Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 27, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-35756 | |
Entity Registrant Name | NEOGENOMICS, INC. | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 74-2897368 | |
Entity Address, Address Line One | 12701 Commonwealth Drive, | |
Entity Address, Address Line Two | Suite 9, | |
Entity Address, City or Town | Fort Myers, | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33913 | |
City Area Code | (239) | |
Local Phone Number | 768-0600 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common stock ($0.001 par value) | |
Trading Symbol | NEO | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 111,029,644 | |
Entity Central Index Key | 0001077183 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus (i.e. Q1,Q2,Q3,FY) | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 233,233,000 | $ 173,016,000 |
Marketable securities, at fair value | 50,375,000 | 0 |
Accounts receivable, net | 103,697,000 | 94,242,000 |
Inventories | 20,643,000 | 14,405,000 |
Prepaid assets | 10,459,000 | 6,327,000 |
Other current assets | 3,968,000 | 2,748,000 |
Total current assets | 422,375,000 | 290,738,000 |
Property and equipment (net of accumulated depreciation of $85,987 and $68,809, respectively) | 85,449,000 | 64,188,000 |
Operating lease right-of-use assets | 45,856,000 | 26,492,000 |
Intangible assets, net | 123,353,000 | 126,640,000 |
Goodwill | 210,833,000 | 198,601,000 |
Restricted cash, non-current | 32,003,000 | 0 |
Prepaid lease asset | 10,142,000 | 0 |
Investment in non-consolidated affiliate | 25,600,000 | 0 |
Other assets | 3,817,000 | 2,847,000 |
Total assets | 959,428,000 | 709,506,000 |
Current liabilities | ||
Accounts payable | 17,735,000 | 19,568,000 |
Accrued compensation | 26,083,000 | 21,365,000 |
Accrued expenses and other liabilities | 8,677,000 | 7,548,000 |
Short-term portion of financing obligations | 3,700,000 | 5,432,000 |
Short-term portion of operating leases | 4,701,000 | 3,381,000 |
Short-term portion of term loan | 0 | 5,000,000 |
Pharma contract liability | 3,716,000 | 1,610,000 |
Total current liabilities | 64,612,000 | 63,904,000 |
Long-term liabilities | ||
Convertible senior notes, net | 166,440,000 | 0 |
Long-term debt, net | 1,399,000 | 3,199,000 |
Long-term portion of operating leases | 43,123,000 | 24,034,000 |
Long-term portion of term loan, net | 0 | 91,829,000 |
Other long-term liabilities | 3,937,000 | 3,566,000 |
Deferred income tax liability, net | 13,554,000 | 15,566,000 |
Total long-term liabilities | 228,453,000 | 138,194,000 |
Total liabilities | 293,065,000 | 202,098,000 |
Stockholders' equity | ||
Common stock, $0.001 par value, (250,000,000 shares authorized; 111,010,418 and 104,781,236 shares issued and outstanding, respectively) | 111,000 | 105,000 |
Additional paid-in capital | 688,832,000 | 520,278,000 |
Accumulated other comprehensive loss | 22,000 | (1,618,000) |
Accumulated deficit | (22,602,000) | (11,357,000) |
Total stockholders’ equity | 666,363,000 | 507,408,000 |
Total liabilities and stockholders' equity | $ 959,428,000 | $ 709,506,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $ 85,987 | $ 68,809 |
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 | 111,010,418 | 104,781,236 |
Common stock, shares outstanding | 111,010,418 | 104,781,236 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Total revenue | $ 125,444 | $ 104,672 | $ 318,451 | $ 301,962 | |
COST OF REVENUE | 71,379 | 53,840 | 190,011 | 155,049 | |
Total gross profit | 54,065 | 50,832 | 128,440 | 146,913 | |
Operating expenses: | |||||
General and administrative | 36,128 | 33,054 | 107,085 | 94,773 | |
Research and development | 1,964 | 2,611 | 6,129 | 6,407 | |
Sales and marketing | 11,304 | 11,508 | 34,757 | 35,048 | |
Total operating expenses | 49,396 | 47,173 | 147,971 | 136,228 | |
Income (loss) from operations | 4,669 | 3,659 | (19,531) | 10,685 | |
Interest expense, net | 2,458 | 203 | 4,825 | 3,333 | |
Other (income) expense, net | (11) | (35) | (7,639) | 5,124 | |
Loss on extinguishment of debt | 0 | 0 | 1,400 | 1,018 | |
Loss on termination of cash flow hedge | 0 | 0 | 3,506 | 0 | |
Income (loss) before taxes | 2,222 | 3,491 | (21,623) | 1,210 | |
Income tax (benefit) expense | (335) | 1,348 | (10,378) | (500) | |
Net income (loss) | 2,557 | 2,143 | (11,245) | 1,710 | |
Net income (loss) | [1] | 2,557 | 2,143 | (11,245) | 1,710 |
Convertible note accretion, amortization, and interest, net of tax | [1] | 1,975 | 0 | 0 | 0 |
NET INCOME (LOSS) USED IN DILUTED EPS | [1] | $ 4,532 | $ 2,143 | $ (11,245) | $ 1,710 |
NET INCOME (LOSS) PER SHARE | |||||
Basic (in dollars per share) | $ 0.02 | $ 0.02 | $ (0.10) | $ 0.02 | |
Diluted (in dollars per share) | $ 0.04 | $ 0.02 | $ (0.10) | $ 0.02 | |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | |||||
Basic (in shares) | 110,461 | 103,899 | 107,605 | 99,149 | |
Diluted (in shares) | 119,191 | 107,880 | 107,605 | 102,766 | |
Clinical Services | |||||
Total revenue | $ 108,733 | $ 92,565 | $ 275,599 | $ 267,757 | |
Total gross profit | 48,126 | 45,039 | 117,312 | 131,200 | |
Pharma Services | |||||
Total revenue | 16,711 | 12,107 | 42,852 | 34,205 | |
Total gross profit | $ 5,939 | $ 5,793 | $ 11,128 | $ 15,713 | |
[1] | This adjustment compensates for the effects of the if-converted impact of convertible notes in adjusted net income. Since an entity using the if-converted method assumes that a convertible debt instrument was converted into common shares at the beginning of the reporting period, the numerator is adjusted to reverse any recognized interest expense (including any amortization of discounts). |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
NET INCOME (LOSS) | $ 2,557 | $ 2,143 | $ (11,245) | $ 1,710 |
OTHER COMPREHENSIVE (LOSS) INCOME: | ||||
Unrealized loss on securities, net | (21) | 0 | (21) | 0 |
Loss on effective cash flow hedges | 0 | (217) | (1,000) | (1,801) |
Cash flow hedge termination reclassified to earnings | 0 | 0 | 2,661 | 0 |
Total other comprehensive (loss) income, net of tax | (21) | (217) | 1,640 | (1,801) |
COMPREHENSIVE INCOME (LOSS) | $ 2,536 | $ 1,926 | $ (9,605) | $ (91) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net (loss) income | $ 2,557 | $ (6,978) | $ 2,143 | $ (2,424) | $ (11,245) | $ 1,710 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 18,705 | 15,200 | |||||
Loss on disposal of assets | 371 | 451 | |||||
Loss on extinguishment of debt | 0 | 0 | 1,400 | 1,018 | $ 1,400 | ||
Loss on termination of cash flow hedge | 0 | 0 | 3,506 | 0 | |||
Amortization of intangibles | 2,500 | 2,400 | 7,387 | 7,482 | |||
Amortization of debt issue costs | 138 | 323 | |||||
Amortization of convertible debt discount | 2,705 | 0 | |||||
Non-cash stock-based compensation | 7,536 | 7,727 | |||||
Non-cash operating lease expense | 6,365 | 3,224 | |||||
Changes in assets and liabilities, net | |||||||
Accounts receivable, net | (9,455) | (14,219) | |||||
Inventories | (5,704) | (3,982) | |||||
Prepaid and other assets | (4,189) | (1,013) | |||||
Prepaid lease asset | (10,142) | 0 | |||||
Other current assets | (2,568) | (381) | |||||
Accounts payable, accrued and other liabilities | (9,335) | 2,470 | |||||
Net cash (used in) provided by operating activities | (4,525) | 20,010 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Purchases of marketable securities | (53,396) | 0 | |||||
Proceeds from sale of marketable securities | 3,000 | 0 | |||||
Purchases of property and equipment | (17,591) | (13,953) | |||||
Business acquisition | (37,000) | 0 | |||||
Investment in non-consolidated affiliate | (25,600) | 0 | |||||
Acquisition working capital adjustment | 0 | 399 | |||||
Net cash used in investing activities | (130,587) | (13,554) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Repayment of revolving credit facility | 0 | (5,000) | |||||
Repayment of equipment financing obligations | (4,331) | (5,481) | |||||
Proceeds from term loan | 0 | 100,000 | |||||
Repayment of term loan | (97,540) | (96,750) | |||||
Cash flow hedge termination | (3,317) | 0 | |||||
Payments of debt issuance costs | 0 | (1,051) | |||||
Issuance of common stock, net | 10,761 | 10,132 | |||||
Proceeds from issuance of convertible debt, net of issuance costs | 194,466 | 0 | |||||
Proceeds from equity offering, net of issuance costs | 127,293 | 160,774 | |||||
Net cash provided by financing activities | 227,332 | 162,624 | |||||
Net change in cash, cash equivalents and restricted cash | 92,220 | 169,080 | |||||
Cash, cash equivalents and restricted cash, beginning of period | $ 173,016 | $ 9,811 | 173,016 | 9,811 | 9,811 | ||
Cash, cash equivalents and restricted cash, end of period | 265,236 | 178,891 | 265,236 | 178,891 | 173,016 | ||
Cash and cash equivalents | 233,233 | 178,891 | 233,233 | 178,891 | 173,016 | ||
Restricted cash, non-current | $ 32,003 | $ 0 | 32,003 | 0 | $ 0 | ||
Supplemental disclosure of cash flow information: | |||||||
Interest paid | 1,638 | 4,295 | |||||
Income taxes paid, net | 209 | 316 | |||||
Supplemental disclosure of non-cash investing and financing information: | |||||||
Working capital adjustment related to acquisition | 0 | 1,977 | |||||
Equipment acquired under financing obligations | 428 | 3,665 | |||||
Property and equipment included in accounts payable | $ 3,521 | $ 810 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2018 | 94,465,440 | ||||
Beginning balance at Dec. 31, 2018 | $ 320,443 | $ 94 | $ 340,291 | $ (579) | $ (19,363) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issuance ESPP Plan (in shares) | 36,032 | ||||
Common stock issuance ESPP Plan | 419 | 419 | |||
Stock issuance fees and expenses | (66) | (66) | |||
Gain (loss) on effective cash flow hedge | (557) | (557) | |||
Issuance of restricted stock, net of forfeitures (in shares) | 182,502 | ||||
Issuance of common stock for stock options (in shares) | 619,536 | ||||
Issuance of common stock for stock options | 3,894 | $ 1 | 3,893 | ||
ESPP expense | 119 | 119 | |||
Stock-based compensation expense - options and restricted stock | 2,020 | 2,020 | |||
NET INCOME (LOSS) | (2,424) | (2,424) | |||
Ending balance (in shares) at Mar. 31, 2019 | 95,303,510 | ||||
Ending balance at Mar. 31, 2019 | 323,848 | $ 95 | 346,676 | (1,136) | (21,787) |
Beginning balance (in shares) at Dec. 31, 2018 | 94,465,440 | ||||
Beginning balance at Dec. 31, 2018 | 320,443 | $ 94 | 340,291 | (579) | (19,363) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Unrealized loss on securities, net | 0 | ||||
Cash flow hedge termination reclassified to earnings | 0 | ||||
NET INCOME (LOSS) | 1,710 | ||||
Ending balance (in shares) at Sep. 30, 2019 | 104,145,895 | ||||
Ending balance at Sep. 30, 2019 | 497,007 | $ 104 | 516,936 | (2,380) | (17,653) |
Beginning balance (in shares) at Mar. 31, 2019 | 95,303,510 | ||||
Beginning balance at Mar. 31, 2019 | 323,848 | $ 95 | 346,676 | (1,136) | (21,787) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issuance ESPP Plan (in shares) | 37,255 | ||||
Common stock issuance ESPP Plan | 653 | 653 | |||
Stock issuance fees and expenses | (211) | (211) | |||
Gain (loss) on effective cash flow hedge | (1,027) | (1,027) | |||
Issuance of restricted stock, net of forfeitures (in shares) | (633) | ||||
Working capital adjustment related to acquisition (in shares) | (99,524) | ||||
Working capital adjustment related to acquisition | (1,977) | (1,977) | |||
Issuance of common stock - Public Offering (in shares) | 8,050,000 | ||||
Issuance of common stock - Public Offering | 160,774 | $ 8 | 160,766 | ||
Issuance of common stock for stock options (in shares) | 543,604 | ||||
Issuance of common stock for stock options | 3,370 | $ 1 | 3,369 | ||
ESPP expense | 162 | 162 | |||
Stock-based compensation expense - options and restricted stock | 2,151 | 2,151 | |||
NET INCOME (LOSS) | 1,991 | 1,991 | |||
Ending balance (in shares) at Jun. 30, 2019 | 103,834,212 | ||||
Ending balance at Jun. 30, 2019 | 489,734 | $ 104 | 511,589 | (2,163) | (19,796) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issuance ESPP Plan (in shares) | 28,672 | ||||
Common stock issuance ESPP Plan | 564 | 564 | |||
Stock issuance fees and expenses | 23 | 23 | |||
Unrealized loss on securities, net | 0 | ||||
Gain (loss) on effective cash flow hedge | (217) | (217) | |||
Cash flow hedge termination reclassified to earnings | 0 | ||||
Issuance of restricted stock, net of forfeitures (in shares) | (6,070) | ||||
Issuance of restricted stock, net of forfeitures | $ (688) | ||||
Issuance of common stock for stock options (in shares) | 289,081 | ||||
Issuance of common stock for stock options | $ 2,173 | ||||
ESPP expense | 144 | 144 | |||
Stock-based compensation expense - options and restricted stock | 3,131 | 3,131 | |||
NET INCOME (LOSS) | 2,143 | 2,143 | |||
Ending balance (in shares) at Sep. 30, 2019 | 104,145,895 | ||||
Ending balance at Sep. 30, 2019 | 497,007 | $ 104 | 516,936 | (2,380) | (17,653) |
Beginning balance (in shares) at Dec. 31, 2019 | 104,781,236 | ||||
Beginning balance at Dec. 31, 2019 | 507,408 | $ 105 | 520,278 | (1,618) | (11,357) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issuance ESPP Plan (in shares) | 34,330 | ||||
Common stock issuance ESPP Plan | 796 | 796 | |||
Stock issuance fees and expenses | (15) | (15) | |||
Gain (loss) on effective cash flow hedge | (1,038) | (1,038) | |||
Issuance of restricted stock, net of forfeitures (in shares) | 76,618 | ||||
Issuance of restricted stock, net of forfeitures | (212) | (212) | |||
Issuance of common stock for stock options (in shares) | 503,873 | ||||
Issuance of common stock for stock options | 2,897 | 2,897 | |||
ESPP expense | 194 | 194 | |||
Stock-based compensation expense - options and restricted stock | 1,991 | 1,991 | |||
NET INCOME (LOSS) | (6,978) | (6,978) | |||
Ending balance (in shares) at Mar. 31, 2020 | 105,396,057 | ||||
Ending balance at Mar. 31, 2020 | 505,043 | $ 105 | 525,929 | (2,656) | (18,335) |
Beginning balance (in shares) at Dec. 31, 2019 | 104,781,236 | ||||
Beginning balance at Dec. 31, 2019 | 507,408 | $ 105 | 520,278 | (1,618) | (11,357) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Unrealized loss on securities, net | (21) | ||||
Cash flow hedge termination reclassified to earnings | $ 2,661 | ||||
Issuance of common stock for stock options (in shares) | 1,276,144 | ||||
NET INCOME (LOSS) | $ (11,245) | ||||
Ending balance (in shares) at Sep. 30, 2020 | 111,010,418 | ||||
Ending balance at Sep. 30, 2020 | 666,363 | $ 111 | 688,832 | 22 | (22,602) |
Beginning balance (in shares) at Mar. 31, 2020 | 105,396,057 | ||||
Beginning balance at Mar. 31, 2020 | 505,043 | $ 105 | 525,929 | (2,656) | (18,335) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issuance ESPP Plan (in shares) | 41,058 | ||||
Common stock issuance ESPP Plan | 928 | 928 | |||
Stock issuance fees and expenses | (209) | (209) | |||
Gain (loss) on effective cash flow hedge | 38 | 38 | |||
Cash flow hedge termination reclassified to earnings | 2,661 | 2,661 | |||
Issuance of restricted stock, net of forfeitures (in shares) | 24,786 | ||||
Issuance of restricted stock, net of forfeitures | (824) | (824) | |||
Issuance of common stock - Public Offering (in shares) | 4,751,500 | ||||
Issuance of common stock - Public Offering | 127,293 | $ 5 | 127,288 | ||
Issuance of common stock for stock options (in shares) | 183,443 | ||||
Issuance of common stock for stock options | 2,014 | 2,014 | |||
ESPP expense | 211 | 211 | |||
Stock-based compensation expense - options and restricted stock | 2,424 | 2,424 | |||
Equity component of convertible note issuance | 30,912 | 30,912 | |||
Tax liability related to convertible note issuance | (9,330) | (9,330) | |||
Convertible note debt issuance costs | (108) | (108) | |||
NET INCOME (LOSS) | (6,824) | (6,824) | |||
Ending balance (in shares) at Jun. 30, 2020 | 110,396,844 | ||||
Ending balance at Jun. 30, 2020 | 654,229 | $ 110 | 679,235 | 43 | (25,159) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issuance ESPP Plan (in shares) | 29,853 | ||||
Common stock issuance ESPP Plan | 808 | 808 | |||
Stock issuance fees and expenses | (29) | (29) | |||
Unrealized loss on securities, net | (21) | (21) | |||
Cash flow hedge termination reclassified to earnings | 0 | ||||
Issuance of restricted stock, net of forfeitures (in shares) | (1,124) | ||||
Issuance of restricted stock, net of forfeitures | (237) | (237) | |||
Issuance of common stock for stock options (in shares) | 584,845 | ||||
Issuance of common stock for stock options | 4,846 | $ 1 | 4,845 | ||
ESPP expense | 222 | 222 | |||
Stock-based compensation expense - options and restricted stock | 2,494 | 2,494 | |||
Adjustment to tax liability related to convertible note issuance | 1,524 | 1,524 | |||
Convertible note debt issuance costs | (30) | (30) | |||
NET INCOME (LOSS) | 2,557 | 2,557 | |||
Ending balance (in shares) at Sep. 30, 2020 | 111,010,418 | ||||
Ending balance at Sep. 30, 2020 | $ 666,363 | $ 111 | $ 688,832 | $ 22 | $ (22,602) |
Nature of the Business, Basis o
Nature of the Business, Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business, Basis of Presentation and Significant Accounting Policies | Nature of the Business, Basis of Presentation and Significant Accounting Policies Nature of the Business NeoGenomics, Inc., a Nevada corporation, and its subsidiaries (the “Parent”, “Company”, or “NeoGenomics”), 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. Basis of Presentation 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. All intercompany transactions and balances have been eliminated in the accompanying consolidated financial statements. Unaudited Interim Financial Information 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 and footnotes. 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, 2019. 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. Principles of Consolidation 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 represents 100% of the Company’s consolidated assets, net revenues and net income for each period presented. For further financial information about these segments see Note 15. Segment Information, in the accompanying notes to the consolidated financial statements. The Company determines whether investments in affiliates are a Variable Interest Entity (“VIE”) at the start of each new venture and when a reconsideration event has occurred. A reporting entity must consolidate a VIE if that reporting entity has a variable interest (or combination of variable interests) and is determined to be the primary beneficiary. The primary beneficiary has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company accounts for its equity investments that are under 20% of the total equity outstanding and for which the Company does not have significant influence by applying the cost method. Investments that are under 20% of the total equity outstanding and for which the entity does have significant influence are accounted for using the equity method unless a scope exception is applicable. Investments in which the Company holds a non-controlling interest and are between 20-50% equity are accounted for using the equity method. For any equity investments in which the Company holds over 50% of the outstanding stock, or for investments in which the Company controls the investee, the Company consolidates those entities into their consolidated financial statements. Marketable Securities The Company classifies all securities as available-for-sale, including those with maturity dates beyond 12 months, and therefore these securities are classified within current assets on the consolidated balance sheets as they are available to support current operational liquidity needs Marketable securities are carried at fair value, with the unrealized holding gains and losses, net of income taxes, reflected in accumulated other comprehensive income until realized. We evaluate our marketable securities for other-than-temporary impairment on a quarterly basis. Unrealized losses are charged against net earnings when a decline in fair value is determined to be other-than-temporary. We review several factors to determine whether a loss is other-than-temporary, such as the length and extent of the fair value decline, the financial condition and near-term prospects of the issuer and whether we have the intent to sell or will more likely than not be required to sell before the securities' anticipated recovery. Regardless of our intent to sell a security, we perform additional analysis on all securities with unrealized losses to evaluate losses associated with the creditworthiness of the security. Credit losses are identified where we do not expect to receive cash flows sufficient to recover the amortized cost basis of a security. For the purposes of computing realized and unrealized gains and losses, cost and fair value are determined on a specific identification basis. Income Taxes We compute income taxes in accordance with FASB ASC Topic 740, Income Taxes, under which deferred taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. During the quarter the Company performed an analysis of its historical research and development expenses and determined that federal and state research and development tax credits for the tax years 2016 – 2019 are available. The Company recorded a tax benefit of $1.9 million as a tax benefit in the reporting period for the expected realizable amount of such credits. COVID-19 Pandemic In December 2019, a novel strain of coronavirus (“COVID-19”) was identified and the disease has since spread across the world, including the United States. In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. The outbreak of the pandemic is materially adversely affecting the Company’s employees, patients, communities and business operations, as well as the United States (“U.S.”) economy and financial markets. The full extent to which the COVID-19 outbreak will impact the Company’s business, results of operations, financial condition and cash flows will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19 and the actions to contain it or treat its impact and the economic impact on local, regional, national and international markets. As the COVID-19 pandemic continues, the Company’s results of operations, financial condition and cash flows are likely to continue to be materially adversely affected, particularly if the pandemic persists for a significant amount of time. Coronavirus Aid, Relief, and Economic Security Act The Federal government passed legislation and the President of the United States signed into law on March 27, 2020, known as the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). On April 10, 2020, the U.S Department of Health & Human Services (“HHS”) announced that Medicare-enrolled providers would receive a portion of a direct deposit disbursement totaling $50 billion. The $50 billion is part of a $100 billion Public Health and Emergency Fund created by the CARES Act. Payments made under the CARES Act are intended to reimburse healthcare providers for health care related expenses or lost revenues attributable to COVID-19 and are not required to be repaid provided that recipients attest to and comply with certain terms and conditions, including limitations on balance billing for COVID-19 patients. In the absence of specific guidance to account for government grants under GAAP, the Company accounts for such grants in accordance with international accounting standards for government grants. Such amounts are recognized when there is reasonable assurance that the Company will (1) comply with the conditions associated with the grant and (2) receive the grant. During the nine months ended September 30, 2020, the Company recognized $7.9 million in grant income related to the CARES Act. This amount was recorded during the second quarter of 2020. No such amounts were recorded in the third quarter of 2020. CARES Act grant income is classified in “Other (income) expense, net”, on the Consolidated Statements of Operations. There was no grant income recognized for the three and nine month periods ended September 30, 2019. The CARES Act also permits the deferral of payment of the employer portion of social security taxes between March 27, 2020 and December 31, 2020, with 50% of the deferred amount due on December 31, 2021 and the remaining 50% due on December 31, 2022. As of September 30, 2020, the accrued deferred social security taxes related to the CARES Act were $2.9 million. This amount was recorded in “Other long-term liabilities” on the Consolidated Balance Sheets. There were no such amounts recorded on the Consolidated Balance Sheets as of December 31, 2019. Additionally, the CARES Act included an Employee Retention Tax Credit (“ERTC”) provision designed to encourage employers to keep employees on their payroll. The ERTC is a refundable tax credit against certain payroll taxes paid by employers for eligible wages paid between March 13, 2020 and December 31, 2020 that meet the requirements of the ERTC provision. During the nine months ended September 30, 2020, the Company recognized $1.1 million under the ERTC. This amount was recorded during the third quarter of 2020. |
Recently Adopted and Issued Acc
Recently Adopted and Issued Accounting Guidance | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Adopted and Issued Accounting Guidance | Recently Adopted and Issued Accounting Guidance Recently Adopted Accounting Guidance In August 2018, the FASB issued ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which changes the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The implementation costs should be presented accordingly as other assets, current and non-current on the balance sheet and expensed over the term of the hosting arrangement. The Company adopted this pronouncement on January 1, 2020 and the impact was not material to the Company's Consolidated Financial Statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement: Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement , which adds and modifies certain disclosure requirements for fair value measurements. Under the new guidance, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, or valuation processes for Level 3 fair value measurements. However, public companies are required to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and related changes in unrealized gains and losses included in other comprehensive income. The Company adopted this pronouncement on January 1, 2020 and the impact was not material to the Company's Consolidated Financial Statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows ( “ Topic 230 ” ): Restricted Cash . The new guidance requires that the reconciliation of the beginning-of-period and end-of-period amounts shown in the statement of cash flows include cash, cash equivalents and restricted cash. ASU 2016-08 was effective for fiscal years beginning after December 15, 2017, including interim periods within those periods, using a retrospective transition method to each period presented. As a result, restricted cash of approximately $32 million as of September 30, 2020 is included in cash and cash equivalents when reconciling the beginning and ending balances in the Consolidated Statements of Cash Flows. Please refer to Note 4. Leases, for additional information regarding the use of restricted cash. There were no restricted cash balances in any reportable period prior to January 2020. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (“Topic 326”) : Measurement of Credit Losses on Financial Instruments, as modified by subsequently issued ASUs 2018-19 (issued November 2018), 2019-04 (issued April 2019), 2019-05 (issued May 2019), 2019-11 (issued November 2019), 2020-02 (issued February 2020) and 2020-03 (issued March 2020). Topic 326 modifies the measurement and recognition of credit losses for most financial assets and certain other instruments. The standard was effective January 1, 2020 and requires the use of forward-looking expected credit loss models based on historical experience, current economic conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount, which may result in earlier recognition of credit losses under the new standard. It also requires that credit losses related to available-for-sale debt securities be recorded as an allowance through net income rather than reducing the carrying amount under the current, other-than-temporary-impairment model. The standard required a modified retrospective approach with a cumulative effect adjustment to retained earnings. The Company adopted and applied the standard as of January 1, 2020. Based on management’s analysis, Topic 326 is applicable to the Company’s trade receivables as well as contract assets recognized within the Pharma Services segment. An assessment was performed on historical trends, current economic conditions, supportable forecasts, and customer and credit risks. The adoption of Topic 326 did not result in a material impact on the Company's Consolidated Financial Statements. Accounting Pronouncements Pending Adoption In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting For Convertible Instruments and Contracts in an Entity’s Own Equity . ASU 2020-06 simplifies the accounting for convertible instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost. These changes will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that was bifurcated according to previously existing rules. In addition, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will be no longer available. The new guidance is effective for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating when it will adopt this pronouncement and the impact that this new guidance will have on its Consolidated Financial Statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform ( “ Topic 848 ” ): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides for temporary optional expedients and exceptions to the current guidance on certain contract modifications and hedging relationships to ease the burdens related to the expected market transition from the London Inter-bank Offered Rate ( “ LIBOR ” ) or other reference rates to alternative reference rates. The guidance is effective upon issuance and can be applied through December 31, 2022. The Company does not expect the adoption of this standard to have a material impact on its Consolidated Financial Statements. In January 2020, the FASB issued ASU No. 2020-01, Investments-Equity Securities (“Topic 321”), Investments-Equity Method and Joint Ventures (“Topic 323”) and Derivatives and Hedging (“Topic 815”) (ASU 2020-01). ASU 2020-01 clarifies the interaction of the accounting for equity securities under Topic 321, the accounting for the equity method investments in Topic 323 and the accounting for certain forward contracts and purchased options in Topic 815. ASU 2020-01 is effective for fiscal years beginning after December 15, 2020 on a prospective basis and early adoption is permitted. The Company is currently evaluating the impact of the provisions of this standard on its Consolidated Financial Statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes (“Topic 740”) , which simplifies the accounting for income taxes, eliminates certain exceptions within Topic 740 and clarifies certain other aspects of the current guidance to promote consistency among reporting entities. The new standard is effective for fiscal years beginning after December 15, 2020 on a prospective basis and early adoption is permitted. The Company will adopt this pronouncement on January 1, 2021 and is currently evaluating the impact of the provisions of this standard on its Consolidated Financial Statements. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy has been established based on three levels of inputs, of which the first two are considered observable and the last unobservable. Level 1: Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2: Inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily-available pricing sources for comparable instruments. Level 3: Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own assumptions of the data that market participants would use in pricing the asset or liability, based on the best information available in the circumstances. Assets and Liabilities that are Measured at Fair Value on a Recurring Basis The Company measures certain financial assets at fair value on a recurring basis, including its marketable securities and certain cash equivalents. The Company considers all securities available-for-sale, including those with maturity dates beyond 12 months, and therefore these securities are classified within current assets on the consolidated balance sheets as they are available to support current operational liquidity needs. The money market accounts are valued based on quoted market prices in active markets. The marketable securities are generally valued based on other observable inputs for those securities (including market corroborated pricing or other models that utilize observable inputs such as interest rates and yield curves) based on information provided by independent third-party pricing entities, except for U.S. Treasury securities which are valued based on quoted market prices in active markets. The following table sets forth the amortized cost, gross unrealized gains, gross unrealized losses and fair values of the Company's marketable securities accounted for as available-for-sale securities as of September 30, 2020. There were no such amounts as of December 31, 2019. September 30, 2020 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Financial Assets: U.S. Treasury securities $ 18,412 $ 1 $ (7) $ 18,406 Commercial paper 13,734 — — 13,734 Asset-backed securities 9,927 1 (7) 9,921 Corporate bonds 8,323 2 (11) 8,314 Total $ 50,396 $ 4 $ (25) $ 50,375 The Company had $0.1 million of accrued interest receivable at September 30, 2020 included in other assets on its Consolidated Balance Sheets related to its marketable securities. There were no realized gains or losses on marketable securities for the three and nine months ended September 30, 2020 and 2019. The following table sets forth the fair value of available-for-sale marketable securities by contractual maturity at September 30, 2020. There were no such amounts at December 31, 2019. September 30, 2020 (in thousands) One Year or Less Over One Year Through Five Years Over Five Years Total Financial Assets: Marketable Securities: U.S. Treasury securities $ 3,033 $ 15,373 $ — $ 18,406 Commercial paper 13,734 — — 13,734 Asset-backed securities — 9,921 — 9,921 Corporate bonds 2,657 5,657 — 8,314 Total $ 19,424 $ 30,951 $ — $ 50,375 The following table sets forth the Company's cash equivalents and marketable securities accounted for as available-for-sale securities that were measured at fair value on a recurring basis based on the fair value hierarchy as of September 30, 2020. As of December 31, 2019, the Company had only money market fund cash equivalents (Level 1) in the amount of $163.8 million. September 30, 2020 (in thousands) Level 1 Level 2 Level 3 Total Financial Assets: Cash equivalents: Money market funds $ 213,624 $ — $ — $ 213,624 Commercial paper $ — $ 4,749 $ — $ 4,749 Marketable securities: U.S. Treasury securities $ 18,406 $ — $ — $ 18,406 Commercial paper $ — $ 13,734 $ — $ 13,734 Asset-backed securities $ — $ 9,921 $ — $ 9,921 Corporate bonds $ — $ 8,314 $ — $ 8,314 Total $ 232,030 $ 36,718 $ — $ 268,748 There were no transfers of financial assets or liabilities into or out of Level 1, Level 2, or Level 3 for the three and nine months ended September 30, 2020 and 2019. Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis The carrying value of cash and cash equivalents, accounts receivable, net, accounts payable, accrued expenses and other liabilities, and other current assets and liabilities, including our prior revolving credit facility are considered reasonable estimates of their respective fair values at September 30, 2020 and December 31, 2019 due to their short-term nature. We also measure certain non-financial assets at fair value on a nonrecurring basis, primarily intangible assets, goodwill, and long-lived assets in connection with periodic evaluations for potential impairment. We estimate the fair value of these assets using primarily unobservable inputs and, as such, these are considered Level 3 fair value measurements. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases The Company leases corporate offices and laboratory space throughout the world, all of which are classified as operating leases expiring at various dates and generally have terms ranging from 1 to 15 years. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Some of the Company’s real estate lease agreements include options to either renew or early terminate the lease. Leases with renewal options allow the Company to extend the lease term typically between 1 and 5 years. When it is reasonably certain that the Company will exercise an option to renew or terminate a lease, these options are considered in determining the classification and measurement of the lease. Lease liabilities are recorded based on the present value of the future lease payments over the lease term and assessed as of the commencement date. Incentives received from landlords, such as reimbursements for tenant improvements and rent abatement periods, effectively reduce the total lease payments owed for leases. Certain real estate leases also include executory costs such as common area maintenance (non-lease component), as well as property insurance and property taxes (non-components). Lease payments, which may include lease components, non-lease components and non-components, are included in the measurement of the Company’s lease liabilities to the extent that such payments are either fixed amounts or variable amounts based on a rate or index (fixed in substance) as stipulated in the lease contract. Any actual costs in excess of such amounts are expensed as incurred as variable lease cost. The Company utilizes its incremental borrowing rate by lease term in order to calculate the present value of its future lease payments. The discount rate represents a risk-adjusted rate on a secured basis, and is the rate at which the Company would borrow funds to satisfy the scheduled lease liability payment streams commensurate with the lease term. The discount rate is determined using the incremental borrowing rate at lease commencement and based on the lease term. Operating Leases Operating lease costs include an immaterial amount of variable lease cost, and are recorded in cost of revenue and general and administrative expenses, depending on the nature of the leased asset. Aside from variable lease costs, operating lease costs represent fixed lease payments recognized on a straight-line basis over the lease term. As of September 30, 2020, the maturities of our operating lease liabilities and a reconciliation to the present value of lease liabilities were as follows (in thousands): Remaining Lease Payments Remainder of 2020 $ 1,129 2021 7,662 2022 5,414 2023 5,289 2024 5,349 Thereafter 37,570 Total remaining lease payments 62,413 Less: imputed interest (14,589) Total operating lease liabilities 47,824 Less: current portion (4,701) Long-term operating lease liabilities $ 43,123 Weighted-average remaining lease term (in years) 12.0 Weighted-average discount rate 4.4 % The following summarizes additional supplemental data related to our operating leases (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Operating lease costs $ 1,747 $ 1,271 $ 6,024 $ 4,365 Nine Months Ended September 30, 2020 2019 Right-of-use assets obtained in exchange for operating lease liabilities $ 23,766 $ 19,341 Cash paid for operating leases $ 5,101 $ 2,878 |
Revenue Recognition and Contrac
Revenue Recognition and Contractual Adjustments | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [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. The Clinical Services segment provides various clinical testing services to community-based pathology practices, oncology practices, hospital pathology labs, reference labs, and academic centers with reimbursement from various payers including client direct billing, commercial insurance, Medicare and other government payers, and patients. The Pharma Services segment supports pharmaceutical firms in their drug development programs by providing testing services and data analytics 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 client direct billing, commercial insurance, Medicare and other government payers, and patients. 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 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 Consolidated Balance Sheets. 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 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. 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 September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Current pharma contract assets (1) $ 1,533 $ 1,000 Long-term pharma contract assets (2) 271 153 Total pharma contract assets $ 1,804 $ 1,153 Current pharma capitalized commissions (1) $ 160 $ 133 Long-term pharma capitalized commissions (2) 809 798 Total pharma capitalized commissions $ 969 $ 931 Current pharma contract liabilities $ 3,716 $ 1,610 Long-term pharma contract liabilities (3) 657 1,171 Total pharma contract liabilities $ 4,373 $ 2,781 (1) Current pharma contract assets and Current pharma capitalized commissions are classified as “Other current assets” on the Consolidated Balance Sheets. (2) Long-term pharma contract assets and Long-term pharma capitalized commissions are classified as “Other assets” on the Consolidated Balance Sheets. (3) Long-term pharma contract liabilities are classified as “Other long-term liabilities” on the Consolidated Balance Sheets. Pharma contract assets increased $0.7 million, or 56%, from December 31, 2019 to September 30, 2020. Pharma contract liabilities increased $1.6 million, or 57%, during the same period, while there was a slight increase in capitalized commissions. Revenue recognized for the three and nine months ended September 30, 2020 related to Pharma contract liability balances outstanding at the beginning of the period was $0.5 million and $2.1 million, respectively. Amortization of capitalized commissions for both three and nine months ended September 30, 2020 was $0.3 million and $0.6 million, respectively. Disaggregation of Revenue The Company considered various factors for both its Clinical Services and Pharma Services segments in determining appropriate levels of homogeneous 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. Unbilled amounts are accrued and allocated to payor categories based on historical experience. In future periods, actual billings by payor category may differ from accrued amounts. 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Clinical Services: Client direct billing $ 72,896 $ 53,555 $ 172,431 $ 155,999 Commercial Insurance 19,218 20,956 56,360 63,052 Medicare and Medicaid 16,460 17,818 46,484 47,961 Self-Pay 159 236 324 745 Total Clinical Services $ 108,733 $ 92,565 $ 275,599 $ 267,757 Pharma Services: 16,711 12,107 42,852 34,205 Total Revenue $ 125,444 $ 104,672 $ 318,451 $ 301,962 |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisition Human Longevity, Inc. On January 10, 2020 (the “Acquisition Date”), the Company acquired the Oncology Division assets of Human Longevity, Inc. (“HLI - Oncology”) for a purchase price of $37 million in cash. Acquisition and integration costs related to HLI - Oncology were approximately $0.4 million and $1.9 million for the three and nine months ended September 30, 2020, respectively, and are reported as general and administrative expenses in the Company's Consolidated Statements of Operations. HLI - Oncology performs Next-Generation Sequencing for pharmaceutical customers. The acquisition of HLI - Oncology adds whole exome and whole genome sequencing capabilities to the Company's current Pharma Services offerings. Revenue related to HLI - Oncology is reported in the Pharma Services segment. The acquisition included assets, primarily consisting of lab equipment, inventory, maintenance agreements for acquired equipment, backlog contracts with HLI - Oncology's customers, as well as HLI - Oncology’s molecular workforce that is experienced with Next-Generation Sequencing. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the Acquisition Date (in thousands): January 10, 2020 Inventory $ 534 Prepaid assets 185 Property and equipment 16,839 Internally developed software 3,110 Customer relationships (1) 4,100 Long-term assets 346 Goodwill (2) 12,232 Total assets acquired $ 37,346 Long-term liabilities (346) Net assets acquired $ 37,000 (1) Acquired intangible assets consisted of customer relationships which are amortized over seven years. (2) The goodwill arising from the acquisition of HLI - Oncology is the amount the Company paid in excess of the fair value of the net assets acquired and was primarily for (i) the expected future cash flows derived from the existing business capabilities and infrastructure, (ii) expanding the Company's scientific expertise as a leading provider of Pharma Services and Next-Generation Sequencing and (iii) an enhanced Pharma Services menu including germline, whole exome and whole genome sequencing. All of the goodwill resulting from the acquisition of HLI - Oncology is expected to be deductible for income tax purposes. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill as of September 30, 2020 and December 31, 2019 was $210.8 million and $198.6 million, respectively. Intangible assets consisted of the following as of (in thousands): September 30, 2020 Amortization Cost Accumulated Net Customer Relationships 84-180 months 143,371 33,465 109,906 Trade Name - Indefinite-lived — 13,447 — 13,447 Total $ 156,818 $ 33,465 $ 123,353 December 31, 2019 Amortization Cost Accumulated Net Trade Name 12-24 months $ 3,679 $ 3,679 $ — Non-Compete Agreement 24 months 27 27 — Customer Relationships 180 months 139,271 26,078 113,193 Trade Name - Indefinite-lived — 13,447 — 13,447 Total $ 156,424 $ 29,784 $ 126,640 The Company recorded approximately $2.5 million and $2.4 million in straight-line amortization expense of intangible assets for the three months ended September 30, 2020 and 2019, respectively, and approximately $7.4 million and $7.5 million for the nine months ended September 30, 2020 and 2019, 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 four succeeding fiscal years and thereafter as of September 30, 2020 is as follows (in thousands): Remainder of 2020 $ 2,468 2021 9,870 2022 9,870 2023 9,870 2024 9,870 Thereafter 67,958 Total $ 109,906 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table summarizes the long-term debt, net at September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 1.25% Senior Convertible Notes due 2025 Principal $ 201,250 $ — Unamortized debt discount (34,245) — Unamortized debt issuance costs (565) — Total 1.25% Senior Convertible Notes due 2025 166,440 — Term loan Principal $ — $ 97,500 Unamortized debt issuance costs — (671) Total term loan — 96,829 Financing obligations 5,099 8,631 Total debt $ 171,539 $ 105,460 Less: Current portion of long-term debt — (5,000) Less: Current portion of financing obligations (3,700) (5,432) Total long-term debt, net $ 167,839 $ 95,028 At September 30, 2020 and December 31, 2019, the carrying value of the Company’s financing obligations approximated fair value based on the current market conditions for similar instruments. At December 31, 2019, the carrying value of the Company’s term loan approximated fair value based on the current market conditions for similar instruments. 1.25% Convertible Senior Notes On May 4, 2020 (the “Closing Date”), the Company completed the sale of $201.3 million of Convertible Senior Notes with a stated interest rate of 1.25% and a maturity date of May 1, 2025 (the “Convertible Notes”), unless earlier converted, redeemed, or repurchased. The Convertible Notes were issued at a discounted price of 97% of their principal amount. The total net proceeds from the issuance of the Convertible Notes and exercise of the Over-allotment Option was approximately $194.4 million, which includes approximately $6.9 million of discounts, commissions and offering expenses paid by the Company. On May 4, 2020, the Company entered into an Indenture (the “Indenture”), with U.S. Bank National Association, as trustee (the “Trustee”), governing the Convertible Notes. Prior to February 1, 2025, noteholders may convert their Convertible Notes at their option, only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (3) if the Company calls any or all of the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after February 1, 2025 until the close of business on the business day immediately preceding the maturity date, noteholders may convert their Convertible Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as applicable, cash, shares of common stock or a combination of cash and shares of common stock, at its election. The initial conversion rate for the Convertible Notes is 27.5198 shares of common stock per $1,000 in principal amounts of Convertible Note, equivalent to an initial conversion price of approximately $36.34 per share of common stock. The conversion rate is subject to adjustment as described in the Indenture. In addition, following certain corporate events that occur prior to the maturity date as described in the Indenture, the Company will pay a make-whole premium by increasing the conversion rate for a holder who elects to convert its Convertible Notes in connection with such a corporate event in certain circumstances. The value of the Convertible Notes, if-converted, exceeds it's principal amount by $3.1 million based on a closing stock price of $36.89 on September 30, 2020. For the three months ended September 30, 2020 the Company included 5,538,360 shares in diluted weighted average common shares outstanding for the if-converted impact of the Convertible Notes. For the nine months ended September 30, 2020 the Company is in a net loss position, therefore, the shares that would be issued upon conversion of the Convertible Notes are excluded from the net loss per share calculation as it would have an antidilutive effect. For further details on the impact of the Convertible Notes on net (loss) income per share please refer to Note 12. Net Income (Loss) Per Share. The Company may not redeem the Convertible Notes prior to May 6, 2023. The Company may redeem for cash all or any portion of the Convertible Notes, at its option, on or after May 6, 2023 if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date of notice by the Company of redemption at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Convertible Notes. If an event involving bankruptcy, insolvency or reorganization events with respect to the Company occurs, then the principal amount of, and all accrued and unpaid interest on, all of the Convertible Notes then outstanding will immediately become due and payable. If any other default event occurs and is continuing, then noteholders of at least 25% of the aggregate principal amount of the Convertible Notes then outstanding, by notice to the Company, may declare the principal amount of, and all accrued and unpaid interest on, all of the Convertible Notes then outstanding to become due and payable immediately. If the Company undergoes a “fundamental change” as defined in the Indenture, then noteholders may require the Company to repurchase their Convertible Notes at a cash repurchase price equal to the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The Convertible Notes are the Company’s senior, unsecured obligations and will be equal in right of payment with its existing and future senior, unsecured indebtedness, senior in right of payment to its existing and future indebtedness that is expressly subordinated to the Convertible Notes and effectively junior to its existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness. The Convertible Notes will be structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, of its subsidiaries. The interest expense recognized on the Convertible Notes includes $0.6 million, $1.8 million and $25,600 for the contractual coupon interest, the accretion of the debt discount and the amortization of the debt issuance costs, respectively, for the three months ended September 30, 2020. For the nine months ended September 30, 2020, the interest expense recognized on the Convertible Notes for the contractual coupon interest, the accretion of the debt discount and the amortization of the debt issuance costs includes $1.0 million, $2.7 million and $44,700, respectively. The effective interest rate on the Convertible Notes is 5.5%, which includes the interest on the Convertible Notes and amortization of the debt discount and debt issuance costs. Interest on the Convertible Notes began accruing upon issuance and is payable semi-annually. The Convertible Notes are accounted for as separate liability and equity components. The allocation was performed in a manner that reflected the Company’s non-convertible debt borrowing rate for similar debt. The equity component of the Convertible Notes was recognized as a debt discount and represents the difference between the proceeds from the issuance of the Convertible Notes and the fair value of the liability of the Convertible Notes on the date of issuance. At the Closing Date, the equity component representing the conversion option was determined to be $21.6 million, net of tax, and was initially recorded by deducting the carrying value of the liability component from the initial proceeds from the Convertible Notes. During the three months ended September 30, 2020 the Company adjusted the equity component representing the conversion option. At September 30, 2020 the equity component of the conversion option was $23.1 million, net of tax. The excess of the principal amount of the Convertible Notes over the carrying amount of the liability component represents a debt discount that is amortized to interest expense over the term of the Convertible Notes under the effective interest rate method. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. Prior Senior Secured Credit Agreement On May 4, 2020, the Company terminated its Senior Secured Credit Agreement (the “Prior Senior Secured Credit Agreement”) and used $96.3 million of the net proceeds from the Convertible Notes to repay all outstanding amounts owed thereunder. On June 27, 2019 (the “Prior Closing Date”), the Company entered into the Prior Senior Secured Credit Agreement with PNC Bank National Association (“PNC”), as administrative agent, and the lenders party thereto. The Prior Senior Secured Credit Agreement provided for a $100.0 million revolving credit facility (the “Prior Revolving Credit Facility”), a $100.0 million term loan facility (the “Prior Term Loan Facility”), and a $50.0 million delayed draw term loan (the “Prior Delayed Draw Term Loan”). Borrowings under the Prior Senior Secured Credit Agreement bore interest at a rate per annum equal to an applicable margin plus, at the Company’s option, either (1) the Adjusted LIBOR rate for the relevant interest period, as defined within the agreement (2) an alternate base rate determined by reference to the greatest of (a) the federal funds rate for the relevant interest period plus 0.5% per annum, (b) the prime lending rate of PNC and (c) the daily LIBOR rate plus 1% per annum, or (3) a combination of (1) and (2). The applicable margin ranged from 1.25% to 2.25% for LIBOR loans and 0.25% to 1.25% for base rate loans, in each case based on NeoGenomics’ Consolidated Leverage Ratio (as defined in the New Credit Agreement). Interest on borrowings under the New Credit Agreement was 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 Company had previously entered into an interest rate swap agreements to hedge against changes in the variable rate for a portion of our long term debt. See Note 9. Derivative Instruments and Hedging Activities, for more information on these instruments. The Prior Revolving Credit Facility included a $10.0 million swing loan sublimit, with swing loans that bore interest at the alternate base rate plus the applicable margin. Any principal outstanding under the Prior Revolving Credit Facility was due and payable on June 27, 2024 or such earlier date as the obligations under the Prior Senior Secured Credit Agreement became due and payable pursuant to the terms of the Prior Senior Secured Credit Agreement. No amounts were outstanding under the Prior Revolving Credit Facility as of December 31, 2019. Principal payments on the Prior Term Loan Facility were due on the last day of each fiscal quarter with an annual principal amortization of 5% in the first year, 5% in the second year, 7.5% in the third year, 7.5% in the fourth year, and 10% in each year thereafter, with the remainder due upon maturity on June 27, 2024 or such earlier date as the obligations under the Prior Senior Secured Credit Agreement become due and payable pursuant to the terms of the Prior Senior Secured Credit Agreement. On December 31, 2019, the Company had current outstanding borrowings under the Prior Term Loan Facility of approximately $5.0 million, and long-term outstanding borrowings of approximately $91.8 million, net of unamortized debt issuance costs of $0.7 million. In association with the early termination of the debt, the Company incurred a loss on the extinguishment of debt of $1.4 million. In addition to paying interest on outstanding principal under the Prior Senior Secured Credit Agreement, the Company was required to pay a commitment fee in respect of the unutilized portion of the commitments under the Prior Revolving Credit Facility and the Prior Delayed Draw Term Loan. The commitment fee rate ranged from 0.15% to 0.35% depending on NeoGenomics’ Consolidated Leverage Ratio. The Company also paid customary letter of credit and agency fees. The Prior Term Loan Facility contained various covenants including entering into certain indebtedness; 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 burdensome agreements; make investments, loans and acquisitions; merge or consolidate with any other person; dispose of assets; enter into certain sale and leaseback transactions; engage in transactions with its affiliates, and materially alter the business it conducts. In addition, the Company was required to meet certain maximum leverage ratios and fixed charge coverage ratios as of the end of each fiscal quarter. The Prior Term Loan Facility required the Company to mandatorily prepay the Prior Term Loan Facility and amounts borrowed under the Prior Revolving Credit Facility with (i) 100% of net cash proceeds from certain sales and dispositions, subject to certain reinvestment rights, and (ii) 100% of net cash proceeds from certain issuances or incurrences of additional debt. Financing Obligations The Company has entered into loans with various banks to finance the purchase of laboratory equipment, office equipment and leasehold improvements. These loans mature at various dates through 2022 and the weighted average interest rate under such loans was approximately 4.91% as of September 30, 2020 and 4.64% as of December 31, 2019. Maturities of Long-Term Debt Maturities of long-term debt as of September 30, 2020 are summarized as follows (in thousands): 1.25% Convertible Senior Notes Financing Obligations Total Debt Remainder of 2020 $ — $ 1,252 $ 1,252 2021 — 2,880 2,880 2022 — 916 916 2023 — 51 51 2024 — — — 2025 167,005 — 167,005 Total Debt 167,005 5,099 172,104 Less: Current portion of long-term debt — (3,700) (3,700) Less: Debt issuance costs (565) — (565) Long-term debt, net $ 166,440 $ 1,399 $ 167,839 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities As of September 30, 2020 , the Company did not have any outstanding interest rate swap agreements. In June of 2018, the Company entered into an interest rate swap agreement to reduce the Company ’ s exposure to interest rate fluctuations on the Company ’ s variable rate debt obligations. This derivative financial instrument was accounted for at fair value as a cash flow hedge to effectively modify the Company’s exposure to interest rate risk by converting a portion of its prior floating rate debt to a fixed rate obligation, thus reducing the impact of interest rate changes on interest expense. Under the swap agreement, the Company received a variable rate of interest based on LIBOR and paid a fixed rate of interest. The following table summarizes the previous interest rate swap agreement. June 2018 Hedge Notional Amount $ 70 million Effective Date June 29, 2018 Index One month LIBOR Maturity December 31, 2021 Fixed Rate 2.98 % As discussed in Note 8. Debt, concurrently with the closing of the Convertible Notes, the proceeds from this transaction were used to pay off all amounts outstanding under our Prior Senior Secured Credit Agreement, after which the Company had no outstanding debt with variable rate interest. On May 1, 2020, the remaining obligation to make any further payments under the swap agreement was terminated. As a result of the termination, the company paid a termination fee of $3.3 million, which is included within Loss on Termination of Cash Flow Hedge in the Consolidated Statements of Operations. As of December 31, 2019, the fair value of the derivative financial instruments included in other long-term liabilities was approximately $2.0 million. Fair value adjustments were historically recorded as an adjustment to Accumulated Other Comprehensive Income (“AOCI”), except that any gains and losses on ineffectiveness of the interest rate swap were recorded as an adjustment to “Other (income) expense, net”. In the second quarter of 2020, upon termination of the interest rate swap, the accumulated losses of $2.7 million, net of tax, related to the interest rate swap were reclassified from AOCI to Loss on Termination of Cash Flow Hedge in the Consolidated Statements of Operations. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Equity | Equity Underwritten Public Equity Offering On April 29, 2020, the Company entered into an underwriting agreement relating to the issuance and sale of 4,400,000 shares of the Company’s common stock, $0.001 par value per share (the “Common Stock Offering”). The price to the public in this offering was $28.50 per share. The net proceeds to the Company from the Common Stock Offering were approximately $117.9 million, after deducting underwriting discounts and commissions of approximately $7.5 million. Under the terms of the underwriting agreement, the Company also granted the Underwriters a 30-day option to purchase up to 660,000 additional shares of Common Stock at the public offering price, less underwriting discounts and commissions. On May 29, 2020, the Underwriters partially exercised their option and on June 3, 2020, purchased an additional 351,500 shares. The net proceeds related to the option exercise were approximately $9.4 million, after deducting underwriting commissions of approximately $0.6 million. |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stock-based Compensation | Stock-Based Compensation The Company recorded approximately $2.7 million and $3.3 million in stock-based compensation expense for the three months ended September 30, 2020 and 2019, respectively, and approximately $7.5 million and $7.7 million in stock-based compensation expense for the nine month periods ended September 30, 2020 and 2019, respectively. A summary of the stock option activity under the Company’s plans for the nine months ended September 30, 2020 is as follows: Number of Weighted Average Exercise Price Options outstanding at December 31, 2019 5,318,759 $ 9.97 Options granted 845,120 $ 28.33 Less: Options exercised 1,276,144 $ 7.75 Options forfeited 63,169 $ 15.82 Options outstanding at September 30, 2020 4,824,566 $ 13.72 Exercisable at September 30, 2020 2,552,710 $ 8.86 The fair value of each stock option award granted during the nine months ended September 30, 2020 was estimated as of the grant date using a trinomial lattice model with the following weighted average assumptions: Nine Months Ended Expected term (in years) 4.0 - 5.5 Risk-free interest rate (%) 0.7% Expected volatility (%) 39.9% - 44.6% Dividend yield (%) — Weighted average fair value/share at grant date $8.88 As of September 30, 2020, there was approximately $7.3 million of unrecognized stock-based compensation expense related to stock options that will be recognized over a weighted-average period of approximately 1.93 years. A summary of the restricted stock activity under the Company’s plans for the nine months ended September 30, 2020 is as follows: Number of Restricted Weighted Average Grant Date Fair Value Nonvested at December 31, 2019 335,298 $ 15.75 Granted 149,012 $ 28.44 Vested (183,532) $ 12.88 Forfeited (5,540) $ 21.10 Nonvested at September 30, 2020 295,238 $ 23.78 As of September 30, 2020, there was approximately $4.2 million of unrecognized stock-based compensation expense related to restricted stock that will be recognized over a weighted-average period of approximately 1.90 years. Employee Stock Purchase Plan (“ESPP”) The Company offers an ESPP through which eligible employees may purchase shares of the Company's common stock at a discount of 15% of the fair market value of the Company’s common stock. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share We present both basic earnings per share (“EPS”) and diluted EPS. Basic EPS excludes potential dilution and is computed by dividing “Net income (loss)” by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if stock awards were exercised and if our Convertible Notes were converted. The potential dilution from stock awards is accounted for using the treasury stock method based on the average market value of the Company's common stock. The potential dilution from conversion of the Convertible Notes is accounted for using the if-converted method, which requires that all of the shares of the Company's common stock issuable upon conversion of the Convertible Notes will be included in the calculation of diluted EPS assuming conversion of the Convertible Notes at the beginning of the reporting period (or at time of issuance, if later). The following table shows the calculations for the three and nine months ended September 30, 2020 and 2019 (in thousands, except per share amounts). Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Numerator - basic Net income (loss) $ 2,557 $ 2,143 $ (11,245) $ 1,710 Numerator - diluted Net income (loss) $ 2,557 $ 2,143 $ (11,245) $ 1,710 Convertible note accretion, amortization, and interest, net of tax 1,975 — — — Net income (loss) used in diluted EPS $ 4,532 $ 2,143 $ (11,245) $ 1,710 Denominator Basic weighted average shares outstanding 110,461 103,899 107,605 99,149 Dilutive effect of stock options 3,017 3,650 — 3,349 Dilutive effect of restricted stock awards 175 331 — 268 Dilutive effect of Convertible Notes 5,538 — — — Diluted weighted average shares outstanding 119,191 107,880 107,605 102,766 Basic net income (loss) per share $ 0.02 $ 0.02 $ (0.10) $ 0.02 Diluted net income (loss) per share $ 0.04 $ 0.02 $ (0.10) $ 0.02 The following potential dilutive shares were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive for the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Stock options — — 3,069,286 — Restricted stock awards — — 201,579 — Convertible Notes — — 3,112,801 — |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions On May 22, 2020, the Company formed a strategic alliance with Inivata Limited, a company incorporated in England and Wales (“Inivata”), and entered into a Strategic Alliance Agreement and Laboratory Services Agreement whereas Inivata will render and perform certain laboratory testing which the Company will make available to customers. For further details on the investment made in Inivata, please refer to Note 14. Investment in Non-Consolidated Affiliate. |
Investment in Non-consolidated
Investment in Non-consolidated Affiliate | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Non-Consolidated Affiliate | Investment in Non-Consolidated Affiliate On May 22, 2020, the Company formed a strategic alliance with Inivata Limited, a company incorporated in England and Wales (“Inivata”), and entered into a Strategic Alliance Agreement and Laboratory Services Agreement whereas Inivata will render and perform certain laboratory testing which the Company will make available to customers. The terms and conditions of the Laboratory Services Agreement are consistent with those that would be negotiated between willing parties on an arm's length basis. Related party amounts related to Inivata for the third quarter were immaterial. In addition to the Laboratory Services Agreement, the Company also entered into an Investment Agreement with Inivata (the “Investment Agreement”), pursuant to which the Company acquired Series C1 Preference Shares (the “Preference Shares”) for $25 million in cash (the “Investment”) resulting in a minority interest in Inivata’s outstanding equity and an Option Deed which provides the Company with an option to purchase Inivata (the “Purchase Option”). The Investment was made in two equal installments, with the initial installment made in May 2020 and the second installment in August 2020. Inivata is a VIE and the Company's investment is under 20% of the total equity outstanding. The Company considers qualitative factors in assessing the primary beneficiary of the VIE which include understanding the purpose and design of the VIE, associated risks that the VIE creates, activities that could be directed by the Company, and the expected relative impact of those activities on the economic performance of the VIE. Based on an evaluation of these factors, the Company concluded that it is not the primary beneficiary of Inivata. The power to control the activities that most significantly impact Inivata’s economic performance are the sole responsibility of Inivata's management, however the Company does have significant influence over Inivata. As the Preference Shares were determined to not be in-substance common stock, and because the Preference Shares and the Purchase Option do not have readily determinable fair values, the Company has elected to measure the Preference Shares and the Purchase Option at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. There were no such events and the Company determined no adjustments to the carrying amounts of the Preference Shares and the Purchase Option were necessary at September 30, 2020. Upon acquisition, the Investment was allocated between the Preference Shares and the Purchase Option based on the relative fair value of each and is recorded, along with associated transaction costs, as “Investment in non-consolidated affiliate” on the Consolidated Balance Sheets. As of September 30, 2020, the investment is classified as Level 3 in the fair value hierarchy as its equity is not traded on a public exchange. At September 30, 2020, the carrying amount of the investment in non-consolidated affiliate is $25.6 million. The value is comprised of $19.2 million in Preference Shares, a $5.8 million Purchase Option and $0.6 million of associated transaction costs. The Company and Inivata also entered into a line of credit agreement in the amount of $15 million (the “Line of Credit”). The Line of Credit will be available to be drawn by Inivata beginning on January 1, 2021 and has a maturity date of December 1, 2025. The Line of Credit bears interest at 0% per annum and the unpaid principal balance is payable on January 1, 2026. The Line of Credit is subject to evaluation for current expected credit losses. The impact of such losses were determined to be immaterial for the three and nine months ended September 30, 2020. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
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 payers, and patients. Our Pharma Services segment supports pharmaceutical firms in their drug development programs by supporting various clinical trials and research as well as providing informatics related services often supporting Pharma commercialization efforts. The financial information reviewed by the Chief Operating Decision Maker (“CODM”) includes revenues, cost of revenue and gross margin for each of the Company’s operating segments. Assets are not presented at the segment level as that information is not used by the CODM. The following table summarizes the segment information (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net revenues: Clinical Services $ 108,733 $ 92,565 $ 275,599 $ 267,757 Pharma Services 16,711 12,107 42,852 34,205 Total revenue 125,444 104,672 318,451 301,962 Cost of revenue: Clinical Services 60,607 47,526 158,287 136,557 Pharma Services 10,772 6,314 31,724 18,492 Total cost of revenue 71,379 53,840 190,011 155,049 Gross Profit: Clinical Services 48,126 45,039 117,312 131,200 Pharma Services 5,939 5,793 11,128 15,713 Total gross profit 54,065 50,832 128,440 146,913 Operating expenses: General and administrative 36,128 33,054 107,085 94,773 Research and development 1,964 2,611 6,129 6,407 Sales and marketing 11,304 11,508 34,757 35,048 Total operating expenses 49,396 47,173 147,971 136,228 Income (loss) from operations 4,669 3,659 (19,531) 10,685 Interest expense, net 2,458 203 4,825 3,333 Other (income) expense, net (11) (35) (7,639) 5,124 Loss on extinguishment of debt — — 1,400 1,018 Loss on termination of cash flow hedge — — 3,506 — Income (loss) before taxes 2,222 3,491 (21,623) 1,210 Income tax (benefit) expense (335) 1,348 (10,378) (500) Net income (loss) $ 2,557 $ 2,143 $ (11,245) $ 1,710 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent EventOn October 22, 2020, HHS issued an updated Post-Payment Notice of Reporting Requirements and a Reporting Requirements Policy Update (together, the “October 22, 2020 Notice”) which, among other changes, effectively reinstates the definition of lost revenues that was the basis for the $7.9 million of grant income received and recognized during the nine months ended September 30, 2020. For further details on the grant income received and recognized please refer to Note 1. Nature of the Business, Basis of Presentation and Significant Accounting Policies. The Company’s evaluation of the October 22, 2020 Notice is ongoing and the amount by which the $7.9 million of grant income may be utilized as a result of the October 22, 2020 Notice is not yet known. |
Nature of the Business, Basis_2
Nature of the Business, Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation 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. All intercompany transactions and balances have been eliminated in the accompanying consolidated financial statements. |
Principles of Consolidation | Principles of ConsolidationThe 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 represents 100% of the Company’s consolidated assets, net revenues and net income for each period presented. The Company accounts for its equity investments that are under 20% of the total equity outstanding and for which the Company does not have significant influence by applying the cost method. Investments that are under 20% of the total equity outstanding and for which the entity does have significant influence are accounted for using the equity method unless a scope exception is applicable. Investments in which the Company holds a non-controlling interest and are between 20-50% equity are accounted for using the equity method. For any equity investments in which the Company holds over 50% of the outstanding stock, or for investments in which the Company controls the investee, the Company consolidates those entities into their consolidated financial statements. |
Variable Interest Entities | The Company determines whether investments in affiliates are a Variable Interest Entity (“VIE”) at the start of each new venture and when a reconsideration event has occurred. A reporting entity must consolidate a VIE if that reporting entity has a variable interest (or combination of variable interests) and is determined to be the primary beneficiary. The primary beneficiary has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. |
Marketable Securities | Marketable Securities The Company classifies all securities as available-for-sale, including those with maturity dates beyond 12 months, and therefore these securities are classified within current assets on the consolidated balance sheets as they are available to support current operational liquidity needs Marketable securities are carried at fair value, with the unrealized holding gains and losses, net of income taxes, reflected in accumulated other comprehensive income until realized. We evaluate our marketable securities for other-than-temporary impairment on a quarterly basis. Unrealized losses are charged against net earnings when a decline in fair value is determined to be other-than-temporary. We review several factors to determine whether a loss is other-than-temporary, such as the length and extent of the fair value decline, the financial condition and near-term prospects of the issuer and whether we have the intent to sell or will more likely than not be required to sell before the securities' anticipated recovery. Regardless of our intent to sell a security, we perform additional analysis on all securities with unrealized losses to evaluate losses associated with the |
Recently Adopted Accounting Guidance and Accounting Pronouncements Pending Adoption | Recently Adopted Accounting Guidance In August 2018, the FASB issued ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which changes the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The implementation costs should be presented accordingly as other assets, current and non-current on the balance sheet and expensed over the term of the hosting arrangement. The Company adopted this pronouncement on January 1, 2020 and the impact was not material to the Company's Consolidated Financial Statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement: Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement , which adds and modifies certain disclosure requirements for fair value measurements. Under the new guidance, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, or valuation processes for Level 3 fair value measurements. However, public companies are required to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and related changes in unrealized gains and losses included in other comprehensive income. The Company adopted this pronouncement on January 1, 2020 and the impact was not material to the Company's Consolidated Financial Statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows ( “ Topic 230 ” ): Restricted Cash . The new guidance requires that the reconciliation of the beginning-of-period and end-of-period amounts shown in the statement of cash flows include cash, cash equivalents and restricted cash. ASU 2016-08 was effective for fiscal years beginning after December 15, 2017, including interim periods within those periods, using a retrospective transition method to each period presented. As a result, restricted cash of approximately $32 million as of September 30, 2020 is included in cash and cash equivalents when reconciling the beginning and ending balances in the Consolidated Statements of Cash Flows. Please refer to Note 4. Leases, for additional information regarding the use of restricted cash. There were no restricted cash balances in any reportable period prior to January 2020. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (“Topic 326”) : Measurement of Credit Losses on Financial Instruments, as modified by subsequently issued ASUs 2018-19 (issued November 2018), 2019-04 (issued April 2019), 2019-05 (issued May 2019), 2019-11 (issued November 2019), 2020-02 (issued February 2020) and 2020-03 (issued March 2020). Topic 326 modifies the measurement and recognition of credit losses for most financial assets and certain other instruments. The standard was effective January 1, 2020 and requires the use of forward-looking expected credit loss models based on historical experience, current economic conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount, which may result in earlier recognition of credit losses under the new standard. It also requires that credit losses related to available-for-sale debt securities be recorded as an allowance through net income rather than reducing the carrying amount under the current, other-than-temporary-impairment model. The standard required a modified retrospective approach with a cumulative effect adjustment to retained earnings. The Company adopted and applied the standard as of January 1, 2020. Based on management’s analysis, Topic 326 is applicable to the Company’s trade receivables as well as contract assets recognized within the Pharma Services segment. An assessment was performed on historical trends, current economic conditions, supportable forecasts, and customer and credit risks. The adoption of Topic 326 did not result in a material impact on the Company's Consolidated Financial Statements. Accounting Pronouncements Pending Adoption In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting For Convertible Instruments and Contracts in an Entity’s Own Equity . ASU 2020-06 simplifies the accounting for convertible instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost. These changes will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that was bifurcated according to previously existing rules. In addition, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will be no longer available. The new guidance is effective for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating when it will adopt this pronouncement and the impact that this new guidance will have on its Consolidated Financial Statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform ( “ Topic 848 ” ): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides for temporary optional expedients and exceptions to the current guidance on certain contract modifications and hedging relationships to ease the burdens related to the expected market transition from the London Inter-bank Offered Rate ( “ LIBOR ” ) or other reference rates to alternative reference rates. The guidance is effective upon issuance and can be applied through December 31, 2022. The Company does not expect the adoption of this standard to have a material impact on its Consolidated Financial Statements. In January 2020, the FASB issued ASU No. 2020-01, Investments-Equity Securities (“Topic 321”), Investments-Equity Method and Joint Ventures (“Topic 323”) and Derivatives and Hedging (“Topic 815”) (ASU 2020-01). ASU 2020-01 clarifies the interaction of the accounting for equity securities under Topic 321, the accounting for the equity method investments in Topic 323 and the accounting for certain forward contracts and purchased options in Topic 815. ASU 2020-01 is effective for fiscal years beginning after December 15, 2020 on a prospective basis and early adoption is permitted. The Company is currently evaluating the impact of the provisions of this standard on its Consolidated Financial Statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes (“Topic 740”) , which simplifies the accounting for income taxes, eliminates certain exceptions within Topic 740 and clarifies certain other aspects of the current guidance to promote consistency among reporting entities. The new standard is effective for fiscal years beginning after December 15, 2020 on a prospective basis and early adoption is permitted. The Company will adopt this pronouncement on January 1, 2021 and is currently evaluating the impact of the provisions of this standard on its Consolidated Financial Statements. |
Fair Value Measurement | Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy has been established based on three levels of inputs, of which the first two are considered observable and the last unobservable. Level 1: Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2: Inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily-available pricing sources for comparable instruments. Level 3: Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own assumptions of the data that market participants would use in pricing the asset or liability, based on the best information available in the circumstances. Assets and Liabilities that are Measured at Fair Value on a Recurring Basis The Company measures certain financial assets at fair value on a recurring basis, including its marketable securities and certain cash equivalents. The Company considers all securities available-for-sale, including those with maturity dates beyond 12 months, and therefore these securities are classified within current assets on the consolidated balance sheets as they are available to support current operational liquidity needs. The money market accounts are valued based on quoted market prices in active markets. The marketable securities are generally valued based on other observable inputs for those securities (including market corroborated pricing or other models that utilize observable inputs such as interest rates and yield curves) based on information provided by independent third-party pricing entities, except for U.S. Treasury securities which are valued based on quoted market prices in active markets. |
Leases | The Company leases corporate offices and laboratory space throughout the world, all of which are classified as operating leases expiring at various dates and generally have terms ranging from 1 to 15 years. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Some of the Company’s real estate lease agreements include options to either renew or early terminate the lease. Leases with renewal options allow the Company to extend the lease term typically between 1 and 5 years. When it is reasonably certain that the Company will exercise an option to renew or terminate a lease, these options are considered in determining the classification and measurement of the lease. Lease liabilities are recorded based on the present value of the future lease payments over the lease term and assessed as of the commencement date. Incentives received from landlords, such as reimbursements for tenant improvements and rent abatement periods, effectively reduce the total lease payments owed for leases. Certain real estate leases also include executory costs such as common area maintenance (non-lease component), as well as property insurance and property taxes (non-components). Lease payments, which may include lease components, non-lease components and non-components, are included in the measurement of the Company’s lease liabilities to the extent that such payments are either fixed amounts or variable amounts based on a rate or index (fixed in substance) as stipulated in the lease contract. Any actual costs in excess of such amounts are expensed as incurred as variable lease cost. The Company utilizes its incremental borrowing rate by lease term in order to calculate the present value of its future lease payments. The discount rate represents a risk-adjusted rate on a secured basis, and is the rate at which the Company would borrow funds to satisfy the scheduled lease liability payment streams commensurate with the lease term. The discount rate is determined using the incremental borrowing rate at lease commencement and based on the lease term. |
Revenue from Contract with Customer | The Company has two operating segments for which it recognizes revenue; Clinical Services and Pharma Services. The Clinical Services segment provides various clinical testing services to community-based pathology practices, oncology practices, hospital pathology labs, reference labs, and academic centers with reimbursement from various payers including client direct billing, commercial insurance, Medicare and other government payers, and patients. The Pharma Services segment supports pharmaceutical firms in their drug development programs by providing testing services and data analytics 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 client direct billing, commercial insurance, Medicare and other government payers, and patients. 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 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 Consolidated Balance Sheets. 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 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. 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. |
Net (Loss) Income Per Share | We present both basic earnings per share (“EPS”) and diluted EPS. Basic EPS excludes potential dilution and is computed by dividing “Net income (loss)” by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if stock awards were exercised and if our Convertible Notes were converted. The potential dilution from stock awards is accounted for using the treasury stock method based on the average market value of the Company's common stock. The potential dilution from conversion of the Convertible Notes is accounted for using the if-converted method, which requires that all of the shares of the Company's common stock issuable upon conversion of the Convertible Notes will be included in the calculation of diluted EPS assuming conversion of the Convertible Notes at the beginning of the reporting period (or at time of issuance, if later). |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis | The following table sets forth the amortized cost, gross unrealized gains, gross unrealized losses and fair values of the Company's marketable securities accounted for as available-for-sale securities as of September 30, 2020. There were no such amounts as of December 31, 2019. September 30, 2020 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Financial Assets: U.S. Treasury securities $ 18,412 $ 1 $ (7) $ 18,406 Commercial paper 13,734 — — 13,734 Asset-backed securities 9,927 1 (7) 9,921 Corporate bonds 8,323 2 (11) 8,314 Total $ 50,396 $ 4 $ (25) $ 50,375 |
Investments Classified by Contractual Maturity Date | The following table sets forth the fair value of available-for-sale marketable securities by contractual maturity at September 30, 2020. There were no such amounts at December 31, 2019. September 30, 2020 (in thousands) One Year or Less Over One Year Through Five Years Over Five Years Total Financial Assets: Marketable Securities: U.S. Treasury securities $ 3,033 $ 15,373 $ — $ 18,406 Commercial paper 13,734 — — 13,734 Asset-backed securities — 9,921 — 9,921 Corporate bonds 2,657 5,657 — 8,314 Total $ 19,424 $ 30,951 $ — $ 50,375 |
Fair Value, Assets Measured on Recurring Basis | The following table sets forth the Company's cash equivalents and marketable securities accounted for as available-for-sale securities that were measured at fair value on a recurring basis based on the fair value hierarchy as of September 30, 2020. As of December 31, 2019, the Company had only money market fund cash equivalents (Level 1) in the amount of $163.8 million. September 30, 2020 (in thousands) Level 1 Level 2 Level 3 Total Financial Assets: Cash equivalents: Money market funds $ 213,624 $ — $ — $ 213,624 Commercial paper $ — $ 4,749 $ — $ 4,749 Marketable securities: U.S. Treasury securities $ 18,406 $ — $ — $ 18,406 Commercial paper $ — $ 13,734 $ — $ 13,734 Asset-backed securities $ — $ 9,921 $ — $ 9,921 Corporate bonds $ — $ 8,314 $ — $ 8,314 Total $ 232,030 $ 36,718 $ — $ 268,748 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments under Topic 842 | As of September 30, 2020, the maturities of our operating lease liabilities and a reconciliation to the present value of lease liabilities were as follows (in thousands): Remaining Lease Payments Remainder of 2020 $ 1,129 2021 7,662 2022 5,414 2023 5,289 2024 5,349 Thereafter 37,570 Total remaining lease payments 62,413 Less: imputed interest (14,589) Total operating lease liabilities 47,824 Less: current portion (4,701) Long-term operating lease liabilities $ 43,123 Weighted-average remaining lease term (in years) 12.0 Weighted-average discount rate 4.4 % |
Supplemental Operating Lease Information | The following summarizes additional supplemental data related to our operating leases (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Operating lease costs $ 1,747 $ 1,271 $ 6,024 $ 4,365 Nine Months Ended September 30, 2020 2019 Right-of-use assets obtained in exchange for operating lease liabilities $ 23,766 $ 19,341 Cash paid for operating leases $ 5,101 $ 2,878 |
Revenue Recognition and Contr_2
Revenue Recognition and Contractual Adjustments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Contract Assets and Liabilities | The following table summarizes the values of contract assets, capitalized commissions and contract liabilities as of September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Current pharma contract assets (1) $ 1,533 $ 1,000 Long-term pharma contract assets (2) 271 153 Total pharma contract assets $ 1,804 $ 1,153 Current pharma capitalized commissions (1) $ 160 $ 133 Long-term pharma capitalized commissions (2) 809 798 Total pharma capitalized commissions $ 969 $ 931 Current pharma contract liabilities $ 3,716 $ 1,610 Long-term pharma contract liabilities (3) 657 1,171 Total pharma contract liabilities $ 4,373 $ 2,781 (1) Current pharma contract assets and Current pharma capitalized commissions are classified as “Other current assets” on the Consolidated Balance Sheets. (2) Long-term pharma contract assets and Long-term pharma capitalized commissions are classified as “Other assets” on the Consolidated Balance Sheets. |
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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Clinical Services: Client direct billing $ 72,896 $ 53,555 $ 172,431 $ 155,999 Commercial Insurance 19,218 20,956 56,360 63,052 Medicare and Medicaid 16,460 17,818 46,484 47,961 Self-Pay 159 236 324 745 Total Clinical Services $ 108,733 $ 92,565 $ 275,599 $ 267,757 Pharma Services: 16,711 12,107 42,852 34,205 Total Revenue $ 125,444 $ 104,672 $ 318,451 $ 301,962 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the Acquisition Date (in thousands): January 10, 2020 Inventory $ 534 Prepaid assets 185 Property and equipment 16,839 Internally developed software 3,110 Customer relationships (1) 4,100 Long-term assets 346 Goodwill (2) 12,232 Total assets acquired $ 37,346 Long-term liabilities (346) Net assets acquired $ 37,000 (1) Acquired intangible assets consisted of customer relationships which are amortized over seven years. (2) The goodwill arising from the acquisition of HLI - Oncology is the amount the Company paid in excess of the fair value of the net assets acquired and was primarily for (i) the expected future cash flows derived from the existing business capabilities and infrastructure, (ii) expanding the Company's scientific expertise as a leading provider of Pharma Services and Next-Generation Sequencing and (iii) an enhanced Pharma Services menu including germline, whole exome and whole genome sequencing. All of the goodwill resulting from the acquisition of HLI - Oncology is expected to be deductible for income tax purposes. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Classes of Intangible Assets | Intangible assets consisted of the following as of (in thousands): September 30, 2020 Amortization Cost Accumulated Net Customer Relationships 84-180 months 143,371 33,465 109,906 Trade Name - Indefinite-lived — 13,447 — 13,447 Total $ 156,818 $ 33,465 $ 123,353 December 31, 2019 Amortization Cost Accumulated Net Trade Name 12-24 months $ 3,679 $ 3,679 $ — Non-Compete Agreement 24 months 27 27 — Customer Relationships 180 months 139,271 26,078 113,193 Trade Name - Indefinite-lived — 13,447 — 13,447 Total $ 156,424 $ 29,784 $ 126,640 |
Estimated Amortization Expense | The estimated amortization expense related to amortizable intangible assets for each of the four succeeding fiscal years and thereafter as of September 30, 2020 is as follows (in thousands): Remainder of 2020 $ 2,468 2021 9,870 2022 9,870 2023 9,870 2024 9,870 Thereafter 67,958 Total $ 109,906 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Long Term Debt | The following table summarizes the long-term debt, net at September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 1.25% Senior Convertible Notes due 2025 Principal $ 201,250 $ — Unamortized debt discount (34,245) — Unamortized debt issuance costs (565) — Total 1.25% Senior Convertible Notes due 2025 166,440 — Term loan Principal $ — $ 97,500 Unamortized debt issuance costs — (671) Total term loan — 96,829 Financing obligations 5,099 8,631 Total debt $ 171,539 $ 105,460 Less: Current portion of long-term debt — (5,000) Less: Current portion of financing obligations (3,700) (5,432) Total long-term debt, net $ 167,839 $ 95,028 |
Summary of Maturities of Long-Term Debt | Maturities of long-term debt as of September 30, 2020 are summarized as follows (in thousands): 1.25% Convertible Senior Notes Financing Obligations Total Debt Remainder of 2020 $ — $ 1,252 $ 1,252 2021 — 2,880 2,880 2022 — 916 916 2023 — 51 51 2024 — — — 2025 167,005 — 167,005 Total Debt 167,005 5,099 172,104 Less: Current portion of long-term debt — (3,700) (3,700) Less: Debt issuance costs (565) — (565) Long-term debt, net $ 166,440 $ 1,399 $ 167,839 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivative Instruments | The following table summarizes the previous interest rate swap agreement. June 2018 Hedge Notional Amount $ 70 million Effective Date June 29, 2018 Index One month LIBOR Maturity December 31, 2021 Fixed Rate 2.98 % |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Summary of Stock Option Activity | A summary of the stock option activity under the Company’s plans for the nine months ended September 30, 2020 is as follows: Number of Weighted Average Exercise Price Options outstanding at December 31, 2019 5,318,759 $ 9.97 Options granted 845,120 $ 28.33 Less: Options exercised 1,276,144 $ 7.75 Options forfeited 63,169 $ 15.82 Options outstanding at September 30, 2020 4,824,566 $ 13.72 Exercisable at September 30, 2020 2,552,710 $ 8.86 |
Summary of Fair Value of Each Stock Option Award Granted | The fair value of each stock option award granted during the nine months ended September 30, 2020 was estimated as of the grant date using a trinomial lattice model with the following weighted average assumptions: Nine Months Ended Expected term (in years) 4.0 - 5.5 Risk-free interest rate (%) 0.7% Expected volatility (%) 39.9% - 44.6% Dividend yield (%) — Weighted average fair value/share at grant date $8.88 |
Summary of Restricted Stock Activity | A summary of the restricted stock activity under the Company’s plans for the nine months ended September 30, 2020 is as follows: Number of Restricted Weighted Average Grant Date Fair Value Nonvested at December 31, 2019 335,298 $ 15.75 Granted 149,012 $ 28.44 Vested (183,532) $ 12.88 Forfeited (5,540) $ 21.10 Nonvested at September 30, 2020 295,238 $ 23.78 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table shows the calculations for the three and nine months ended September 30, 2020 and 2019 (in thousands, except per share amounts). Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Numerator - basic Net income (loss) $ 2,557 $ 2,143 $ (11,245) $ 1,710 Numerator - diluted Net income (loss) $ 2,557 $ 2,143 $ (11,245) $ 1,710 Convertible note accretion, amortization, and interest, net of tax 1,975 — — — Net income (loss) used in diluted EPS $ 4,532 $ 2,143 $ (11,245) $ 1,710 Denominator Basic weighted average shares outstanding 110,461 103,899 107,605 99,149 Dilutive effect of stock options 3,017 3,650 — 3,349 Dilutive effect of restricted stock awards 175 331 — 268 Dilutive effect of Convertible Notes 5,538 — — — Diluted weighted average shares outstanding 119,191 107,880 107,605 102,766 Basic net income (loss) per share $ 0.02 $ 0.02 $ (0.10) $ 0.02 Diluted net income (loss) per share $ 0.04 $ 0.02 $ (0.10) $ 0.02 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potential dilutive shares were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive for the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Stock options — — 3,069,286 — Restricted stock awards — — 201,579 — Convertible Notes — — 3,112,801 — |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | The following table summarizes the segment information (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net revenues: Clinical Services $ 108,733 $ 92,565 $ 275,599 $ 267,757 Pharma Services 16,711 12,107 42,852 34,205 Total revenue 125,444 104,672 318,451 301,962 Cost of revenue: Clinical Services 60,607 47,526 158,287 136,557 Pharma Services 10,772 6,314 31,724 18,492 Total cost of revenue 71,379 53,840 190,011 155,049 Gross Profit: Clinical Services 48,126 45,039 117,312 131,200 Pharma Services 5,939 5,793 11,128 15,713 Total gross profit 54,065 50,832 128,440 146,913 Operating expenses: General and administrative 36,128 33,054 107,085 94,773 Research and development 1,964 2,611 6,129 6,407 Sales and marketing 11,304 11,508 34,757 35,048 Total operating expenses 49,396 47,173 147,971 136,228 Income (loss) from operations 4,669 3,659 (19,531) 10,685 Interest expense, net 2,458 203 4,825 3,333 Other (income) expense, net (11) (35) (7,639) 5,124 Loss on extinguishment of debt — — 1,400 1,018 Loss on termination of cash flow hedge — — 3,506 — Income (loss) before taxes 2,222 3,491 (21,623) 1,210 Income tax (benefit) expense (335) 1,348 (10,378) (500) Net income (loss) $ 2,557 $ 2,143 $ (11,245) $ 1,710 |
Nature of the Business, Basis_3
Nature of the Business, Basis of Presentation and Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Number of operating segments | segment | 2 | ||||
Percentage of consolidated assets net revenues and net income reported by reportable operating segment | 100.00% | ||||
Tax benefit for research and development tax credits | $ 1,900,000 | ||||
COVID-19, grant income | 0 | $ 0 | $ 7,900,000 | $ 0 | |
COVID-19, deferred social security payroll tax | $ 2,900,000 | 2,900,000 | $ 0 | ||
Employee Retention Tax Credit, COVID-19 | $ 1,100,000 |
Recently Adopted and Issued A_2
Recently Adopted and Issued Accounting Guidance - Narrative (Details) $ in Millions | Sep. 30, 2020USD ($) |
Accounting Changes and Error Corrections [Abstract] | |
Restricted cash | $ 32 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Amortized Cost (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | $ 50,396,000 | |
Gross Unrealized Gains | 4,000 | |
Gross Unrealized Losses | (25,000) | |
Fair Value | 50,375,000 | $ 0 |
Accrued interest receivable | 100,000 | |
U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | 18,412,000 | |
Gross Unrealized Gains | 1,000 | |
Gross Unrealized Losses | (7,000) | |
Fair Value | 18,406,000 | |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | 13,734,000 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 13,734,000 | |
Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | 9,927,000 | |
Gross Unrealized Gains | 1,000 | |
Gross Unrealized Losses | (7,000) | |
Fair Value | 9,921,000 | |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | 8,323,000 | |
Gross Unrealized Gains | 2,000 | |
Gross Unrealized Losses | (11,000) | |
Fair Value | $ 8,314,000 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value by Contractual Maturity (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
One Year or Less | $ 19,424,000 | |
Over One Year Through Five Years | 30,951,000 | |
Over Five Years | 0 | |
Total | 50,375,000 | $ 0 |
U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
One Year or Less | 3,033,000 | |
Over One Year Through Five Years | 15,373,000 | |
Over Five Years | 0 | |
Total | 18,406,000 | |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
One Year or Less | 13,734,000 | |
Over One Year Through Five Years | 0 | |
Over Five Years | 0 | |
Total | 13,734,000 | |
Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
One Year or Less | 0 | |
Over One Year Through Five Years | 9,921,000 | |
Over Five Years | 0 | |
Total | 9,921,000 | |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
One Year or Less | 2,657,000 | |
Over One Year Through Five Years | 5,657,000 | |
Over Five Years | 0 | |
Total | $ 8,314,000 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured on Recurring Basis (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | $ 50,375,000 | $ 0 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | 13,734,000 | |
U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | 18,406,000 | |
Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | 9,921,000 | |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | 8,314,000 | |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 268,748,000 | |
Fair Value, Recurring | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 213,624,000 | |
Fair Value, Recurring | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 4,749,000 | |
Marketable securities, at fair value | 13,734,000 | |
Fair Value, Recurring | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | 18,406,000 | |
Fair Value, Recurring | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | 9,921,000 | |
Fair Value, Recurring | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | 8,314,000 | |
Level 1 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 232,030,000 | |
Level 1 | Fair Value, Recurring | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 213,624,000 | $ 163,800,000 |
Level 1 | Fair Value, Recurring | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Marketable securities, at fair value | 0 | |
Level 1 | Fair Value, Recurring | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | 18,406,000 | |
Level 1 | Fair Value, Recurring | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | 0 | |
Level 1 | Fair Value, Recurring | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | 0 | |
Level 2 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 36,718,000 | |
Level 2 | Fair Value, Recurring | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Level 2 | Fair Value, Recurring | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 4,749,000 | |
Marketable securities, at fair value | 13,734,000 | |
Level 2 | Fair Value, Recurring | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | 0 | |
Level 2 | Fair Value, Recurring | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | 9,921,000 | |
Level 2 | Fair Value, Recurring | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | 8,314,000 | |
Level 3 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | |
Level 3 | Fair Value, Recurring | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Level 3 | Fair Value, Recurring | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Marketable securities, at fair value | 0 | |
Level 3 | Fair Value, Recurring | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | 0 | |
Level 3 | Fair Value, Recurring | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | 0 | |
Level 3 | Fair Value, Recurring | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, at fair value | $ 0 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Lessee, Lease, Description [Line Items] | |
Minimum lease payments for leases executed but not yet commenced | $ 34.6 |
Florida | |
Lessee, Lease, Description [Line Items] | |
Minimum lease payments for leases executed but not yet commenced | 25 |
Florida | Leasehold Improvements | |
Lessee, Lease, Description [Line Items] | |
Minimum lease payments for leases executed but not yet commenced | $ 17 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, remaining lease term | 1 year |
Lease renewal term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, remaining lease term | 15 years |
Lease renewal term | 5 years |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Remainder of 2020 | $ 1,129 | |
2021 | 7,662 | |
2022 | 5,414 | |
2023 | 5,289 | |
2024 | 5,349 | |
Thereafter | 37,570 | |
Total remaining lease payments | 62,413 | |
Less: imputed interest | (14,589) | |
Total operating lease liabilities | 47,824 | |
Less: current portion | (4,701) | $ (3,381) |
Long-term portion of operating leases | $ 43,123 | $ 24,034 |
Weighted-average remaining lease term (in years) | 12 years | |
Weighted-average discount rate | 4.40% |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Lease Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease costs | $ 1,747 | $ 1,271 | $ 6,024 | $ 4,365 |
Right-of-use assets obtained in exchange for operating lease liabilities | 23,766 | 19,341 | ||
Cash paid for operating leases | $ 5,101 | $ 2,878 |
Revenue Recognition and Contr_3
Revenue Recognition and Contractual Adjustments - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($)segment | |
Revenue from Contract with Customer [Abstract] | ||
Number of operating segments | segment | 2 | |
Increase in Pharma contract assets | $ 0.7 | |
Pharma contract asset, increase (as a percent) | 56.00% | 56.00% |
Increase in pharma contract liabilities | $ 1.6 | |
Increase in pharma contract liabilities (as a percent) | 57.00% | |
Pharma contract liability, revenue recognized | $ 0.5 | $ 2.1 |
Amortization of contract commissions | $ 0.3 | $ 0.6 |
Revenue Recognition and Contr_4
Revenue Recognition and Contractual Adjustments - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Contract with Customer, Asset, Net [Abstract] | ||
Current pharma contract assets | $ 1,533 | $ 1,000 |
Long-term pharma contract assets | 271 | 153 |
Total pharma contract assets | 1,804 | 1,153 |
Capitalized Contract Cost [Abstract] | ||
Current pharma capitalized commissions | 160 | 133 |
Long-term pharma capitalized commissions | 809 | 798 |
Total pharma capitalized commissions | 969 | 931 |
Contract with Customer, Liability [Abstract] | ||
Current pharma contract liabilities | 3,716 | 1,610 |
Long-term pharma contract liabilities | 657 | 1,171 |
Total pharma contract liabilities | $ 4,373 | $ 2,781 |
Revenue Recognition and Contr_5
Revenue Recognition and Contractual Adjustments - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 125,444 | $ 104,672 | $ 318,451 | $ 301,962 |
Clinical Services | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 108,733 | 92,565 | 275,599 | 267,757 |
Clinical Services | Client direct billing | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 72,896 | 53,555 | 172,431 | 155,999 |
Clinical Services | Commercial Insurance | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 19,218 | 20,956 | 56,360 | 63,052 |
Clinical Services | Medicare and Medicaid | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 16,460 | 17,818 | 46,484 | 47,961 |
Clinical Services | Self-Pay | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 159 | 236 | 324 | 745 |
Pharma Services | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 16,711 | $ 12,107 | $ 42,852 | $ 34,205 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - Human Longevity, Inc. - USD ($) $ in Millions | Jan. 10, 2020 | Sep. 30, 2020 | Sep. 30, 2020 |
Business Acquisition [Line Items] | |||
Payment for business acquisition | $ 37 | ||
Acquisition and integration costs | $ 0.4 | $ 1.9 |
Acquisitions - Schedule of Prov
Acquisitions - Schedule of Provisional Information (Details) - USD ($) $ in Thousands | Jan. 10, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 210,833 | $ 198,601 | |
Human Longevity, Inc. | |||
Business Acquisition [Line Items] | |||
Inventory | $ 534 | ||
Prepaid assets | 185 | ||
Property and equipment | 16,839 | ||
Long-term assets | 346 | ||
Goodwill | 12,232 | ||
Total assets acquired | 37,346 | ||
Long-term liabilities | (346) | ||
Net assets acquired | 37,000 | ||
Customer Relationships | Human Longevity, Inc. | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 4,100 | ||
Customer relationships, useful life | 7 years | ||
Internally Developed Software | Human Longevity, Inc. | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 3,110 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 210,833 | $ 210,833 | $ 198,601 | ||
Amortization of intangibles | $ 2,500 | $ 2,400 | $ 7,387 | $ 7,482 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Classes of Intangible Assets (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Total cost of intangibles | $ 156,818 | $ 156,424 |
Accumulated Amortization | 33,465 | 29,784 |
Finite-lived intangibles, net | 109,906 | |
Intangible assets, net | 123,353 | 126,640 |
Trade Name - Indefinite-lived | ||
Finite-Lived Intangible Assets [Line Items] | ||
Trade Name - Indefinite-lived | 13,447 | 13,447 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 143,371 | 139,271 |
Accumulated Amortization | 33,465 | 26,078 |
Finite-lived intangibles, net | $ 109,906 | 113,193 |
Trade Name - Indefinite-lived | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 3,679 | |
Accumulated Amortization | 3,679 | |
Finite-lived intangibles, net | $ 0 | |
Non-Compete Agreement | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 24 months | |
Cost | $ 27 | |
Accumulated Amortization | 27 | |
Finite-lived intangibles, net | $ 0 | |
Minimum | Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 84 months | |
Minimum | Trade Name - Indefinite-lived | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 12 months | |
Maximum | Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 180 months | 180 months |
Maximum | Trade Name - Indefinite-lived | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 24 months |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Estimated Amortization Expense (Detail) $ in Thousands | Sep. 30, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 2,468 |
2021 | 9,870 |
2022 | 9,870 |
2023 | 9,870 |
2024 | 9,870 |
Thereafter | 67,958 |
Total | $ 109,906 |
Debt - Summary of Long Term Deb
Debt - Summary of Long Term Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | May 04, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | $ (565) | ||
Financing obligations | 5,099 | $ 8,631 | |
Total debt | 171,539 | 105,460 | |
Less: Current portion of long-term debt | 0 | (5,000) | |
Less: Current portion of financing obligations | (3,700) | (5,432) | |
Total long-term debt, net | 167,839 | 95,028 | |
Convertible Debt | 1.25% Convertible Senior Notes | |||
Debt Instrument [Line Items] | |||
Principal | 201,250 | 0 | |
Unamortized debt discount | (34,245) | 0 | |
Unamortized debt issuance costs | (565) | 0 | |
Long-term debt | $ 166,440 | 0 | |
Stated interest rate (as a percent) | 1.25% | 1.25% | |
Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Principal | $ 0 | 97,500 | |
Unamortized debt issuance costs | 0 | (671) | |
Long-term debt | 0 | 96,829 | |
Financing Obligations | |||
Debt Instrument [Line Items] | |||
Less: Current portion of financing obligations | $ (3,700) | $ (5,432) |
Debt - Narrative (Detail)
Debt - Narrative (Detail) | May 04, 2020USD ($)day$ / sharesRate | Jun. 27, 2019USD ($) | Sep. 30, 2020USD ($)$ / sharesRateshares | Sep. 30, 2019USD ($)shares | Sep. 30, 2020USD ($)$ / sharesRateshares | Sep. 30, 2019USD ($)shares | Dec. 31, 2019USD ($) |
Line of Credit Facility [Line Items] | |||||||
Issuance of common stock, net | $ 10,761,000 | $ 10,132,000 | |||||
Dilutive effect of Convertible Notes (in shares) | shares | 5,538,360 | 0 | 0 | 0 | |||
Ownership of convertible notes (as a percent) | 25.00% | ||||||
Proceeds from issuance of convertible debt, net of issuance costs | $ 194,466,000 | $ 0 | |||||
Short-term portion of term loan | $ 0 | 0 | $ 5,000,000 | ||||
Long-term portion of term loan, net | 0 | 0 | 91,829,000 | ||||
Debt issuance costs | 565,000 | 565,000 | |||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ 1,400,000 | $ 1,018,000 | $ 1,400,000 | ||
Debt instrument, weighted average interest rates | 4.91% | 4.91% | 4.64% | ||||
Convertible Debt | |||||||
Line of Credit Facility [Line Items] | |||||||
Proceeds from issuance of convertible debt, net of issuance costs | $ 96,300,000 | ||||||
Term Loan Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt issuance costs | $ 0 | $ 0 | $ 671,000 | ||||
1.25% Convertible Senior Notes | Convertible Debt | |||||||
Line of Credit Facility [Line Items] | |||||||
Stated interest rate (as a percent) | Rate | 1.25% | 1.25% | 1.25% | ||||
Debt instrument, face amount | $ 201,300,000 | ||||||
Discount on principal amount (as a percent) | Rate | 97.00% | ||||||
Discount on shares | $ 6,900,000 | ||||||
Threshold trading days | day | 20 | ||||||
Consecutive trading days | day | 30 | ||||||
Conversion price on applicable trading day (as a percent) | 130.00% | ||||||
Convertible Notes, conversion ratio | Rate | 2.75198% | ||||||
Convertible Notes, conversion price (in dollars per share) | $ / shares | $ 36.34 | $ 36.89 | $ 36.89 | ||||
Convertible debt, if converted, value in excess of principal | $ 3,100,000 | ||||||
Redemption price of principal (as a percent) | 100.00% | ||||||
Interest expense, contractual coupon interest | $ 600,000 | $ 1,000,000 | |||||
Interest expense, accretion of debt discount | 1,800,000 | 2,700,000 | |||||
Interest expense, amortization of debt issuance costs | 25,600 | $ 44,700 | |||||
Effective interest rate on Convertible Notes (as a percent) | 5.50% | ||||||
Carrying amount of equity component | $ 21,600,000 | 23,100,000 | $ 23,100,000 | ||||
Debt issuance costs | $ 565,000 | $ 565,000 | $ 0 | ||||
1.25% Convertible Senior Notes | Convertible Debt | Debt Instrument, Redemption, Period One | |||||||
Line of Credit Facility [Line Items] | |||||||
Threshold trading days | day | 20 | ||||||
Consecutive trading days | day | 30 | ||||||
Conversion price on applicable trading day (as a percent) | 130.00% | ||||||
1.25% Convertible Senior Notes | Convertible Debt | Debt Instrument, Redemption, Period Two | |||||||
Line of Credit Facility [Line Items] | |||||||
Threshold trading days | day | 5 | ||||||
Consecutive trading days | day | 5 | ||||||
Principal amount priced to investors (as a percent) | Rate | 98.00% | ||||||
New Credit Agreement | Federal Funds Rate | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument variable interest rate | 0.50% | ||||||
New Credit Agreement | LIBOR | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument variable interest rate | 1.00% | ||||||
New Credit Agreement | LIBOR | Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument applicable margin | 1.25% | ||||||
New Credit Agreement | LIBOR | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument applicable margin | 2.25% | ||||||
New Credit Agreement | Base Rate | Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument applicable margin | 0.25% | ||||||
New Credit Agreement | Base Rate | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument applicable margin | 1.25% | ||||||
New Credit Agreement | Revolving Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility maximum borrowing capacity | $ 100,000,000 | ||||||
Line of credit facility, swingline sublimit | $ 10,000,000 | ||||||
New Credit Agreement | Revolving Credit Facility | Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Commitment fee (as a percent) | 0.15% | ||||||
New Credit Agreement | Revolving Credit Facility | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Commitment fee (as a percent) | 0.35% | ||||||
New Credit Agreement | Term Loan | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility maximum borrowing capacity | $ 100,000,000 | ||||||
Annual principal amortization, year one (as a percent) | 5.00% | ||||||
Annual principal amortization, year two (as a percent) | 5.00% | ||||||
Annual principal amortization, year three (as a percent) | 7.50% | ||||||
Annual principal amortization, year four (as a percent) | 7.50% | ||||||
Annual principal amortization, thereafter (as a percent) | 10.00% | ||||||
Debt instrument, percentage of net cash proceeds from sales and dispositions subject to certain reinvestment rights | 100.00% | 100.00% | |||||
Debt instrument, percentage of net cash proceeds from issuances or incurrence of additional debt to be used for mandatory prepayment | 100.00% | 100.00% | |||||
New Credit Agreement | Delayed Draw Term Loan | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility maximum borrowing capacity | $ 50,000,000 | ||||||
Over-Allotment Option | |||||||
Line of Credit Facility [Line Items] | |||||||
Issuance of common stock, net | $ 194,400,000 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long Term Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | May 04, 2020 | Dec. 31, 2019 |
Long-term Debt, by Current and Noncurrent [Abstract] | |||
Less: Current portion of long-term debt | $ 0 | $ (5,000) | |
Unamortized debt issuance costs | (565) | ||
Finance Obligations | |||
Less: Current portion of long-term debt | (3,700) | (5,432) | |
Long-term debt, net | 1,399 | 3,199 | |
Total Debt | |||
Remainder of 2020 | 1,252 | ||
2021 | 2,880 | ||
2022 | 916 | ||
2023 | 51 | ||
2024 | 0 | ||
2025 | 167,005 | ||
Total Debt | 172,104 | ||
Less: Current portion of long-term debt | (3,700) | ||
Total long-term debt, net | $ 167,839 | 95,028 | |
1.25% Convertible Senior Notes | Convertible Debt | |||
Line of Credit Facility [Line Items] | |||
Stated interest rate (as a percent) | 1.25% | 1.25% | |
Long-term Debt, by Current and Noncurrent [Abstract] | |||
Unamortized debt issuance costs | $ (565) | 0 | |
Term Loan And Revolving Credit Facility | |||
Long-term Debt, by Current and Noncurrent [Abstract] | |||
Remainder of 2020 | 0 | ||
2021 | 0 | ||
2022 | 0 | ||
2023 | 0 | ||
2024 | 0 | ||
2025 | 167,005 | ||
Total Debt | 167,005 | ||
Less: Current portion of long-term debt | 0 | ||
Unamortized debt issuance costs | (565) | ||
Long-term debt, net | 166,440 | ||
Financing Obligations | |||
Finance Obligations | |||
Remainder of 2020 | 1,252 | ||
2021 | 2,880 | ||
2022 | 916 | ||
2023 | 51 | ||
2024 | 0 | ||
2025 | 0 | ||
Total Debt | 5,099 | ||
Less: Current portion of long-term debt | (3,700) | $ (5,432) | |
Long-term debt, net | $ 1,399 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities (Details) - USD ($) | May 01, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Derivative [Line Items] | |||||||
Termination fee | $ 3,317,000 | $ 0 | |||||
Loss on derivative reclassified from AOCI to earnings | $ 0 | $ 2,661,000 | $ 0 | 2,661,000 | $ 0 | ||
Previous interest rate swap agreement | |||||||
Derivative [Line Items] | |||||||
Termination fee | $ 3,300,000 | ||||||
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Hedge June 2018 | |||||||
Derivative [Line Items] | |||||||
Notional amount | $ 70,000,000 | $ 70,000,000 | |||||
Fixed interest rate (as a percent) | 2.98% | 2.98% | |||||
Loss on derivative reclassified from AOCI to earnings | $ 2,700,000 | ||||||
Other Noncurrent Liabilities | Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Hedge June 2018 | |||||||
Derivative [Line Items] | |||||||
Fair value of derivative instrument | $ 2,000,000 |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 03, 2020 | Apr. 29, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Subsidiary, Sale of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Common Stock Offering | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Shares sold in offering (in shares) | 4,400,000 | |||
Common stock, par value (in dollars per share) | $ 0.001 | |||
Offering price per share (in dollars per share) | $ 28.50 | |||
Net proceeds of common stock | $ 117.9 | |||
Option period (in days) | 30 days | |||
Payments of equity issue costs | $ 7.5 | |||
Over-Allotment Option | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Shares sold in offering (in shares) | 351,500 | 660,000 | ||
Net proceeds of common stock | $ 9.4 | |||
Payments of equity issue costs | $ 0.6 |
Stock Based Compensation - Narr
Stock Based Compensation - Narrative (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock compensation expense (gain) | $ 2,700 | $ 3,300 | $ 7,500 | $ 7,700 | ||||
Unrecognized stock-based compensation cost | 7,300 | $ 7,300 | ||||||
Unrecognized share-based compensation expense, weighted-average recognition period (in years) | 1 year 11 months 4 days | |||||||
Common stock issuance ESPP Plan | 808 | $ 928 | $ 796 | $ 564 | $ 653 | $ 419 | ||
Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Unrecognized stock-based compensation cost | $ 4,200 | $ 4,200 | ||||||
Unrecognized share-based compensation expense, weighted-average recognition period (in years) | 1 year 10 months 24 days | |||||||
Employee Stock Purchase Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Employee stock purchase plan, discount rate (as a percent) | 15.00% | |||||||
Common stock issuance ESPP Plan (in shares) | 29,853 | 28,672 | 105,241 | 101,959 | ||||
Common stock issuance ESPP Plan | $ 200 | $ 100 | $ 600 | $ 400 |
Stock Based Compensation - Summ
Stock Based Compensation - Summary of Stock Option Activity (Detail) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019shares | Sep. 30, 2020$ / sharesshares | |
Number of shares | ||
Beginning balance (in shares) | shares | 5,318,759 | |
Options granted (in shares) | shares | 845,120 | |
Less: | ||
Options exercised (in shares) | shares | 289,081 | 1,276,144 |
Options canceled or expired (in shares) | shares | 63,169 | |
Ending balance (in shares) | shares | 4,824,566 | |
Exercisable at September 30, 2020 (in shares) | shares | 2,552,710 | |
Weighted Average Exercise Price | ||
Weighted average exercise price, beginning balance (in dollars per share) | $ / shares | $ 9.97 | |
Weighted average exercise price, granted (in dollars per share) | $ / shares | 28.33 | |
Less: | ||
Weighted average exercise price, exercised (in dollars per share) | $ / shares | 7.75 | |
Weighted average exercise price, canceled or expired (in dollars per share) | $ / shares | 15.82 | |
Weighted average exercise price, ending balance (in dollars per share) | $ / shares | 13.72 | |
Weighted average exercise price, exercisable, ending balance (in dollars per share) | $ / shares | $ 8.86 |
Stock Based Compensation - Fair
Stock Based Compensation - Fair Value of Each Stock Option Award Granted (Detail) | 9 Months Ended |
Sep. 30, 2020$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate (%) | 0.70% |
Dividend yield (%) | 0.00% |
Weighted average fair value/share at grant date (in dollars per share) | $ 8.88 |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 4 years |
Expected volatility (%) | 39.90% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 5 years 6 months |
Expected volatility (%) | 44.60% |
Stock Based Compensation - Su_2
Stock Based Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Number of shares | |
Beginning balance (in shares) | shares | 335,298 |
Granted (in shares) | shares | 149,012 |
Vested (in shares) | shares | (183,532) |
Forfeited (in shares) | shares | (5,540) |
Ending balance (in shares) | shares | 295,238 |
Weighted average price | |
Beginning balance (in dollars per share) | $ / shares | $ 15.75 |
Granted (in dollars per share) | $ / shares | 28.44 |
Vested (in dollars per share) | $ / shares | 12.88 |
Forfeited (in dollars per share) | $ / shares | 21.10 |
Ending balance (in dollars per share) | $ / shares | $ 23.78 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Basic and Diluted Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Numerator - basic | |||||
Net income (loss) | [1] | $ 2,557 | $ 2,143 | $ (11,245) | $ 1,710 |
Numerator - diluted | |||||
Convertible note accretion, amortization, and interest, net of tax | [1] | 1,975 | 0 | 0 | 0 |
NET INCOME (LOSS) USED IN DILUTED EPS | [1] | $ 4,532 | $ 2,143 | $ (11,245) | $ 1,710 |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | |||||
Basic weighted average shares outstanding (in shares) | 110,461,000 | 103,899,000 | 107,605,000 | 99,149,000 | |
Dilutive effect of Convertible Notes (in shares) | 5,538,360 | 0 | 0 | 0 | |
Diluted weighted average shares outstanding (in shares) | 119,191,000 | 107,880,000 | 107,605,000 | 102,766,000 | |
NET INCOME (LOSS) PER SHARE | |||||
Basic (in dollars per share) | $ 0.02 | $ 0.02 | $ (0.10) | $ 0.02 | |
Diluted (in dollars per share) | $ 0.04 | $ 0.02 | $ (0.10) | $ 0.02 | |
Stock options | |||||
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | |||||
Dilutive effect of stock options and restricted stock awards (in shares) | 3,017,000 | 3,650,000 | 0 | 3,349,000 | |
Restricted stock awards | |||||
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | |||||
Dilutive effect of stock options and restricted stock awards (in shares) | 175,000 | 331,000 | 0 | 268,000 | |
[1] | This adjustment compensates for the effects of the if-converted impact of convertible notes in adjusted net income. Since an entity using the if-converted method assumes that a convertible debt instrument was converted into common shares at the beginning of the reporting period, the numerator is adjusted to reverse any recognized interest expense (including any amortization of discounts). |
Net Income (Loss) Per Share -_2
Net Income (Loss) Per Share - Schedule of Antidilutive Shares (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 0 | 0 | 3,069,286 | 0 |
Restricted Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 0 | 0 | 201,579 | 0 |
Convertible Debt Securities | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 0 | 0 | 3,112,801 | 0 |
Investment in Non-Consolidate_2
Investment in Non-Consolidated Affiliate (Details) | May 22, 2020USD ($)installment | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Schedule of Equity Method Investments [Line Items] | |||
Carrying amount of investment in non-consolidated affiliate | $ 959,428,000 | $ 709,506,000 | |
Variable Interest Entity, Not Primary Beneficiary | |||
Schedule of Equity Method Investments [Line Items] | |||
Number of installment payments | installment | 2 | ||
Carrying amount of investment in non-consolidated affiliate | 25,600,000 | ||
Variable Interest Entity, Not Primary Beneficiary | Preference Shares | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying amount of investment in non-consolidated affiliate | 19,200,000 | ||
Variable Interest Entity, Not Primary Beneficiary | Purchase Option | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying amount of investment in non-consolidated affiliate | 5,800,000 | ||
Variable Interest Entity, Not Primary Beneficiary | Transaction Costs | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying amount of investment in non-consolidated affiliate | $ 600,000 | ||
Affiliated Entity | Strategic Alliance With Inivata Limited | |||
Schedule of Equity Method Investments [Line Items] | |||
Line of credit facility maximum borrowing capacity | $ 15,000,000 | ||
Stated interest rate (as a percent) | 0.00% | ||
Affiliated Entity | Variable Interest Entity, Not Primary Beneficiary | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment in minority interest | $ 25,000,000 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting [Abstract] | |||||||||
Number of operating segments | segment | 2 | ||||||||
Segment Reporting Information [Line Items] | |||||||||
Total revenue | $ 125,444 | $ 104,672 | $ 318,451 | $ 301,962 | |||||
Total cost of revenue | 71,379 | 53,840 | 190,011 | 155,049 | |||||
Total gross profit | 54,065 | 50,832 | 128,440 | 146,913 | |||||
General and administrative | 36,128 | 33,054 | 107,085 | 94,773 | |||||
Research and development | 1,964 | 2,611 | 6,129 | 6,407 | |||||
Sales and marketing | 11,304 | 11,508 | 34,757 | 35,048 | |||||
Total operating expenses | 49,396 | 47,173 | 147,971 | 136,228 | |||||
Income (loss) from operations | 4,669 | 3,659 | (19,531) | 10,685 | |||||
Interest expense, net | 2,458 | 203 | 4,825 | 3,333 | |||||
Other (income) expense, net | (11) | (35) | (7,639) | 5,124 | |||||
Loss on extinguishment of debt | 0 | 0 | 1,400 | 1,018 | $ 1,400 | ||||
Loss on termination of cash flow hedge | 0 | 0 | 3,506 | 0 | |||||
Income (loss) before taxes | 2,222 | 3,491 | (21,623) | 1,210 | |||||
Income tax (benefit) expense | (335) | 1,348 | (10,378) | (500) | |||||
Net income (loss) | 2,557 | $ (6,824) | $ (6,978) | 2,143 | $ 1,991 | $ (2,424) | (11,245) | 1,710 | |
Clinical Services | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Total revenue | 108,733 | 92,565 | 275,599 | 267,757 | |||||
Total cost of revenue | 60,607 | 47,526 | 158,287 | 136,557 | |||||
Total gross profit | 48,126 | 45,039 | 117,312 | 131,200 | |||||
Pharma Services | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Total revenue | 16,711 | 12,107 | 42,852 | 34,205 | |||||
Total cost of revenue | 10,772 | 6,314 | 31,724 | 18,492 | |||||
Total gross profit | $ 5,939 | $ 5,793 | $ 11,128 | $ 15,713 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Subsequent Events [Abstract] | ||||
COVID-19, grant income | $ 0 | $ 0 | $ 7,900,000 | $ 0 |