Unaudited Quarterly Financial Data

12 Months Ended

Dec. 31, 2020

Quarterly Financial Information Disclosure [Abstract]

14.	Unaudited Quarterly Financial Data

	Quarter Ended
	March 31			June 30			September 30			December 31
	(in thousands, except per share amounts)
2020:
Total revenue (1)	$	245,617		$	240,321		$	244,108		$	260,487
Total cost of revenue (exclusive of depreciation)		131,206			138,153			131,073			135,165
Operating income (1)(2)(3)(4)		33,159			19,775			28,947			23,675
Income before income taxes (1)(2)(3)(4)		28,676			14,250			22,742			19,688
Income tax provision (5)		(7,162	)		(3,884	)		(9,176	)		(6,423	)
Net income (1)(2)(3)(4)(5)		21,514			10,366			13,566			13,265
Basic earnings per common share (1)(2)(3)(4)(5)	$	0.67		$	0.32		$	0.42		$	0.42
Diluted earnings per common share (1)(2)(3)(4)(5)		0.66			0.32			0.42			0.41

2019:
Total revenue	$	244,793		$	245,856		$	251,414		$	254,747
Total cost of revenue (exclusive of depreciation)		128,963			132,234			132,054			131,871
Operating income (2)		32,093			30,338			33,420			30,258
Income before income taxes (2)		25,851			26,837			28,821			24,214
Income tax provision (5)		(6,600	)		(7,458	)		(7,262	)		(1,633	)
Net income (2)(5)		19,251			19,379			21,559			22,581
Basic earnings per common share (2)(5)	$	0.60		$	0.60		$	0.67		$	0.71
Diluted earnings per common share (2)(5)		0.59			0.60			0.66			0.70

(1)

During the second quarter of 2020, we began to experience extended sales and implementation cycles and processing volume reductions resulting from the economic slowdown caused by the COVID-19 pandemic. However, we had sequential quarterly growth in both the third and fourth quarters of 2020 reflecting a stabilization of these sales and implementation cycles and a rebound in processing volumes.

(2)	During the first, second, third, and fourth quarters of 2020 we incurred restructuring and reorganization charges of $1.0 million, $2.5 million, $0.8 million, and $1.0 million, respectively, or $0.02, $0.06, $0.02, and $0.02 per diluted share.

During the second, third, and fourth quarters of 2019 we incurred restructuring and reorganization charges of $1.8 million, $1.3 million, and $1.6 million, respectively, or $0.04, $0.03, and $0.04 per diluted share.

See Note 8 for further discussion of our restructuring and reorganization activities.

(3)	During the second quarter of 2020 we wrote-off approximately $10 million of deferred contract costs resulting from the discontinuance of a project implementation (see Note 4).

(4)

During the third and fourth quarters of 2020, we incurred executive transition costs of $1.8 and $11.2 million, respectively, or $0.03 and $0.23 per diluted share, related to the planned departure of our then-current CEO under terms of his separation agreement. These costs relate to compensation, benefits, and other payments pursuant to the terms of his employment agreement and accelerated vesting of unvested restricted stock awards that were recognized over his remaining service term (see Note 13).

(5)	Fluctuations in our effective income tax rate between quarters generally relates to the accounting for discrete income tax items in any given quarter, and revisions of estimates for certain income tax components during the year.

For 2020: Our effective income tax rates for the first, second, third, and fourth quarters were 25%, 27%, 40%, and 33%, respectively. The third and fourth quarter effective income tax rates were primarily impacted negatively by the disallowance of compensation relating to the executive transition costs.

For 2019: Our effective income tax rates for the first, second, third, and fourth quarters were 26%, 28%, 25%, and 7%, respectively. The fourth quarter effective income tax rate was positively impacted by an approximately $4 million net income tax benefit we received as a result of Comcast’s exercise of their remaining 0.4 million of vested common stock warrants (see Note 12).