SHAREHOLDERS’ EQUITY

12 Months Ended

Dec. 31, 2019

Stock Dividend

On January 18, 2019, the Board of Directors of the Company approved a common stock dividend, accounted for as a stock split. The stock split was effected through a stock dividend of three shares for each share outstanding as of the approval date. The effect of this dividend has been retroactively applied to the consolidated financial statements as of and for the period ended December 31, 2018 resulting in an increase in shares outstanding from 9,855,339 to 39,421,356. All share and per share information included in the consolidated financial statements have been retroactively adjusted to reflect the impact of the stock dividend. The shares of common stock authorized remained at 100,000,000, and the shares retained a par value of $0.01.

Capital Return Program and Quarterly Cash Dividends

On June 14, 2019, the Company announced that its Board of Directors approved a capital return program under which the Company may expend a total of up to $250.0 million for a share repurchase program and payment of dividends. Share repurchases may be effected in various ways, which could include open-market or private repurchase transactions, accelerated stock repurchase programs, tender offers or other transactions. The amount, timing and terms of any return of capital transaction will be determined based on prevailing market conditions and other factors. The Company expects to fund any share repurchases and dividends from existing capital resources. There is no fixed time period to complete share repurchases.

On July 26, 2019, the Company completed a modified Dutch auction tender offer (“Offer”). Initially, 2,542,357 shares were accepted for payment. As a result of a DTC participant’s error identified in August 2019, 37,386 shares that had been improperly tendered were returned, which reduced the number of purchased shares to 2,504,971 and an aggregate purchase price of $73.9 million. The offer was funded with cash on hand.

During the year ended December 31, 2019, in addition to those shares purchased as part of the Offer, the Company repurchased 6,558,379 shares under the capital return program for an aggregate cost of $148.8 million.

Total share repurchase activity during the years ended December 31, 2019 and 2018 were as follows:



	Year Ended December 31,
(in thousands, except share and per share data)	2019		2018
Number of common shares repurchased	9,079,690		338,648
Total cost	$	223,075	$	7,958
Average cost per share, including commissions	$	24.57	$	23.50

All shares repurchased during the years ended December 31, 2019 and 2018 were transferred to treasury stock during the year of repurchase. The Company retired 1,431,980 shares of its common stock held in treasury during the year ended December 31, 2019. All shares repurchased during the year ended December 31, 2019 remained in treasury stock as of December 31, 2019. The shares retired during the year were returned to the status of authorized but unissued.

During the year ended December 31, 2019, the Company paid cash dividends of $0.10 per common share on July 23, 2019 and October 25, 2019, for a total of $0.20 per common share and a total cost of approximately $7.6 million. As of December 31, 2019, $19.7 million remained available for use under the above-mentioned capital return program. Future dividends will be considered and declared by the Board of Directors at its discretion.

On February 10, 2020, subsequent to the year ended 2019, the Board of Directors approved an increase in its previously announced capital return program of $100.0 million.

Temporary Equity

In accordance with the Put Amendment, at the election of the participant, shares issued upon the exercise of stock options or the vesting of RSUs and PSUs may be Put to the Company at fair value during any Put Period after the stock option exercise or during any Put Period that is three years following the vesting date of the RSUs and PSUs.

For the year ended December 31, 2017, 54,976 shares of redeemable common stock were issued and remained outstanding and were subject to a Put, respectively, upon exercise of stock options. For the year ended December 31, 2017, 16,968 shares of redeemable common stock were issued and remained outstanding, respectively, upon vesting of RSUs. For the year ended December 31, 2017, the redeemable shares of common stock were classified outside of permanent equity in temporary equity in the consolidated balance sheets. The Company recorded the redeemable shares of common stock at fair value at the end of each reporting period and reflected the period to period change as a deemed dividend related to change in fair value of common stock subject to possible redemption in the consolidated statements of operations and comprehensive income.

In January 2018, 25,136 shares of redeemable common stock were issued and remained outstanding, respectively, upon vesting of RSUs. In December 2018, all outstanding equity awards were amended to remove the Put rights. See Note 12 “Equity Plans”. Upon the removal of the Put rights effective December 2018, the fair value of the 357,224 shares of common stock that were no longer redeemable were reclassified from temporary equity to common stock and additional paid in capital in permanent equity in the consolidated balance sheets.

The following table summarizes the Company’s redeemable common stock activities for the years ended December 31, 2018 and 2017:



(in thousands, except share data)	Shares Subject to Redemption		Total Temporary Equity
Balance as of December 31, 2016	260,144		$	4,995
Release of restricted units for common stock subject to possible redemption	16,968		326
Stock options exercised for common stock subject to possible redemption	54,976		1,388
Deemed dividends related to change in fair value of common stock subject to possible redemption	—		2,344
Balance as of December 31, 2017	332,088		9,053
Release of restricted units for common stock subject to possible redemption	25,136		685
Deemed dividends related to change in fair value of common stock subject to possible redemption	—		(640		)
Common stock no longer subject to possible redemption due to extinguishment of Puts	(357,224	)	(9,098		)
Balance as of December 31, 2018	—		$	—