NetSpend 2011 Annual Report Download - page 112

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Table of Contents
NetSpend Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
December 31, 2011, 2010 and 2009
NOTE 20: SELECTED QUARTERLY RESULTS OF OPERATIONS (unaudited) (Continued)
NOTE 21: SUBSEQUENT EVENTS
Share Repurchase Program
In February 2012, the Company completed its second share repurchase program (see "Note 12"). During 2012, the Company repurchased
2,050,959 shares of common stock for $17.4 million pursuant to this program.
Stock Options and Other Stock-Based Awards
In February 2012, the Company granted 1.3 million options and issued 0.6 million shares of restricted stock to employees under the 2004
Plan. In addition, the Company issued 75,937 shares of restricted stock to members of the board of directors under the 2004 Plan. 34,915 shares
of the restricted stock issued to members of the board of directors were issued in lieu of cash retainer fees. The options and restricted stock
issued to employees vests in four equal installments on the four succeeding anniversaries of the grant date. The restricted stock issued to
members of the board of directors vests one year from the anniversary of the grant date.
TQP Development, LLC
TQP Development, LLC ("TQP") filed a patent infringement case against NetSpend in the U.S. District Court for the Eastern District of
Texas on February 9, 2012. TQP asserts in its complaint that
103
2010
First
Quarter Second
Quarter Third
Quarter Fourth
Quarter(1)
(in thousands of dollars, except per share data)
Revenues
$
69,520
67,447
$
68,208
$
70,212
Direct operating costs
32,713
30,304
32,364
35,402
Other operating expenses
23,911
25,204
24,518
25,396
Settlements and other losses
4,000
300
—
—
Operating income
8,896
11,639
11,326
9,414
Net income
$
4,618
$
6,446
$
6,380
$
5,288
Basic net income per share
Common stock
$
0.05
$
0.08
$
0.07
$
0.06
Class B common stock
0.05
0.08
0.07
—
Diluted net income per share
Common stock
$
0.05
$
0.08
$
0.07
$
0.06
Class B common stock
0.05
0.08
0.07
—
(1) In addition to the Company's recurring provisions for negative cardholder account activity, during the fourth quarter of
2010, the Company recorded approximately $1.3 million of additional charges associated with chargebacks and other
losses resulting from recoveries that had been incorrectly processed in periods prior to the fourth quarter of 2010. These
amounts were accrued within the cardholders' reserve as of December 31, 2010 and have been reflected in the fourth
quarter direct operating costs above.