Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 01, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | NEOGENOMICS INC | |
Entity Central Index Key | 1,077,183 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 81,639,406 | |
Trading Symbol | NEO |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 9,435 | $ 12,821 |
Accounts receivable | 60,765 | 60,427 |
Inventories | 6,898 | 7,474 |
Other current assets | 6,161 | 5,153 |
Total current assets | 83,259 | 85,875 |
Property and equipment (net of accumulated depreciation of $45,678 and $40,530, respectively) | 42,873 | 36,504 |
Intangible assets, net | 71,330 | 74,165 |
Goodwill | 147,019 | 147,019 |
Other assets | 1,302 | 891 |
Total assets | 345,783 | 344,454 |
Current liabilities | ||
Accounts payable | 12,337 | 10,450 |
Accrued compensation | 11,184 | 9,482 |
Accrued expenses and other liabilities | 9,889 | 6,144 |
Short-term portion of capital leases and car loans | 5,847 | 5,239 |
Short-term portion of loans | 6,562 | 3,750 |
Pharma contract liability | 2,155 | 1,406 |
Total current liabilities | 47,974 | 36,471 |
Long-term liabilities | ||
Long-term portion of capital leases and car loans | 5,414 | 5,303 |
Long-term portion of loans, net | 91,535 | 66,616 |
Revolving credit facility, net | 29,176 | 24,516 |
Long-term pharma contract liability | 648 | 283 |
Deferred income tax liability, net | 6,827 | 6,688 |
Total long-term liabilities | 133,600 | 103,406 |
Total liabilities | 181,574 | 139,877 |
Commitments and contingencies | ||
Redeemable convertible preferred stock | ||
Series A Redeemable Convertible Preferred Stock, $0.001 par value, (50,000,000 shares authorized; 0 and 6,864,000 shares issued and outstanding) | 0 | 32,615 |
Stockholders' equity | ||
Common stock, $0.001 par value, (250,000,000 shares authorized; 81,632,045 and 80,462,574 shares issued and outstanding, respectively) | 81 | 80 |
Additional paid-in capital | 217,451 | 230,030 |
Accumulated other comprehensive income | 257 | 274 |
Accumulated deficit | (53,580) | (58,422) |
Total stockholders’ equity | 164,209 | 171,962 |
Total Liabilities and Stockholders' Equity | $ 345,783 | $ 344,454 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $ 45,678 | $ 40,530 |
Redeemable Convertible Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Redeemable Convertible Preferred Stock, shares authorized | 50,000,000 | 50,000,000 |
Redeemable Convertible Preferred Stock, shares issued | 0 | 6,864,000 |
Redeemable Convertible Preferred Stock, shares outstanding | 0 | 6,864,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 81,632,045 | 80,462,574 |
Common stock, shares outstanding | 81,632,045 | 80,462,574 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
NET REVENUE | ||||
Clinical Services | $ 59,540 | $ 55,547 | $ 116,511 | $ 108,455 |
Pharma Services | 8,206 | 6,717 | 14,658 | 11,238 |
Total Revenue | 67,746 | 62,264 | 131,169 | 119,693 |
COST OF REVENUE | 37,216 | 34,912 | 73,336 | 69,392 |
GROSS PROFIT | 30,530 | 27,352 | 57,833 | 50,301 |
Operating expenses: | ||||
General and administrative | 20,983 | 18,432 | 38,050 | 35,450 |
Research and development | 1,073 | 947 | 2,029 | 1,809 |
Sales and marketing | 7,680 | 6,132 | 14,455 | 11,779 |
Total operating expenses | 29,736 | 25,511 | 54,534 | 49,038 |
Income from Operations | 794 | 1,841 | 3,299 | 1,263 |
Interest expense, net | 1,407 | 1,411 | 2,892 | 2,775 |
Other expense | 124 | 0 | 62 | 0 |
Income (loss) before taxes | (737) | 430 | 345 | (1,512) |
Income tax expense (benefit) | (357) | (53) | 81 | (832) |
NET INCOME (LOSS) | (380) | 483 | 264 | (680) |
Deemed dividends on preferred stock | 947 | 929 | 1,950 | 1,822 |
Amortization of preferred stock beneficial conversion feature | 1,824 | 1,710 | 3,677 | 3,383 |
Gain on redemption of preferred stock | (9,075) | 0 | (9,075) | 0 |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ 5,924 | $ (2,156) | $ 3,712 | $ (5,885) |
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | ||||
Basic (in dollars per share) | $ 0.07 | $ (0.03) | $ 0.05 | $ (0.07) |
Diluted (in dollars per share) | $ 0.07 | $ (0.03) | $ 0.04 | $ (0.07) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic (in shares) | 81,017 | 79,413 | 80,789 | 79,075 |
Diluted (in shares) | 90,168 | 79,413 | 89,305 | 79,075 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
NET INCOME(LOSS) | $ (380) | $ 483 | $ 264 | $ (680) |
OTHER COMPREHENSIVE INCOME, NET OF TAX: | ||||
Foreign currency translation adjustments | 6 | 0 | (22) | 0 |
Gain (loss) on effective cash flow hedge | (266) | 0 | 5 | 0 |
Total other comprehensive (loss), net of tax | (260) | 0 | (17) | 0 |
COMPREHENSIVE INCOME (LOSS) | $ (640) | $ 483 | $ 247 | $ (680) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 264 | $ (680) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation | 7,444 | 7,906 |
Amortization of intangibles | 2,834 | 3,450 |
Amortization of debt issue costs | 242 | 219 |
Loss on disposal of assets | 106 | 0 |
Non-cash stock based compensation | 3,957 | 3,052 |
Changes in assets and liabilities, net: | ||
(Increase) in accounts receivable, net of write-offs | (338) | (6,255) |
Decrease in inventories | 576 | 796 |
(Increase) in prepaid expenses | (2,198) | (720) |
(Increase) in other current assets | (977) | (129) |
Increase (decrease) in accounts payable, accrued and other liabilities | 9,042 | (2,797) |
Net cash provided by operating activities | 20,952 | 4,842 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (8,943) | (7,864) |
Net cash used in investing activities | (8,943) | (7,864) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Advances from revolving credit facility, net | 10,000 | 4,997 |
Redemption of preferred stock | (50,096) | 0 |
Repayment of capital lease obligations, loans | (3,014) | (2,754) |
Repayment of term loan and revolving credit facility | (7,275) | (1,878) |
Issuance of common stock | 5,588 | 1,176 |
Proceeds from term loan | 30,000 | 0 |
Payments of debt issue costs | (576) | (112) |
Net cash (used in) provided by financing activities | (15,373) | 1,429 |
Effects of foreign exchange rate changes on cash and cash equivalents | (22) | 0 |
Net change in cash and cash equivalents | (3,386) | (1,593) |
Cash and cash equivalents, beginning of period | 12,821 | 12,525 |
Cash and cash equivalents, end of period | 9,435 | 10,932 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 2,703 | 2,573 |
Income taxes paid | 49 | 102 |
Supplemental disclosure of non-cash investing and financing information: | ||
Equipment acquired under capital lease/loan obligations | $ 3,733 | $ 2,557 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | Nature of Business and Basis of Presentation NeoGenomics, Inc., a Nevada corporation (the “Parent” or the “Parent Company”), and its subsidiaries, NeoGenomics Laboratories, Inc., a Florida corporation (“NeoGenomics Laboratories”), Clarient Inc. and its wholly-owned subsidiary Clarient Diagnostic Services, Inc. (“Clarient”), NeoGenomics Bioinformatics, Inc., NeoGenomics Europe, SA, and NeoGenomics Singapore, Pte. Ltd. (collectively referred to as “we”, “us”, “our”, “NeoGenomics”, or the “Company”), operates as a certified “high complexity” clinical laboratory in accordance with the federal government’s Clinical Laboratory Improvement Act, as amended (“CLIA”), and is dedicated to the delivery of clinical diagnostic services to pathologists, oncologists, urologists, hospitals, and other laboratories as well as providing clinical trial services to pharmaceutical firms. The accompanying interim consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. These accompanying consolidated financial statements include the accounts of the Parent and its subsidiaries. All intercompany transactions and balances have been eliminated in the accompanying consolidated financial statements. Certain information and footnote disclosures normally included in the Company’s annual audited consolidated financial statements and accompanying notes have been condensed or omitted in these accompanying interim consolidated financial statements. Accordingly, the accompanying interim consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2017 , filed with the SEC on March 13, 2018. The year-end consolidated balance sheet data was derived from the audited consolidated financial statements as of December 31, 2017, but does not include all the disclosures required by accounting principles. The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for any future periods. In the opinion of management, these unaudited consolidated financial statements include all adjustments and accruals, consisting only of normal, recurring adjustments that are necessary for a fair statement of the results of all interim periods reported herein. The Company reports its activities in two operating segments; the Clinical Services Segment and the Pharma Services Segment. These reportable segments deliver testing services to hospitals, pathologists, oncologists, clinicians, pharmaceutical firms and researchers and represent 100% of the Company’s consolidated assets, net revenues and net income (loss) for each period ended June 30, 2018 and December 31, 2017 . For further financial information about these segments see Note K. Reclassifications The Company adopted ASC 606 on a full retrospective basis, which required the Company to restate its results for certain previously reported periods as if ASC 606 had been effective for those periods. For further details regarding the impact of this new accounting standard see Note B. |
Recently Adopted and Issued Acc
Recently Adopted and Issued Accounting Guidance | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Adopted and Issued Accounting Guidance | Recently Adopted and Issued Accounting Guidance Adopted In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation . This standard expands the scope of current stock compensation recognition standards to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year, with early adoption permitted. The Company early adopted this ASU on April 1, 2018. The adoption of this standard substantially aligned the accounting for share based payments to employees and nonemployees. Under the new standard, the Company recorded a cumulative adjustment of $1.1 million to increase retained earnings and decrease APIC. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging. This standard refines hedge accounting to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amended guidance also expands items eligible for hedge accounting and simplifies the hedge effectiveness testing. ASU 2017-12 is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods. Early adoption is permitted. The Company early adopted this standard on April 1, 2018 and applied this guidance to the cash flow hedge entered into in June 2018. See Note F. The adoption of ASU 2017-12 did not have a material effect on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, which amends FASB Accounting Standards Codification by creating Topic 606, Revenues from Contracts with Customers. This standard update calls for a number of revisions in the revenue recognition rules. The Company adopted this ASU on January 1, 2018 using a full retrospective method of adoption. Under this method, the Company has restated its results for each prior reporting period presented as if ASC 606 had been effective for those periods. The adoption of this standard required us to implement new revenue policies, procedures and internal controls related to revenue recognition. In addition, the adoption resulted in enhanced financial statement disclosures surrounding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. For further details, see Note C. The new standard impacts each of our two reportable segments differently due to the transactional nature of the Clinical Services Division versus the generally long-term nature of our Pharma Services Division contracts. The specific effect on our reportable segments is explained below: Clinical Services Revenue Under the new standard, substantially all of our bad debt expense, which has historically been presented as part of general and administrative expense, is considered an implicit price concession and is reported as a reduction in revenue. As a result of ASC 606, we reported a material cumulative reduction in clinical revenue from previously reported periods and a similar reduction in general and administrative expenses. Pharma Services Revenue The adoption of ASC 606 also resulted in changes to the timing of revenue recognition related to Pharma Services contracts as certain individual deliverables such as study setup fees, for which revenue was previously recognized in the period when the deliverables were completed and invoiced, will be recognized over the remaining performance period under the new standard. Additionally, certain costs to obtain contracts, primarily for sales commissions, are capitalized when incurred and are amortized over the term of the contract. Under ASC 606, the Company is required to make estimates of the total transaction price per contract, including estimates of variable consideration and the number of performance obligations, and recognize the estimated amount as revenue as it transfers control of the product or performance obligations to its customers. The estimation of total transaction price, number of performance obligations, variable consideration and the application of the related constraint, was not required under previous GAAP and requires the use of significant management judgment and estimates. The Company elected certain practical expedients as allowed under the standard including the following: contracts that began and ended within the same annual reporting period were not restated; contracts with variable consideration were estimated using the transaction price at the date the contract was completed; contract modifications that occurred prior to earliest reporting period have not been retrospectively restated but have rather been reflected as an aggregate adjustment in the earliest reporting period. The cumulative effect of this standard did not result in a material change to our Pharma Services revenue. ASC 606 Adoption Impact to Previously Reported Results We adjusted our condensed consolidated financial statements from amounts previously reported due to the adoption of ASC 606. Select condensed consolidated balance sheet line items, which reflect the adoption of ASC 606, are as follows (in thousands): December 31, 2017 As Reported Impact of Adoption As Adjusted Other current assets $ 4,241 $ 912 $ 5,153 Other assets 689 202 891 Total Assets $ 343,340 $ 1,114 $ 344,454 Pharma contract liability $ — $ 1,406 $ 1,406 Long-term pharma contract liability — 283 283 Deferred income tax liability, net 6,307 381 6,688 Stockholders' Equity 172,918 (956 ) 171,962 Total Liabilities and Stockholders' Equity $ 343,340 $ 1,114 $ 344,454 Select unaudited condensed consolidated statement of operations line items, which reflect the adoption of ASC 606, are as follows (in thousands): For the Three Months Ended June 30, 2017 For the Six Months Ended June 30, 2017 As Reported Impact of Adoption As Adjusted As Reported Impact of Adoption As Adjusted Net Revenue Clinical Services $ 59,791 $ (4,244 ) $ 55,547 $ 116,482 $ (8,027 ) $ 108,455 Pharma Services 6,299 418 6,717 11,285 (47 ) 11,238 Total Revenue $ 66,090 $ (3,826 ) $ 62,264 $ 127,767 $ (8,074 ) $ 119,693 Gross Profit $ 31,178 $ (3,826 ) $ 27,352 $ 58,374 $ (8,073 ) $ 50,301 Total operating expenses (1) $ 29,864 $ (4,353 ) $ 25,511 $ 57,175 $ (8,137 ) $ 49,038 Income from Operations 1,314 527 1,841 1,199 64 1,263 Interest expense 1,411 — 1,411 2,775 — 2,775 Income tax (benefit) expense (54 ) 1 (53 ) (879 ) 47 (832 ) Net Income (Loss) $ (43 ) $ 526 $ 483 $ (697 ) $ 17 (680 ) In May 2017 the FASB issued ASU 2017-09, Compensation – Stock Compensation . This standard provides guidance related to the scope of stock option modification accounting, to reduce diversity in practice and reduce cost and complexity regarding existing guidance. This update is effective for annual periods beginning after December 15, 2017. The Company adopted this standard on January 1, 2018. The adoption of this standard did not have an impact on the consolidated financial statements. In January 2017 the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment . This standard eliminates Step 2 of the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This update is effective for annual and interim periods beginning after December 15, 2019. The Company early adopted this standard on January 1, 2018. The adoption of this standard did not have an impact on the consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments . This standard clarifies how specific cash receipts and cash payments are classified and presented in the statement of cash flows. This update is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. The Company adopted this standard on January 1, 2018. The adoption of this standard did not have an impact on the consolidated financial statements. Issued In February 2016, the FASB issued ASU 2016-02, Leases. The update was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities, including for operating leases, on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of this ASU will result in an increase on the balance sheet for lease liabilities and right to use assets. The Company is currently evaluating the quantitative impact that adopting ASU 2016-02 will have on its consolidated financial statements and assessing any changes to its processes and controls. |
Revenue Recognition and Contrac
Revenue Recognition and Contractual Adjustments | 6 Months Ended |
Jun. 30, 2018 | |
Revenue Recognition [Abstract] | |
Revenue Recognition and Contractual Adjustments | Revenue Recognition and Contractual Adjustments The Company has two operating segments for which it recognizes revenue; Clinical Services and Pharma Services. Our Clinical Services segment provides various clinical testing services to community-based pathology practices, hospital pathology labs and academic centers with reimbursement from various payers including client direct billing, commercial insurance, Medicare and other government, and patients. Our Pharma Services segment supports pharmaceutical firms in their drug development programs by providing testing services for clinical trials and research. Clinical Services Revenue The Company’s specialized diagnostic services are performed based on a written test requisition form or electronic equivalent. The performance obligation is satisfied and revenues are recognized once the diagnostic services have been performed and the results have been delivered to the ordering physician. These diagnostic services are billed to various payers, including Medicare, commercial insurance companies, other directly billed healthcare institutions such as hospitals and clinics, and individuals. Revenue is recorded for all payers based on the amount expected to be collected, which considers implicit price concessions. Implicit price concessions represent differences between amounts billed and the estimated consideration the Company expects to receive based on negotiated discounts, historical collection experience and other anticipated adjustments, including anticipated payer denials. Collection of consideration the Company expects to receive typically occurs within 30 to 60 days of billing for commercial insurance, Medicare and other governmental and self-pay payers and within 60 to 90 days of billing for client payers. Pharma Services Revenue The Company’s Pharma Services segment generally enters into contracts with pharmaceutical and biotech customers as well as other Contract Research Organizations ("CROs") to provide research and clinical trial services ranging in duration from one month to several years. The Company records revenue on a unit-of-service basis based on number of units completed and the total expected contract value. The total expected contract value is estimated based on historical experience of total contracted units compared to realized units as well as known factors on a specific contract-by-contract basis. Certain contracts include upfront fees, final settlement amounts or billing milestones that may not align with the completion of performance obligations. The value of these upfront fees or final settlement amounts is usually recognized over time based on the number of units completed, which aligns with the progress of the Company towards fulfilling its obligations under the contract. The Company also enters into other contracts, such as validation studies, for which the sole deliverable is a final report that is sent to sponsors at the completion of contracted activities. For these contracts, revenue is recognized at a point in time upon delivery of the final report to the sponsor. Any contracts that contain multiple performance obligations and include both units-of-service and point in time deliverables are accounted for as separate performance obligations and revenue is recognized as previously disclosed. The Company negotiates billing schedules and payment terms on a contract-by-contract basis. While the contract terms generally provide for payments based on a unit-of-service arrangement, the billing schedules, payment terms and related cash payments may not align with the performance of services and, as such, may not correspond to revenue recognized in any given period. Amounts collected in advance of services being provided are deferred as contract liabilities on the balance sheet. The associated revenue is recognized and the contract liability is reduced as the contracted services are subsequently performed. Contract assets are established for revenue that has been recognized but not yet billed. These contract assets are reduced once the customer is invoiced and a corresponding account receivable is recorded. Additionally, certain costs to obtain contracts, primarily for sales commissions, are capitalized when incurred and are amortized over the term of the contract. Amounts capitalized for contracts with an initial contract term of twelve months or less are classified as current assets and all others are classified as non-current assets. Most contracts are terminable by the customer, either immediately or according to advance notice terms specified within the contracts. All contracts require payment of fees to the Company for services rendered through the date of termination and may require payment for subsequent services necessary to conclude the study or close out the contract. The following table summarizes the values of contract assets, capitalized commissions and contract liabilities as of June 30, 2018 and December 31, 2017 (in thousands): June 30, 2018 December 31, 2017 Current pharma contract asset $ 400 $ 541 Long-term pharma contract asset 29 31 Total pharma contract asset $ 429 $ 572 Current pharma capitalized commissions $ 264 $ 371 Long-term pharma capitalized commissions 574 171 Total pharma capitalized commissions $ 838 $ 542 Current pharma contract liability $ 2,155 $ 1,406 Long-term pharma contract liability 648 283 Total pharma contract liability $ 2,803 $ 1,689 There were no significant changes in the contract assets for the period ended June 30, 2018 as compared to the balances at December 31, 2017. Pharma contract liabilities increased $1.1 million , or 66% , from December 31, 2017 while capitalized commissions also increased by $0.3 million or 55% . These increases are due to higher upfront fees driven by increases in the volume of Pharma contracts in process. Revenue recognized for the three and six months ended June 30, 2018 related to pharma contract liability balances outstanding at the beginning of the period was $0.3 million and $1.3 million , respectively. Amortization of capitalized commissions for the three and six months ended June 30, 2018 were $0.3 million and $0.4 million , respectively. The amount of existing performance obligations under long-term contracts, as defined by ASC 606, which were unsatisfied as of June 30, 2018 , was $63.7 million. We expect to recognize approximately 40 - 45 % of these remaining performance obligations as revenue in the next 12 months and the balance thereafter. The Company applied the practical expedient and does not disclose information about remaining performance obligations that have original expected durations of one year or less. The unsatisfied existing performance obligations under long-term contracts as defined by ASC 606 differs from backlog in that it does not include wholly unperformed contracts where the promised consideration is variable and/or the application of other practical expedients. Disaggregation of Revenue The Company considered various factors for both its Clinical Services and Pharma Services segments in determining appropriate levels of homogenous data for its disaggregation of revenue, including the nature, amount, timing and uncertainty of revenue and cash flows. For Clinical Services, the categories identified align with our type of customer due to similarities of billing method, level of reimbursement and timing of cash receipts at this level. Pharma Services revenue was not further disaggregated as substantially all of our revenue relates to contracts with large pharmaceutical and biotech customers as well as other CROs for which the nature, timing and uncertainty of revenue and cash flows is similar and primarily driven by individual contract terms. The following table details the disaggregation of revenue for both the Clinical and Pharma Services Segments (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Clinical Services: Client direct billing $ 40,847 $ 36,796 $ 79,561 $ 70,427 Commercial Insurance 8,981 10,124 18,922 21,560 Medicare and Medicaid 9,024 8,403 17,201 16,221 Self-Pay 688 224 827 247 Total Clinical Services $ 59,540 $ 55,547 $ 116,511 $ 108,455 Pharma Services: 8,206 6,717 14,658 11,238 Total Revenue $ 67,746 $ 62,264 $ 131,169 $ 119,693 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill as of June 30, 2018 and December 31, 2017 was $147.0 million . There were no changes in the carrying amount of goodwill during these periods. Intangible assets as of June 30, 2018 and December 31, 2017 consisted of the following (in thousands): June 30, 2018 Amortization Period Cost Accumulated Amortization Net Customer Relationships 156 - 180 months $ 85,068 $ 13,753 $ 71,315 Non-Compete Agreement 36 months 26 11 15 Total $ 85,094 $ 13,764 $ 71,330 December 31, 2017 Amortization Period Cost Accumulated Amortization Net Customer Relationships 156 - 180 months $ 85,068 $ 10,925 $ 74,143 Non-Compete Agreement 36 months 26 4 22 Trade Name 24 months 3,000 3,000 — Total $ 88,094 $ 13,929 $ 74,165 We recorded approximately $1.4 and $1.7 million in straight-line amortization expense of intangible assets for the three month periods ended June 30, 2018 and 2017 , respectively. We recorded approximately $2.8 and $3.5 million in straight-line amortization expense of intangible assets for the six month periods ended June 30, 2018 and 2017 , respectively. The Company records amortization expense as a general and administrative expense. The estimated amortization expense related to amortizable intangible assets for each of the five succeeding fiscal years and thereafter as of June 30, 2018 is as follows (in thousands): Remainder of 2018 $ 2,842 2019 5,680 2020 5,671 2021 5,671 2022 5,671 Thereafter 45,795 Total $ 71,330 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table summarizes the long term debt at June 30, 2018 and December 31, 2017 (in thousands): June 30, 2018 December 31, 2017 Term Loan Facility $ 99,375 $ 71,250 Revolving Credit Facility 30,000 25,400 Capital leases and car loans 11,261 10,542 Total Debt $ 140,636 $ 107,192 Less: Debt issuance costs (2,102 ) (1,768 ) Less: Current portion of long-term debt (12,409 ) (8,989 ) Total Long-Term Debt, net $ 126,125 $ 96,435 The carrying value of the Company’s long-term capital lease obligations and term debt approximates its fair value based on the current market conditions for similar instruments. Term Loan On December 22, 2016, the Company entered into a Credit Agreement with Regions Bank as administrative agent and collateral agent. The Credit Agreement provided for a $75 million term loan facility (the “Term Loan Facility”). On June 21, 2018, the Company entered into an amendment to the Credit Agreement (the “Amendment”) which provided for an additional term loan in the amount of $30 million , for which revised terms are included below. On June 30, 2018 and December 31, 2017 , the Company had current outstanding borrowings under the Term Loan, as amended, of approximately $6.6 million and $3.8 million and long-term outstanding borrowings of approximately $91.5 million and $66.6 million , net of unamortized debt issuance costs of $1.3 million and $0.9 million , respectively. The debt issuance costs were recorded as a reduction in the carrying amount of the related liability and are being amortized over the life of the loan. The Term Loan Facility bears interest at a rate per annum equal to an applicable margin plus, at NeoGenomics Laboratories’ option, either (1)the Adjusted LIBOR rate for the relevant interest period, (2) an alternate base rate determined by reference to the greatest of (a) the prime lending rate of Regions, (b) the federal funds rate for the relevant interest period plus 0.5% per annum and (c) the one month LIBOR rate plus 1% per annum, or (3) a combination of (1) and (2). The applicable margin will range from 2.25% to 4.00% for LIBOR loans and 1.25% to 3.00% for base rate loans, in each case based on NeoGenomics Laboratories’ consolidated leverage ratio (as defined in the Credit Agreement and revised in the Amendment). Interest on borrowings is payable on the last day of each month, in the case of each base rate loan, and on the last day of each interest period (but no less frequently than every three months), in the case of Adjusted LIBOR loans. The Company entered into interest rate swap agreements to hedge against changes in the variable rate for a portion of both the Term Loan Facility and the Amendment. See Note F-Derivative Instruments and Hedging Activities for more information on these instruments. The Term Loan Facility and amounts borrowed under the Revolving Credit Facility are secured on a first priority basis by a security interest in substantially all of the tangible and intangible assets of NeoGenomics Laboratories and the Guarantors. The Term Loan Facility contains various affirmative and negative covenants including ability to incur liens and encumbrances; make certain restricted payments, including paying dividends on its equity securities or payments to redeem, repurchase or retire its equity securities; enter into certain restrictive agreements; make investments, loans and acquisitions; merge or consolidate with any other person; dispose of assets; enter into sale and leaseback transactions; engage in transactions with its affiliates, and materially alter the business it conducts. In addition, the Company must meet certain maximum leverage ratios and fixed charge coverage ratios as of the end of each fiscal quarter commencing with the quarter ending March 31, 2017. The Company was in compliance with all required covenants as of June 30, 2018 . The Term Loan Facility and Amendment have a maturity date of December 22, 2021 . The Credit Agreement requires NeoGenomics Laboratories to mandatorily prepay the Term Loan Facility and amounts borrowed under the Revolving Credit Facility with (i) 100% of net cash proceeds from certain sales and dispositions, subject to certain reinvestment rights, (ii) 100% of net cash proceeds from certain issuances or incurrences of additional debt, (iii) beginning with the fiscal year ending December 31, 2018, 75% of consolidated excess cash flow (as defined) if NeoGenomics Laboratories’ consolidated leverage ratio is greater than or equal to 3.25 :1.0 or 50% of consolidated excess cash flow (as defined) if NeoGenomics Laboratories’ consolidated leverage ratio is less than or equal to 3.25 :1.0 but greater than or equal to 2.75 :1.0 and (iv) 100% of net cash proceeds from issuances of permitted equity securities by NeoGenomics Laboratories made in order to cure a failure to comply with the financial covenants. NeoGenomics Laboratories is permitted to voluntarily prepay the Term Loan Facility and amounts borrowed under the Revolving Credit Facility at any time without penalty. Revolving Credit Facility On December 22, 2016 , the Company entered into a Credit Agreement with Regions Bank as administrative agent and collateral agent. The Credit Agreement provided for a $75 million revolving credit facility (the “Revolving Facility”). On June 30, 2018 , and December 31, 2017 , the Company had outstanding borrowings of approximately $29.2 million and $24.5 million , net of unamortized debt issuance costs of $0.8 million and $0.9 million , respectively. The Revolving Credit Facility includes a $10 million swingline sublimit, with swingline loans bearing interest at the alternate base rate plus the applicable margin. Any principal outstanding under the Revolving Credit Facility is due and payable on December 22, 2021 or such earlier date as the obligations under the Credit Agreement become due and payable pursuant to the terms of the Credit Agreement. The Revolving Facility bears interest at a rate per annum equal to an applicable margin plus, at NeoGenomics Laboratories’ option, either (1)the Adjusted LIBOR rate for the relevant interest period, (2) an alternate base rate determined by reference to the greatest of (a) the prime lending rate of Regions, (b) the federal funds rate for the relevant interest period plus 0.5% per annum and (c) the one month LIBOR rate plus 1% per annum, or (3) a combination of (1) and (2). The applicable margin will range from 2.25% to 4.00% for Adjusted LIBOR loans and 1.25% to 3.00% for base rate loans, in each case based on NeoGenomics Laboratories’ consolidated leverage ratio. Interest on the outstanding principal of the Term Loan Facility will be payable on the last day of each month, in the case of each base rate loan, and on the last day of each interest period (but no less frequently than every three months), in the case of LIBOR loans. The Credit Agreement, as amended requires NeoGenomics Laboratories to mandatorily prepay the Term Loan Facility and amounts borrowed under the Revolving Credit Facility with (i) 100% of net cash proceeds from certain sales and dispositions, subject to certain reinvestment rights, (ii) 100% of net cash proceeds from certain issuances or incurrences of additional debt, (iii) beginning with the fiscal year ending December 31, 2018, 75% of consolidated excess cash flow (as defined) if NeoGenomics Laboratories’ consolidated leverage ratio is greater than or equal to 3.25 :1.0 or 50% of consolidated excess cash flow (as defined) if NeoGenomics Laboratories’ consolidated leverage ratio is less than or equal to 3.25 :1.0 but greater than or equal to 2.75 :1.0 and (iv) 100% of net cash proceeds from issuances of permitted equity securities by NeoGenomics Laboratories made in order to cure a failure to comply with the financial covenants. NeoGenomics Laboratories is permitted to voluntarily prepay the Term Loan Facility and amounts borrowed under the Revolving Credit Facility at any time without penalty, subject to customary “breakage” costs with respect to prepayments of Adjusted LIBOR rate loans made on a day other than the last day of any applicable interest period. Capital Leases The Company has entered into capital leases to purchase laboratory equipment, office equipment and leasehold improvements. These leases expire at various dates through 2021 and the weighted average interest rate under such leases was approximately 4.86% at June 30, 2018 . Most of these leases contain bargain purchase options that allow us to purchase the leased property for a minimal amount upon the expiration of the lease term. The remaining leases have purchase options at fair market value. Property and equipment acquired under capital lease agreements are pledged as collateral to secure the performance of the future minimum lease payments. Maturities of Long-Term Debt Maturities of long-term debt at June 30, 2018 are summarized as follows (in thousands): Term Loan and Revolving Credit Facility Capital Lease Obligations and Car loans Total Long-Term Debt Remainder of 2018 $ 2,625 $ 3,288 $ 5,913 2019 7,873 5,345 13,218 2020 7,873 2,859 10,732 2021 111,004 369 111,373 129,375 11,861 141,236 Less: Interest on capital leases — (600 ) (600 ) 129,375 11,261 140,636 Less: Current portion of long-term debt (6,562 ) (5,847 ) (12,409 ) Less: Debt issuance costs (2,102 ) — (2,102 ) Long-term debt, net $ 120,711 $ 5,414 $ 126,125 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities In December of 2016 and June of 2018, the Company entered into interest rate swap agreements to reduce our exposure to interest rate fluctuations on our variable rate debt obligations. These derivative financial instruments are accounted for at fair value as cash flow hedges, which effectively modifies our exposure to interest rate risk by converting a portion of our floating rate debt to a fixed rate obligation, thus reducing the impact of interest rate changes on future interest expense. We account for derivatives in accordance with ASC Topic 815. Under these agreements, we receive a variable rate of interest based on LIBOR and we pay a fixed rate of interest. The following table summarizes the interest rate swap agreements as of June 30, 2018 and December 31, 2017. December 2016 Hedge June 2018 Hedge Notional Amount $50 million $20 million (1) Effective Date December 30, 2016 June 29, 2018 Index One month LIBOR One month LIBOR Maturity December 31, 2019 December 31, 2021 Rate 1.59 % 2.98 % (1) The notional amount increases to $70 million upon maturity of December 2016 hedge on December 31, 2019. The fair value of the interest rate swaps will be included in other long term assets or liabilities, when applicable. As of June 30, 2018 and December 31, 2017 , the fair value of the derivative financial instruments were $0.4 million and $0.4 million which was included in the balance sheet as other assets and reflected in AOCI. The instrument will be evaluated on a monthly basis and resulting increases or decreases will be recorded as a component of AOCI and will be reclassified to interest expense in the period during which the hedged transaction affects earnings. Cash flows from the interest rate swap are included in operating activities on the consolidated statement of cash flows. The Company performed an effectiveness assessment and determined that the interest rate swaps are highly effective and, thus, there is no impact to the Company's consolidated statements of operations. As of June 30, 2018, the Company estimates that it will reclassify gains or losses on derivative instruments of $0.2 million from AOCI to earnings during the next twelve months as the anticipated cash flows occur. |
Class A Redeemable Convertible
Class A Redeemable Convertible Preferred Stock | 6 Months Ended |
Jun. 30, 2018 | |
Temporary Equity Disclosure [Abstract] | |
Class A Redeemable Convertible Preferred Stock | Class A Redeemable Convertible Preferred Stock On December 30, 2015, the Company issued 14,666,667 shares of its Series A Redeemable Convertible Preferred Stock ("Series A Preferred Stock") as part of the consideration for the acquisition of Clarient. The Series A Preferred Stock has a face value of $7.50 per share for a total liquidation value of $110 million . During the first year, the Series A Preferred Stock had a liquidation value of $100 million if the shares were redeemed prior to December 29, 2016. On December 22, 2016, the Company redeemed 8,066,667 shares of the Series A Preferred Stock for $55.0 million in cash. The redemption amount per share equaled $6.82 ( $7.50 minus the liquidation discount of 9.09% ). In December 2017, the Company issued 264,000 additional shares of Preferred Stock as a Paid-in-Kind (“PIK”) dividend, resulting in a balance of 6,864,000 shares of Series A Preferred Stock outstanding at March 31, 2018. On June 25, 2018, the Company redeemed the remaining outstanding Preferred Stock for an aggregate redemption amount of $50.1 million , prior to consideration of any transaction related expenses. The shares were redeemed at $7.30 per share, representing the applicable 4.55% redemption discount on the original liquidation preference plus an additional $0.14 per share in respect of accrued and unpaid dividends for 2018. Following the redemption, no shares of Preferred Stock remain outstanding. The gain or loss was calculated as the carrying value of the shares of Preferred Stock before the redemption of $37.8 million plus the amount of the beneficial conversion feature originally recorded with the redeemed shares of $21.3 million, as compared to the total consideration being paid, in this case the $50.1 million . Issue Discount The Company recorded the Series A Preferred Stock at a fair value of approximately $73.2 million , or $4.99 per share, on the date of issuance. The difference between the fair value of $73.2 million and the liquidation value of $110 million represents a discount of $36.8 million from the initial face value representing the impact the rights and features of the instrument had on the value to the Company. After the partial redemption, the Series A Preferred stock had a fair value of approximately $32.9 million , or $4.99 per share. The difference between the fair value of $32.9 million and the liquidation value of $49.5 million represented a discount of approximately $16.6 million . Beneficial Conversion Features The fair value of the common stock into which the Series A Preferred Stock was convertible exceeded the allocated purchase price fair value of the Series A Preferred Stock at the date of issuance and after the partial redemption in December of 2016 by approximately $44.7 and $20.1 million , respectively, resulting in a beneficial conversion feature. The Company recognized the beneficial conversion feature as non-cash, deemed dividends to the holder of Series A Preferred Stock over the first three years the Series A Preferred Stock was outstanding, as the date the stock first becomes convertible is three years from the issue date. In addition to the beneficial conversion feature (“BCF”) recorded at the original issue date, we recorded additional BCF discounts for payment-in-kind shares accrued for the quarter ended March 31, 2018 as dividends. Automatic Conversion Absent an early redemption, each share of Series A Preferred Stock issued and outstanding as of the tenth anniversary of the original issue date would have automatically converted into fully paid and non-assessable shares of common stock. Classification Prior to redemption, the Company classified the Preferred Stock as temporary equity on the consolidated balance sheets due to certain change in control events that are outside the Company’s control, including deemed liquidation events described in the Series A Certificate of Designation. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Equity | Equity A summary of the stock option activity under the Company’s plans for the six months ended June 30, 2018 is as follows: Number of shares Weighted average price Options outstanding at December 31, 2017 6,342,526 $ 6.51 Options granted 2,168,602 $ 8.34 Less: Options exercised 1,030,576 $ 5.53 Options canceled or expired 25,498 $ 8.72 Options outstanding at June 30, 2018 7,455,054 $ 7.18 Exercisable at June 30, 2018 2,958,222 $ 6.14 Of the 7,455,054 outstanding options at June 30, 2018 , 840,001 were stock options issued to non-employees of the Company of which 416,663 options were vested and 423,338 options were unvested as of June 30, 2018 . The fair value of each stock option award granted during the six months ended June 30, 2018 was estimated as of the grant date using a trinomial lattice model with the following weighted average assumptions: Six Months Ended Expected term (in years) 2.0 - 4.0 Risk-free interest rate (%) 2.4% Expected volatility (%) 35.6% - 45.5% Dividend yield (%) — Weighted average fair value/share at grant date $2.61 As of June 30, 2018 , there was approximately $4.5 million of unrecognized share based compensation expense related to stock options that will be recognized over a weighted-average period of approximately 0.8 years . A summary of the restricted stock activity under the Company’s plans for the six months ended June 30, 2018 is as follows: Number of Weighted average price Nonvested at December 31, 2017 327,211 $ 7.27 Granted 41,382 $ 11.60 Vested (119,180 ) 7.27 Nonvested at June 30, 2018 249,413 $ 7.99 Stock based compensation expense recognized for stock options and restricted stock and included in the consolidated statements of operations was allocated as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Research and development expense $ 251 $ 285 $ 269 $ 327 General and administrative expense 2,082 1,637 3,688 2,725 Total stock based compensation expense $ 2,333 $ 1,922 $ 3,957 $ 3,052 Stock based compensation recorded in research and development relates to unvested options granted to a non-employee. Employee Stock Purchase Plan We offer an employee stock purchase plan (“ESPP”) through which eligible employees may purchase shares of our common stock at a discount. On May 25, 2017, the Company amended the ESPP, increasing the discount from 5% to 15% of the fair market value of the Company’s common stock. As a result of this change, we began recording stock based compensation expense related to the ESPP during the quarter ended September 31, 2017. During the three months ended June 30, 2018 and 2017 , employees purchased 29,266 and 26,569 shares, respectively under the ESPP. The expense recorded for these periods was approximately $0.1 million and $0 , respectively. During the six months ended June 30, 2018 and 2017 , employees purchased 66,188 and 50,932 shares, respectively under the ESPP. The expense recorded for these periods was approximately $0.1 million and $0 , respectively. |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Commitments During the three and six months ended June 30, 2018 , the Company entered into leases of approximately $0.3 million and $3.7 million. These leases were primarily to fund the construction of our laboratory in Houston, Texas which was completed in May 2018. These leases have 36 month terms, a $1.00 buyout option at the end of the term and interest rates ranging from 4.6% to 5.8% . The Company accounted for these leases as capital leases. |
Related Party Transaction
Related Party Transaction | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | Related Party Transaction During the three months ended June 30, 2018 and 2017 , Steven C. Jones, a director, officer and shareholder of the Company, earned approximately $41,000 and $52,000 , respectively, for consulting work performed in connection with his duties as Executive Vice President and for reimbursement of related expenses. During the same periods, Mr. Jones also earned $12,500 and $12,500 , respectively, as compensation for his services on the Board. During the six months ended June 30, 2018 and 2017, Mr. Jones earned approximately $87,000 and $118,000 , respectively for consulting work performed in connection with his duties as Executive Vice President and for reimbursement of related expenses. During the same periods, Mr. Jones also earned $25,000 and $12,500 , respectively as compensation for his services on the Board. On June 1, 2018, the Company granted stock options and restricted stock to each of its Board members as part of its annual Board compensation process. Mr. Jones was granted 3,017 stock options and 6,897 shares of restricted stock for his services on the Board. The options were granted at a price of $11.60 per option and each option had a fair market value of $3.74 . The options vest on June 1, 2019. The restricted stock has a fair value of $11.60 per share and vests on June 1, 2019. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company has two operating segments for which it recognizes revenue; Clinical Services and Pharma Services. Our Clinical Services segment provides various clinical testing services to community-based pathology practices, hospital pathology labs and academic centers with reimbursement from various payers including client direct billing, commercial insurance, Medicare and other government, and patients. Our Pharma Services segment supports pharmaceutical firms in their drug development programs by supporting various clinical trials and research. In the fourth quarter of 2017, changes were made in the information provided to our Chief Operating Decision Maker (“CODM”); greater detail was provided regarding the performance of our Pharma business and our Clinical business as there was an increased focus on this financial data due to the growth of our Pharma business. Our CODM also changed the way he was using this financial information to make strategic decisions regarding allocation of resources and evaluating performance of the Company. This resulted in a change in our operating segments to align with how the CODM views our business which resulted in two operating segments; a Pharma Services segment and a Clinical Services segment. We have presented the financial information reviewed by the CODM including revenues, cost of revenue and gross margin for each of our operating segments. The segment information presented in these financial statements has been conformed to present segments on this revised basis for all prior periods. Assets are not presented at the segment level as that information is not used by the CODM. The following table summarizes segment information for the six month periods ended June 30, 2018 and 2017, respectively (in thousands). Three Months Ended June 30, Six Months Ended June 30, 2018 2017 (as adjusted) 2018 2017 (as adjusted) Net revenues: Clinical Services $ 59,540 $ 55,547 $ 116,511 $ 108,455 Pharma Services 8,206 6,717 14,658 11,238 Total Revenue $ 67,746 $ 62,264 $ 131,169 $ 119,693 Cost of revenue: Clinical Services $ 32,035 $ 30,997 $ 63,076 $ 61,704 Pharma Services 5,181 3,915 10,260 7,688 Total Cost of Revenue $ 37,216 $ 34,912 $ 73,336 $ 69,392 Gross Profit: Clinical Services $ 27,505 $ 24,550 $ 53,435 $ 46,751 Pharma Services 3,025 2,802 4,398 3,550 Total Gross Profit $ 30,530 $ 27,352 $ 57,833 $ 50,301 Operating expenses: General and administrative $ 20,983 $ 18,432 $ 38,050 $ 35,450 Research and development 1,073 947 2,029 1,809 Sales and marketing 7,680 6,132 14,455 11,779 Total operating expenses 29,736 25,511 54,534 49,038 Income from Operations 794 1,841 3,299 1,263 Interest expense, net 1,407 1,411 2,892 2,775 Other expense 124 — 62 — Income (loss) before taxes (737 ) 430 345 (1,512 ) Income tax (benefit) expense (357 ) (53 ) 81 (832 ) Net Income (Loss) $ (380 ) $ 483 $ 264 $ (680 ) |
Recently Adopted and Issued A18
Recently Adopted and Issued Accounting Guidance (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Summary of Adoption of New Accounting Pronouncements | Select condensed consolidated balance sheet line items, which reflect the adoption of ASC 606, are as follows (in thousands): December 31, 2017 As Reported Impact of Adoption As Adjusted Other current assets $ 4,241 $ 912 $ 5,153 Other assets 689 202 891 Total Assets $ 343,340 $ 1,114 $ 344,454 Pharma contract liability $ — $ 1,406 $ 1,406 Long-term pharma contract liability — 283 283 Deferred income tax liability, net 6,307 381 6,688 Stockholders' Equity 172,918 (956 ) 171,962 Total Liabilities and Stockholders' Equity $ 343,340 $ 1,114 $ 344,454 Select unaudited condensed consolidated statement of operations line items, which reflect the adoption of ASC 606, are as follows (in thousands): For the Three Months Ended June 30, 2017 For the Six Months Ended June 30, 2017 As Reported Impact of Adoption As Adjusted As Reported Impact of Adoption As Adjusted Net Revenue Clinical Services $ 59,791 $ (4,244 ) $ 55,547 $ 116,482 $ (8,027 ) $ 108,455 Pharma Services 6,299 418 6,717 11,285 (47 ) 11,238 Total Revenue $ 66,090 $ (3,826 ) $ 62,264 $ 127,767 $ (8,074 ) $ 119,693 Gross Profit $ 31,178 $ (3,826 ) $ 27,352 $ 58,374 $ (8,073 ) $ 50,301 Total operating expenses (1) $ 29,864 $ (4,353 ) $ 25,511 $ 57,175 $ (8,137 ) $ 49,038 Income from Operations 1,314 527 1,841 1,199 64 1,263 Interest expense 1,411 — 1,411 2,775 — 2,775 Income tax (benefit) expense (54 ) 1 (53 ) (879 ) 47 (832 ) Net Income (Loss) $ (43 ) $ 526 $ 483 $ (697 ) $ 17 (680 ) |
Revenue Recognition and Contr19
Revenue Recognition and Contractual Adjustments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue Recognition [Abstract] | |
Summary of Contract Assets and Liabilities | The following table summarizes the values of contract assets, capitalized commissions and contract liabilities as of June 30, 2018 and December 31, 2017 (in thousands): June 30, 2018 December 31, 2017 Current pharma contract asset $ 400 $ 541 Long-term pharma contract asset 29 31 Total pharma contract asset $ 429 $ 572 Current pharma capitalized commissions $ 264 $ 371 Long-term pharma capitalized commissions 574 171 Total pharma capitalized commissions $ 838 $ 542 Current pharma contract liability $ 2,155 $ 1,406 Long-term pharma contract liability 648 283 Total pharma contract liability $ 2,803 $ 1,689 |
Summary of Disaggregation of Revenue | The following table details the disaggregation of revenue for both the Clinical and Pharma Services Segments (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Clinical Services: Client direct billing $ 40,847 $ 36,796 $ 79,561 $ 70,427 Commercial Insurance 8,981 10,124 18,922 21,560 Medicare and Medicaid 9,024 8,403 17,201 16,221 Self-Pay 688 224 827 247 Total Clinical Services $ 59,540 $ 55,547 $ 116,511 $ 108,455 Pharma Services: 8,206 6,717 14,658 11,238 Total Revenue $ 67,746 $ 62,264 $ 131,169 $ 119,693 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Classes of Intangible Assets | Intangible assets as of June 30, 2018 and December 31, 2017 consisted of the following (in thousands): June 30, 2018 Amortization Period Cost Accumulated Amortization Net Customer Relationships 156 - 180 months $ 85,068 $ 13,753 $ 71,315 Non-Compete Agreement 36 months 26 11 15 Total $ 85,094 $ 13,764 $ 71,330 December 31, 2017 Amortization Period Cost Accumulated Amortization Net Customer Relationships 156 - 180 months $ 85,068 $ 10,925 $ 74,143 Non-Compete Agreement 36 months 26 4 22 Trade Name 24 months 3,000 3,000 — Total $ 88,094 $ 13,929 $ 74,165 |
Estimated Amortization Expense | The estimated amortization expense related to amortizable intangible assets for each of the five succeeding fiscal years and thereafter as of June 30, 2018 is as follows (in thousands): Remainder of 2018 $ 2,842 2019 5,680 2020 5,671 2021 5,671 2022 5,671 Thereafter 45,795 Total $ 71,330 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Long Term Debt | The following table summarizes the long term debt at June 30, 2018 and December 31, 2017 (in thousands): June 30, 2018 December 31, 2017 Term Loan Facility $ 99,375 $ 71,250 Revolving Credit Facility 30,000 25,400 Capital leases and car loans 11,261 10,542 Total Debt $ 140,636 $ 107,192 Less: Debt issuance costs (2,102 ) (1,768 ) Less: Current portion of long-term debt (12,409 ) (8,989 ) Total Long-Term Debt, net $ 126,125 $ 96,435 |
Summary of Maturities of Long-Term Debt | Maturities of long-term debt at June 30, 2018 are summarized as follows (in thousands): Term Loan and Revolving Credit Facility Capital Lease Obligations and Car loans Total Long-Term Debt Remainder of 2018 $ 2,625 $ 3,288 $ 5,913 2019 7,873 5,345 13,218 2020 7,873 2,859 10,732 2021 111,004 369 111,373 129,375 11,861 141,236 Less: Interest on capital leases — (600 ) (600 ) 129,375 11,261 140,636 Less: Current portion of long-term debt (6,562 ) (5,847 ) (12,409 ) Less: Debt issuance costs (2,102 ) — (2,102 ) Long-term debt, net $ 120,711 $ 5,414 $ 126,125 |
Derivative Instruments and He22
Derivative Instruments and Hedging Activities Derivative Instruments and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivative Instruments | The following table summarizes the interest rate swap agreements as of June 30, 2018 and December 31, 2017. December 2016 Hedge June 2018 Hedge Notional Amount $50 million $20 million (1) Effective Date December 30, 2016 June 29, 2018 Index One month LIBOR One month LIBOR Maturity December 31, 2019 December 31, 2021 Rate 1.59 % 2.98 % (1) The notional amount increases to $70 million upon maturity of December 2016 hedge on December 31, 2019. |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Summary of Stock Option Activity | A summary of the stock option activity under the Company’s plans for the six months ended June 30, 2018 is as follows: Number of shares Weighted average price Options outstanding at December 31, 2017 6,342,526 $ 6.51 Options granted 2,168,602 $ 8.34 Less: Options exercised 1,030,576 $ 5.53 Options canceled or expired 25,498 $ 8.72 Options outstanding at June 30, 2018 7,455,054 $ 7.18 Exercisable at June 30, 2018 2,958,222 $ 6.14 |
Summary of Fair Value of Each Stock Option Award Granted | The fair value of each stock option award granted during the six months ended June 30, 2018 was estimated as of the grant date using a trinomial lattice model with the following weighted average assumptions: Six Months Ended Expected term (in years) 2.0 - 4.0 Risk-free interest rate (%) 2.4% Expected volatility (%) 35.6% - 45.5% Dividend yield (%) — Weighted average fair value/share at grant date $2.61 |
Summary of Restricted Stock Activity | A summary of the restricted stock activity under the Company’s plans for the six months ended June 30, 2018 is as follows: Number of Weighted average price Nonvested at December 31, 2017 327,211 $ 7.27 Granted 41,382 $ 11.60 Vested (119,180 ) 7.27 Nonvested at June 30, 2018 249,413 $ 7.99 |
Summary of Stock-Based Compensation Expense Recognized for Stock Options and Restricted Stock Included in Consolidated Statements of Operations | Stock based compensation expense recognized for stock options and restricted stock and included in the consolidated statements of operations was allocated as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Research and development expense $ 251 $ 285 $ 269 $ 327 General and administrative expense 2,082 1,637 3,688 2,725 Total stock based compensation expense $ 2,333 $ 1,922 $ 3,957 $ 3,052 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | The following table summarizes segment information for the six month periods ended June 30, 2018 and 2017, respectively (in thousands). Three Months Ended June 30, Six Months Ended June 30, 2018 2017 (as adjusted) 2018 2017 (as adjusted) Net revenues: Clinical Services $ 59,540 $ 55,547 $ 116,511 $ 108,455 Pharma Services 8,206 6,717 14,658 11,238 Total Revenue $ 67,746 $ 62,264 $ 131,169 $ 119,693 Cost of revenue: Clinical Services $ 32,035 $ 30,997 $ 63,076 $ 61,704 Pharma Services 5,181 3,915 10,260 7,688 Total Cost of Revenue $ 37,216 $ 34,912 $ 73,336 $ 69,392 Gross Profit: Clinical Services $ 27,505 $ 24,550 $ 53,435 $ 46,751 Pharma Services 3,025 2,802 4,398 3,550 Total Gross Profit $ 30,530 $ 27,352 $ 57,833 $ 50,301 Operating expenses: General and administrative $ 20,983 $ 18,432 $ 38,050 $ 35,450 Research and development 1,073 947 2,029 1,809 Sales and marketing 7,680 6,132 14,455 11,779 Total operating expenses 29,736 25,511 54,534 49,038 Income from Operations 794 1,841 3,299 1,263 Interest expense, net 1,407 1,411 2,892 2,775 Other expense 124 — 62 — Income (loss) before taxes (737 ) 430 345 (1,512 ) Income tax (benefit) expense (357 ) (53 ) 81 (832 ) Net Income (Loss) $ (380 ) $ 483 $ 264 $ (680 ) |
Nature of Business and Basis 25
Nature of Business and Basis of Presentation (Detail) - segment | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of operating segments | 2 | |
Percentage of consolidated assets net revenues and net income reported by reportable operating segment | 100.00% | 100.00% |
Recently Adopted and Issued A26
Recently Adopted and Issued Accounting Guidance - Narrative (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2018segment | Apr. 01, 2018USD ($) | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Number of reportable segments | segment | 2 | |
Retained Earnings | Accounting Standards Update 2018-07 | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Cumulative effect adjustment on retained earnings | $ 1.1 | |
Additional Paid-in Capital | Accounting Standards Update 2018-07 | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Cumulative effect adjustment on retained earnings | $ (1.1) |
Recently Adopted and Issued A27
Recently Adopted and Issued Accounting Guidance - Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Other current assets | $ 6,161 | $ 5,153 |
Other assets | 1,302 | 891 |
Total Assets | 344,454 | |
Current pharma contract liability | 2,155 | 1,406 |
Long-term pharma contract liability | 648 | 283 |
Deferred income tax liability, net | 6,827 | 6,688 |
Stockholders' Equity | 164,209 | 171,962 |
Total Liabilities and Stockholders' Equity | $ 345,783 | 344,454 |
As Reported | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Other current assets | 4,241 | |
Other assets | 689 | |
Total Assets | 343,340 | |
Current pharma contract liability | 0 | |
Long-term pharma contract liability | 0 | |
Deferred income tax liability, net | 6,307 | |
Stockholders' Equity | 172,918 | |
Total Liabilities and Stockholders' Equity | 343,340 | |
Impact of Adoption | Accounting Standards Update 2014-09 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Other current assets | 912 | |
Other assets | 202 | |
Total Assets | 1,114 | |
Current pharma contract liability | 1,406 | |
Long-term pharma contract liability | 283 | |
Deferred income tax liability, net | 381 | |
Stockholders' Equity | (956) | |
Total Liabilities and Stockholders' Equity | $ 1,114 |
Recently Adopted and Issued A28
Recently Adopted and Issued Accounting Guidance - Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Clinical Services | $ 59,540 | $ 55,547 | $ 116,511 | $ 108,455 |
Pharma Services | 8,206 | 6,717 | 14,658 | 11,238 |
Total Revenue | 67,746 | 62,264 | 131,169 | 119,693 |
Gross Profit | 30,530 | 27,352 | 57,833 | 50,301 |
Total operating expenses | 29,736 | 25,511 | 54,534 | 49,038 |
Income from Operations | 794 | 1,841 | 3,299 | 1,263 |
Interest expense | 1,407 | 1,411 | 2,892 | 2,775 |
Income tax (benefit) expense | (357) | (53) | 81 | (832) |
NET INCOME (LOSS) | $ (380) | 483 | $ 264 | (680) |
As Reported | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Clinical Services | 59,791 | 116,482 | ||
Pharma Services | 6,299 | 11,285 | ||
Total Revenue | 66,090 | 127,767 | ||
Gross Profit | 31,178 | 58,374 | ||
Total operating expenses | 29,864 | 57,175 | ||
Income from Operations | 1,314 | 1,199 | ||
Interest expense | 1,411 | 2,775 | ||
Income tax (benefit) expense | (54) | (879) | ||
NET INCOME (LOSS) | (43) | (697) | ||
Impact of Adoption | Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Clinical Services | (4,244) | (8,027) | ||
Pharma Services | 418 | (47) | ||
Total Revenue | (3,826) | (8,074) | ||
Gross Profit | (3,826) | (8,073) | ||
Total operating expenses | (4,353) | (8,137) | ||
Income from Operations | 527 | 64 | ||
Interest expense | 0 | 0 | ||
Income tax (benefit) expense | 1 | 47 | ||
NET INCOME (LOSS) | $ 526 | $ 17 |
Revenue Recognition and Contr29
Revenue Recognition and Contractual Adjustments - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($)segment | Dec. 31, 2017USD ($) | |
Disaggregation of Revenue [Line Items] | |||
Number of operating segments | segment | 2 | ||
Increase in pharma contract liabilities | $ 1,100 | ||
Increase in pharma contract liabilities (as a percent) | 66.00% | ||
Capitalized contract costs | $ 838 | $ 838 | $ 542 |
Pharma contract liability, revenue recognized | 300 | 1,300 | |
Amortization of contract commissions | 300 | 400 | |
Commissions | |||
Disaggregation of Revenue [Line Items] | |||
Capitalized contract costs | $ 300 | $ 300 | |
Capitalized contract costs (as a percent) | 55.00% | 55.00% |
Revenue Recognition and Contr30
Revenue Recognition and Contractual Adjustments - Remaining Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01 $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Existing performance obligation unsatisfied | $ 63.7 |
Performance obligations expected to be satisfied, expected timing | 12 months |
Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation expected to be recognized (as a percent) | 40.00% |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation expected to be recognized (as a percent) | 45.00% |
Revenue Recognition and Contr31
Revenue Recognition and Contractual Adjustments - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Contract with Customer, Asset, Net [Abstract] | ||
Current pharma contract asset | $ 400 | $ 541 |
Long-term pharma contract asset | 29 | 31 |
Total pharma contract asset | 429 | 572 |
Capitalized Contract Cost [Abstract] | ||
Current pharma capitalized commissions | 264 | 371 |
Long-term pharma capitalized commissions | 574 | 171 |
Total pharma capitalized commissions | 838 | 542 |
Contract with Customer, Liability [Abstract] | ||
Current pharma contract liability | 2,155 | 1,406 |
Long-term pharma contract liability | 648 | 283 |
Total pharma contract liability | $ 2,803 | $ 1,689 |
Revenue Recognition and Contr32
Revenue Recognition and Contractual Adjustments - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenues | $ 67,746 | $ 62,264 | $ 131,169 | $ 119,693 |
Clinical Services | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenues | 59,540 | 55,547 | 116,511 | 108,455 |
Clinical Services | Client direct billing | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenues | 40,847 | 36,796 | 79,561 | 70,427 |
Clinical Services | Commercial Insurance | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenues | 8,981 | 10,124 | 18,922 | 21,560 |
Clinical Services | Medicare and Medicaid | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenues | 9,024 | 8,403 | 17,201 | 16,221 |
Clinical Services | Self-Pay | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenues | 688 | 224 | 827 | 247 |
Pharma Services | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenues | $ 8,206 | $ 6,717 | $ 14,658 | $ 11,238 |
Goodwill and Intangible Asset33
Goodwill and Intangible Assets - Narrative (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 147,019,000 | $ 147,019,000 | $ 147,019,000 | ||
Changes in carrying amount of goodwill | 0 | $ 0 | |||
Amortization of intangibles | $ 1,400,000 | $ 1,700,000 | $ 2,834,000 | $ 3,450,000 |
Goodwill and Intangible Asset34
Goodwill and Intangible Assets - Classes of Intangible Assets (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 85,094 | $ 88,094 |
Accumulated Amortization | 13,764 | 13,929 |
Net | 71,330 | 74,165 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 85,068 | 85,068 |
Accumulated Amortization | 13,753 | 10,925 |
Net | $ 71,315 | $ 74,143 |
Non-Compete Agreement | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 36 months | 36 months |
Cost | $ 26 | $ 26 |
Accumulated Amortization | 11 | 4 |
Net | $ 15 | $ 22 |
Trade Name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 24 months | |
Cost | $ 3,000 | |
Accumulated Amortization | 3,000 | |
Net | $ 0 | |
Minimum | Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 156 months | 156 months |
Maximum | Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 180 months | 180 months |
Goodwill and Intangible Asset35
Goodwill and Intangible Assets - Estimated Amortization Expense (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2018 | $ 2,842 | |
2,019 | 5,680 | |
2,020 | 5,671 | |
2,021 | 5,671 | |
2,022 | 5,671 | |
Thereafter | 45,795 | |
Net | $ 71,330 | $ 74,165 |
Debt - Summary of Long Term De
Debt - Summary of Long Term Debt (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Capital leases and car loans | $ 11,261 | $ 10,542 |
Total Debt | 140,636 | 107,192 |
Less: Debt issuance costs | (2,102) | (1,768) |
Less: Current portion of long-term debt | (12,409) | (8,989) |
Total Long-Term Debt, net | 126,125 | 96,435 |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | 99,375 | 71,250 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 30,000 | $ 25,400 |
Debt - Narrative (Detail)
Debt - Narrative (Detail) - USD ($) | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 21, 2018 | Dec. 31, 2017 | Dec. 22, 2016 | |
Line of Credit Facility [Line Items] | ||||
Long-term outstanding borrowings | $ 29,176,000 | $ 24,516,000 | ||
Capital Leases | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, weighted average interest rates | 4.86% | |||
Term Loan | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, maximum borrowing capacity | $ 30,000,000 | $ 75,000,000 | ||
Current outstanding borrowings | $ 6,600,000 | 3,800,000 | ||
Long-term outstanding borrowings | 91,500,000 | 66,600,000 | ||
Unamortized transaction costs | $ 1,300,000 | 900,000 | ||
Debt instrument, percentage of net cash proceeds from sales and dispositions subject to certain reinvestment rights | 100.00% | |||
Debt instrument, percentage of net cash proceeds from issuances or incurrence of additional debt to be used for mandatory prepayment | 100.00% | |||
Debt instrument, percentage of excess cash flow to be used for mandatory prepayment starting next fiscal year | 75.00% | |||
Debt instrument, step-down percentage | 50.00% | |||
Debt instrument covenant leverage ratio | 325.00% | |||
Debt instrument, percentage of net cash proceeds from issuances of permitted equity securities to be used for mandatory prepayment | 100.00% | |||
Term Loan | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument covenant leverage ratio | 275.00% | |||
Term Loan | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument covenant leverage ratio | 325.00% | |||
Term Loan | Federal Funds Rate | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument variable interest rate | 0.50% | |||
Term Loan | LIBOR | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument variable interest rate | 1.00% | |||
Term Loan | LIBOR | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument applicable margin | 2.25% | |||
Term Loan | LIBOR | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument applicable margin | 4.00% | |||
Term Loan | Base Rate | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument applicable margin | 1.25% | |||
Term Loan | Base Rate | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument applicable margin | 3.00% | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, percentage of net cash proceeds from sales and dispositions subject to certain reinvestment rights | 100.00% | |||
Debt instrument, percentage of net cash proceeds from issuances or incurrence of additional debt to be used for mandatory prepayment | 100.00% | |||
Debt instrument, percentage of excess cash flow to be used for mandatory prepayment starting next fiscal year | 75.00% | |||
Debt instrument, step-down percentage | 50.00% | |||
Debt instrument covenant leverage ratio | 325.00% | |||
Debt instrument, percentage of net cash proceeds from issuances of permitted equity securities to be used for mandatory prepayment | 100.00% | |||
Line of credit facility maximum borrowing capacity | 75,000,000 | |||
Long-term outstanding borrowings | $ 29,200,000 | 24,500,000 | ||
Unamortized transaction costs | $ 800,000 | $ 900,000 | ||
Line of credit facility, swingline sublimit | $ 10,000,000 | |||
Revolving Credit Facility | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Debt covenant, leverage ratio required for step-down percentage | 2.75 | |||
Revolving Credit Facility | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Debt covenant, leverage ratio required for step-down percentage | 3.25 | |||
Revolving Credit Facility | Federal Funds Rate | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument variable interest rate | 0.50% | |||
Revolving Credit Facility | LIBOR | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument variable interest rate | 1.00% | |||
Revolving Credit Facility | LIBOR | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument variable interest rate | 2.25% | |||
Revolving Credit Facility | LIBOR | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument variable interest rate | 4.00% | |||
Revolving Credit Facility | Base Rate | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument variable interest rate | 1.25% | |||
Revolving Credit Facility | Base Rate | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument variable interest rate | 3.00% |
Debt - Schedule of Maturities
Debt - Schedule of Maturities of Long Term Debt (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Long-term Debt, by Current and Noncurrent [Abstract] | ||
Less: Debt issuance costs | $ (2,102) | $ (1,768) |
Capital Lease Obligations | ||
Less: Interest on capital leases | (600) | |
Total Long-Term Debt | ||
Remainder of 2018 | 5,913 | |
2,019 | 13,218 | |
2,020 | 10,732 | |
2,021 | 111,373 | |
Long-term Debt and Capital Lease Obligations | 141,236 | |
Total Debt | 140,636 | 107,192 |
Less: Current portion of long-term debt | (12,409) | (8,989) |
Total Long-Term Debt, net | 126,125 | $ 96,435 |
Term Loan And Revolving Credit Facility | ||
Long-term Debt, by Current and Noncurrent [Abstract] | ||
Remainder of 2018 | 2,625 | |
2,019 | 7,873 | |
2,020 | 7,873 | |
2,021 | 111,004 | |
Long-term Debt | 129,375 | |
Long-term debt | 129,375 | |
Less: Current portion of long-term debt | (6,562) | |
Less: Debt issuance costs | (2,102) | |
Long-term debt, net | 120,711 | |
Capital Lease Obligations and Car loans | ||
Long-term Debt, by Current and Noncurrent [Abstract] | ||
Less: Debt issuance costs | 0 | |
Capital Lease Obligations | ||
Remainder of 2018 | 3,288 | |
2,019 | 5,345 | |
2,020 | 2,859 | |
2,021 | 369 | |
Capital Lease Obligations | 11,861 | |
Less: Interest on capital leases | (600) | |
Capital Lease Obligations | 11,261 | |
Less: Current portion of long-term debt | (5,847) | |
Long-term portion of capital leases | $ 5,414 |
Derivative Instruments and He39
Derivative Instruments and Hedging Activities (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | ||
Estimated reclassification of derivative gain (loss) from AOCI to earnings | $ 200,000 | |
Interest Rate Swap | ||
Derivative [Line Items] | ||
Fair value of derivative instrument | 400,000 | $ 400,000 |
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Hedge December 2016 | ||
Derivative [Line Items] | ||
Total notional amount | $ 50,000,000 | $ 50,000,000 |
Fixed interest rate | 1.59% | 1.59% |
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Hedge June 2018 | ||
Derivative [Line Items] | ||
Total notional amount | $ 20,000,000 | $ 20,000,000 |
Fixed interest rate | 2.98% | 2.98% |
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Swap | ||
Derivative [Line Items] | ||
Notional amount increase upon maturity | $ 70,000,000 |
Class A Redeemable Convertibl40
Class A Redeemable Convertible Preferred Stock (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jun. 25, 2018 | Jun. 24, 2018 | Dec. 22, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 29, 2016 | Dec. 30, 2015 |
Temporary Equity [Line Items] | |||||||||
Temporary equity, shares issued | 0 | 6,864,000 | |||||||
Temporary equity, face value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||
Temporary equity, shares outstanding | 0 | 6,864,000 | |||||||
Redemption of preferred stock | $ 50,096 | $ 0 | |||||||
Temporary equity, beneficial conversion feature, recognition period (in years) | 3 years | ||||||||
Series A Redeemable Convertible Preferred Stock | |||||||||
Temporary Equity [Line Items] | |||||||||
Temporary equity, shares issued | 14,666,667 | ||||||||
Temporary equity, face value (in dollars per share) | $ 7.50 | $ 7.50 | |||||||
Temporary equity, liquidation value | $ 49,500 | $ 110,000 | |||||||
Temporary equity liquidation amount at redemption | $ 100,000 | ||||||||
Temporary equity shares redemption | 8,066,667 | ||||||||
Temporary equity redemption amount | $ 55,000 | ||||||||
Temporary equity, redemption per share (in dollars per share) | $ 7.30 | $ 6.82 | |||||||
Redemption discounts percentage | 4.55% | 9.09% | |||||||
Temporary equity, shares outstanding | 6,864,000 | ||||||||
Redemption of preferred stock | $ 50,100 | ||||||||
Additional amount per share added for accrued and unpaid dividends (in dollars per share) | $ 0.14 | ||||||||
Temporary equity, carrying amount | $ 37,800 | ||||||||
Temporary equity, recognized amount of beneficial conversion feature | $ (21,300) | ||||||||
Temporary equity, fair value | $ 32,900 | $ 73,200 | |||||||
Temporary equity issued, price per share (in dollars per share) | $ 4.99 | $ 4.99 | |||||||
Temporary equity issue discount | $ 16,600 | $ 36,800 | |||||||
Temporary equity, value of beneficial conversion feature | $ 20,100 | $ 44,700 | |||||||
Series A Redeemable Convertible Preferred Stock | Payment In Kind Period Two | |||||||||
Temporary Equity [Line Items] | |||||||||
Temporary equity, shares issued | 264,000 |
Equity - Summary of Stock Optio
Equity - Summary of Stock Option Activity (Detail) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Number of shares | |
Stock options, beginning balance (in shares) | shares | 6,342,526 |
Stock options, granted (in shares) | shares | 2,168,602 |
Stock options, exercised (in shares) | shares | 1,030,576 |
Stock options, canceled or expired (in shares) | shares | 25,498 |
Stock options, ending balance (in shares) | shares | 7,455,054 |
Stock options, exercisable, ending balance (in shares) | shares | 2,958,222 |
Weighted average price | |
Weighted average exercise price, beginning balance (in dollars per share) | $ / shares | $ 6.51 |
Weighted average exercise price, granted (in dollars per share) | $ / shares | 8.34 |
Weighted average exercise price, exercised (in dollars per share) | $ / shares | 5.53 |
Weighted average exercise price, canceled or expired (in dollars per share) | $ / shares | 8.72 |
Weighted average exercise price, ending balance (in dollars per share) | $ / shares | 7.18 |
Weighted average exercise price, exercisable, ending balance (in dollars per share) | $ / shares | $ 6.14 |
Equity - Narrative (Detail)
Equity - Narrative (Detail) - USD ($) $ in Millions | May 25, 2017 | May 24, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock option outstanding (in shares) | 7,455,054 | 7,455,054 | 6,342,526 | ||||
Stock options, granted (in shares) | 2,168,602 | ||||||
Unrecognized stock-based compensation cost | $ 4.5 | $ 4.5 | |||||
Unrecognized share-based compensation expense, weighted-average recognition period (in years) | 9 months | ||||||
Employee Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Change in discount rate | 15.00% | 5.00% | |||||
Shares purchased by employees under ESPP | 29,266 | 26,569 | 66,188 | 50,932 | |||
Stock compensation expense (gain) | $ 0.1 | $ 0 | $ 0.1 | $ 0 | |||
Non Employee | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock options, granted (in shares) | 840,001 | ||||||
Stock option vested (in shares) | 416,663 | ||||||
Stock option unvested (in shares) | 423,338 | 423,338 |
Equity - Fair Value of Each Sto
Equity - Fair Value of Each Stock Option Award Granted (Detail) | 6 Months Ended |
Jun. 30, 2018$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate (%) | 2.40% |
Dividend yield (%) | 0.00% |
Weighted average fair value/share at grant date (in dollars per share) | $ 2.61 |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 2 years |
Expected volatility (%) | 35.60% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 4 years |
Expected volatility (%) | 45.50% |
Equity - Summary of Restricted
Equity - Summary of Restricted Stock Activity (Details) - Restricted Stock | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Number of shares | |
Beginning balance (in shares) | shares | 327,211 |
Granted (in shares) | shares | 41,382 |
Vested (in shares) | shares | (119,180) |
Ending balance (in shares) | shares | 249,413 |
Weighted average price | |
Beginning balance (in dollars per share) | $ / shares | $ 7.27 |
Granted (in dollars per share) | $ / shares | 11.60 |
Vested (in dollars per share) | $ / shares | 7.27 |
Ending balance (in dollars per share) | $ / shares | $ 7.99 |
Equity - Summary of Stock-Based
Equity - Summary of Stock-Based Compensation Expense Recognized for Stock Options and Restricted Stock Included in Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock based compensation expense | $ 2,333 | $ 1,922 | $ 3,957 | $ 3,052 |
Research and development expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock based compensation expense | 251 | 285 | 269 | 327 |
General and administrative expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock based compensation expense | $ 2,082 | $ 1,637 | $ 3,688 | $ 2,725 |
Commitments (Detail)
Commitments (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | |
Contractual Obligation [Line Items] | |||
Capital lease obligation amount | $ 3,733,000 | $ 2,557,000 | |
Laboratory And Computer Equipment | |||
Contractual Obligation [Line Items] | |||
Capital lease obligation amount | $ 300,000 | $ 3,700,000 | |
Lease term | 36 months | ||
Capital leases buy out amount | $ 1 | $ 1 | |
Minimum | Laboratory And Computer Equipment | |||
Contractual Obligation [Line Items] | |||
Capital lease interest rate | 4.60% | 4.60% | |
Maximum | Laboratory And Computer Equipment | |||
Contractual Obligation [Line Items] | |||
Capital lease interest rate | 5.80% | 5.80% |
Related Party Transaction (Deta
Related Party Transaction (Detail) - USD ($) | Jun. 01, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | ||||||
Stock options, granted (in shares) | 2,168,602 | |||||
Weighted average exercise price, granted (in dollars per share) | $ 8.34 | |||||
Executive Vice President | ||||||
Related Party Transaction [Line Items] | ||||||
Fees for performing duties | $ 41,000 | $ 52,000 | $ 87,000 | $ 118,000 | ||
Related party transaction compensation for services on board | $ 12,500 | $ 12,500 | $ 25,000 | $ 12,500 | ||
Stock options, granted (in shares) | 3,017 | |||||
Weighted average exercise price, granted (in dollars per share) | $ 11.60 | |||||
Fair market value of options granted (in dollars per share) | $ 3.74 | |||||
Restricted Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Restricted stock granted (in shares) | 41,382 | |||||
Restricted stock fair value (in dollars per share) | $ 7.99 | $ 7.99 | $ 7.27 | |||
Restricted Stock | Executive Vice President | ||||||
Related Party Transaction [Line Items] | ||||||
Restricted stock granted (in shares) | 6,897 | |||||
Restricted stock fair value (in dollars per share) | $ 11.60 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)segment | Jun. 30, 2017USD ($) | |
Segment Reporting [Abstract] | ||||
Number of operating segments | segment | 2 | |||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 67,746 | $ 62,264 | $ 131,169 | $ 119,693 |
Cost of Revenue | 37,216 | 34,912 | 73,336 | 69,392 |
GROSS PROFIT | 30,530 | 27,352 | 57,833 | 50,301 |
General and administrative | 20,983 | 18,432 | 38,050 | 35,450 |
Research and development | 1,073 | 947 | 2,029 | 1,809 |
Sales and marketing | 7,680 | 6,132 | 14,455 | 11,779 |
Total operating expenses | 29,736 | 25,511 | 54,534 | 49,038 |
Income from Operations | 794 | 1,841 | 3,299 | 1,263 |
Interest expense, net | (1,407) | (1,411) | (2,892) | (2,775) |
Other expense | 124 | 0 | 62 | 0 |
Income (loss) before taxes | (737) | 430 | 345 | (1,512) |
Income tax expense (benefit) | (357) | (53) | 81 | (832) |
NET INCOME (LOSS) | (380) | 483 | 264 | (680) |
Clinical Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 59,540 | 55,547 | 116,511 | 108,455 |
Cost of Revenue | 32,035 | 30,997 | 63,076 | 61,704 |
GROSS PROFIT | 27,505 | 24,550 | 53,435 | 46,751 |
Pharma Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 8,206 | 6,717 | 14,658 | 11,238 |
Cost of Revenue | 5,181 | 3,915 | 10,260 | 7,688 |
GROSS PROFIT | $ 3,025 | $ 2,802 | $ 4,398 | $ 3,550 |