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NOTE 1: | ACCOUNTING PRINCIPLES AND PRACTICES |
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NOTE 2: | FAIR VALUE MEASUREMENT |
• | Level 1: Investments valued using quoted market prices in active markets for identical assets or liabilities |
• | Level 2: Investments valued using other observable market-based inputs or unobservable inputs that are corroborated by market data |
• | Level 3: Investments with no observable inputs and, therefore, are valued using significant management judgment |
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NOTE 3: | RESTRICTED CASH AND INVESTMENTS |
September 30, 2011 | December 31, 2010 | ||||||
Cash collateral held by insurance carriers | $ | 21.3 | $ | 108.7 | |||
Cash and cash equivalents held in Trust (1) | 28.3 | — | |||||
Investments held in Trust | 80.9 | — | |||||
Cash collateral backing letters of credit | 4.1 | 4.1 | |||||
Cash collateral backing surety bonds | — | 3.0 | |||||
Other | 1.9 | 4.3 | |||||
Total Restricted cash and investments | $ | 136.5 | $ | 120.1 |
September 30, 2011 | |||||||||||||||
Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Municipal securities | $ | 42.5 | $ | 0.7 | $ | (0.1 | ) | $ | 43.1 | ||||||
Corporate bonds | 17.1 | 0.1 | — | 17.2 | |||||||||||
Asset backed bonds | 14.3 | 0.1 | — | 14.4 | |||||||||||
State government and agency securities | 4.5 | — | — | 4.5 | |||||||||||
United States Treasury securities | 2.5 | — | — | 2.5 | |||||||||||
$ | 80.9 | $ | 0.9 | $ | (0.1 | ) | $ | 81.7 |
September 30, 2011 | |||||||
Amortized Cost | Fair Value | ||||||
Due in one year or less | $ | 13.5 | $ | 13.5 | |||
Due after one year through five years | 39.6 | 40.0 | |||||
Due after five years through ten years | 27.8 | 28.2 | |||||
$ | 80.9 | $ | 81.7 |
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NOTE 4: | PROPERTY AND EQUIPMENT, NET |
September 30, 2011 | December 31, 2010 | ||||||
Buildings and land | $ | 23.8 | $ | 23.5 | |||
Computers and software | 80.6 | 71.2 | |||||
Cash dispensing machines | 4.5 | 11.4 | |||||
Furniture and equipment | 8.6 | 8.6 | |||||
Construction in progress | 2.4 | 2.7 | |||||
119.9 | 117.4 | ||||||
Less accumulated depreciation and amortization | (65.2 | ) | (63.4 | ) | |||
$ | 54.7 | $ | 54.0 |
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NOTE 5: | GOODWILL AND INTANGIBLE ASSETS |
Carrying Amount | |||
Goodwill as of December 31, 2010 | $ | 36.9 | |
Acquisitions | 11.2 | ||
Goodwill as of September 30, 2011 | $ | 48.1 |
September 30, 2011 | December 31, 2010 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Amortizable intangible assets (1): | |||||||||||||||||||||||
Customer relationships | $ | 19.1 | $ | (7.7 | ) | $ | 11.4 | $ | 18.0 | $ | (6.2 | ) | $ | 11.8 | |||||||||
Trade name/trademarks | 3.3 | (1.2 | ) | 2.1 | 3.0 | (0.9 | ) | 2.1 | |||||||||||||||
Non-compete agreements | 2.5 | (1.6 | ) | 0.9 | 2.1 | (1.3 | ) | 0.8 | |||||||||||||||
$ | 24.9 | $ | (10.5 | ) | $ | 14.4 | $ | 23.1 | $ | (8.4 | ) | $ | 14.7 | ||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||
Trade name/trademarks | $ | 5.8 | $ | — | $ | 5.8 | $ | 5.8 | $ | — | $ | 5.8 |
Remainder of 2011 | $ | 0.8 | |
2012 | 3.1 | ||
2013 | 2.7 | ||
2014 | 2.6 | ||
2015 | 2.6 | ||
Thereafter | 2.6 | ||
$ | 14.4 |
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NOTE 6: | WORKERS’ COMPENSATION INSURANCE AND RESERVES |
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NOTE 7: | COMMITMENTS AND CONTINGENCIES |
Excess Liquidity: | Prime Rate Loans: | LIBOR Rate Loans: |
Greater than $40 million | 0.50% | 1.50% |
Equal to or greater than $20 million to equal to or less than $40 million | 0.75% | 1.75% |
Less than $20 million | 1.00% | 2.00% |
September 30, 2011 | December 31, 2010 | ||||||
Cash collateral held by insurance carriers | $ | 21.3 | $ | 108.7 | |||
Cash and cash equivalents held in Trust (1)(2) | 28.3 | — | |||||
Investments held in Trust (1) | 80.9 | — | |||||
Letters of credit (3) | 15.0 | 15.1 | |||||
Surety bonds (4) | 16.7 | 16.8 | |||||
Total collateral commitments | $ | 162.2 | $ | 140.6 |
(1) | During the first quarter of 2011, we entered into an agreement with Chartis and the Bank of New York Mellon creating a trust at the Bank of New York Mellon which holds the majority of our collateral obligations. |
(2) | Included in this amount is $0.8 million of accrued interest at September 30, 2011. |
(3) | We had $4.1 million of restricted cash collateralizing our letters of credit at both September 30, 2011 and December 31, 2010. |
(4) | We had $3.0 million of restricted cash collateralizing our surety bonds at December 31, 2010. During the second quarter of 2011, our obligation to collateralize these surety bonds was released. |
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NOTE 8: | STOCK-BASED COMPENSATION |
Thirteen weeks ended | Thirty-nine weeks ended | ||||||||||||||
September 30, 2011 | September 24, 2010 | September 30, 2011 | September 24, 2010 | ||||||||||||
Restricted stock and performance share units expense | $ | 1.3 | $ | 1.2 | $ | 5.1 | $ | 4.4 | |||||||
Stock option expense | 0.1 | 0.2 | 0.3 | 0.8 | |||||||||||
ESPP expense | 0.1 | 0.1 | 0.2 | 0.2 | |||||||||||
Total stock-based compensation | $ | 1.5 | $ | 1.5 | $ | 5.6 | $ | 5.4 |
Thirty-nine weeks ended | ||||||
September 30, 2011 | ||||||
Shares | Price (1) | |||||
Nonvested at beginning of period | 882 | $ | 13.14 | |||
Granted | 759 | $ | 14.76 | |||
Vested | (355 | ) | $ | 13.86 | ||
Forfeited | (17 | ) | $ | 12.90 | ||
Nonvested at the end of the period | 1,269 | $ | 13.92 |
(1) | Weighted average market price on grant-date. |
Thirty-nine weeks ended | ||||||
September 30, 2011 | ||||||
Shares | Price (1) | |||||
Outstanding, December 31, 2010 | 1,119 | $ | 15.62 | |||
Granted | — | $ | — | |||
Exercised | (8 | ) | $ | 13.20 | ||
Expired/Forfeited | — | $ | — | |||
Outstanding, September 30, 2011 | 1,111 | $ | 15.64 | |||
Exercisable, September 30, 2011 | 813 | $ | 18.03 | |||
Options expected to vest, September 30, 2011 | 298 | $ | 9.14 |
(1) | Weighted average exercise price. |
Thirty-nine weeks ended | |||||||
September 30, 2011 | September 24, 2010 | ||||||
Expected life (in years) | — | 3.36 | |||||
Expected volatility | — | % | 59.6 | % | |||
Risk-free interest rate | — | % | 1.3 | % | |||
Expected dividend yield | — | % | 0.0 | % | |||
Weighted average fair value of options granted during the period | $ | — | $ | 6.24 |
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NOTE 9: | STOCK REPURCHASES |
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NOTE 10: | INCOME TAXES |
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NOTE 11: | NET INCOME PER SHARE |
Thirteen weeks ended | Thirty-nine weeks ended | ||||||||||||||
September 30, 2011 | September 24, 2010 | September 30, 2011 | September 24, 2010 | ||||||||||||
Net income | $ | 13.9 | $ | 10.2 | $ | 23.2 | $ | 15.9 | |||||||
Weighted average number of common shares used in basic net income per common share | 41.6 | 43.3 | 42.8 | 43.2 | |||||||||||
Dilutive effect of outstanding stock options and non-vested restricted stock | 0.4 | 0.2 | 0.4 | 0.3 | |||||||||||
Weighted average number of common shares used in diluted net income per common share | 42.0 | 43.5 | 43.2 | 43.5 | |||||||||||
Net income per common share: | |||||||||||||||
Basic | $ | 0.33 | $ | 0.24 | $ | 0.54 | $ | 0.37 | |||||||
Diluted | $ | 0.33 | $ | 0.23 | $ | 0.54 | $ | 0.37 | |||||||
Antidilutive stock options and other | 1.1 | 1.1 | 0.7 | 1.0 |