UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction |
(I.R.S. Employer |
(Address of principal executive offices, including zip code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of May 1, 2023, there were
CSG SYSTEMS INTERNATIONAL, INC.
FORM 10-Q for the Quarter Ended March 31, 2023
INDEX
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Page No. |
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Part I - FINANCIAL INFORMATION |
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Item 1. |
Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 (Unaudited) |
3 |
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4 |
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5 |
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6 |
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7 |
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Notes to Condensed Consolidated Financial Statements (Unaudited) |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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Part II - OTHER INFORMATION |
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Item 1. |
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Item 1A. |
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Item 2. |
27 |
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Item 6. |
27 |
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28 |
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29 |
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2
CSG SYSTEMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(in thousands)
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March 31, 2023 |
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December 31, 2022 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Short-term investments |
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- |
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Total cash, cash equivalents, and short-term investments |
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Settlement and merchant reserve assets |
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Trade accounts receivable: |
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Billed, net of allowance of $ |
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Unbilled |
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Income taxes receivable |
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Other current assets |
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Total current assets |
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Non-current assets: |
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Property and equipment, net of depreciation of $ |
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Operating lease right-of-use assets |
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Software, net of amortization of $ |
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Goodwill |
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Acquired customer contracts, net of amortization of $ |
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Customer contract costs, net of amortization of $ |
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Deferred income taxes |
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Other assets |
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Total non-current assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Current portion of long-term debt |
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$ |
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$ |
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Operating lease liabilities |
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Customer deposits |
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Trade accounts payable |
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Accrued employee compensation |
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Settlement and merchant reserve liabilities |
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Deferred revenue |
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Income taxes payable |
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Other current liabilities |
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Total current liabilities |
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Non-current liabilities: |
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Long-term debt, net of unamortized discounts of $ |
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Operating lease liabilities |
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Deferred revenue |
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Income taxes payable |
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Deferred income taxes |
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Other non-current liabilities |
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Total non-current liabilities |
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Total liabilities |
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Stockholders' equity: |
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Preferred stock, par value $ |
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Common stock, par value $ |
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Additional paid-in capital |
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Treasury stock, at cost; |
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( |
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Accumulated other comprehensive income (loss): |
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Unrealized gain on short-term investments, net of tax |
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Cumulative foreign currency translation adjustments |
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Accumulated earnings |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
CSG SYSTEMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(in thousands, except per share amounts)
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Quarter Ended |
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March 31, 2023 |
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March 31, 2022 |
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Revenue |
$ |
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$ |
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Cost of revenue (exclusive of depreciation, shown separately below) |
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Other operating expenses: |
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Research and development |
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Selling, general and administrative |
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Depreciation |
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Restructuring and reorganization charges |
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Total operating expenses |
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Operating income |
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Other income (expense): |
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Interest expense |
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Interest and investment income, net |
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Loss on derivative liability upon debt conversion |
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( |
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Other, net |
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( |
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Total other |
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( |
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( |
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Income before income taxes |
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Income tax provision |
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( |
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( |
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Net income |
$ |
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$ |
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Weighted-average shares outstanding: |
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Basic |
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Diluted |
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Earnings per common share: |
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Basic |
$ |
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$ |
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Diluted |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
CSG SYSTEMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - UNAUDITED
(in thousands)
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Quarter Ended |
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March 31, 2023 |
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March 31, 2022 |
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Net income |
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$ |
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$ |
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Other comprehensive income (loss), net of tax: |
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Foreign currency translation adjustments |
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( |
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Unrealized holding loss on short-term investments arising during period |
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( |
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Other comprehensive income (loss), net of tax |
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( |
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Total comprehensive income, net of tax |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
CSG SYSTEMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - UNAUDITED
(in thousands)
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Shares of Common Stock Outstanding |
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Common Stock |
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Additional Paid-in Capital |
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Treasury Stock |
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Accumulated Other Comprehensive Income (Loss) |
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Accumulated Earnings |
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Noncontrolling Interest |
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Total Stockholders' Equity |
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For the Quarter Ended March 31, 2023: |
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BALANCE, January 1, 2023 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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$ |
- |
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$ |
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Comprehensive income: |
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Net income |
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- |
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- |
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- |
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- |
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- |
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- |
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Unrealized gain on short-term investments, net of tax |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Foreign currency translation adjustments |
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- |
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- |
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- |
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- |
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- |
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- |
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Total comprehensive income |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Repurchase of common stock |
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( |
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( |
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( |
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- |
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- |
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- |
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- |
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( |
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Issuance of common stock pursuant to employee stock |
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- |
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- |
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- |
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- |
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- |
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Issuance of restricted common stock pursuant to |
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( |
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- |
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- |
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- |
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- |
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- |
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Cancellation of restricted common stock issued |
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( |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Stock-based compensation expense |
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- |
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- |
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- |
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- |
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- |
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- |
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Dividends |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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( |
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BALANCE, March 31, 2023 |
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$ |
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$ |
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$ |
( |
) |
$ |
( |
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$ |
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$ |
- |
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$ |
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Shares of Common Stock Outstanding |
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Common Stock |
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Additional Paid-in Capital |
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Treasury Stock |
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Accumulated Other Comprehensive Income (Loss) |
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Accumulated Earnings |
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Noncontrolling Interest |
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Total Stockholders' Equity |
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For the Quarter Ended March 31, 2022: |
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BALANCE, January 1, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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$ |
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$ |
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Comprehensive income: |
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Net income |
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- |
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- |
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- |
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- |
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- |
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- |
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Unrealized loss on short-term investments, net of tax |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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- |
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Foreign currency translation adjustments |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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- |
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Total comprehensive income |
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Repurchase of common stock |
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( |
) |
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( |
) |
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( |
) |
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( |
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- |
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- |
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- |
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( |
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Issuance of common stock pursuant to employee stock |
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- |
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- |
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- |
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- |
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- |
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Issuance of restricted common stock pursuant to |
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( |
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- |
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- |
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- |
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- |
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- |
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Cancellation of restricted common stock issued |
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( |
) |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Stock-based compensation expense |
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- |
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- |
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- |
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- |
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- |
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- |
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Settlement of convertible debt securities, net of tax |
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- |
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- |
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( |
) |
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- |
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- |
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- |
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- |
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( |
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Adjustments due to adoption of new accounting |
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- |
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- |
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( |
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- |
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- |
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- |
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- |
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Dividends |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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( |
) |
BALANCE, March 31, 2022 |
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$ |
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$ |
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$ |
( |
) |
$ |
( |
) |
$ |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
CSG SYSTEMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(in thousands)
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Quarter Ended |
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March 31, 2023 |
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March 31, 2022 |
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Cash flows from operating activities: |
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Net income |
$ |
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$ |
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Adjustments to reconcile net income to net cash provided by (used in) operating activities- |
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Depreciation |
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Amortization |
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Asset impairment |
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(Gain) loss on short-term investments and other |
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( |
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Loss on derivative liability upon debt conversion |
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Unrealized foreign currency transactions (gain)/loss, net |
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( |
) |
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Deferred income taxes |
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( |
) |
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Stock-based compensation |
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Changes in operating assets and liabilities, net of acquired amounts: |
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Trade accounts receivable, net |
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( |
) |
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Other current and non-current assets and liabilities |
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( |
) |
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( |
) |
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Income taxes payable/receivable |
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( |
) |
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Trade accounts payable and accrued liabilities |
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( |
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( |
) |
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Deferred revenue |
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( |
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Net cash provided by (used in) operating activities |
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( |
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Cash flows from investing activities: |
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Purchases of software, property and equipment |
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