Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Document Information [Line Items] | ||
Entity Registrant Name | Victory Capital Holdings, Inc. | |
Entity Central Index Key | 0001570827 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Ex Transition Period | false | |
Entity Interactive Data Current | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Title of 12(b) Security | Class A Common Stock, $0.01 Par Value | |
Trading Symbol | VCTR | |
Security Exchange Name | NASDAQ | |
Entity Tax Identification Number | 32-0402956 | |
Entity File Number | 001-38388 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 15935 La Cantera Parkway | |
Entity Address, City or Town | San Antonio | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78256 | |
City Area Code | 216 | |
Local Phone Number | 898-2400 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 16,588,474 | |
Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 51,307,072 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 37,130 | $ 37,121 |
Receivables | 77,610 | 95,093 |
Prepaid expenses | 6,709 | 4,852 |
Investments | 15,631 | 19,076 |
Property and equipment, net | 14,028 | 13,240 |
Goodwill | 404,750 | 404,750 |
Other intangible assets, net | 1,172,305 | 1,175,471 |
Other assets | 3,600 | 3,706 |
Total assets | 1,731,763 | 1,753,309 |
Liabilities and stockholders' equity | ||
Accounts payable and accrued expenses | 79,111 | 89,203 |
Accrued compensation and benefits | 33,544 | 54,842 |
Consideration payable for acquisition of business | 113,200 | 118,700 |
Deferred tax liability, net | 11,134 | 5,486 |
Other liabilities | 25,047 | 22,668 |
Long-term debt, net | 888,647 | 924,539 |
Total liabilities | 1,150,683 | 1,215,438 |
Stockholders' equity | ||
Additional paid-in capital | 632,468 | 624,766 |
Accumulated other comprehensive loss | (4,887) | |
Retained earnings (deficit) | 18,860 | (34,705) |
Total stockholders' equity | 581,080 | 537,871 |
Total liabilities and stockholders' equity | 1,731,763 | 1,753,309 |
Class A | ||
Stockholders' equity | ||
Common stock | 185 | 181 |
Treasury stock, at cost | (25,918) | (21,524) |
Class B | ||
Stockholders' equity | ||
Common stock | 545 | 539 |
Treasury stock, at cost | $ (40,173) | $ (31,386) |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Class A | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 18,508,087 | 18,099,772 |
Common stock, shares outstanding | 16,582,902 | 16,414,617 |
Treasury stock, shares | 1,925,185 | 1,685,155 |
Class B | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 54,537,895 | 53,937,394 |
Common stock, shares outstanding | 51,436,953 | 51,281,512 |
Treasury stock, shares | 3,100,942 | 2,655,882 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue | ||
Total revenue | $ 204,421 | $ 87,479 |
Expenses | ||
Personnel compensation and benefits | 47,571 | 34,501 |
Distribution and other asset-based expenses | 54,860 | 15,767 |
General and administrative | 11,888 | 7,087 |
Depreciation and amortization | 4,050 | 5,222 |
Change in value of consideration payable for acquisition of business | (5,500) | |
Acquisition-related costs | (69) | 2,777 |
Restructuring and integration costs | 998 | |
Total operating expenses | 113,798 | 65,354 |
Income from operations | 90,623 | 22,125 |
Other (expense) income | ||
Interest income and other (expense) income | (4,172) | 1,833 |
Interest expense and other financing costs | (11,408) | (4,624) |
Loss on debt extinguishment | (1,054) | |
Total other expense, net | (16,634) | (2,791) |
Income before income taxes | 73,989 | 19,334 |
Income tax expense | (16,823) | (4,807) |
Net income | $ 57,166 | $ 14,527 |
Earnings per share of common stock | ||
Basic | $ 0.84 | $ 0.22 |
Diluted | $ 0.77 | $ 0.20 |
Weighted average number of shares outstanding | ||
Basic | 67,790 | 67,521 |
Diluted | 74,350 | 72,282 |
Dividends declared per share of common stock | $ 0.05 | |
Investment Management Fees | ||
Revenue | ||
Total revenue | $ 146,881 | $ 74,411 |
Fund Administration and Distribution Fees | ||
Revenue | ||
Total revenue | $ 57,540 | $ 13,068 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 57,166 | $ 14,527 |
Other comprehensive (loss) income, net of tax | ||
Net unrealized loss on cash flow hedges | (4,820) | |
Net unrealized (loss) income on foreign currency translation | (67) | 12 |
Total other comprehensive (loss) income, net of tax | (4,887) | 12 |
Comprehensive income | $ 52,279 | $ 14,539 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common StockClass A | Common StockClass B | Treasury StockClass A | Treasury StockClass B | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained (Deficit) Earnings |
Balance at beginning of period at Dec. 31, 2018 | $ 455,548 | $ 153 | $ 553 | $ (8,045) | $ (21,719) | $ 604,401 | $ (86) | $ (119,709) |
Balance at beginning of period (in shares) at Dec. 31, 2018 | 15,281 | 55,284 | (856) | (2,147) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of common stock | 13 | 13 | ||||||
Share conversion - Class B to A | $ 4 | $ (4) | ||||||
Repurchase of shares | (1,344) | $ (1,344) | ||||||
Shares withheld related to net settlement of equity awards | (318) | $ (318) | ||||||
Exercise of options | 221 | 1 | 220 | |||||
Cumulative effect of adoption of ASU 2016-01 and 2018-02 | 62 | (62) | ||||||
Other comprehensive loss | 12 | 12 | ||||||
Share-based compensation | 1,547 | 1,547 | ||||||
Dividends paid | (41) | (41) | ||||||
Net income | 14,527 | 14,527 | ||||||
Balance at end of period at Mar. 31, 2019 | 470,165 | $ 157 | $ 550 | $ (9,389) | $ (22,037) | 606,181 | (12) | (105,285) |
Balance at end of period (in shares) at Mar. 31, 2019 | 15,663 | 55,014 | (979) | (2,176) | ||||
Balance at beginning of period at Dec. 31, 2019 | 537,871 | $ 181 | $ 539 | $ (21,524) | $ (31,386) | 624,766 | (34,705) | |
Balance at beginning of period (in shares) at Dec. 31, 2019 | 18,100 | 53,937 | (1,685) | (2,656) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of common stock | 26 | 26 | ||||||
Share conversion - Class B to A | $ 4 | $ (4) | ||||||
Repurchase of shares | (4,394) | $ (4,394) | ||||||
Shares withheld related to net settlement of equity awards | (8,787) | $ (8,787) | ||||||
Vesting of restricted share grants | 7 | (7) | ||||||
Exercise of options | 1,693 | 3 | 1,690 | |||||
Other comprehensive loss | (4,887) | (4,887) | ||||||
Share-based compensation | 5,993 | 5,993 | ||||||
Dividends paid | (3,601) | (3,601) | ||||||
Net income | 57,166 | 57,166 | ||||||
Balance at end of period at Mar. 31, 2020 | $ 581,080 | $ 185 | $ 545 | $ (25,918) | $ (40,173) | $ 632,468 | $ (4,887) | $ 18,860 |
Balance at end of period (in shares) at Mar. 31, 2020 | 18,508 | 54,538 | (1,925) | (3,101) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities | ||
Net income | $ 57,166 | $ 14,527 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for deferred income taxes | 7,182 | 1,360 |
Depreciation and amortization | 4,050 | 5,222 |
Deferred financing costs and derivative and accretion expense | 1,174 | 593 |
Stock-based and deferred compensation | 2,772 | 3,924 |
Change in fair value of contingent consideration obligations | (5,500) | |
Unrealized depreciation (appreciation) on investments | 4,971 | (1,458) |
Loss on equity method investment | 4 | |
Loss on debt extinguishment | 1,054 | |
Changes in operating assets and liabilities: | ||
Receivables | 16,439 | (327) |
Prepaid expenses | (1,857) | (1,181) |
Other assets | (18) | |
Accounts payable and accrued expenses | (11,760) | 5,685 |
Accrued compensation and benefits | (23,990) | (10,331) |
Other liabilities | 239 | (80) |
Net cash provided by operating activities | 51,922 | 17,938 |
Cash flows from investing activities | ||
Purchases of property and equipment | (708) | (484) |
Purchases of trading securities | (2,617) | (1,533) |
Sales of trading securities | 1,091 | 570 |
Net cash used in investing activities | (2,234) | (1,447) |
Cash flows from financing activities | ||
Repurchase of common stock | (6,020) | (1,643) |
Payments of taxes related to net share settlement of equity awards | (4,431) | (196) |
Repayment of long-term senior debt | (38,000) | |
Repayment of promissory note | (96) | |
Payment of dividends | (3,490) | (41) |
Receipt of consideration for acquisition | 649 | |
Net cash used in financing activities | (49,573) | (1,742) |
Effect of changes of foreign exchange rate on cash and cash equivalents | (106) | 21 |
Net increase in cash and cash equivalents | 9 | 14,770 |
Cash and cash equivalents, beginning of period | 37,121 | 51,491 |
Cash and cash equivalents, end of period | 37,130 | 66,261 |
Supplemental cash flow information | ||
Cash paid for interest | 20,112 | 3,801 |
Cash paid for income taxes | 1,345 | 343 |
Class A | ||
Cash flows from financing activities | ||
Issuance of common stock, net of costs | 26 | 13 |
Class B | ||
Cash flows from financing activities | ||
Issuance of common stock, net of costs | $ 1,693 | $ 221 |
Organization and Nature of Busi
Organization and Nature of Business | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Nature of Business | Note 1. ORGANIZATION AND NATURE OF BUSINESS Victory Capital Holdings, Inc., a Delaware corporation (along with its wholly-owned subsidiaries, collectively referred to as the “Company,” “Victory,” or in the first-person notations of “we,” “us,” and “our”) was formed on February 13, 2013 for the purpose of acquiring Victory Capital Management Inc. (“VCM”) and Victory Capital Advisers, Inc. (“VCA”), which occurred on August 1, 2013. On February 12, 2018, the Company completed the initial public offering (the “IPO”) of its Class A common stock, which trades on the NASDAQ under the symbol “VCTR.” On and effective July 1, 2019, the Company completed the acquisition (the “USAA AMCO Acquisition”) of USAA Adviser and VCTA, formerly known as the USAA Transfer Agency Company d/b/a USAA Shareholder Account Services. The USAA AMCO Acquisition includes USAA’s mutual fund and ETF businesses and its 529 College Savings Plan (collectively, the “USAA Mutual Fund Business”). Refer to Note 4, Acquisitions, for further details on the acquisition. VCM is a registered investment adviser managing assets through open-end mutual funds, separately managed accounts, unified management accounts, ETFs, collective trust funds, wrap separate account programs and Undertakings Collective Investment in Transferable Securities (“UCITs”). VCM also provides mutual fund administrative services for the Victory Portfolios, Victory Variable Insurance Funds, Victory Institutional Funds and the mutual fund series of the Victory Portfolios II (collectively, the “Victory Funds”), a family of open-end mutual funds, the VictoryShares (the Company’s ETF brand), as well as the USAA Mutual Fund Business, which includes the USAA Mutual Fund Trust, a family of open-end mutual funds (the “USAA Funds”). Additionally, VCM employs all of the Company’s United States investment professionals across its Franchises and Solutions, which are not separate legal entities. Effective on or about June 30, 2020, Victory Capital Advisers, Inc. is changing its name to Victory Capital Services, Inc. VCA is registered with the SEC as an introducing broker-dealer and serves as distributor and underwriter for the Victory Funds and USAA Funds. VCTA is registered with the SEC as a transfer agent for the USAA Funds. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | NOTE 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for complete annual financial statements. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, the consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial condition, results of operations, and cash flows for the interim periods presented. Operating results for the three month period ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. Principles of Consolidation The unaudited condensed consolidated financial statements include the operations of the Company and its wholly-owned subsidiaries, after elimination of all intercompany balances and transactions. Our involvement with non-consolidated variable interest entities (“VIEs”) include sponsored investment funds and, in 2019, an equity method investment. For further discussion regarding VIEs, refer to Note 2, Significant Accounting Policies, in our Annual Report on Form 10-K for the year ended December 31, 2019. Use of Estimates and Assumptions The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements and the notes. Actual results may ultimately differ materially from those estimates. On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. The global spread of COVID-19 has created significant volatility, uncertainty, and economic disruption. COVID-19 did not have a material adverse effect on our reported results for our first quarter. New Accounting Pronouncements Accounting Standards Adopted in 2020 • Derivatives and Hedging: Effective January 1, 2020, the Company early adopted Accounting Standards Update (“ASU”) 2017-12 (“ASU 2017-12”), Derivatives and Hedging (Topic 815) and ASU 2019-04, Codification Improvements to Topic 815, Derivatives and Hedging (“ASU 2019-04”). ASU 2017-12 improves and simplifies accounting rules for hedge accounting to better present the economic results of an entity’s risk management activities in its financial statements and improves the disclosures of hedging arrangements. Various provisions of ASU 2017-12 were subsequently clarified by the Financial Accounting Standards Board (“FASB”) in April 2019 through the issuance of ASU 2019-04. The Company did not have any existing hedging relationships at the time of adoption; therefore, the adoption of ASU 2017-12 and ASU 2019-04 had no impact on our consolidated financial statements. On March 27, 2020, the Company entered into an interest rate swap transaction (the “Swap”) to manage interest rate risk associated with a portion of its floating-rate long term debt (notional amount of $450 million). The Swap was designated as a cash flow hedge and the initial prospective quantitative hedge effectiveness assessment was deemed highly effective. Under ASU 2017-12, the Company has the option to perform subsequent assessments of hedge effectiveness qualitatively. The Company has elected to assess the Swap’s hedge effectiveness qualitatively and will verify and document on a quarterly basis that facts and circumstances have not changed. Recently Issued Accounting Standards • Subsequent Measurement of Goodwill: In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350) (“ASU 2017-04”) which simplifies the test for goodwill impairment. ASU 2017-04 eliminates the requirement to calculate the implied fair value of goodwill (step two) to measure a goodwill impairment charge. Goodwill impairment will be based upon the results of step one of the impairment test, which is defined as the excess of the carrying amount of a reporting unit over its fair value, not to exceed the carrying amount of goodwill allocated to that reporting unit. The effective date for calendar-year public business entities was January 1, 2020. Due to the Company’s status as an emerging growth company (“EGC”), the new guidance will be effective for the Company’s fiscal year that begins on January 1, 2021 and requires a prospective approach to adoption. Early adoption is permitted for interim or annual goodwill impairment tests. The impact of this new guidance will depend upon the performance of our one reporting unit and the market conditions impacting the fair value. • Leases: In February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842) (the “New Lease Standard”) which supersedes previous lease guidance, Accounting Standards Codification (“ASC”) Topic 840 (“ASC Topic 840”). The New Lease Standard requires lessees to recognize a right-of-use asset and a lease liability for all leases (with the exception of short-term leases) on their balance sheet at the commencement date and recognize expenses on their income statement similar to ASC Topic 840 guidance. In addition, the FASB issued ASU 2018-11, Leases Targeted Improvements, which provides a package of practical expedients for entities to apply upon adoption. The effective date for calendar-year public business entities was January 1, 2019. In November 2019, the FASB deferred the effective date of the New Lease Standard for private companies and other companies who had not yet been required to adopt the standard. Due to the Company’s EGC status, we will adopt the New Lease Standard on January 1, 2021. We have assessed and evaluated our portfolio of active real estate leases and are currently surveying our business for other leases. As outlined in our Annual Report on Form 10-K for the year ended December 31, 2019, we have approximately $23 million in undiscounted, future minimum cash commitments under net operating leases. The New Lease Standard is expected to result in a gross up on our Consolidated Balance Sheets and to have no material impact to our Consolidated Statements of Operations, our liquidity or our debt covenant compliance under our current credit agreement. • Expected Credit Losses: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 creates a new model for determining current expected credit losses (“CECL”) on trade and other receivables, net investments in leases, contract assets and long-term receivables. The CECL impairment model requires companies to consider the risk of loss even if it is remote and to include forecasts of future economic conditions as well as information about past events and current conditions. The effective date for calendar-year public business entities is January 1, 2020. As an EGC, the Company currently expects to adopt ASU 2016-13 on January 1, 2023. We are currently reviewing the effect of this new standard on our consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | NOTE 3. Revenue RECOGNITION In accordance with the new revenue recognition standard requirements, the following table disaggregates our revenue by type and product: Three Months Ended March 31, (in thousands) 2020 2019 Investment management fees Mutual funds (Victory/USAA Funds) $ 119,514 $ 50,576 ETFs (VictoryShares) 3,162 2,016 Separate accounts and other vehicles 24,545 22,050 Performance-based fees Separate accounts and other vehicles (340 ) (231 ) Total investment management fees $ 146,881 $ 74,411 Fund administration and distribution fees Administration fees Mutual funds (Victory/USAA Funds) $ 29,610 $ 5,245 ETFs (VictoryShares) 385 270 Distribution fees Mutual funds (Victory/USAA Funds) 6,796 7,553 Transfer agent fees Mutual funds (USAA Funds) 20,749 — Total fund administration and distribution fees $ 57,540 $ 13,068 Total revenue $ 204,421 $ 87,479 The following table presents balances of receivables: (in thousands) March 31, 2020 December 31, 2019 Customer receivables Mutual funds (Victory/USAA Funds) $ 54,464 $ 64,407 ETFs (VictoryShares) 1,155 1,391 Separate accounts and other vehicles 21,861 27,836 Receivables from contracts with customers 77,480 93,634 Non-customer receivables 130 1,459 Total receivables $ 77,610 $ 95,093 Revenue The Company’s revenue includes fees earned from providing; • investment management services, • fund administration services, • fund transfer agent services, and • fund distribution services. Revenue is recognized for each distinct performance obligation identified in customer contracts when the performance obligation has been satisfied by transferring services to a customer either over time or at the point in time when the customer obtains control of the service. Revenue is recognized in the amount of variable or fixed consideration allocated to the satisfied performance obligation that Victory expects to be entitled to in exchange for transferring services to a customer. Variable consideration is included in the transaction price only when it is probable that a significant reversal of such revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Investment management, fund administration and fund distribution fees are generally considered variable consideration as they are typically calculated as a percentage of AUM. Fund transfer agent fees are also considered variable consideration as they are calculated as a percentage of AUM or based on the number of accounts in the fund. In such cases, the amount of fees earned is subject to factors outside of the Company’s control including customer or underlying investor contributions and redemptions and financial market volatility. These fees are considered constrained and are excluded from the transaction price until the asset values or number of accounts on which the customer is billed are calculated and the value of consideration is measurable. The Company has contractual arrangements with third parties to provide certain advisory, administration, transfer agent and distribution services. Management considers whether we are acting as the principal service provider or as an agent to determine whether revenue should be recorded based on the gross amount payable by the customer or net of payments to third-party service providers, respectively. Victory is considered a principal service provider if we control the service that is transferred to the customer. We are considered an agent when we arrange for the service to be provided by another party and do not control the service. Investment Management Fees Investment management fees are received in exchange for investment management services that represent a series of distinct incremental days of investment management service. Control of investment management services is transferred to the customers over time as these customers receive and consume the benefits provided by these services. Investment management fees are calculated as a contractual percentage of AUM and are generally paid in arrears on a monthly or quarterly basis. Investment management fees are recognized as revenue using a time-based output method to measure progress. Revenue is recorded at month end or quarter end when the value of consideration is measured. The amount of investment management fee revenue varies from one reporting period to another as levels of AUM change (from inflows, outflows and market movements) and as the number of days in the reporting period change. The Company may waive certain fees for investment management services provided to the Victory Funds, USAA Funds and VictoryShares and may subsidize certain share classes of the Victory Funds, USAA Funds and VictoryShares to ensure that specified operating expenses attributable to such share classes do not exceed a specified percentage. These waivers and reimbursements reduce the transaction price allocated to investment management services and are recognized as a reduction to investment management fees revenue. The amounts due to the Victory Funds, USAA Funds and VictoryShares for waivers and expense reimbursements represent consideration payable to customers, which is recorded in accounts payable and accrued expenses in the unaudited Condensed Consolidated Balance Sheets, and no distinct services are received in exchange for these payments. Performance‑based investment management fees, which include fees under performance fee and fulcrum fee arrangements, are included in the transaction price for providing investment management services. Performance-based investment management fees are calculated as a percentage of investment performance on a client’s account versus a specified benchmark or hurdle based on the terms of the contract with the customer. Performance-based investment management fees are variable consideration and are recognized as revenue when it is probable that a significant reversal of the cumulative revenue for the contractual performance period will not occur. Performance-based investment management fees recognized as revenue in the current period may pertain to performance obligations satisfied in prior periods. Fund Administration Fees The Company recognizes fund administration fees as revenue using a time-based output method to measure progress. Fund administration fees are determined based on the contractual rate applied to average daily net assets of the Victory Funds, USAA Funds and VictoryShares for which administration services are provided. Revenue is recorded on a monthly basis when the value of consideration is measured using actual average daily net assets and constraints are removed. The Company has contractual arrangements with a third party to provide certain sub-administration services. We are the primary obligor under the contracts with the Victory Funds, USAA Funds and VictoryShares and have the ability to select the service provider and establish pricing. As a result, fund administration fees and sub-administration expenses are recorded on a gross basis. Fund Transfer Agent Fees The Company recognizes fund transfer agent fees using a time-based output method to measure progress. Fund transfer agent fees are determined based on the contractual rate applied to either the average daily net assets of the USAA Funds for which transfer agent services are provided or number of accounts in the USAA Funds. Revenue is recorded on a monthly basis when the value of consideration is measured using actual average daily net assets or actual number of accounts and constraints are removed. The Company has contractual arrangements with a third party to provide certain sub-transfer agent services. We are the primary obligor under the transfer agency contracts with the USAA Funds and have the ability to select the service provider and establish pricing. As a result, fund transfer agent fees and sub-transfer agent expenses are recorded on a gross basis. Fund Distribution Fees The Company receives compensation for sales and sales-related services promised under distribution contracts with the Victory Funds and USAA Funds. Revenue is measured in an amount that reflects the consideration to which the Company expects to be entitled in exchange for providing distribution services. Distribution fees are generally calculated as a percentage of average net assets in the Victory Funds and USAA Funds. The Company’s performance obligation is satisfied at the point in time when control of the services is transferred to customers, which is upon investor subscription or redemption. Based on the nature of the calculation, the revenue for these services is accounted for as variable consideration, the Company may recognize distribution fee revenue in the current period that pertains to performance obligations satisfied in prior periods, as it represents variable consideration and is recognized as uncertainties are resolved. The Company’s distribution fee revenue is recorded in fund administration and distribution fees in the unaudited Condensed Consolidated Statements of Operations. The Company has contractual arrangements with third parties to provide certain distribution services. The Company is the primary obligor under the contracts with the Victory Funds and USAA Funds and has the ability to select the service provider and establish pricing. Substantially all of the Company’s revenue is recorded gross of payments made to third parties. Costs Incurred to Obtain or Fulfill Customer Contracts The Company is required to capitalize certain costs directly related to the acquisition or fulfillment of a contract with a customer. Victory has not identified any sales-based compensation or similar costs that meet the definition of an incremental cost to acquire a contract and as such we have no intangible assets related to contract acquisitions. Direct costs incurred to fulfill services under the Company’s distribution contracts include sales commissions paid to third party dealers for the sale of Class C Shares. The Company may pay upfront sales commissions to dealers and institutions that sell Class C shares of the participating Victory Funds at the time of such sale. Upfront sales commission payments with respect to Class C shares equal 1.00% of the purchase price of the Class C shares sold by the dealer or institution. When the Company makes an upfront payment to a dealer or institution for the sale of Class C shares, the Company capitalizes the cost of such payment, which is recorded in Prepaid expenses in the unaudited Condensed Consolidated Balance Sheets and amortizes the cost over a 12-month period, the estimated period of benefit. Valuation of Assets Under Management The fair value of assets under management of the Victory Funds, USAA Funds and VictoryShares is primarily determined using quoted market prices or independent third-party pricing services or broker price quotes. In limited circumstances, a quotation or price evaluation is not readily available from a pricing service. In these cases, pricing is determined by management based on a prescribed valuation process that has been approved by the directors/trustees of the sponsored products. The same prescribed valuation process is used to price securities in separate accounts and other vehicles for which a quotation or price evaluation is not readily available from a pricing service. For the periods presented, a de minimis amount of the AUM was priced in this manner. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 4. ACQUISITIONS USAA AMCO Acquisition On and effective July 1, 2019, the Company completed the USAA AMCO Acquisition, acquiring 100% of the outstanding common stock of the USAA Acquired Companies and the USAA Mutual Fund Business. The USAA AMCO Acquisition expands and diversifies the Company’s investment platform, particularly in the fixed income and solutions asset classes, and increases the Company’s size and scale. Additional products added to the Company’s investment platforms include target date and target risk strategies, managed volatility mutual funds, active fixed income ETFs, sub-advised and multi-manager equity funds. The acquisition also added to the Company’s lineup of asset allocation portfolios and smart beta equity ETFs and provided the Company the rights to offer products and services using the USAA brand and the opportunity to offer its products to USAA members through a direct member channel. Purchase Price During the first quarter of 2020, the Company received a post-closing purchase price adjustment of $0.7 million in cash from the sellers related to net working capital adjustments. We continue to evaluate the acquisition and purchase price accounting. Total consideration paid through March 31, 2020 for the USAA AMCO Acquisition was $949.4 million, comprised of $851.3 million of cash paid at closing plus the acquisition date value of contingent payments due to sellers of $98.8 million less $0.7 million in net working capital adjustments settled in the first quarter of 2020. A maximum of $150.0 million ($37.5 million per year) in contingent payments is payable to sellers based on the annual revenue of USAA Adviser attributable to all “non-managed money”-related AUM in each of the first four years following the closing. To receive any contingent payment in respect of “non-managed money”-related assets for a given year, annual revenue from “non-managed money”-related assets must be at least 80% of the revenue run-rate (as calculated under the Stock Purchase Agreement) of the USAA Adviser’s “non-managed money”-related assets under management as of the closing date, and to achieve the maximum contingent payment for a given year, such annual revenue must total at least 100% of that closing date revenue run-rate. Annual contingent payments in respect of “non-managed money”-related assets are subject to certain “catch-up” provisions set forth in the USAA Stock Purchase Agreement. The Company accounted for the acquisition in accordance with ASC 805, Business Combinations. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of the USAA AMCO Acquisition. We used an independent valuation specialist to assist with the determination of fair value for certain of the acquired assets and assumed liabilities disclosed below. The excess purchase price over the estimated fair values of assets acquired and liabilities assumed of $120.6 million was recorded to goodwill in the unaudited Condensed Consolidated Balance Sheets, all of which is expected to be deductible for tax purposes. The goodwill arising from the acquisition primarily results from expected future earnings and cash flows, as well as the synergies created by the integration of the USAA Acquired Companies within our organization. The following table summarizes the estimated amounts of identified acquired assets and liabilities assumed as of the acquisition date: (in thousands) Cash and cash equivalents $ 17,473 Investment management fees receivable 25,353 Fund administration and distribution fees receivable 4,779 Other receivables and prepaid expenses 299 Property and equipment 1,165 Other intangible assets (1) 808,670 Goodwill 120,643 Accounts payable and accrued expenses (5,575 ) Accrued compensation and benefits (5,907 ) Payable to members and custodians (17,473 ) Contingent consideration payable to sellers (98,800 ) Total purchase price consideration $ 850,627 (1) The following table summarizes the change in the goodwill balance from December 31, 2019 to March 31, 2020: (in thousands) As of March 31, 2020 Balance, beginning of period $ 404,750 Goodwill recorded in acquisition — Balance, end of period $ 404,750 Contingent Consideration The fair value of contingent consideration payable to sellers at March 31, 2020 was estimated to be $113.2 million as compared to $118.7 million at December 31, 2019. The decrease in the liability of $5.5 million in the first quarter of 2020 was recorded in change in value of consideration payable for acquisition of business in the unaudited Condensed Consolidated Statements of Operations. The fair value of the USAA AMCO Acquisition contingent consideration payable was estimated using the real options method. Revenue related to “non-managed money” assets was simulated in a risk-neutral framework to calculate expected probability-weighted earn out payments, which were then discounted from the expected payment dates at the relevant cost of debt. Significant assumptions and inputs include the “non-managed money” revenue projected annual growth rate, the market price of risk, which adjusts the projected revenue growth rate to a risk-neutral expected growth rate, revenue volatility and discount rate. As of March 31, 2020, the projected annual growth rate for “non-managed money” revenue was approximately 5%. The market price of risk and revenue volatility of approximately 8% and 18%, respectively, were based on data for comparable companies. As the contingent consideration represents a subordinate, unsecured claim of the Company, we have assessed a discount rate of approximately 7.5%, which incorporates adjustments for credit risk and the subordination of the contingent consideration. Total estimated undiscounted earn out payments ranged from $130 million to $150 million, the maximum amount payable to sellers. Actual and Pro Forma Results for USAA Acquired Companies Revenue of the USAA Acquired Companies for the three months ended March 31, 2019, was as follows: Unaudited Three Months Ended (in millions) March 31, 2019 Revenue $ 117.4 Net income attributable to the USAA Acquired Companies for the three months ended March 31, 2019 is impractical to determine as the Company does not prepare discrete financial information at that level. The following Unaudited Pro Forma Condensed Combined Statements of Operations are provided for illustrative purposes only and assume that the acquisition occurred on January 1, 2018. This unaudited information should not be relied upon as indicative of historical results that would have been obtained if the acquisition had occurred on that date, nor of the results that may be obtained in the future. The historical consolidated financial information of Victory and the USAA Acquired Companies have been adjusted to give effect to unaudited pro forma events that are directly attributable to the transaction, factually supportable and expected to have continuing impact on the combined results. These amounts have been calculated after adjusting the results of the USAA Acquired Companies to reflect additional interest expense, distribution costs, share-based compensation expense, income taxes and intangible asset amortization that would have been expensed assuming the fair value adjustments had been applied on January 1, 2018. In addition, Victory’s and the USAA Acquired Companies’ results were adjusted to remove incentive compensation, legal fees and mutual fund proxy costs directly attributable to the acquisition. Unaudited Three Months Ended (in thousands, except per share amount) March 31, 2019 Revenue $ 205.0 Net income $ 13.2 Earnings per share of common stock Basic $ 0.20 Diluted $ 0.18 Weighted average number of shares outstanding Basic 67,599 Diluted 72,376 Acquisition-Related Costs Costs related to acquisitions are summarized below and include legal and filing fees, advisory services, mutual fund proxy voting costs and other one-time expenses related to the transactions. These costs are included in acquisition-related costs in the unaudited Condensed Consolidated Statements of Operations. Acquisition-related costs Three Months Ended March 31, (in thousands) 2020 2019 USAA AMCO Acquisition $ (124 ) $ 2,586 Other 55 191 Total acquisition-related costs $ (69 ) $ 2,777 Restructuring and Integration Costs In connection with business combinations, asset purchases and changes in business strategy, the Company incurs costs integrating investment platforms, products and personnel into existing systems, processes and service provider arrangements and restructuring the business to capture operating expense synergies. The following table presents the rollforward of restructuring and integration liabilities, which are recorded in accounts payable and accrued expenses in the unaudited Condensed Consolidated Balance Sheets, for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, (in millions) 2020 2019 Liability balance, beginning of period $ 3.0 $ 0.1 Integration costs-USAA AMCO 1.0 — Total restructuring and integration costs 1.0 — Settlement of liabilities (1.5 ) — Liability balance, end of period $ 2.5 $ 0.1 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 5. Fair Value Measurements The Company determines the fair value of certain financial and nonfinancial assets and liabilities. Fair value is determined based on the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value determinations utilize a valuation hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the fair value hierarchy contains three levels: • Level 1—Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets. • Level 2—Valuation inputs are quoted prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets and other observable inputs directly or indirectly related to the asset or liability being measured. • Level 3—Valuation inputs are unobservable and significant to the fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability. The table below shows liabilities measured at fair value on a recurring basis. As of March 31, 2020 (in thousands) Total Level 1 Level 2 Level 3 Financial Liabilities Interest Rate Swap Liability $ (6,300 ) $ - $ (6,300 ) $ - Contingent Consideration Arrangements (113,200 ) - - (113,200 ) Total Financial Liabilities $ (119,500 ) $ - $ (6,300 ) $ (113,200 ) As of December 31, 2019 (in thousands) Total Level 1 Level 2 Level 3 Financial Liabilities Contingent Consideration Arrangements $ (118,700 ) $ - $ - $ (118,700 ) Total Financial Liabilities $ (118,700 ) $ - $ - $ (118,700 ) The Swap liability represents amounts owed as of March 31, 2020 under a The contingent consideration arrangement liabilities represent the USAA AMCO Acquisition estimated earn-out payment liability, which is included in consideration payable for acquisition of business in the unaudited Condensed Consolidated Balance Sheets. Refer to Note 4, Acquisitions, for further details related to the contingent consideration arrangement. Significant unobservable inputs for the option pricing model used to determine the estimated fair value of the USAA AMCO Acquisition earn-out payment liability include the “non-managed money” revenue projected growth rate, revenue volatility, market price of risk and discount rate. An increase in market price of risk, discount rate and revenue volatility results in a lower fair value for the earn-out payment liability, while an increase in the projected growth rate for “non-managed money” revenue results in a higher fair value for the earn-out payment liability. Refer to Note 4, Acquisitions, for further details related to the valuation of contingent consideration payable related to the USAA AMCO Acquisition. Changes in the fair value of the liability, realized or unrealized, are recorded in earnings and are included in change in value of consideration payable for acquisition of business in the unaudited Condensed Consolidated Statements of Operations. The following table presents the balance of the contingent consideration arrangement liabilities at December 31, 2019 and March 31, 2020, respectively. (in thousands) Contingent Consideration Liabilities Balance, December 31, 2019 $ (118,700 ) USAA AMCO change in fair value measurement 5,500 Balance, March 31, 2020 $ (113,200 ) There were no transfers between any of the Level 1, 2 and 3 categories in the fair value measurement hierarchy from December 31, 2019 to March 31, 2020. The Company recognizes transfers at the end of the reporting period. The net carrying value of accounts receivable and accounts payable approximates fair value due to the short‑term nature of these assets and liabilities. The fair value of our long-term debt at March 31, 2020 is considered to be its carrying value as the interest rate on the bank debt is variable and approximates current market rates. As a result, Level 2 inputs are utilized to determine the fair value of our long‑term debt. The fair value of the Company’s money market investment ($10.1 million within cash and cash equivalents), available-for-sale investments and trading securities are measured using Level 1 inputs, which are the market prices for shares in these open-end mutual funds . |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | NOTE 6. Related-Party Transactions The Company considers certain funds that it manages, including the Victory Funds, the USAA Funds, the VictoryShares and collective trust funds that it sponsors (the “Victory Collective Funds”), to be related parties as a result of our advisory relationship. The Company receives investment management, administrative, distribution and compliance fees in accordance with contracts that VCM and VCA have with the Victory Funds and the USAA Funds and has invested a portion of its balance sheet cash in the USAA Treasury Money Market Fund and earns interest on the amount invested in this fund. We also receive investment management fees from the VictoryShares and Victory Collective Funds under VCM’s advisory contracts with these funds and administrative fees from the VictoryShares. In addition, we receive transfer agent fees in accordance with a contract that VCTA has with the USAA Funds. The table below presents balances and transactions involving related parties included in the unaudited Condensed Consolidated Balance Sheets and unaudited Condensed Consolidated Statements of Operations. • Included in cash and cash equivalents is cash held in the USAA Treasury Money Market Fund. • Included in receivables (fund administration and distribution fees) are amounts due from the Victory Funds and USAA Funds for compliance services and amounts due from the USAA Funds for transfer agent services. • Included in revenue (fund administration and distribution fees) are amounts earned for compliance services and transfer agent services. • Realized and unrealized gains and losses and dividend income on investments in the Victory Funds classified as available-for-sale securities and investments in the Victory Funds and USAA Funds classified as trading securities and dividend income on investments in the USAA Treasury Money Market Fund are recorded in interest income and other income (expense) in the unaudited Condensed Consolidated Statements of Operations. • Amounts due to the Victory Funds, USAA Funds and VictoryShares for waivers of investment management fees and reimbursements of fund operating expenses are included in accounts payable and accrued expenses in the unaudited Condensed Consolidated Balance Sheets and represent consideration payable to customers. (in thousands) March 31, 2020 December 31, 2019 Related party assets Cash and cash equivalents $ 10,085 $ 10,060 Receivables (investment management fees) 39,722 47,872 Receivables (fund administration and distribution fees) 17,315 19,313 Investments (available-for-sale securities, fair value) 582 771 Investments (trading securities, fair value) 14,679 17,914 Total $ 82,383 $ 95,930 Related party liabilities Accounts payable and accrued expenses (fund reimbursements) $ 4,587 $ 4,316 Three Months Ended March 31, (in thousands) 2020 2019 Related party revenue Investment management fees $ 124,312 $ 53,793 Fund administration and distribution fees 57,540 13,067 Total $ 181,852 $ 66,860 Related party other (expense) income Interest income and other (expense) income $ (4,798 ) $ 1,361 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2020 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | NOTE 7. Investments As of March 31, 2020 and December 31, 2019, the Company held both available-for-sale securities and trading securities. Available-for-sale investments consist entirely of seed capital investments in certain Victory Funds. Trading securities are held under a deferred compensation plan and include Victory Funds, USAA Funds and third party mutual funds. Available‑For‑Sale Securities A summary of the cost and fair value of investments classified as available-for-sale were as follows: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of March 31, 2020 $ 696 $ 4 $ (118 ) $ 582 As of December 31, 2019 696 85 (10 ) 771 Unrealized and realized gains and losses on available‑for‑sale investments are recognized in the unaudited Condensed Consolidated Statements of Operations as interest income and other income (expense). There were no sales of available-for-sale investments in the three months ended March 31, 2020 and 2019. Trading Securities A summary of the cost and fair value of investments classified as trading securities were as follows: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of March 31, 2020 $ 20,170 $ 38 $ (5,159 ) $ 15,049 As of December 31, 2019 18,670 733 (1,098 ) 18,305 Unrealized and realized gains and losses on trading securities are recorded in i nterest income and other income (expense) in the unaudited Condensed Consolidated Statements of Operations. Proceeds from sales and realized gains and losses from trading securities in the periods ended March 31 , 20 20 and 201 9 were as follows: Sale Realized (in thousands) Proceeds Gains (Losses) For the three months ended March 31, 2020 $ 1,091 $ 20 $ (46 ) For the three months ended March 31, 2019 570 2 (20 ) |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8. Income Taxes The effective tax rate for the three months ended March 31, 2020 and 2019 differs from the United States federal statutory rate primarily as a result of state and local income taxes, excess tax benefits on share-based compensation, certain non-deductible expenses and for 2020, expense related to increasing the liability for unrecorded state tax benefits. For the three months ended March 31, 2020 and 2019, the provision for income taxes was $16.8 million and $4.8 million, or 22.7% and 24.9%, of pre-tax income respectively. No valuation allowance was recorded for deferred tax assets in the period ended March 31, 2020 and 2019. During the three months ended March 31, 2020, the Company recorded a liability for $0.3 million ($0.2 million net of federal benefit) for unrecognized tax benefits. The gross unrecognized tax benefits and interest and penalties of $2.2 million and $2.9 million at March 31, 2020 and December 31, 2019, respectively, are included in other liabilities in the unaudited Condensed Consolidated Balance Sheets. The Company expects that the amount of unrecognized tax benefits will change in the next 12 months; however, this change is not expected to have a material impact on the consolidated financial statements. The following table presents the changes in gross unrecognized tax benefits, excluding interest and penalties, for the three months ending March 31, 2020 and 2019. (in thousands) 2020 2019 Beginning balance $ 2,582 $ — Additions based on tax positions related to current period 280 — Reductions related to settlement of tax matters (908 ) — Ending balance $ 1,954 $ — |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 9. Debt 2020 Debt Repricing Concurrent with the USAA AMCO Acquisition on July 1, 2019, the Company (i) entered into the 2019 Credit Agreement, (ii) repaid all indebtedness outstanding under the previous credit agreement (dated February 2018), and (iii) terminated the previous credit agreement. On January 17, 2020, we entered into the First Amendment (the “First Amendment”) to the 2019 Credit Agreement The following table summarizes the components of l ong-term debt under the 2019 Credit Agreement in the unaudited Condensed Consolidated Balance Sheets at March 31 , 20 20 and December 31, 201 9 : (in thousands) March 31, 2020 December 31, 2019 Term loan principal outstanding $ 914,000 $ 952,000 Unamortized debt issuance costs (15,907 ) (17,230 ) Unamortized debt discount (9,446 ) (10,231 ) Long-term debt, net $ 888,647 $ 924,539 The 2019 Credit Agreement contains customary affirmative and negative covenants, including covenants that affect, among other things, the ability of the first lien leverage ratio, measured as of the last day of each fiscal quarter on which outstanding borrowings under the revolving credit facility exceed 35.0% of the commitments thereunder (excluding certain letters of credit), of no greater than 3.80 to 1.00. As of March 31, 2020, there were no outstanding borrowings under the revolving credit facility and we were in compliance with our financial performance covenant. A total of $38.0 million of the outstanding term loans under the 2019 Credit Agreement was repaid in the first quarter of 2020. Refer to Note 15, Subsequent Events, for information related to term loan activity subsequent to March 31, 2020. 2020 Swap Transaction On March 27, 2020, the Company executed the Swap, a floating-to-fixed interest rate swap transaction, to effectively fix the interest rate at 3.465% on $450 million of its outstanding term loan through the term loan maturity date of July 2026. Refer to Note 14, Derivatives, for further information on the Swap. Interest Expense As of March 31, 2020, the term loans under the 2019 Credit Agreement had an interest period of one month and an interest rate of 4.02%. Including the impact of amortization of debt issuance costs and original issue discount described herein, the effective yield for term loans under the 2019 Credit Agreement as of March 31, 2020 was 4.45%. The following table summarizes the components of interest expense and other financing costs in the unaudited Condensed Consolidated Statements of Operations for the periods ended March 31, 2020 and 2019: For the Three Months Ended March 31, (in thousands) 2020 2019 Interest expense $ 10,056 $ 3,880 Amortization of debt issuance costs 781 364 Amortization of debt discount 392 146 Other 179 234 Total $ 11,408 $ 4,624 |
Equity
Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Equity | NOTE 10. Equity Shares Rollforward The following tables present the changes in the number of shares of common stock issued and repurchased (in thousands): Shares of Common Stock Issued Shares of Treasury Stock Class A Class B Class A Class B Balance, December 31, 2019 18,100 53,937 (1,685 ) (2,656 ) Issuance of shares 2 — — — Share conversion - Class B to A 406 (406 ) — — Repurchase of shares — — (240 ) — Vesting of restricted share grants — 719 — — Exercise of options — 288 — — Shares withheld related to net settlement of equity awards — — — (445 ) Balance, March 31, 2020 18,508 54,538 (1,925 ) (3,101 ) Shares of Common Stock Issued Shares of Treasury Stock Class A Class B Class A Class B Balance, December 31, 2018 15,281 55,284 (856 ) (2,147 ) Issuance of shares — — — — Share conversion - Class B to A 382 (382 ) — — Repurchase of shares — — (123 ) — Vesting of restricted share grants — 40 — — Exercise of options — 72 — — Shares withheld related to net settlement of equity awards — — — (29 ) Balance, March 31, 2019 15,663 55,014 (979 ) (2,176 ) Share Repurchase Program The share repurchase program authorized in 2018 for $15.0 million of the Company’s Class A common stock was completed in September 2019. In August 2019, the Company’s Board of Directors authorized the Company to repurchase up to an additional $15.0 million of the Company’s Class A common stock in the open market or in privately negotiated transactions (“2019 Share Repurchase Program”). The amount and timing of the purchases under the 2019 Share Repurchase Program will depend on a number of factors including the price and availability of the Company’s shares, trading volume, capital availability, Company performance and general economic and market conditions. The 2019 Share Repurchase Program can be suspended or discontinued at any time. As of March 31, 2020, a total of 1,925,185 shares of Class A common stock had been repurchased under the initial share repurchase program and the 2019 Share Repurchase Program at a total cost of $25.9 million for an average price of $13.46 per share. As of March 31, 2020, $4.1 million was available for future repurchases. The 2019 Share Repurchase Program expires on December 31, 2020. Quarterly Dividends Dividends paid during the three months ended March 31, 2020 included $3.4 million for the March 2020 quarterly dividend and $0.1 million in cash bonuses and distributions related to dividends previously declared upon vesting of restricted stock and stock option awards. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | NOTE 11. Share‑Based Compensation Current Period Activity During the three months ended March 31, 2020, the Company issued restricted stock awards for 276,981 shares of common stock, of which awards for 3,238 shares were fully vested on the grant date and awards for 273,743 shares vest based on service over a three year period. Stock option award and restricted stock award activity during the three months ended March 31, 2020 and 2019 was as follows: Shares Subject to Stock Option Awards Three Months Ended March 31, 2020 2019 Avg wtd Avg wtd Avg wtd Avg wtd grant-date exercise grant-date exercise fair value price Units fair value price Units Outstanding at beginning of period $ 3.83 $ 6.27 7,880,167 $ 3.79 $ 6.12 9,070,052 Forfeited 6.32 13.80 1,708 6.52 14.27 (25,160 ) Exercised 3.74 5.89 (287,565 ) 2.80 3.08 (71,652 ) Outstanding at end of the period $ 3.84 $ 6.28 7,594,310 $ 3.79 $ 6.12 8,973,240 Vested $ 3.67 $ 5.75 6,659,406 $ 3.41 $ 4.95 6,752,579 Unvested 5.04 10.05 934,904 4.94 9.69 2,220,661 Restricted Stock Awards Three Months Ended March 31, 2020 2019 Avg wtd grant- Avg wtd grant- date fair value Units date fair value Units Unvested at beginning of period $ 14.29 3,215,619 $ 13.17 2,997,856 Granted 16.62 276,981 14.97 518,385 Vested 14.14 (719,531 ) 13.15 (39,636 ) Forfeited 16.07 (2,390 ) 14.02 (367,998 ) Unvested at end of period $ 14.62 2,770,679 $ 13.37 3,108,607 Dividend Payments At March 31, 2020 and December 31, 2019, the amount of cash bonuses and distributions related to dividends previously declared on unvested and outstanding restricted share awards and stock options totaled $1.2 million and $1.3 million, respectively, which was not recorded as a liability as of the balance sheet date. A liability will be recorded for these cash bonuses and dividends when the restricted shares and options vest. Share-Based Compensation Expense The Company recorded $6.0 million and $1.5 million of share-based compensation expense in the three months ended March 31, 2020 and 2019, respectively, in personnel compensation and benefits in the unaudited Condensed Consolidated Statements of Operations. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 12. Earnings Per Share The following table sets forth the reconciliation of basic earnings per share and diluted earnings per share from net income for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, (in thousands except per share amounts) 2020 2019 Net income $ 57,166 $ 14,527 Shares: Basic 67,790 67,521 Plus 6,560 4,761 Diluted 74,350 72,282 Earnings per share Basic: $ 0.84 $ 0.22 Diluted: $ 0.77 $ 0.20 Outstanding instruments excluded from the computation of weighted average shares for diluted earnings per share because the effect would be anti-dilutive totaled 31 thousand and 1.4 million for the three months ended March 31, 2020 and 2019, respectively. Holders of non-vested share-based compensation awards do not have rights to receive nonforfeitable dividends on the shares covered by the awards. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2020 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | NOTE 13. Accumulated Other Comprehensive Loss The following table presents changes in accumulated other comprehensive loss by component for the three months ended March 31, 2020 and 2019. Available-for- Cumulative Sale Cash Flow Translation (in thousands) Securities Hedges Adjustment Total Balance, December 31, 2019 $ — $ — $ — $ — Other comprehensive loss before reclassification and tax — (6,318 ) (88 ) (6,406 ) Tax impact — 1,498 21 1,519 Net current period other comprehensive loss — (4,820 ) (67 ) (4,887 ) Balance, March 31, 2020 $ — $ (4,820 ) $ (67 ) $ (4,887 ) Balance, December 31, 2018 $ (59 ) $ — $ (27 ) $ (86 ) Other comprehensive income before reclassification and tax — — 16 16 Tax impact — — (4 ) (4 ) Net current period other comprehensive income — — 12 12 Cumulative effect of adoption of ASU 2016-01 and 2018-02 59 — 3 62 Balance, March 31, 2019 $ — $ — $ (12 ) $ (12 ) |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives | NOTE 14. DERIVATIVES Interest Rate Swaps On March 27, 2020, the Company entered into the Swap to manage interest rate risk associated with a portion of its floating-rate long-term debt. The Swap has a notional amount of $450 million. The Company will pay interest at a fixed rate of interest of 3.465% and receive interest that varies with the three-month LIBOR rate. The designation of a derivative instrument as a hedge and its ability to meet the hedge accounting criteria determine how the Company reflects the change in fair value of the derivative instrument. A derivative qualifies for hedge accounting treatment if, at inception, it meets defined correlation and effectiveness criteria. These criteria require that the anticipated cash flows and/or changes in fair value of the hedging instrument substantially offset those of the position being hedged. The Swap is designated as a cash flow hedge. Accordingly, the Swap is measured at fair value with mark-to-market gains or losses deferred and included in accumulated other comprehensive income (loss), net of tax, to the extent the hedge is determined to be effective. Gains or losses from the Swap will be reclassified to interest expense in the same period during which the hedged transaction affects earnings. At March 31, 2020, the fair value of the interest rate swap was $6.3 million, which was included in other liabilities on the unaudited Condensed Consolidated Balance Sheets. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 15. SUBSEQUENT EVENTS Subsequent to March 31, 2020, the Company established a trading account to purchase its outstanding term loans in the open market and has bought back $31 million of outstanding term loans for a total debt reduction of $217 million since July 1, 2019. On May 11, 2020, our Board of Directors declared a quarterly cash dividend of $0.05 per share on Victory common stock. The dividend is payable on June 25, 2020, to stockholders of record on June 10, 2020. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for complete annual financial statements. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, the consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial condition, results of operations, and cash flows for the interim periods presented. Operating results for the three month period ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the operations of the Company and its wholly-owned subsidiaries, after elimination of all intercompany balances and transactions. Our involvement with non-consolidated variable interest entities (“VIEs”) include sponsored investment funds and, in 2019, an equity method investment. For further discussion regarding VIEs, refer to Note 2, Significant Accounting Policies, in our Annual Report on Form 10-K for the year ended December 31, 2019. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements and the notes. Actual results may ultimately differ materially from those estimates. On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. The global spread of COVID-19 has created significant volatility, uncertainty, and economic disruption. COVID-19 did not have a material adverse effect on our reported results for our first quarter. |
New Accounting Pronouncements | New Accounting Pronouncements Accounting Standards Adopted in 2020 • Derivatives and Hedging: Effective January 1, 2020, the Company early adopted Accounting Standards Update (“ASU”) 2017-12 (“ASU 2017-12”), Derivatives and Hedging (Topic 815) and ASU 2019-04, Codification Improvements to Topic 815, Derivatives and Hedging (“ASU 2019-04”). ASU 2017-12 improves and simplifies accounting rules for hedge accounting to better present the economic results of an entity’s risk management activities in its financial statements and improves the disclosures of hedging arrangements. Various provisions of ASU 2017-12 were subsequently clarified by the Financial Accounting Standards Board (“FASB”) in April 2019 through the issuance of ASU 2019-04. The Company did not have any existing hedging relationships at the time of adoption; therefore, the adoption of ASU 2017-12 and ASU 2019-04 had no impact on our consolidated financial statements. On March 27, 2020, the Company entered into an interest rate swap transaction (the “Swap”) to manage interest rate risk associated with a portion of its floating-rate long term debt (notional amount of $450 million). The Swap was designated as a cash flow hedge and the initial prospective quantitative hedge effectiveness assessment was deemed highly effective. Under ASU 2017-12, the Company has the option to perform subsequent assessments of hedge effectiveness qualitatively. The Company has elected to assess the Swap’s hedge effectiveness qualitatively and will verify and document on a quarterly basis that facts and circumstances have not changed. Recently Issued Accounting Standards • Subsequent Measurement of Goodwill: In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350) (“ASU 2017-04”) which simplifies the test for goodwill impairment. ASU 2017-04 eliminates the requirement to calculate the implied fair value of goodwill (step two) to measure a goodwill impairment charge. Goodwill impairment will be based upon the results of step one of the impairment test, which is defined as the excess of the carrying amount of a reporting unit over its fair value, not to exceed the carrying amount of goodwill allocated to that reporting unit. The effective date for calendar-year public business entities was January 1, 2020. Due to the Company’s status as an emerging growth company (“EGC”), the new guidance will be effective for the Company’s fiscal year that begins on January 1, 2021 and requires a prospective approach to adoption. Early adoption is permitted for interim or annual goodwill impairment tests. The impact of this new guidance will depend upon the performance of our one reporting unit and the market conditions impacting the fair value. • Leases: In February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842) (the “New Lease Standard”) which supersedes previous lease guidance, Accounting Standards Codification (“ASC”) Topic 840 (“ASC Topic 840”). The New Lease Standard requires lessees to recognize a right-of-use asset and a lease liability for all leases (with the exception of short-term leases) on their balance sheet at the commencement date and recognize expenses on their income statement similar to ASC Topic 840 guidance. In addition, the FASB issued ASU 2018-11, Leases Targeted Improvements, which provides a package of practical expedients for entities to apply upon adoption. The effective date for calendar-year public business entities was January 1, 2019. In November 2019, the FASB deferred the effective date of the New Lease Standard for private companies and other companies who had not yet been required to adopt the standard. Due to the Company’s EGC status, we will adopt the New Lease Standard on January 1, 2021. We have assessed and evaluated our portfolio of active real estate leases and are currently surveying our business for other leases. As outlined in our Annual Report on Form 10-K for the year ended December 31, 2019, we have approximately $23 million in undiscounted, future minimum cash commitments under net operating leases. The New Lease Standard is expected to result in a gross up on our Consolidated Balance Sheets and to have no material impact to our Consolidated Statements of Operations, our liquidity or our debt covenant compliance under our current credit agreement. • Expected Credit Losses: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 creates a new model for determining current expected credit losses (“CECL”) on trade and other receivables, net investments in leases, contract assets and long-term receivables. The CECL impairment model requires companies to consider the risk of loss even if it is remote and to include forecasts of future economic conditions as well as information about past events and current conditions. The effective date for calendar-year public business entities is January 1, 2020. As an EGC, the Company currently expects to adopt ASU 2016-13 on January 1, 2023. We are currently reviewing the effect of this new standard on our consolidated financial statements. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Type and Product | In accordance with the new revenue recognition standard requirements, the following table disaggregates our revenue by type and product: Three Months Ended March 31, (in thousands) 2020 2019 Investment management fees Mutual funds (Victory/USAA Funds) $ 119,514 $ 50,576 ETFs (VictoryShares) 3,162 2,016 Separate accounts and other vehicles 24,545 22,050 Performance-based fees Separate accounts and other vehicles (340 ) (231 ) Total investment management fees $ 146,881 $ 74,411 Fund administration and distribution fees Administration fees Mutual funds (Victory/USAA Funds) $ 29,610 $ 5,245 ETFs (VictoryShares) 385 270 Distribution fees Mutual funds (Victory/USAA Funds) 6,796 7,553 Transfer agent fees Mutual funds (USAA Funds) 20,749 — Total fund administration and distribution fees $ 57,540 $ 13,068 Total revenue $ 204,421 $ 87,479 |
Schedule of Balances of Receivables from Contracts with Customers | The following table presents balances of receivables: (in thousands) March 31, 2020 December 31, 2019 Customer receivables Mutual funds (Victory/USAA Funds) $ 54,464 $ 64,407 ETFs (VictoryShares) 1,155 1,391 Separate accounts and other vehicles 21,861 27,836 Receivables from contracts with customers 77,480 93,634 Non-customer receivables 130 1,459 Total receivables $ 77,610 $ 95,093 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Acquisitions | |
Schedule Of Goodwill | The following table summarizes the change in the goodwill balance from December 31, 2019 to March 31, 2020: (in thousands) As of March 31, 2020 Balance, beginning of period $ 404,750 Goodwill recorded in acquisition — Balance, end of period $ 404,750 |
Summary of Revenue from Acquisition | Revenue of the USAA Acquired Companies for the three months ended March 31, 2019, was as follows: Unaudited Three Months Ended (in millions) March 31, 2019 Revenue $ 117.4 |
Summary of Unaudited Pro Forma Information | Unaudited Three Months Ended (in thousands, except per share amount) March 31, 2019 Revenue $ 205.0 Net income $ 13.2 Earnings per share of common stock Basic $ 0.20 Diluted $ 0.18 Weighted average number of shares outstanding Basic 67,599 Diluted 72,376 |
Summary of Business Acquisition Related Cost | Acquisition-related costs Three Months Ended March 31, (in thousands) 2020 2019 USAA AMCO Acquisition $ (124 ) $ 2,586 Other 55 191 Total acquisition-related costs $ (69 ) $ 2,777 |
Summary of Rollforward of Restructuring and Integration Liabilities | The following table presents the rollforward of restructuring and integration liabilities, which are recorded in accounts payable and accrued expenses in the unaudited Condensed Consolidated Balance Sheets, for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, (in millions) 2020 2019 Liability balance, beginning of period $ 3.0 $ 0.1 Integration costs-USAA AMCO 1.0 — Total restructuring and integration costs 1.0 — Settlement of liabilities (1.5 ) — Liability balance, end of period $ 2.5 $ 0.1 |
USAA AMCO | |
Acquisitions | |
Summary of Allocation of Purchase Price | The following table summarizes the estimated amounts of identified acquired assets and liabilities assumed as of the acquisition date: (in thousands) Cash and cash equivalents $ 17,473 Investment management fees receivable 25,353 Fund administration and distribution fees receivable 4,779 Other receivables and prepaid expenses 299 Property and equipment 1,165 Other intangible assets (1) 808,670 Goodwill 120,643 Accounts payable and accrued expenses (5,575 ) Accrued compensation and benefits (5,907 ) Payable to members and custodians (17,473 ) Contingent consideration payable to sellers (98,800 ) Total purchase price consideration $ 850,627 (1) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Measured at Fair Value on Recurring Basis | The table below shows liabilities measured at fair value on a recurring basis. As of March 31, 2020 (in thousands) Total Level 1 Level 2 Level 3 Financial Liabilities Interest Rate Swap Liability $ (6,300 ) $ - $ (6,300 ) $ - Contingent Consideration Arrangements (113,200 ) - - (113,200 ) Total Financial Liabilities $ (119,500 ) $ - $ (6,300 ) $ (113,200 ) As of December 31, 2019 (in thousands) Total Level 1 Level 2 Level 3 Financial Liabilities Contingent Consideration Arrangements $ (118,700 ) $ - $ - $ (118,700 ) Total Financial Liabilities $ (118,700 ) $ - $ - $ (118,700 ) |
Summary of Contingent Consideration | The following table presents the balance of the contingent consideration arrangement liabilities at December 31, 2019 and March 31, 2020, respectively. (in thousands) Contingent Consideration Liabilities Balance, December 31, 2019 $ (118,700 ) USAA AMCO change in fair value measurement 5,500 Balance, March 31, 2020 $ (113,200 ) |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Summary of Related-Party Transactions | (in thousands) March 31, 2020 December 31, 2019 Related party assets Cash and cash equivalents $ 10,085 $ 10,060 Receivables (investment management fees) 39,722 47,872 Receivables (fund administration and distribution fees) 17,315 19,313 Investments (available-for-sale securities, fair value) 582 771 Investments (trading securities, fair value) 14,679 17,914 Total $ 82,383 $ 95,930 Related party liabilities Accounts payable and accrued expenses (fund reimbursements) $ 4,587 $ 4,316 Three Months Ended March 31, (in thousands) 2020 2019 Related party revenue Investment management fees $ 124,312 $ 53,793 Fund administration and distribution fees 57,540 13,067 Total $ 181,852 $ 66,860 Related party other (expense) income Interest income and other (expense) income $ (4,798 ) $ 1,361 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Available For Sale Securities | |
Gain (Loss) on Securities [Line Items] | |
Summary of Cost and Fair Value of Investments | A summary of the cost and fair value of investments classified as available-for-sale were as follows: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of March 31, 2020 $ 696 $ 4 $ (118 ) $ 582 As of December 31, 2019 696 85 (10 ) 771 |
Trading Securities | |
Gain (Loss) on Securities [Line Items] | |
Summary of Cost and Fair Value of Investments | A summary of the cost and fair value of investments classified as trading securities were as follows: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of March 31, 2020 $ 20,170 $ 38 $ (5,159 ) $ 15,049 As of December 31, 2019 18,670 733 (1,098 ) 18,305 |
Summary of Proceeds and Realized Gains and Losses | Proceeds from sales and realized gains and losses from trading securities in the periods ended March 31 , 20 20 and 201 9 were as follows: Sale Realized (in thousands) Proceeds Gains (Losses) For the three months ended March 31, 2020 $ 1,091 $ 20 $ (46 ) For the three months ended March 31, 2019 570 2 (20 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Changes in Gross Unrecognized Tax Benefits Excluding Interest And Penalties | The following table presents the changes in gross unrecognized tax benefits, excluding interest and penalties, for the three months ending March 31, 2020 and 2019. (in thousands) 2020 2019 Beginning balance $ 2,582 $ — Additions based on tax positions related to current period 280 — Reductions related to settlement of tax matters (908 ) — Ending balance $ 1,954 $ — |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Long-Term Debt | (in thousands) March 31, 2020 December 31, 2019 Term loan principal outstanding $ 914,000 $ 952,000 Unamortized debt issuance costs (15,907 ) (17,230 ) Unamortized debt discount (9,446 ) (10,231 ) Long-term debt, net $ 888,647 $ 924,539 |
Schedule of Components of Interest Expense and Other Financing Costs | For the Three Months Ended March 31, (in thousands) 2020 2019 Interest expense $ 10,056 $ 3,880 Amortization of debt issuance costs 781 364 Amortization of debt discount 392 146 Other 179 234 Total $ 11,408 $ 4,624 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Changes in Number of Shares of Common Stock Issued and Repurchased | The following tables present the changes in the number of shares of common stock issued and repurchased (in thousands): Shares of Common Stock Issued Shares of Treasury Stock Class A Class B Class A Class B Balance, December 31, 2019 18,100 53,937 (1,685 ) (2,656 ) Issuance of shares 2 — — — Share conversion - Class B to A 406 (406 ) — — Repurchase of shares — — (240 ) — Vesting of restricted share grants — 719 — — Exercise of options — 288 — — Shares withheld related to net settlement of equity awards — — — (445 ) Balance, March 31, 2020 18,508 54,538 (1,925 ) (3,101 ) Shares of Common Stock Issued Shares of Treasury Stock Class A Class B Class A Class B Balance, December 31, 2018 15,281 55,284 (856 ) (2,147 ) Issuance of shares — — — — Share conversion - Class B to A 382 (382 ) — — Repurchase of shares — — (123 ) — Vesting of restricted share grants — 40 — — Exercise of options — 72 — — Shares withheld related to net settlement of equity awards — — — (29 ) Balance, March 31, 2019 15,663 55,014 (979 ) (2,176 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Activity Related to Stock Options Awards, Restricted Stock Awards | Stock option award and restricted stock award activity during the three months ended March 31, 2020 and 2019 was as follows: Shares Subject to Stock Option Awards Three Months Ended March 31, 2020 2019 Avg wtd Avg wtd Avg wtd Avg wtd grant-date exercise grant-date exercise fair value price Units fair value price Units Outstanding at beginning of period $ 3.83 $ 6.27 7,880,167 $ 3.79 $ 6.12 9,070,052 Forfeited 6.32 13.80 1,708 6.52 14.27 (25,160 ) Exercised 3.74 5.89 (287,565 ) 2.80 3.08 (71,652 ) Outstanding at end of the period $ 3.84 $ 6.28 7,594,310 $ 3.79 $ 6.12 8,973,240 Vested $ 3.67 $ 5.75 6,659,406 $ 3.41 $ 4.95 6,752,579 Unvested 5.04 10.05 934,904 4.94 9.69 2,220,661 Restricted Stock Awards Three Months Ended March 31, 2020 2019 Avg wtd grant- Avg wtd grant- date fair value Units date fair value Units Unvested at beginning of period $ 14.29 3,215,619 $ 13.17 2,997,856 Granted 16.62 276,981 14.97 518,385 Vested 14.14 (719,531 ) 13.15 (39,636 ) Forfeited 16.07 (2,390 ) 14.02 (367,998 ) Unvested at end of period $ 14.62 2,770,679 $ 13.37 3,108,607 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Reconciliation of Basic Earnings Per Share and Diluted Earnings Per Share | The following table sets forth the reconciliation of basic earnings per share and diluted earnings per share from net income for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, (in thousands except per share amounts) 2020 2019 Net income $ 57,166 $ 14,527 Shares: Basic 67,790 67,521 Plus 6,560 4,761 Diluted 74,350 72,282 Earnings per share Basic: $ 0.84 $ 0.22 Diluted: $ 0.77 $ 0.20 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income/(Loss) by Component | The following table presents changes in accumulated other comprehensive loss by component for the three months ended March 31, 2020 and 2019. Available-for- Cumulative Sale Cash Flow Translation (in thousands) Securities Hedges Adjustment Total Balance, December 31, 2019 $ — $ — $ — $ — Other comprehensive loss before reclassification and tax — (6,318 ) (88 ) (6,406 ) Tax impact — 1,498 21 1,519 Net current period other comprehensive loss — (4,820 ) (67 ) (4,887 ) Balance, March 31, 2020 $ — $ (4,820 ) $ (67 ) $ (4,887 ) Balance, December 31, 2018 $ (59 ) $ — $ (27 ) $ (86 ) Other comprehensive income before reclassification and tax — — 16 16 Tax impact — — (4 ) (4 ) Net current period other comprehensive income — — 12 12 Cumulative effect of adoption of ASU 2016-01 and 2018-02 59 — 3 62 Balance, March 31, 2019 $ — $ — $ (12 ) $ (12 ) |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies - Additional Information (Details) - USD ($) | Mar. 27, 2020 | Dec. 31, 2019 |
Significant Accounting Policies [Line Items] | ||
Future minimum cash commitments under operating leases | $ 23,000,000 | |
Interest Rate Swap | ||
Significant Accounting Policies [Line Items] | ||
Notional amount | $ 450,000,000 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue by Type and Product (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of revenue | ||
Total revenue | $ 204,421 | $ 87,479 |
Investment Management Fees | ||
Disaggregation of revenue | ||
Total revenue | 146,881 | 74,411 |
Investment Management Fees | Mutual Funds | ||
Disaggregation of revenue | ||
Total revenue | 119,514 | 50,576 |
Investment Management Fees | ETF's | ||
Disaggregation of revenue | ||
Total revenue | 3,162 | 2,016 |
Investment Management Fees | Separate Accounts and Other Vehicles | ||
Disaggregation of revenue | ||
Total revenue | 24,545 | 22,050 |
Performance-based Investment Fees | Separate Accounts and Other Vehicles | ||
Disaggregation of revenue | ||
Total revenue | (340) | (231) |
Administration Fees | Mutual Funds | ||
Disaggregation of revenue | ||
Total revenue | 29,610 | 5,245 |
Administration Fees | ETF's | ||
Disaggregation of revenue | ||
Total revenue | 385 | 270 |
Fund Distribution Fees | Mutual Funds | ||
Disaggregation of revenue | ||
Total revenue | 6,796 | 7,553 |
Transfer Agent Fees | Mutual Funds | ||
Disaggregation of revenue | ||
Total revenue | 20,749 | |
Fund Administration and Distribution Fees | ||
Disaggregation of revenue | ||
Total revenue | $ 57,540 | $ 13,068 |
Revenue - Schedule of Balances
Revenue - Schedule of Balances of Receivables from Contracts with Customers (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Disaggregation of revenue | ||
Receivables from contracts with customers | $ 77,480 | $ 93,634 |
Non-customer receivables | 130 | 1,459 |
Total receivables | 77,610 | 95,093 |
Mutual Funds | ||
Disaggregation of revenue | ||
Receivables from contracts with customers | 54,464 | 64,407 |
ETF's | ||
Disaggregation of revenue | ||
Receivables from contracts with customers | 1,155 | 1,391 |
Separate Accounts and Other Vehicles | ||
Disaggregation of revenue | ||
Receivables from contracts with customers | $ 21,861 | $ 27,836 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Class C | |
Disaggregation of revenue | |
Upfront sales commission percentage | 1.00% |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) | Jul. 01, 2019 | Mar. 31, 2020 | Dec. 31, 2019 |
Acquisitions | |||
Contingent consideration liability | $ 113,200,000 | $ 118,700,000 | |
Goodwill | 404,750,000 | $ 404,750,000 | |
Decrease in contingent consideration liability | $ 5,500,000 | ||
Percentage of projected annual growth rate for non managed money revenue | 5.00% | ||
Percentage of market price risk | 8.00% | ||
Percentage of revenue volatility | 18.00% | ||
Discount rate | 7.50% | ||
Minimum | |||
Acquisitions | |||
Estimated undiscounted earn out payments | $ 130,000,000 | ||
Maximum | |||
Acquisitions | |||
Estimated undiscounted earn out payments | 150,000,000 | ||
USAA AMCO | |||
Acquisitions | |||
Percentage of outstanding common stock acquired | 100.00% | ||
Working capital adjustment | $ 700,000 | 700,000 | |
Total consideration | 949,400,000 | ||
Payments to acquire business | 851,300,000 | ||
Contingent consideration liability | 98,800,000 | ||
Maximum aggregate contingent payment | 150,000,000 | ||
Maximum annual contingent payment | $ 37,500,000 | ||
Period of time over which contingent payments will be made | 4 years | ||
Contingent consideration threshold percentage | 80.00% | ||
Annual revenue percentage requirement to achieve the maximum contingent payment | 100.00% | ||
Goodwill | $ 120,643,000 | 120,600,000 | |
Decrease in contingent consideration liability | $ (5,500,000) |
Acquisitions - Summary of Alloc
Acquisitions - Summary of Allocation of Purchase Price (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Jul. 01, 2019 |
Acquisitions | |||
Goodwill | $ 404,750 | $ 404,750 | |
Contingent consideration payable to sellers | (113,200) | $ (118,700) | |
USAA AMCO | |||
Acquisitions | |||
Cash and cash equivalents | $ 17,473 | ||
Investment management fees receivable | 25,353 | ||
Fund administration and distribution fees receivable | 4,779 | ||
Other receivables and prepaid expenses | 299 | ||
Property and equipment | 1,165 | ||
Other intangible assets | 808,670 | ||
Goodwill | $ 120,600 | 120,643 | |
Accounts payable and accrued expenses | (5,575) | ||
Accrued compensation and benefits | (5,907) | ||
Payable to members and custodians | (17,473) | ||
Contingent consideration payable to sellers | (98,800) | ||
Total purchase price consideration | $ 850,627 |
Acquisitions - Summary of All_2
Acquisitions - Summary of Allocation of Purchase Price (Parenthetical) (Details) - USAA AMCO $ in Thousands | Jul. 01, 2019USD ($) |
Acquisitions | |
Other intangible assets, net | $ 808,670 |
Trade Name | |
Acquisitions | |
Other intangible assets, net | 38,200 |
Lease-Related Assets | |
Acquisitions | |
Other intangible assets, net | 400 |
Investment Advisory Contracts | |
Acquisitions | |
Other intangible assets, net | 750,200 |
Transfer Agent Contracts | |
Acquisitions | |
Other intangible assets, net | 19,100 |
Distribution Contracts | |
Acquisitions | |
Other intangible assets, net | $ 800 |
Acquisitions - Summary of Chang
Acquisitions - Summary of Change in Goodwill Balance (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Changes in the goodwill balance | |
Balance, beginning of period | $ 404,750 |
Balance, end of period | $ 404,750 |
Acquisitions - Summary of Reven
Acquisitions - Summary of Revenue from Acquisition (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Acquisitions | |
Revenue | $ 205,000 |
USAA AMCO | |
Acquisitions | |
Revenue | $ 117,400,000 |
Acquisitions - Summary of Unaud
Acquisitions - Summary of Unaudited Pro Forma Information (Details) $ / shares in Units, shares in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Business Combinations [Abstract] | |
Revenue | $ | $ 205,000 |
Net income | $ | $ 13,200 |
Basic | $ / shares | $ 0.20 |
Diluted | $ / shares | $ 0.18 |
Basic | shares | 67,599 |
Diluted | shares | 72,376 |
Acquisitions - Summary of Acqui
Acquisitions - Summary of Acquisition Related Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Acquisitions | ||
Acquisition-related costs | $ (69) | $ 2,777 |
USAA AMCO | ||
Acquisitions | ||
Acquisition-related costs | (124) | 2,586 |
Other | ||
Acquisitions | ||
Acquisition-related costs | $ 55 | $ 191 |
Acquisitions - Summary of Rollf
Acquisitions - Summary of Rollforward of Restructuring and Integration Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Rollforward of restructuring and integration liabilities | ||
Liability balance, beginning of period | $ 3,000 | $ 100 |
Restructuring and integration costs | 998 | |
Settlement of liabilities | (1,500) | |
Liability balance, end of period | 2,500 | 100 |
USAA AMCO | ||
Rollforward of restructuring and integration liabilities | ||
Integration costs-USAA AMCO | $ 1,000 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Financial Liabilities | ||
Interest Rate Swap Liability | $ (6,300) | |
Contingent Consideration Arrangements | (113,200) | $ (118,700) |
Total Financial Liabilities | (119,500) | (118,700) |
Level 2 | ||
Financial Liabilities | ||
Interest Rate Swap Liability | (6,300) | |
Total Financial Liabilities | (6,300) | |
Level 3 | ||
Financial Liabilities | ||
Contingent Consideration Arrangements | (113,200) | (118,700) |
Total Financial Liabilities | $ (113,200) | $ (118,700) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | Mar. 27, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Transfers between levels | $ 0 | $ 0 | |
Cash and Cash Equivalents | Level 1 | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Investments, fair value | $ 10,100,000 | ||
Interest Rate Swap | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional amount | $ 450,000,000 | ||
Rate of interest | 3.465% |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Contingent Consideration Arrangement Liabilities (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Beginning balance | $ (118,700) |
Change in fair value of contingent consideration obligations | (5,500) |
Ending balance | (113,200) |
USAA AMCO | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Change in fair value of contingent consideration obligations | $ 5,500 |
Related-Party Transactions - Su
Related-Party Transactions - Summary of Related-Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Related party assets | |||
Cash and cash equivalents | $ 37,130 | $ 37,121 | |
Related party revenue | |||
Total revenue | 204,421 | $ 87,479 | |
Investment Management Fees | |||
Related party revenue | |||
Total revenue | 146,881 | 74,411 | |
Fund Administration and Distribution Fees | |||
Related party revenue | |||
Total revenue | 57,540 | 13,068 | |
VCH | |||
Related party assets | |||
Cash and cash equivalents | 10,085 | 10,060 | |
Receivables (investment management fees) | 39,722 | 47,872 | |
Receivables (fund administration and distribution fees) | 17,315 | 19,313 | |
Investments (available-for-sale securities, fair value) | 582 | 771 | |
Investments (trading securities, fair value) | 14,679 | 17,914 | |
Total | 82,383 | 95,930 | |
Related party liabilities | |||
Accounts payable and accrued expenses (fund reimbursements) | 4,587 | $ 4,316 | |
Related party revenue | |||
Total revenue | 181,852 | 66,860 | |
Related party other (expense) income | |||
Interest income and other (expense) income | 4,798 | (1,361) | |
VCH | Investment Management Fees | |||
Related party revenue | |||
Total revenue | 124,312 | 53,793 | |
VCH | Fund Administration and Distribution Fees | |||
Related party revenue | |||
Total revenue | $ 57,540 | $ 13,067 |
Investments - Summary of Cost a
Investments - Summary of Cost and Fair Value of Investments Classified as Available-for-sale (Details) - Available For Sale Securities - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | $ 696 | $ 696 |
Gross Unrealized Gains | 4 | 85 |
Gross Unrealized (Losses) | (118) | (10) |
Available-for-sale securities, at fair value | $ 582 | $ 771 |
Investments - Summary of Cost_2
Investments - Summary of Cost and Fair Value of Investments Classified as Trading Securities (Details) - Trading Securities - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Schedule Of Trading Securities And Other Trading Assets [Line Items] | ||
Cost | $ 20,170 | $ 18,670 |
Gross Unrealized Gains | 38 | 733 |
Gross Unrealized (Losses) | (5,159) | (1,098) |
Trading securities, at fair value | $ 15,049 | $ 18,305 |
Investments - Summary of Procee
Investments - Summary of Proceeds and Realized Gains and Losses Classified as Trading Securities (Details) - Trading Securities - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Proceeds and realized gains and losses recognized | ||
Sale Proceeds | $ 1,091 | $ 570 |
Realized Gains | 20 | 2 |
Realized (Losses) | $ (46) | $ (20) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Income Taxes [Line Items] | |||
Income Tax Expense (Benefit) | $ 16,823 | $ 4,807 | |
Federal income tax at U.S. statutory rate | 22.70% | 24.90% | |
Valuation allowance, deferred tax assets | $ 0 | $ 0 | |
Unrecognized tax benefits | 300 | ||
Unrecognized tax benefits, net of federal benefit | 200 | ||
Other Liabilities | |||
Income Taxes [Line Items] | |||
Accrual for interest and penalties | $ 2,200 | $ 2,900 |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in Gross Unrecognized Tax Benefits Excluding Interest and Penalties (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Beginning balance | $ 2,582 |
Additions based on tax positions related to current period | 280 |
Reductions related to settlement of tax matters | (908) |
Ending balance | $ 1,954 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Mar. 27, 2020 | Jan. 17, 2020 | Jul. 01, 2019 | Mar. 31, 2020 |
Interest Rate Swap | ||||
Debt Instrument [Line Items] | ||||
Base Spread (as a percent) | 3.465% | |||
Notional amount | $ 450,000,000 | |||
Repriced Term Loans | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 952,000 | |||
Debt maturity date | 2026-07 | |||
Debt instrument interest rate description | Repriced Term Loans provide for a reduced applicable margin on LIBOR of 75 basis points. | |||
Basis spread on variable rate, increase (decrease) | 0.075% | |||
Repriced Term Loans | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Base Spread (as a percent) | 2.50% | |||
Term Loans | ||||
Debt Instrument [Line Items] | ||||
Repayments of debt | $ 38,000 | |||
Term Loans | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Base Spread (as a percent) | 3.25% | |||
Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Maximum percentage of borrowings for revolving credit facility as a percent of total commitments | 35.00% | |||
Maximum first lien leverage ratio on last day of quarter (as a percent) | 380.00% | |||
Average effective interest rate (as a percent) | 4.02% | |||
Effective interest rate (as a percent) | 4.45% | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Outstanding borrowing | $ 0 |
Debt - Schedule of Components o
Debt - Schedule of Components of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ (15,907) | $ (17,230) |
Unamortized debt discount | (9,446) | (10,231) |
Long-term debt, net | 888,647 | 924,539 |
Term Loans | ||
Debt Instrument [Line Items] | ||
Principal outstanding | $ 914,000 | $ 952,000 |
Debt - Schedule of Components_2
Debt - Schedule of Components of Interest Expense and Other Financing Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Interest expense | $ 10,056 | $ 3,880 |
Amortization of debt issuance costs | 781 | 364 |
Amortization of debt discount | 392 | 146 |
Other | 179 | 234 |
Total | $ 11,408 | $ 4,624 |
Equity - Schedule of Changes in
Equity - Schedule of Changes in Number of Shares of Common Stock Issued and Repurchased (Detail) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Common Stock | Class A | ||
Balance at beginning of period (in shares) | 18,100 | 15,281 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Issuance of shares | 2 | |
Share conversion - Class B to A | 406 | 382 |
Balance at end of period (in shares) | 18,508 | 15,663 |
Common Stock | Class B | ||
Balance at beginning of period (in shares) | 53,937 | 55,284 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Share conversion - Class B to A | (406) | (382) |
Vesting of restricted share grants | 719 | 40 |
Exercise of options | 288 | 72 |
Balance at end of period (in shares) | 54,538 | 55,014 |
Treasury Stock | Class A | ||
Balance at beginning of period (in shares) | (1,685) | (856) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Repurchase of shares | (240) | (123) |
Balance at end of period (in shares) | (1,925) | (979) |
Treasury Stock | Class B | ||
Balance at beginning of period (in shares) | (2,656) | (2,147) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Shares withheld related to net settlement of equity awards | (445) | (29) |
Balance at end of period (in shares) | (3,101) | (2,176) |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Aug. 31, 2019 | Dec. 31, 2018 | |
Number of shares acquired | 1,925,185 | ||
Average cost of acquired shares (in dollars per share) | $ 13.46 | ||
Cost of acquired shares | $ 25.9 | ||
Remaining authorized amount for share repurchase program | 4.1 | ||
Dividends paid | 3.4 | ||
Special dividends paid | $ 0.1 | ||
Class A | |||
Authorized amount for share repurchase program | $ 15 | $ 15 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Amount of cash bonuses and distributions related to all dividends previously declared on unvested shares | $ 0.1 | |
Stock based compensation expense | $ 6 | $ 1.5 |
Restricted Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total number of restricted shares granted | 276,981 | 518,385 |
Restricted Shares | Vested Immediately | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total number of restricted shares granted | 3,238 | |
Restricted Shares | Three Year Vesting Period | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total number of restricted shares granted | 273,743 | |
Vesting period from grant date | 3 years | |
Stock Options and Restricted Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Amount of cash bonuses and distributions related to all dividends previously declared on unvested shares | $ 1.2 | $ 1.3 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Activity Related to Stock Options Awards, Restricted Stock Awards (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Stock Options | ||
Avg wtd grant-date fair value | ||
Outstanding at beginning of period | $ 3.83 | $ 3.79 |
Forfeited | 6.32 | 6.52 |
Exercised | 3.74 | 2.80 |
Outstanding at end of the period | 3.84 | 3.79 |
Vested | 3.67 | 3.41 |
Unvested | 5.04 | 4.94 |
Avg wtd exercise price | ||
Outstanding at beginning of period | 6.27 | 6.12 |
Forfeited | 13.80 | 14.27 |
Exercised | 5.89 | 3.08 |
Outstanding at end of the period | 6.28 | 6.12 |
Vested | 5.75 | 4.95 |
Unvested | $ 10.05 | $ 9.69 |
Units | ||
Outstanding at beginning of period | 7,880,167 | 9,070,052 |
Reversal of Forfeited | 1,708 | |
Forfeited | (25,160) | |
Exercised | (287,565) | (71,652) |
Outstanding at end of the period | 7,594,310 | 8,973,240 |
Vested | 6,659,406 | 6,752,579 |
Unvested | 934,904 | 2,220,661 |
Restricted Shares | ||
Avg wtd grant-date fair value | ||
Unvested at beginning of period | $ 14.29 | $ 13.17 |
Granted | 16.62 | 14.97 |
Vested | 14.14 | 13.15 |
Forfeited | 16.07 | 14.02 |
Unvested at end of period | $ 14.62 | $ 13.37 |
Units | ||
Unvested at beginning of period | 3,215,619 | 2,997,856 |
Granted | 276,981 | 518,385 |
Vested | (719,531) | (39,636) |
Forfeited | (2,390) | (367,998) |
Unvested at end of period | 2,770,679 | 3,108,607 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Reconciliation of Basic Earnings Per Share and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share Reconciliation [Abstract] | ||
Net income | $ 57,166 | $ 14,527 |
Shares: | ||
Basic: Weighted average number of shares outstanding | 67,790 | 67,521 |
Plus: Incremental shares from assumed conversion of dilutive instruments | 6,560 | 4,761 |
Diluted: Weighted average number of shares outstanding | 74,350 | 72,282 |
Earnings per share | ||
Basic: | $ 0.84 | $ 0.22 |
Diluted: | $ 0.77 | $ 0.20 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Number of shares excluded from the computations of weighted average shares for diluted earnings per share because the effects would be anti dilutive | 31 | 1,400 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income/(Loss) by Component (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance at beginning of period | $ 537,871 | $ 455,548 |
Total other comprehensive (loss) income, net of tax | (4,887) | 12 |
Balance at end of period | 581,080 | 470,165 |
Available-for-sale Securities | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance at beginning of period | (59) | |
Cumulative effect of adoption of ASU 2016-01 and 2018-02 | 59 | |
Cash Flow Hedges | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Other comprehensive loss before reclassification and tax | (6,318) | |
Tax impact | 1,498 | |
Total other comprehensive (loss) income, net of tax | (4,820) | |
Balance at end of period | (4,820) | |
Cumulative Translation Adjustment | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance at beginning of period | (27) | |
Other comprehensive loss before reclassification and tax | (88) | 16 |
Tax impact | 21 | (4) |
Total other comprehensive (loss) income, net of tax | (67) | 12 |
Cumulative effect of adoption of ASU 2016-01 and 2018-02 | 3 | |
Balance at end of period | (67) | (12) |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance at beginning of period | (86) | |
Other comprehensive loss before reclassification and tax | (6,406) | 16 |
Tax impact | 1,519 | (4) |
Total other comprehensive (loss) income, net of tax | (4,887) | 12 |
Cumulative effect of adoption of ASU 2016-01 and 2018-02 | 62 | |
Balance at end of period | $ (4,887) | $ (12) |
Derivatives - Additional Inform
Derivatives - Additional Information (Details) - USD ($) | Mar. 27, 2020 | Mar. 31, 2020 |
Derivative [Line Items] | ||
Fair value of interest rate swap | $ 6,300,000 | |
Other Liabilities | ||
Derivative [Line Items] | ||
Fair value of interest rate swap | $ 6,300,000 | |
Interest Rate Swap | ||
Derivative [Line Items] | ||
Notional amount | $ 450,000,000 | |
Rate of interest | 3.465% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) | May 11, 2020 | Mar. 31, 2020 | May 08, 2020 |
Subsequent Event [Line Items] | |||
Dividends declared per share of common stock | $ 0.05 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Dividends declared per share of common stock | $ 0.05 | ||
Dividends, date of declared | May 11, 2020 | ||
Dividends payable date | Jun. 25, 2020 | ||
Dividends payable, date of record | Jun. 10, 2020 | ||
Term Loans | |||
Subsequent Event [Line Items] | |||
Repayments of debt | $ 38,000 | ||
Term Loans | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Outstanding debt bought back amount | $ 31,000,000 | ||
Repayments of debt | $ 217,000,000 |