold,
beginning of year
|
|
|
724,638
|
|
|
|
423,621
|
|
Unrestricted cash, cash equivalents, and federal funds sold, end of
period
|
|
|
$
|
764,351
|
|
|
|
$
|
680,011
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
|
$
|
2,278
|
|
|
|
$
|
46
|
|
Cash paid for income taxes
|
|
|
$
|
891
|
|
|
|
$
|
219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GREEN DOT CORPORATION
REPORTABLE SEGMENTS
(UNAUDITED)
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2015
|
|
|
|
|
|
|
Processing and
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlement
|
|
|
Corporate and
|
|
|
|
|
|
|
Account Services
|
|
|
Services
|
|
|
Other
|
|
|
Total
|
|
|
|
(In thousands)
|
Operating revenues
|
|
|
$
|
134,772
|
|
|
|
$
|
42,631
|
|
|
|
$
|
(7,156
|
)
|
|
|
$
|
170,247
|
Operating expenses
|
|
|
125,051
|
|
|
|
18,139
|
|
|
|
20,139
|
|
|
|
163,329
|
Operating income
|
|
|
$
|
9,721
|
|
|
|
$
|
24,492
|
|
|
|
$
|
(27,295
|
)
|
|
|
$
|
6,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2015
|
|
|
|
|
|
|
Processing and
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlement
|
|
|
Corporate and
|
|
|
|
|
|
|
Account Services
|
|
|
Services
|
|
|
Other
|
|
|
Total
|
|
|
|
(In thousands)
|
Operating revenues
|
|
|
$
|
282,631
|
|
|
|
$
|
132,807
|
|
|
|
$
|
(18,026
|
)
|
|
|
$
|
397,412
|
Operating expenses
|
|
|
243,204
|
|
|
|
54,997
|
|
|
|
26,397
|
|
|
|
324,598
|
Operating income
|
|
|
$
|
39,427
|
|
|
|
$
|
77,810
|
|
|
|
$
|
(44,423
|
)
|
|
|
$
|
72,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning in 2015, the Company's operations are comprised of two
reportable segments, Account Services and Processing and Settlement
Services. The Account Services segment consists of revenues and expenses
derived from the Company's branded and private label deposit account
programs. These programs include Green Dot-branded and affinity-branded
GPR card accounts, private label GPR card accounts, checking accounts
and open-loop gift cards. The Processing and Settlement Services segment
consists of revenues and expenses derived from reload services through
the Green Dot Network and the Company's tax refund processing services.
The Corporate and Other segment primarily consists of unallocated
corporate expenses, depreciation and amortization, intercompany
eliminations and other costs that are not considered when the Company's
management evaluates segment performance.
|
|
|
|
|
|
|
GREEN DOT CORPORATION
Reconciliation of Total Operating Revenues to Non-GAAP Total
Operating Revenues (1)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
(In thousands)
|
Total operating revenues
|
|
|
$
|
170,247
|
|
|
|
$
|
147,016
|
|
|
|
$
|
397,412
|
|
|
|
$
|
306,285
|
Stock-based retailer incentive compensation (2)(4)
|
|
|
614
|
|
|
|
2,022
|
|
|
|
2,520
|
|
|
|
4,410
|
Contra-revenue advertising costs (3)(4)
|
|
|
(72
|
)
|
|
|
-
|
|
|
|
1,744
|
|
|
|
-
|
Non-GAAP total operating revenues
|
|
|
$
|
170,789
|
|
|
|
$
|
149,038
|
|
|
|
$
|
401,676
|
|
|
|
$
|
310,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to Non-GAAP Net Income (1)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
(In thousands, except per share data)
|
Net income
|
|
|
$
|
3,496
|
|
|
|
$
|
14,343
|
|
|
|
$
|
44,309
|
|
|
|
$
|
29,648
|
|
Employee stock-based compensation expense (5)
|
|
|
6,410
|
|
|
|
4,714
|
|
|
|
11,623
|
|
|
|
8,686
|
|
Stock-based retailer incentive compensation (2)
|
|
|
614
|
|
|
|
2,022
|
|
|
|
2,520
|
|
|
|
4,410
|
|
Amortization of acquired intangibles (6)
|
|
|
5,884
|
|
|
|
286
|
|
|
|
11,209
|
|
|
|
286
|
|
Change in fair value of contingent consideration (6)
|
|
|
100
|
|
|
|
-
|
|
|
|
(7,516
|
)
|
|
|
-
|
|
Other charges (7)
|
|
|
(182
|
)
|
|
|
-
|
|
|
|
2,485
|
|
|
|
-
|
|
Transaction costs (6)
|
|
|
403
|
|
|
|
-
|
|
|
|
685
|
|
|
|
-
|
|
Amortization of deferred financing costs (7)
|
|
|
383
|
|
|
|
-
|
|
|
|
767
|
|
|
|
-
|
|
Impairment charges (7)
|
|
|
4,997
|
|
|
|
-
|
|
|
|
4,997
|
|
|
|
-
|
|
Income tax effect (8)
|
|
|
(7,259
|
)
|
|
|
(2,593
|
)
|
|
|
(10,355
|
)
|
|
|
(5,005
|
)
|
Non-GAAP net income
|
|
|
$
|
14,846
|
|
|
|
$
|
18,772
|
|
|
|
$
|
60,724
|
|
|
|
$
|
38,025
|
|
Diluted earnings per share*
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
$
|
0.06
|
|
|
|
$
|
0.31
|
|
|
|
$
|
0.83
|
|
|
|
$
|
0.64
|
|
Non-GAAP
|
|
|
$
|
0.28
|
|
|
|
$
|
0.41
|
|
|
|
$
|
1.13
|
|
|
|
$
|
0.83
|
|
Diluted weighted-average shares issued and outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
52,275
|
|
|
|
40,052
|
|
|
|
52,104
|
|
|
|
39,466
|
|
Non-GAAP
|
|
|
53,804
|
|
|
|
45,857
|
|
|
|
53,678
|
|
|
|
45,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
|
Reconciliations between GAAP and non-GAAP diluted weighted-average
shares issued and outstanding are provided in the next table.
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Diluted Weighted-Average
Shares Issued and Outstanding (1)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
(In thousands)
|
Diluted weighted-average shares issued and outstanding
|
|
|
52,275
|
|
|
|
40,052
|
|
|
|
52,104
|
|
|
|
39,466
|
Assumed conversion of weighted-average shares of preferred stock
|
|
|
1,518
|
|
|
|
5,369
|
|
|
|
1,516
|
|
|
|
6,011
|
Weighted-average shares subject to repurchase
|
|
|
11
|
|
|
|
436
|
|
|
|
58
|
|
|
|
491
|
Non-GAAP diluted weighted-average shares issued and outstanding
|
|
|
53,804
|
|
|
|
45,857
|
|
|
|
53,678
|
|
|
|
45,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GREEN DOT CORPORATION
Supplemental Detail on Non-GAAP Diluted Weighted-Average Shares
Issued and Outstanding
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
(In thousands)
|
Stock outstanding as of June 30:
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common stock
|
|
|
51,911
|
|
|
|
40,053
|
|
|
|
51,911
|
|
|
|
40,053
|
|
Preferred stock (on an as-converted basis)
|
|
|
1,519
|
|
|
|
5,369
|
|
|
|
1,519
|
|
|
|
5,369
|
|
Total stock outstanding as of June 30:
|
|
|
53,430
|
|
|
|
45,422
|
|
|
|
53,430
|
|
|
|
45,422
|
|
Weighting adjustment
|
|
|
(90
|
)
|
|
|
(223
|
)
|
|
|
(225
|
)
|
|
|
(487
|
)
|
Dilutive potential shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options
|
|
|
272
|
|
|
|
515
|
|
|
|
276
|
|
|
|
831
|
|
Restricted stock units
|
|
|
185
|
|
|
|
138
|
|
|
|
189
|
|
|
|
195
|
|
Employee stock purchase plan
|
|
|
7
|
|
|
|
5
|
|
|
|
8
|
|
|
|
7
|
|
Non-GAAP diluted weighted-average shares issued and outstanding
|
|
|
53,804
|
|
|
|
45,857
|
|
|
|
53,678
|
|
|
|
45,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to Adjusted EBITDA (1)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
(In thousands)
|
Net income
|
|
|
$
|
3,496
|
|
|
|
$
|
14,343
|
|
|
|
$
|
44,309
|
|
|
|
$
|
29,648
|
|
Net interest income (4)
|
|
|
431
|
|
|
|
(1,010
|
)
|
|
|
549
|
|
|
|
(1,971
|
)
|
Income tax expense
|
|
|
2,991
|
|
|
|
8,399
|
|
|
|
27,956
|
|
|
|
17,715
|
|
Depreciation of property and equipment (4)
|
|
|
9,102
|
|
|
|
7,607
|
|
|
|
18,477
|
|
|
|
15,271
|
|
Employee stock-based compensation expense (4)(5)
|
|
|
6,410
|
|
|
|
4,714
|
|
|
|
11,623
|
|
|
|
8,686
|
|
Stock-based retailer incentive compensation (2)(4)
|
|
|
614
|
|
|
|
2,022
|
|
|
|
2,520
|
|
|
|
4,410
|
|
Amortization of acquired intangibles (4)(6)
|
|
|
5,884
|
|
|
|
286
|
|
|
|
11,209
|
|
|
|
286
|
|
Change in fair value of contingent consideration (4)(6)
|
|
|
100
|
|
|
|
-
|
|
|
|
(7,516
|
)
|
|
|
-
|
|
Other charges (4)(7)
|
|
|
(182
|
)
|
|
|
-
|
|
|
|
2,485
|
|
|
|
-
|
|
Transaction costs (4)(6)
|
|
|
403
|
|
|
|
-
|
|
|
|
685
|
|
|
|
-
|
|
Impairment charges (4)(7)
|
|
|
4,997
|
|
|
|
-
|
|
|
|
4,997
|
|
|
|
-
|
|
Adjusted EBITDA
|
|
|
$
|
34,246
|
|
|
|
$
|
36,361
|
|
|
|
$
|
117,294
|
|
|
|
$
|
74,045
|
|
Non-GAAP total operating revenues
|
|
|
$
|
170,789
|
|
|
|
$
|
149,038
|
|
|
|
$
|
401,676
|
|
|
|
$
|
310,695
|
|
Adjusted EBITDA/non-GAAP total operating revenues (adjusted EBITDA
margin)
|
|
|
20.1
|
%
|
|
|
24.4
|
%
|
|
|
29.2
|
%
|
|
|
23.8
|
%
|
|
|
|
|
|
|
|
GREEN DOT CORPORATION
Reconciliation of Forward Looking Guidance for Non-GAAP
Financial Measures to
Projected GAAP Total Operating Revenue (1)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2015
|
|
|
|
|
|
|
Range
|
|
|
|
Q3 2015
|
|
|
Low
|
|
|
High
|
|
|
|
(In millions)
|
Total operating revenues
|
|
|
$
|
147
|
|
|
|
$
|
694
|
|
|
|
$
|
714
|
Stock-based retailer incentive compensation (2)
|
|
|
-
|
|
|
|
3
|
|
|
|
3
|
Contra-revenue advertising costs (3)
|
|
|
1
|
|
|
|
3
|
|
|
|
3
|
Non-GAAP total operating revenues
|
|
|
$
|
148
|
|
|
|
$
|
700
|
|
|
|
$
|
720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Forward Looking Guidance for Non-GAAP
Financial Measures to
Projected Adjusted EBITDA (1)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2015
|
|
|
|
|
|
|
Range
|
|
|
|
Q3 2015
|
|
|
Low
|
|
|
High
|
|
|
|
(In millions)
|
Net income (loss)
|
|
|
$
|
(4
|
)
|
|
|
$
|
36
|
|
|
|
$
|
42
|
|
Adjustments (9)
|
|
|
22
|
|
|
|
114
|
|
|
|
118
|
|
Adjusted EBITDA
|
|
|
$
|
18
|
|
|
|
$
|
150
|
|
|
|
$
|
160
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP total operating revenues
|
|
|
$
|
148
|
|
|
|
$
|
720
|
|
|
|
$
|
700
|
|
Adjusted EBITDA / Non-GAAP total operating revenues (Adjusted EBITDA
margin)
|
|
|
12
|
%
|
|
|
21
|
%
|
|
|
23
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Forward Looking Guidance for Non-GAAP
Financial Measures to
Projected GAAP Net Income (1)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2015
|
|
|
|
|
|
|
Range
|
|
|
|
Q3 2015
|
|
|
Low
|
|
|
High
|
|
|
|
(In millions, except per share data)
|
Net income (loss)
|
|
|
$
|
(4
|
)
|
|
|
$
|
36
|
|
|
|
$
|
42
|
Adjustments (9)
|
|
|
8
|
|
|
|
32
|
|
|
|
32
|
Non-GAAP net income
|
|
|
$
|
4
|
|
|
|
$
|
68
|
|
|
|
$
|
74
|
Diluted earnings per share*
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
$
|
(0.08
|
)
|
|
|
$
|
0.68
|
|
|
|
$
|
0.79
|
Non-GAAP
|
|
|
$
|
0.07
|
|
|
|
$
|
1.24
|
|
|
|
$
|
1.35
|
Diluted weighted-average shares issued and outstanding
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
53
|
|
|
|
53
|
|
|
|
53
|
Non-GAAP
|
|
|
54
|
|
|
|
55
|
|
|
|
55
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
|
Reconciliations between GAAP and non-GAAP diluted weighted-average
shares issued and outstanding are provided in the next table.
|
|
|
|
|
|
|
|
|
|
|
|
GREEN DOT CORPORATION
Reconciliation of Forward Looking Guidance for Non-GAAP
Financial Measures to
Projected GAAP Diluted Weighted-Average Shares Issued and
Outstanding (1)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2015
|
|
|
|
|
|
|
Range
|
|
|
|
Q3 2015
|
|
|
Low
|
|
|
High
|
|
|
|
(In millions)
|
Diluted weighted-average shares issued and outstanding
|
|
|
|
|
|
|
|
|
|
Assumed conversion of weighted-average shares of preferred stock
|
|
|
53
|
|
|
|
53
|
|
|
|
53
|
Weighted-average shares subject to repurchase
|
|
|
1
|
|
|
|
2
|
|
|
|
2
|
Non-GAAP diluted weighted-average shares issued and outstanding
|
|
|
54
|
|
|
|
55
|
|
|
|
55
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
To supplement the Company's consolidated financial statements
presented in accordance with GAAP, the Company uses measures of
operating results that are adjusted to exclude various, primarily
non-cash, expenses and charges. These financial measures are not
calculated or presented in accordance with GAAP and should not be
considered as alternatives to or substitutes for operating
revenues, operating income, net income or any other measure of
financial performance calculated and presented in accordance with
GAAP. These financial measures may not be comparable to
similarly-titled measures of other organizations because other
organizations may not calculate their measures in the same manner
as we do. These financial measures are adjusted to eliminate the
impact of items that the Company does not consider indicative of
its core operating performance. You are encouraged to evaluate
these adjustments and the reasons we consider them appropriate.
|
|
|
|
The Company believes that the non-GAAP financial measures it presents
are useful to investors in evaluating the Company's operating
performance for the following reasons:
-
stock-based retailer incentive compensation is a non-cash GAAP
accounting charge that is an offset to the Company's actual revenues
from operations as the Company has historically calculated them. This
charge results from the monthly lapsing of the Company's right to
repurchase a portion of the 2,208,552 shares it issued to its largest
distributor, Walmart, in May 2010. By adding back this charge to the
Company's GAAP 2010 and future total operating revenues, investors can
make direct comparisons of the Company's revenues from operations
prior to and after May 2010 and thus more easily perceive trends in
the Company's core operations. Further, because the monthly charge is
based on the then-current fair market value of the shares as to which
the Company's repurchase right lapses, adding back this charge
eliminates fluctuations in the Company's operating revenues caused by
variations in its stock price and thus provides insight on the
operating revenues directly associated with those core operations;
-
the Company records employee stock-based compensation from period to
period, and recorded employee stock-based compensation expenses of
approximately $6.4 million and $4.7 million for the three months ended
June 30, 2015 and 2014, respectively. By comparing the Company's
adjusted EBITDA, non-GAAP net income and non-GAAP diluted earnings per
share in different historical periods, investors can evaluate the
Company's operating results without the additional variations caused
by employee stock-based compensation expense, which may not be
comparable from period to period due to changes in the fair market
value of the Company's Class A common stock (which is influenced by
external factors like the volatility of public markets and the
financial performance of the Company's peers) and is not a key measure
of the Company's operations;
-
adjusted EBITDA is widely used by investors to measure a company's
operating performance without regard to items, such as interest
expense, income tax expense, depreciation and amortization, employee
stock-based compensation expense, stock-based retailer incentive
compensation expense, contingent consideration, other charges,
transaction costs, and impairment charges that can vary substantially
from company to company depending upon their respective financing
structures and accounting policies, the book values of their assets,
their capital structures and the methods by which their assets were
acquired; and
-
securities analysts use adjusted EBITDA as a supplemental measure to
evaluate the overall operating performance of companies.
The Company's management uses the non-GAAP financial measures:
-
as measures of operating performance, because they exclude the impact
of items not directly resulting from the Company's core operations;
-
for planning purposes, including the preparation of the Company's
annual operating budget;
-
to allocate resources to enhance the financial performance of the
Company's business;
-
to evaluate the effectiveness of the Company's business strategies; and
-
in communications with the Company's board of directors concerning the
Company's financial performance.
The Company understands that, although adjusted EBITDA and other
non-GAAP financial measures are frequently used by investors and
securities analysts in their evaluations of companies, these measures
have limitations as an analytical tool, and you should not consider them
in isolation or as substitutes for analysis of the Company's results of
operations as reported under GAAP. Some of these limitations are:
-
that these measures do not reflect the Company's capital expenditures
or future requirements for capital expenditures or other contractual
commitments;
-
that these measures do not reflect changes in, or cash requirements
for, the Company's working capital needs;
-
that these measures do not reflect interest expense or interest income;
-
that these measures do not reflect cash requirements for income taxes;
-
that, although depreciation and amortization are non-cash charges, the
assets being depreciated or amortized will often have to be replaced
in the future, and these measures do not reflect any cash requirements
for these replacements; and
-
that other companies in the Company's industry may calculate these
measures differently than the Company does, limiting their usefulness
as comparative measures.
(2)
|
|
This expense consists of the recorded fair value of the shares of
Class A common stock for which the Company's right to repurchase
has lapsed pursuant to the terms of the May 2010 agreement under
which they were issued to Wal-Mart Stores, Inc., a contra-revenue
component of the Company's total operating revenues. The Company
does not believe these non-cash expenses are reflective of ongoing
operating results. Our right to repurchase any shares issued to
Walmart fully lapsed during the three months ended June 30, 2015.
As a result, we will no longer recognize stock-based retailer
incentive compensation in future periods.
|
|
|
|
(3)
|
|
This expense consists of certain co-op advertising costs
recognized as contra-revenue under GAAP. The Company believes the
substance of the costs incurred are a result of advertising and is
not reflective of ongoing total operating revenues. The Company
believes that excluding co-op advertising costs from total
operating revenues facilitates the comparison of our financial
results to the Company's historical operating results. Prior to
2015, the Company did not have any co-op advertising costs
recorded as contra-revenue.
|
|
|
|
(4)
|
|
The Company does not include any income tax impact of the
associated non-GAAP adjustment to non-GAAP total operating
revenues or adjusted EBITDA, as the case may be, because each of
these non-GAAP financial measures is provided before income tax
expense.
|
|
|
|
(5)
|
|
This expense consists primarily of expenses for employee stock
options and restricted stock units. Employee stock-based
compensation expense is not comparable from period to period due
to changes in the fair market value of the Company's Class A
common stock (which is influenced by external factors like the
volatility of public markets and the financial performance of the
Company's peers) and is not a key measure of the Company's
operations. The Company excludes employee stock-based compensation
expense from its non-GAAP financial measures primarily because it
consists of non-cash expenses that the Company does not believe
are reflective of ongoing operating results. Further, the Company
believes that it is useful to investors to understand the impact
of employee stock-based compensation to its results of operations.
|
|
|
|
(6)
|
|
The Company excludes certain income and expenses that are the
result of acquisitions. These acquisition related adjustments
include the amortization of acquired intangible assets, changes in
the fair value of contingent consideration, settlements of
contingencies established at time of acquisition and other
acquisition related charges, such as integration charges and
professional and legal fees, which result in the Company recording
expenses or fair value adjustments in its GAAP financial
statements. The Company analyzes the performance of its operations
without regard to these adjustments. In determining whether any
acquisition related adjustment is appropriate, the Company takes
into consideration, among other things, how such adjustments would
or would not aid in the understanding of the performance of its
operations.
|
|
|
|
(7)
|
|
The Company excludes certain income and expenses that are not
reflective of ongoing operating results. It is difficult to
estimate the amount or timing of these items in advance. Although
these events are reflected in the Company's GAAP financial
statements, the Company excludes them in it's non-GAAP financial
measures because the Company believes these items may limit the
comparability of ongoing operations with prior and future periods.
These adjustments include amortization attributable to deferred
financing costs, impairment charges related to internal-use
software and other charges related to gain or loss contingencies.
In determining whether any such adjustments is appropriate, the
Company takes into consideration, among other things, how such
adjustments would or would not aid in the understanding of the
performance of its operations.
|
|
|
|
(8)
|
|
Represents the tax effect for the related non-GAAP measure
adjustments using the Company's year to date effective tax rate.
|
|
|
|
(9)
|
|
These amounts represent estimated adjustments for net interest
income, income taxes, depreciation and amortization, employee
stock-based compensation expense, stock-based retailer incentive
compensation expense, contingent consideration, other income and
expenses and transaction costs. Employee stock-based compensation
expense and stock-based retailer incentive compensation expense
include assumptions about the future fair market value of the
Company's Class A common stock (which is influenced by external
factors like the volatility of public markets and the financial
performance of the Company's peers).
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20150804006919/en/
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