Blackhawk Network Holdings, Inc. Reports Unaudited Consolidated Financial Results for the Third Quarter and Nine Months Ended September 6, 2014; Provides Effective Tax Rate Guidance for the Fourth Quarter of 2014; Revises Earnings Guidance for the Full Year 2014
Oct 8 14
Blackhawk Network Holdings, Inc. reported unaudited consolidated financial results for the third quarter and nine months ended September 6, 2014. For the third quarter, the company reported total operating revenues of $269,027,000 compared to $205,996,000 for the same period a year ago. Operating income was $1,663,000 compared to $3,734,000 last year. Income before income tax expense was $765,000 compared to $3,793,000 last year. Net income attributable to the company $555,000 or $0.01 per diluted share compared to $2,355,000 or $0.04 per basic and diluted share last year. Adjusted operating revenues were $130,428,000 compared to $100,635,000 last year. EBITDA was $12,128,000 compared to $10,046,000 last year. Adjusted EBITDA was $14,714,000 compared to $11,477,000 last year. Adjusted income before income tax was $7,436,000 compared to $6,430,000 last year. Adjusted net income attributable available to common shareholders was $4,681,000 compared to $53,074,000 last year. Adjusted diluted earnings per share were $0.09 compared to $0.08 per share last year. This increase in revenue was due to a 28% increase in commissions and fees driven primarily by higher closed loop gift card sales, a 73% increase in program, interchange, marketing and other fees due to strong open loop gift card sales in the U.S., issuing bank contract amendments and the acquisition of InteliSpend, and a 4% increase in product sales. The decline in net income was driven primarily by intangibles asset amortization expense and interest expense related to the InteliSpend and Retailo acquisitions. Capital expenditures were $7.7 million up 24% from last year.
For the nine months, the company reported total operating revenues of $786,086,000 compared to $616,908,000 for the same period a year ago. Operating income was $6,391,000 compared to $9,413,000 last year. Income before income tax expense was $4,436,000 compared to $9,845,000 last year. Net income attributable to the company was $2,830,000 or $0.05 per basic and diluted share compared to $4,832,000 or $0.09 per basic and diluted share last year. Net cash used in operating activities was $63,409,000 compared to $537,589,000 last year. Expenditures for property, equipment and technology and intangible assets were $25,960,000 compared to $21,349,000 last year. Adjusted operating revenues were $385,963,000 compared to $297,412,000 last year. EBITDA was $38,544,000 compared to $26,376,000 last year. Adjusted EBITDA was $48,225,000 compared to $37,361,000 last year. Adjusted income before income tax was $28,319,000 compared to $23,114,000 last year. Adjusted net income attributable available to common shareholders was $17,619,000 compared to $14,391,000 last year. Adjusted diluted earnings per share were $0.33 compared to $0.28 per share last year. Net cash flow used in operating activities was $463,409,000 compared to $537,589,000 a year ago. Adjusted net cash from operating activities was $7,536,000 compared to $1,130,000 last year. Expenditures for property, equipment and technology amounted to $25,960,000 compared to $21,349,000 a year ago. CapEx was $26.0 million, up 22% from a year ago.
The company expects full year 2014 CapEx, excluding the Parago acquisition, in the range of $35 million to $37 million or around 5.3% of adjusted operating revenues, down from 5.6% in 2013. The company expects to finish the year within its previous guidance range for adjusted operating revenues of $670 million to $690 million. Now this guidance excludes the acquisitions of Parago and CardLab, which should add another $20 million to $25 million revenues, resulting in total revenues in the range of $690 million to $715 million. The expects adjusted net income to be high end of its
previously stated annual guidance range of $64 million to $67 million or $1.19 to $1.24 per diluted share. The company expects total 2014 earnings to be in the range of $1.54 to $1.59 per share. The company expects year 2014 tax rate on adjusted income before income taxes to be just under 39%.
The company expects fourth quarter 2014 tax rate to be just under 39%.