The accompanying notes are an integral part of these condensed consolidated financial statements.
The accompanying notes are an integral part of these condensed consolidated financial statements.
The accompanying notes are an integral part of these condensed consolidated financial statements.
The accompanying notes are an integral part of these condensed consolidated financial statements.
The accompanying notes are an integral part of these condensed consolidated financial statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
We have prepared the accompanying unaudited condensed consolidated financial statements as of March 31, 2020 and December 31, 2019, and for the quarters ended March 31, 2020 and 2019, in accordance with accounting principles generally accepted in the United States of America (“U.S.”) (“GAAP”) for interim financial information, and pursuant to the instructions to Form 10-Q and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of our management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position and operating results have been included. The unaudited Condensed Consolidated Financial Statements (the “Financial Statements”) should be read in conjunction with the Consolidated Financial Statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), contained in our Annual Report on Form 10-K for the year ended December 31, 2019 (our “2019 10-K”), filed with the SEC. The results of operations for the quarter ended March 31, 2020 are not necessarily indicative of the expected results for the entire year ending December 31, 2020.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates in Preparation of Financial Statements. The preparation of the accompanying Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our Financial Statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
Revenue. The majority of our future revenue is related to our revenue management solution client contracts that include variable consideration dependent upon a series of monthly volumes and/or daily usage of services and have contractual terms ending from 2020 through 2028. Our client contracts may also include guaranteed minimums and fixed monthly or annual fees. As of March 31, 2020, our aggregate amount of the transaction price allocated to the remaining performance obligations is approximately $1 billion, which is made up of fixed fee consideration and guaranteed minimums expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied). We expect to recognize approximately 75% of this amount by the end of 2022, with the remaining amount recognized by the end of 2028. We have excluded from this amount variable consideration expected to be recognized in the future related to performance obligations that are unsatisfied.
The nature, amount, timing and uncertainty of our revenue and how revenue and cash flows are affected by economic factors is most appropriately depicted by geographic region (using the location of the client as the basis of attributing revenue to the individual regions) as follows (in thousands):
|
|
Quarter Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Americas (principally the U.S.)
|
|
$
|
216,997
|
|
|
$
|
210,729
|
|
|
Europe, Middle East, and Africa
|
|
|
21,032
|
|
|
|
24,626
|
|
|
Asia Pacific
|
|
|
7,588
|
|
|
|
9,438
|
|
|
Total revenue
|
|
$
|
245,617
|
|
|
$
|
244,793
|
|
|
Deferred revenue recognized in the first quarter of 2020 was $17.7 million.
Cash and Cash Equivalents. We consider all highly liquid investments with original maturities of three months or less at the date of the purchase to be cash equivalents. As of March 31, 2020 and December 31, 2019, our cash equivalents consist primarily of institutional money market funds, commercial paper, and time deposits held at major banks.
As of March 31, 2020 and December 31, 2019, we had $2.6 million and $2.7 million, respectively, of restricted cash that serves to collateralize outstanding letters of credit. This restricted cash is included in cash and cash equivalents in our Condensed Consolidated Balance Sheets (“Balance Sheets” or “Balance Sheet”).
8
Short-term Investments and Other Financial Instruments. Our financial instruments as of March 31, 2020 and December 31, 2019 include cash and cash equivalents, short-term investments, accounts receivable, accounts payable, and debt. Because of their short maturities, the carrying amounts of cash equivalents, accounts receivable, and accounts payable approximate their fair value.
Our short-term investments and certain of our cash equivalents are considered “available-for-sale” and are reported at fair value in our Balance Sheets, with unrealized gains and losses, net of the related income tax effect, excluded from earnings and reported in a separate component of stockholders’ equity. Realized and unrealized gains and losses were not material in any period presented.
Primarily all short-term investments held by us as of March 31, 2020 and December 31, 2019 have contractual maturities of less than two years from the time of acquisition. Our short-term investments as of March 31, 2020 and December 31, 2019 consisted almost entirely of fixed income securities. Proceeds from the sale/maturity of short-term investments for the three months ended March 31, 2020 and 2019 were $18.7 million and $19.6 million, respectively.
Our short-term investments as of March 31, 2020 and December 31, 2019 were $23.5 million and $26.1 million, respectively.
The following table represents the fair value hierarchy based upon three levels of inputs, of which Levels 1 and 2 are considered observable and Level 3 is unobservable, for our financial assets measured at fair value (in thousands):
|
|
March 31, 2020
|
|
|
December 31, 2019
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Total
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds
|
|
$
|
4,150
|
|
|
$
|
—
|
|
|
$
|
4,150
|
|
|
$
|
4,847
|
|
|
$
|
—
|
|
|
$
|
4,847
|
|
Commercial paper
|
|
|
—
|
|
|
|
9,393
|
|
|
|
9,393
|
|
|
|
—
|
|
|
|
26,964
|
|
|
|
26,964
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt securities
|
|
|
—
|
|
|
|
19,595
|
|
|
|
19,595
|
|
|
|
—
|
|
|
|
22,159
|
|
|
|
22,159
|
|
Asset-backed securities
|
|
|
—
|
|
|
|
3,934
|
|
|
|
3,934
|
|
|
|
—
|
|
|
|
3,950
|
|
|
|
3,950
|
|
Total
|
|
$
|
4,150
|
|
|
$
|
32,922
|
|
|
$
|
37,072
|
|
|
$
|
4,847
|
|
|
$
|
53,073
|
|
|
$
|
57,920
|
|
Valuation inputs used to measure the fair values of our money market funds and corporate equity securities were derived from quoted market prices. The fair values of all other financial instruments are based upon pricing provided by third-party pricing services. These prices were derived from observable market inputs.
We have chosen not to measure our debt at fair value, with changes recognized in earnings each reporting period. The following table indicates the carrying value (par value for convertible debt) and estimated fair value of our debt as of the indicated periods (in thousands):
|
|
March 31, 2020
|
|
|
December 31, 2019
|
|
|
|
Carrying
|
|
|
Fair
|
|
|
Carrying
|
|
|
Fair
|
|
|
|
Value
|
|
|
Value
|
|
|
Value
|
|
|
Value
|
|
2018 Credit Agreement (carrying value including current maturities)
|
|
$
|
135,000
|
|
|
$
|
135,000
|
|
|
$
|
136,875
|
|
|
$
|
136,875
|
|
2016 Convertible Debt (par value)
|
|
|
230,000
|
|
|
|
236,325
|
|
|
|
230,000
|
|
|
|
262,775
|
|
The fair value for our credit agreement was estimated using a discounted cash flow methodology, while the fair value for our convertible debt was estimated based upon quoted market prices or recent sales activity, both of which are considered Level 2 inputs.
Equity Method Investment. As of March 31, 2020, we held an 8% noncontrolling interest in a payment technology and services company with a carrying value of $6.6 million.
9
3. LONG-LIVED ASSETS
Goodwill. The changes in the carrying amount of goodwill for the first quarter of 2020 were as follows (in thousands):
|
|
|
|
|
January 1, 2020 balance
|
|
$
|
259,164
|
|
Tekzenit, Inc. acquisition
|
|
|
9,154
|
|
Effects of changes in foreign currency exchange rates
|
|
|
(5,485
|
)
|
March 31, 2020 balance
|
|
$
|
262,833
|
|
See Note 5 for discussion regarding the Tekzenit, Inc. acquisition.
Other Intangible Assets. Our other intangible assets subject to ongoing amortization consist primarily of acquired client contracts and software. As of March 31, 2020 and December 31, 2019, the carrying values of these assets were as follows (in thousands):
|
|
March 31, 2020
|
|
|
December 31, 2019
|
|
|
|
Gross
|
|
|
|
|
|
|
|
|
|
|
Gross
|
|
|
|
|
|
|
|
|
|
|
|
Carrying
|
|
|
Accumulated
|
|
|
Net
|
|
|
Carrying
|
|
|
Accumulated
|
|
|
Net
|
|
|
|
Amount
|
|
|
Amortization
|
|
|
Amount
|
|
|
Amount
|
|
|
Amortization
|
|
|
Amount
|
|
Acquired client contracts
|
|
$
|
149,195
|
|
|
$
|
(93,866
|
)
|
|
$
|
55,329
|
|
|
$
|
148,872
|
|
|
$
|
(93,767
|
)
|
|
$
|
55,105
|
|
Software
|
|
|
159,307
|
|
|
|
(128,662
|
)
|
|
|
30,645
|
|
|
|
157,963
|
|
|
|
(125,437
|
)
|
|
|
32,526
|
|
Total other intangible assets
|
|
$
|
308,502
|
|
|
$
|
(222,528
|
)
|
|
$
|
85,974
|
|
|
$
|
306,835
|
|
|
$
|
(219,204
|
)
|
|
$
|
87,631
|
|
The total amortization expense related to other intangible assets for the first quarters of 2020 and 2019 were $6.3 million and $5.6 million, respectively. Based on the March 31, 2020 net carrying value of our other intangible assets, the estimated total amortization expense for each of the five succeeding fiscal years ending December 31 are: 2020 – $23.2 million; 2021 – $16.0 million; 2022 – $13.2 million; 2023 – $9.6 million; and 2024 – $6.7 million.
Client Contract Costs. As of March 31, 2020 and December 31, 2019, the carrying values of our client contract cost assets, related to those contracts with a contractual term greater than one year, were as follows (in thousands):
|
|
March 31, 2020
|
|
|
December 31, 2019
|
|
|
|
Gross
|
|
|
|
|
|
|
|
|
|
|
Gross
|
|
|
|
|
|
|
|
|
|
|
|
Carrying
|
|
|
Accumulated
|
|
|
Net
|
|
|
Carrying
|
|
|
Accumulated
|
|
|
Net
|
|
|
|
Amount
|
|
|
Amortization
|
|
|
Amount
|
|
|
Amount
|
|
|
Amortization
|
|
|
Amount
|
|
Client contract costs
|
|
$
|
86,611
|
|
|
$
|
(34,644
|
)
|
|
$
|
51,967
|
|
|
$
|
82,272
|
|
|
$
|
(31,526
|
)
|
|
$
|
50,746
|
|
The total amortization expense related to client contract costs for the first quarters of 2020 and 2019 were $4.0 million and $6.0 million, respectively.
10
4. DEBT
Our long-term debt, as of March 31, 2020 and December 31, 2019, was as follows (in thousands):
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
2018 Credit Agreement:
|
|
|
|
|
|
|
|
|
Term loan, due March 2023, interest at adjusted LIBOR plus 1.5% (combined rate of 2.95% at March 31, 2020 and 3.44% at December 31, 2019)
|
|
$
|
135,000
|
|
|
$
|
136,875
|
|
|
Less – deferred financing costs
|
|
|
(1,574
|
)
|
|
|
(1,715
|
)
|
2018 term loan, net of unamortized discounts
|
|
|
133,426
|
|
|
|
135,160
|
|
$200 million revolving loan facility, due March 2023, interest at adjusted LIBOR plus applicable margin
|
|
—
|
|
|
—
|
|
Convertible Notes:
|
|
|
|
|
|
|
|
|
2016 Convertible Notes – Senior convertible notes; due March 15, 2036; cash interest at 4.25%
|
|
|
230,000
|
|
|
|
230,000
|
|
Less – unamortized original issue discount
|
|
|
(5,274
|
)
|
|
|
(6,004
|
)
|
Less – deferred financing costs
|
|
|
(2,049
|
)
|
|
|
(2,334
|
)
|
2016 Convertible Notes, net of unamortized discounts
|
|
|
222,677
|
|
|
|
221,662
|
|
Total debt, net of unamortized discounts
|
|
|
356,103
|
|
|
|
356,822
|
|
Current portion of long-term debt, net of unamortized discounts
|
|
|
(11,250
|
)
|
|
|
(10,313
|
)
|
Long-term debt, net of unamortized discounts
|
|
$
|
344,853
|
|
|
$
|
346,509
|
|
2018 Credit Agreement
During the quarter ended March 31, 2020, we made $1.9 million of principal repayments on our $150 million aggregate principal five-year term loan (the “2018 Term Loan”). As of March 31, 2020, our interest rate on the 2018 Term Loan is 2.95% (adjusted LIBOR plus 1.50% per annum), effective through June 2020, and our commitment fee on the unused $200 million aggregate principal five-year revolving loan facility (the “2018 Revolver”) is 0.20%. As of March 31, 2020, we had no borrowings outstanding on our 2018 Revolver and had the entire $200.0 million available to us.
The interest rates under the 2018 Credit Agreement are based upon our choice of an adjusted LIBOR rate plus an applicable margin of 1.50% – 2.50%, or an alternate base rate plus an applicable margin of 0.50% – 1.50%, with the applicable margin, depending on our then-net secured total leverage ratio. We will pay a commitment fee of 0.200% – 0.375% of the average daily unused amount of the 2018 Revolver, with the commitment fee rate also dependent upon our then-net secured total leverage ratio. If the LIBOR rate is no longer available, then our interest rate under the Credit Agreement will be determined by the alternate base rate plus an applicable margin as discussed above.
2016 Convertible Notes
Upon conversion of the 2016 Convertible Notes, we will settle our conversion obligation by paying or delivering, as the case may be, cash, shares of our common stock, or a combination thereof, at our election. It is our current intent and policy to settle our conversion obligations as follows: (i) pay cash for 100% of the par value of the 2016 Convertible Notes that are converted; and (ii) to the extent the value of our conversion obligation exceeds the par value, we can satisfy the remaining conversion obligation in cash, shares of our common stock, or a combination thereof, at our election.
The 2016 Convertible Notes will be convertible at the option of the note holders upon the satisfaction of specified conditions and during certain periods. During the period from, and including, December 15, 2021 to the close of business on the business day immediately preceding March 15, 2022 and on or after December 15, 2035, holders may convert all or any portion of their 2016 Convertible Notes at the conversion rate then in effect at any time regardless of these conditions.
As a result of our quarterly dividend in March 2020 (see Note 8), the previous conversion rate for the 2016 Convertible Notes of 17.5843 shares of our common stock per $1,000 principal amount of the 2016 Convertible Notes, which is equivalent to an initial conversion price of $56.87 per share of our common stock, has been adjusted to 17.6036 shares of our common stock per $1,000 principal amount of the 2016 Convertible Notes, which is equivalent to an initial conversion price of $56.81 per share of our common stock.
11
Holders may require us to repurchase the 2016 Convertible Notes for cash on each of March 15, 2022, March 15, 2026, and March 15, 2031, or upon the occurrence of a fundamental change (as defined in the 2016 Convertible Notes Indenture) in each case at a purchase price equal to the principal amount thereof plus accrued and unpaid interest.
We may redeem for cash all or part of the 2016 Convertible Notes if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. On or after March 15, 2022, we may redeem for cash all or part of the 2016 Convertible Notes regardless of the sales price condition described in the preceding sentence. In each case, the redemption price will equal the principal amount of the 2016 Convertible Notes to be redeemed, plus accrued and unpaid interest.
As of March 31, 2020, none of the conversion features have been achieved, and thus, the 2016 Convertible Notes are not convertible by the holders.
5. ACQUISITIONS
Tekzenit, Inc. On January 2, 2020, we acquired Tekzenit Inc. (“Tekzenit”) for a purchase price of approximately $10 million. This acquisition will allow us to accelerate our go-to-market approach serving clients who are focused on improving their customers’ experience while transforming their business. The purchase agreement includes provisions for additional purchase price (“Provisional Purchase Price”) payments in the form of earn-out and qualified sales payments for up to $10 million over a three-year measurement period upon meeting certain financial and sales criteria. Of the Provisional Purchase Price amount, $6 million is considered contingent purchase price payments, of which $1.5 million was accrued upon acquisition. The remaining $4 million is tied to certain financial and sales criteria over a defined service period by the eligible recipients, and is therefore accounted for as post-acquisition compensation. As of March 31, 2020, we have not accrued any amounts related to the post-acquisition compensation payments due to the uncertainty of payment.
The preliminary estimated fair values of assets acquired primarily include goodwill of $9.2 million and acquired client contracts of $2.9 million and liabilities assumed primarily include the contingent purchase price liabilities of $1.5 million. The estimated fair values are considered provisional and are based on the information that was available as of the date of the Tekzenit acquisition. Thus, the provisional measurements of fair value set forth above are subject to change. Such changes are not expected to be significant. We expect to finalize the valuation and complete the purchase price allocation as soon as practicable but not later than one year from the acquisition date.
Forte Payment Systems, Inc. In 2018, we acquired Forte Payment Systems, Inc. (“Forte”), a leading provider of advanced payment solutions headquartered in Allen, Texas. We acquired 100% of the equity of Forte for a purchase price of approximately $93 million, (approximately $85 million, excluding cash acquired). The purchase agreement also includes provisions for $18.8 million of potential future earn-out payments over a four-year measurement period. The earn-out payments are tied to performance-based goals and a defined service period by the eligible recipients, and are therefore accounted for as post-acquisition compensation. As of March 31, 2020, we have accrued $2.5 million related to the potential earn-out payments.
6. COMMITMENTS, GUARANTEES AND CONTINGENCIES
Warranties. We generally warrant that our solutions and related offerings will conform to published specifications, or to specifications provided in an individual client arrangement, as applicable. The typical warranty period is 90 days from the date of acceptance of the solution or offering. For certain service offerings we provide a warranty for the duration of the services provided. We generally warrant that services will be performed in a professional and workmanlike manner. The typical remedy for breach of warranty is to correct or replace any defective deliverable, and if not possible or practical, we will accept the return of the defective deliverable and refund the amount paid under the client arrangement that is allocable to the defective deliverable. Our contracts also generally contain limitation of damages provisions in an effort to reduce our exposure to monetary damages arising from breach of warranty claims. Historically, we have incurred minimal warranty costs, and as a result, do not maintain a warranty reserve.
Solution and Services Indemnifications. Our arrangements with our clients generally include an indemnification provision that will indemnify and defend a client in actions brought against the client that claim our products and/or services infringe upon a copyright, trade secret, or valid patent. Historically, we have not incurred any significant costs related to such indemnification claims, and as a result, do not maintain a reserve for such exposure.
12
Claims for Company Non-performance. Our arrangements with our clients typically cap our liability for breach to a specified amount of the direct damages incurred by the client resulting from the breach. From time-to-time, these arrangements may also include provisions for possible liquidated damages or other financial remedies for our non-performance, or in the case of certain of our outsourced customer care and billing solutions, provisions for damages related to service level performance requirements. The service level performance requirements typically relate to system availability and timeliness of service delivery. As of March 31, 2020, we believe we have adequate reserves, based on our historical experience, to cover any reasonably anticipated exposure as a result of our nonperformance for any past or current arrangements with our clients.
Indemnifications Related to Officers and the Board of Directors. We have agreed to indemnify members of our Board of Directors (the “Board”) and certain of our officers if they are named or threatened to be named as a party to any proceeding by reason of the fact that they acted in such capacity. We maintain directors’ and officers’ (D&O) insurance coverage to protect against such losses. We have not historically incurred any losses related to these types of indemnifications, and are not aware of any pending or threatened actions or claims against any officer or member of our Board. As a result, we have not recorded any liabilities related to such indemnifications as of March 31, 2020. In addition, as a result of the insurance policy coverage, we believe these indemnification agreements are not significant to our results of operations.
Legal Proceedings. From time-to-time, we are involved in litigation relating to claims arising out of our operations in the normal course of business.
7. EARNINGS PER COMMON SHARE
Basic and diluted earnings per common share (“EPS”) amounts are presented on the face of the accompanying Income Statements.
No reconciliation of the basic and diluted EPS numerators is necessary as net income is used as the numerators for all periods presented. The reconciliation of the basic and diluted EPS denominators related to the common shares is included in the following table (in thousands):
|
|
Quarter Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Basic weighted-average common shares
|
|
|
31,994
|
|
|
|
32,128
|
|
|
Dilutive effect of restricted common stock
|
|
|
364
|
|
|
|
174
|
|
|
Dilutive effect of Stock Warrants
|
|
|
-
|
|
|
|
136
|
|
|
Diluted weighted-average common shares
|
|
|
32,358
|
|
|
|
32,438
|
|
|
The Convertible Notes have a dilutive effect only in those quarterly periods in which our average stock price exceeds the current effective conversion price (see Note 4).
The stock warrants have a dilutive effect only in those quarterly periods in which our average stock price exceeds the exercise price of $26.68 per warrant (under the treasury stock method), and are not subject to performance vesting conditions (see Note 8).
Potentially dilutive common shares related to non-participating unvested restricted stock excluded from the computation of diluted EPS, as the effect was antidilutive, were not material in any period presented.
8. STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION PLANS
Stock Repurchase Program. We currently have a stock repurchase program, approved by our Board, authorizing us to repurchase our common stock from time-to-time as market and business conditions warrant (the “Stock Repurchase Program”). During the first quarters of 2020 and 2019 we repurchased approximately 142,000 shares of our common stock for $6.4 million (weighted-average price of $45.26 per share) and approximately 249,000 shares of our common stock for $9.3 million (weighted-average price of $37.37 per share), respectively, under a SEC Rule 10b5-1 Plan. In early April 2020, we suspended stock repurchases under the Stock Repurchase Program and terminated our existing SEC Rule 10b5-1 Plan.
As of March 31, 2020, the total remaining number of shares available for repurchase under the Stock Repurchase Program totaled 4.8 million shares.
13
Stock Repurchases for Tax Withholdings. In addition to the above-mentioned stock repurchases, during the first quarters of 2020 and 2019 we repurchased and then cancelled approximately 157,000 shares of common stock for $7.6 million and approximately 103,000 shares of common stock for $4.1 million, respectively, in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.
Cash Dividends. During the first quarter of 2020, the Board approved a quarterly cash dividend of $0.235 per share of common stock, totaling $7.7 million. During the first quarter of 2019, the Board approved a quarterly cash dividend of $0.2225 per share of common stock, totaling $7.4 million.
Warrants. In 2014, in conjunction with the execution of an amendment to our current agreement with Comcast Corporation (“Comcast”), we issued stock warrants (the “Warrant Agreement”) for the right to purchase up to 2.9 million shares of our common stock (the “Stock Warrants”) as an additional incentive for Comcast to convert customer accounts onto our Advanced Convergent Platform (“ACP”) based on various milestones. The Stock Warrants have a ten-year term and an exercise price of $26.68 per warrant.
As of March 31, 2020, 1.0 million Stock Warrants remain issued, none of which were vested. The remaining unvested Stock Warrants will be accounted for as a client contract cost asset once the performance conditions necessary for vesting are considered probable.
Stock-Based Awards. A summary of our unvested restricted common stock activity during the first quarter of 2020 is as follows (shares in thousands):
|
Quarter Ended
|
|
|
|
|
March 31, 2020
|
|
|
|
|
Shares
|
|
|
Weighted-
Average
Grant
Date Fair Value
|
|
|
|
Unvested awards, beginning
|
|
1,117
|
|
|
$
|
42.60
|
|
|
|
Awards granted
|
|
498
|
|
|
|
47.56
|
|
|
|
Awards forfeited/cancelled
|
|
(14
|
)
|
|
|
43.00
|
|
|
|
Awards vested
|
|
(448
|
)
|
|
|
43.23
|
|
|
|
Unvested awards, ending
|
|
1,153
|
|
|
$
|
44.55
|
|
|
|
Included in the awards granted during the first quarter of 2020 are performance-based awards for 0.1 million restricted common stock shares issued to members of executive management and certain key employees, which vest in the first quarter of 2022 upon meeting certain pre-established financial performance objectives over a two-year performance period. Certain performance-based awards become fully vested upon a change in control, as defined, the subsequent involuntary termination of employment, and death.
The other restricted common stock shares granted during the first quarter of 2020 are primarily time-based awards, which vest annually over four years with no restrictions other than the passage of time. Certain shares of the restricted common stock become fully vested upon a change in control, as defined, the subsequent involuntary termination of employment, and death.
We recorded stock-based compensation expense for the first quarters of 2020 and 2019 of $4.9 million and $3.7 million, respectively.
14