Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 21, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | HSTM | ||
Entity Registrant Name | HEALTHSTREAM INC | ||
Entity Central Index Key | 1,095,565 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 32,329,409 | ||
Entity Public Float | $ 703.7 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 134,321 | $ 84,768 |
Marketable securities | 34,497 | 46,350 |
Accounts receivable, net of allowance for doubtful accounts of $1,161 and $1,979 at December 31, 2018 and December 31, 2017, respectively | 38,124 | 36,691 |
Accounts receivable - unbilled | 2,880 | 1,327 |
Prepaid royalties, net of amortization | 13,596 | 16,137 |
Other prepaid expenses and other current assets | 18,016 | 8,330 |
Current assets of discontinued operations | 6,125 | |
Total current assets | 241,434 | 199,728 |
Property and equipment, net of accumulated depreciation of $20,827 and $24,392 at December 31, 2018 and December 31, 2017, respectively | 15,866 | 8,092 |
Capitalized software development, net of accumulated amortization of $46,757 and $37,174 at December 31, 2018 and December 31, 2017, respectively | 18,352 | 16,014 |
Goodwill | 86,144 | 86,144 |
Intangible assets, net | 59,378 | 68,497 |
Deferred tax assets | 145 | 45 |
Deferred commissions | 16,470 | |
Non-marketable equity investments | 3,376 | 3,772 |
Other assets | 783 | 754 |
Long-term assets of discontinued operations | 28,073 | |
Total assets | 441,948 | 411,119 |
Current liabilities: | ||
Accounts payable | 8,497 | 4,178 |
Accrued royalties | 15,756 | 12,849 |
Accrued liabilities | 13,458 | 9,567 |
Accrued compensation and related expenses | 3,082 | 2,762 |
Deferred revenue | 66,061 | 64,938 |
Current liabilities of discontinued operations | 6,772 | |
Total current liabilities | 106,854 | 101,066 |
Deferred tax liabilities | 11,068 | |
Deferred revenue, noncurrent | 2,868 | 6,287 |
Other long term liabilities | 2,211 | 1,048 |
Long-term liabilities of discontinued operations | 2,548 | |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Common stock, no par value, 75,000 shares authorized; 32,325 and 31,908 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively | 286,597 | 282,666 |
Retained earnings | 32,373 | 17,542 |
Accumulated other comprehensive loss | (23) | (38) |
Total shareholders’ equity | 318,947 | 300,170 |
Total liabilities and shareholders’ equity | 441,948 | 411,119 |
Customer-Related Intangible Assets [Member] | ||
Current assets: | ||
Intangible assets, net | 53,469 | 59,681 |
Other Intangible Assets [Member] | ||
Current assets: | ||
Intangible assets, net | $ 5,909 | $ 8,816 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Allowance for doubtful accounts, net | $ 1,161 | $ 1,979 |
Accumulated depreciation on property and equipment | 20,827 | 24,392 |
Accumulated amortization on capitalized software development | 46,757 | 37,174 |
Accumulated amortization on intangible assets | $ 32,908 | $ 24,741 |
Common stock, no par value | ||
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 32,325,000 | 31,908,000 |
Common stock, shares outstanding | 32,325,000 | 31,908,000 |
Customer-Related Intangible Assets [Member] | ||
Accumulated amortization on intangible assets | $ 23,245 | $ 17,033 |
Other Intangible Assets [Member] | ||
Accumulated amortization on intangible assets | $ 9,663 | $ 7,708 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Revenues, net | $ 231,616 | $ 214,899 | $ 192,124 |
Operating costs and expenses: | |||
Cost of revenues (excluding depreciation and amortization) | 96,014 | 87,208 | 74,966 |
Product development | 25,735 | 24,148 | 24,234 |
Sales and marketing | 35,698 | 38,606 | 34,929 |
Other general and administrative expenses | 34,447 | 31,483 | 30,458 |
Depreciation and amortization | 24,231 | 24,047 | 20,366 |
Total operating costs and expenses | 216,125 | 205,492 | 184,953 |
Operating income | 15,491 | 9,407 | 7,171 |
Other income, net | 1,084 | 733 | 581 |
Income from continuing operations before income tax provision | 16,575 | 10,140 | 7,752 |
Income tax provision | 3,324 | 1,302 | 2,961 |
Income from continuing operations | 13,251 | 8,838 | 4,791 |
(Loss) income from discontinued operations before income tax provision | (64) | 393 | (1,604) |
Gain on sale of discontinued operations | 29,489 | ||
Income tax provision (benefit) | 10,459 | (773) | (568) |
Income (loss) from discontinued operations | 18,966 | 1,166 | (1,036) |
Net Income | $ 32,217 | $ 10,004 | $ 3,755 |
Net income per share – basic: | |||
Continuing operations | $ 0.41 | $ 0.27 | $ 0.15 |
Discontinued operations | 0.59 | 0.04 | (0.03) |
Net income per share - basic | 1 | 0.31 | 0.12 |
Net income per share - diluted: | |||
Continuing operations | 0.41 | 0.27 | 0.15 |
Discontinued operations | 0.59 | 0.04 | (0.03) |
Net income per share - diluted | $ 1 | $ 0.31 | $ 0.12 |
Weighted average shares of common stock outstanding: | |||
Basic | 32,264 | 31,861 | 31,721 |
Diluted | 32,335 | 32,196 | 32,068 |
Dividends declared per share | $ 1 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income | $ 32,217 | $ 10,004 | $ 3,755 |
Other comprehensive income, net of taxes: | |||
Unrealized gain on marketable securities | 15 | 13 | 19 |
Total other comprehensive income | 15 | 13 | 19 |
Comprehensive income | $ 32,232 | $ 10,017 | $ 3,774 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Retained Earnings (Accumulated Deficit) [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Beginning balance at Dec. 31, 2015 | $ 280,320 | $ 278,799 | $ 1,591 | $ (70) |
Beginning balance, shares at Dec. 31, 2015 | 31,647 | |||
Net income | 3,755 | 3,755 | ||
Comprehensive income | 19 | 19 | ||
Stock based compensation | 1,968 | $ 1,968 | ||
Tax benefit from equity awards | 217 | 217 | ||
Common stock issued under stock plans, net of shares withheld for employee taxes | (171) | $ (171) | ||
Common stock issued under stock plans, net of shares withheld for employee taxes, shares | 101 | |||
Ending balance at Dec. 31, 2016 | 286,108 | $ 280,813 | 5,346 | (51) |
Ending balance, shares at Dec. 31, 2016 | 31,748 | |||
Cumulative effect of accounting change | 2,192 | 2,192 | ||
Net income | 10,004 | 10,004 | ||
Comprehensive income | 13 | 13 | ||
Stock based compensation | 1,852 | $ 1,852 | ||
Common stock issued under stock plans, net of shares withheld for employee taxes | 1 | $ 1 | ||
Common stock issued under stock plans, net of shares withheld for employee taxes, shares | 160 | |||
Ending balance at Dec. 31, 2017 | $ 300,170 | $ 282,666 | 17,542 | (38) |
Ending balance, shares at Dec. 31, 2017 | 31,908 | 31,908 | ||
Cumulative effect of accounting change | $ 15,132 | 15,132 | ||
Net income | 32,217 | 32,217 | ||
Comprehensive income | 15 | 15 | ||
Dividends declared on common stock ($1.00 per share) | (32,518) | (32,518) | ||
Stock based compensation | 1,686 | $ 1,686 | ||
Common stock issued under stock plans, net of shares withheld for employee taxes | 2,245 | $ 2,245 | ||
Common stock issued under stock plans, net of shares withheld for employee taxes, shares | 417 | |||
Ending balance at Dec. 31, 2018 | $ 318,947 | $ 286,597 | $ 32,373 | $ (23) |
Ending balance, shares at Dec. 31, 2018 | 32,325 | 32,325 |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) | 12 Months Ended |
Dec. 31, 2018$ / shares | |
Statement Of Stockholders Equity [Abstract] | |
Dividends per share common stock | $ 1 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
OPERATING ACTIVITIES: | |||
Net income | $ 32,217 | $ 10,004 | $ 3,755 |
Income (loss) from discontinued operations | (18,966) | (1,166) | 1,036 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 24,231 | 24,047 | 20,366 |
Stock-based compensation | 1,777 | 1,736 | 1,895 |
Amortization of deferred commissions | 7,659 | ||
Excess tax benefits from equity awards | (217) | ||
Provision for doubtful accounts | 1,033 | 1,568 | 590 |
Deferred income taxes | 3,017 | (2,144) | 1,447 |
(Gain) loss on non-marketable equity investments | (42) | 5 | (120) |
Change in fair value of cost method investments | 1,271 | ||
Other | (9) | 409 | 1,026 |
Changes in operating assets and liabilities: | |||
Accounts and unbilled receivables | (4,050) | 1,125 | (7,964) |
Prepaid royalties | 1,639 | 2,046 | (4,008) |
Other prepaid expenses and other current assets | (3,938) | (25) | (1,176) |
Deferred commissions | (11,577) | ||
Other assets | (30) | (201) | 323 |
Accounts payable and accrued expenses | 2,008 | 5,784 | 1,674 |
Accrued royalties | 2,907 | (32) | 3,675 |
Deferred revenue | 5,103 | (552) | 1,586 |
Net cash provided by continuing operating activities | 44,250 | 42,604 | 23,888 |
Net cash (used in) provided by discontinued operating activities | (1,004) | 4,108 | 346 |
Net cash provided by operating activities | 43,246 | 46,712 | 24,234 |
INVESTING ACTIVITIES: | |||
Business combinations, net of cash acquired | (55,255) | ||
Proceeds from sale of discontinued operations, net of tax | 44,049 | ||
Proceeds from maturities of marketable securities | 68,992 | 90,073 | 119,395 |
Purchases of marketable securities | (57,085) | (83,279) | (106,965) |
Payments to acquire cost method investments | (833) | (500) | |
Proceeds for sale of long-lived assets | 975 | ||
Payments associated with capitalized software development | (11,284) | (9,597) | (8,979) |
Purchases of property and equipment | (7,166) | (5,515) | (4,806) |
Net cash provided by (used in) continuing investing activities | 36,673 | (8,818) | (55,635) |
Net cash used in discontinued investing activities | (115) | (2,761) | (1,021) |
Net cash provided by (used in) investing activities | 36,558 | (11,579) | (56,656) |
FINANCING ACTIVITIES: | |||
Proceeds from exercise of stock options | 2,582 | 413 | 145 |
Taxes paid related to net settlement of equity awards | (338) | (412) | (316) |
Excess tax benefits from equity awards | 217 | ||
Payment of earn-out related to prior acquisitions | (38) | ||
Payment of debt issue costs | (100) | ||
Payment of cash dividends | (32,357) | ||
Net cash (used in) provided by financing activities | (30,251) | 1 | 46 |
Net increase (decrease) in cash and cash equivalents | 49,553 | 35,134 | (32,376) |
Cash and cash equivalents at beginning of period | 84,768 | 49,634 | 82,010 |
Cash and cash equivalents at end of period | 134,321 | 84,768 | 49,634 |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Interest paid | 117 | 101 | 76 |
Income taxes paid | 16,513 | $ 638 | $ 2,496 |
Non-cash additions to property and equipment | $ 1,013 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity and Segments HealthStream, Inc. (the Company) was incorporated in 1990 as a Tennessee corporation and is headquartered in Nashville, Tennessee. As of December 31, 2018, the Company operated in two segments: HealthStream Workforce Solutions and HealthStream Provider Solutions. Workforce Solutions products consist of software-as-a-service (SaaS) based services and subscription-based solutions to meet the ongoing training, certification, assessment, and development needs of the healthcare community. These solutions provide, deliver, and track online education for our customers in the United States through our SaaS model. Provider Solutions products offer healthcare organizations software applications for administering and tracking provider credentialing, privileging, call center, and enrollment activities. On February 12, 2018, the Company divested its Patient Experience (PX) business to Press Ganey Associates (Press Ganey) for $65.2 million in cash (after giving effect to the post-closing working capital adjustment). This sale of the PX business resulted in the divestiture of the Company’s patient experience solutions business segment. The results of operations for PX are presented as discontinued operations within the notes to consolidated financial statements herein. Recently Adopted Accounting Standards The Company adopted the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Sub Topic 825-10) Recognition of Revenue Revenues are recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled in exchange for transferring those goods or services. Revenue is recognized based on the following five step model: • Identification of the contract with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation Subscription/SaaS services revenues primarily consist of fees in consideration of providing customers access to one or more of our SaaS-based solutions and/or courseware subscriptions, as well as fees related to licensing agreements, all of which include routine customer support and technology enhancements. Revenue is generally recognized over time during the contract term beginning when the service is made available to the customer. Subscription/SaaS contracts are generally non-cancelable, one to five years in length, and billed annually, semi-annually, quarterly, or monthly in advance. Professional services revenues primarily consist of fees for implementation services, consulting, custom courseware development, and training. The majority of our professional services contracts are billed in advance based on a fixed price basis, and revenue is recognized over time as the services are performed. For both subscription/SaaS services and professional services, the time between billing the customer and when performance obligations are satisfied is generally not significant. Our contracts with customers often contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The contract price, which represents transaction price, is allocated to the separate performance obligations on a relative standalone selling price basis. We generally determine standalone selling prices based on the standard list price for each product, taking into consideration certain factors, including contract length and the number of subscribers within the contract. We receive payments from customers based on billing schedules established in our contracts. Accounts receivable - unbilled represent contract assets related to our conditional right to consideration for subscription/SaaS and professional services contracts where performance has occurred under the contract. Accounts receivable are primarily comprised of trade receivables that are recorded at the invoice amount, net of an allowance for doubtful accounts, when the right to consideration becomes unconditional. Other receivables, which are included within Accounts Receivable, include receivables from certain content partners and are not material. Deferred revenue represents contract liabilities that are recorded when cash payments are received or are due in advance of our satisfaction of performance obligations. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. These accounting principles require management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates and such differences could be material to the consolidated financial statements. Cash Equivalents The Company considers cash equivalents to be unrestricted, highly liquid investments with initial maturities of less than three months. Marketable Securities Marketable securities are classified as available for sale and are stated at fair market value, with the unrealized gains and losses, net of tax, reported in other accumulated comprehensive income (loss) on the accompanying consolidated balance sheets. Realized gains and losses and declines in market value judged to be other than temporary on investments in marketable securities are included in interest and other income on the accompanying consolidated statements of income. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available for sale are included in other income (expense) on the accompanying consolidated statements of income. Premiums and discounts are amortized over the life of the related available for sale security as an adjustment to the yield using the effective interest method. Deferred Commissions Deferred commissions represent costs to acquire contracts with customers, such as the initial sales commission payment, which are capitalized and amortized consistent with the transfer of the goods or services to the customer over the expected period of benefit. The capitalized contract cost is included under the caption “deferred commissions” in the accompanying consolidated balance sheet. The expected period of benefit is the contract term, except when the capitalized commission is expected to provide economic benefit to the Company for a period longer than the contract term, such as for new customer or incremental sales where renewals are expected and renewal commissions are not commensurate with initial commissions. Non-commensurate commissions are amortized over the greater of the contract term or expected customer relationship period, limited by the technological obsolescence period of approximately three years. Prepaid Royalties Prepaid royalties represents advance payments associated with the sale of third party products, such as courseware subscriptions. Royalties are typically paid in advance at the commencement of the revenue cycle or periodically throughout the revenue cycle, such as quarterly, bi-annual, or annual installments. Royalty payments are amortized over the term of the underlying contracts, which generally range from 12 to 60 months, in order to match the direct royalty costs to the same period the subscription revenue is recognized. Amortization of royalties is included under the caption “cost of revenues (excluding depreciation and amortization)” in the accompanying consolidated statements of income. Allowance for Doubtful Accounts The Company estimates its allowance for doubtful accounts to include accounts that may become uncollectible in the future, along with using a specific identification method in which management considers the facts and circumstances surrounding each potentially uncollectible receivable. Uncollectible receivables are written-off in the period management believes it has exhausted its ability to collect payment from the customer. Bad debt expense is recorded when events or circumstances indicate an additional allowance is required. Changes in the allowance for doubtful accounts and the amounts charged to bad debt expense from continuing operations for the years ended December 31 were as follows (in thousands): Allowance Balance at Beginning of Period Charged to Costs and Expenses Write-offs Allowance Balance at End of Period 2018 $ 1,979 $ 1,033 $ (1,851 ) $ 1,161 2017 839 1,568 (428 ) 1,979 2016 292 590 (43 ) 839 Capitalized Software Development Capitalized software development is stated on the basis of cost and is presented net of accumulated amortization. The Company capitalizes costs incurred during the software development phase for projects when such costs are material. These assets are generally amortized using the straight-line method over three years. The Company capitalized approximately $11.9 million and $10.2 million during 2018 and 2017, respectively. Amortization of capitalized software development from continuing operations was approximately $9.6 million, $8.9 million, and $6.8 million during 2018, 2017, and 2016, respectively. Maintenance and operating costs are expensed as incurred. As of December 31, 2018 and 2017, there were no capitalized software development costs for external computer software developed for resale. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used in measuring fair value. There are three levels to the fair value hierarchy based on the reliability of inputs, as follows: Level 1 Level 2 Level 3 The Company evaluates assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them for each reporting period. This determination requires significant judgments to be made by the Company. At December 31, 2018 and 2017, our assets measured at fair value on a recurring basis consisted of marketable securities, which are classified as available for sale (see Note 4 – Marketable Securities). Property and Equipment Property and equipment are stated on the basis of cost. Depreciation is provided on the straight-line method over the following estimated useful lives, except for assets under capital leases and leasehold improvements, which are amortized over the shorter of the estimated useful life or their respective lease term. Years Furniture and fixtures 5 - 7 Equipment 3 Goodwill and Intangible Assets Goodwill represents the excess of purchase price in a business combination over the fair value of the net identifiable assets acquired. The carrying amount of our goodwill is evaluated for impairment at least annually during the fourth quarter and whenever events or changes in facts or circumstances indicate that impairment may exist. In accordance with ASC 350, Intangibles – Goodwill and Other As of December 31, 2018, intangible assets include customer relationships, internally-developed technology and patents, non-competition agreements, and trade names. These intangible assets are considered to have definite useful lives and are being amortized on a straight-line basis over periods ranging between five and thirteen years. The weighted average amortization period for definite lived intangible assets as of December 31, 2018 was 11.3 years. Intangible assets are reviewed for impairment whenever events or changes in facts or circumstances indicate that the carrying amount of the assets may not be recoverable. There were no intangible asset impairments identified or recorded for the years ended December 31, 2018, 2017, or 2016. Long-Lived Assets Long-lived assets to be held for use are reviewed for events or changes in facts and circumstances, both internally and externally, which may indicate that an impairment of long-lived assets held for use is present. The Company measures any impairment using observable market values or discounted future cash flows from the related long-lived assets. The cash flow estimates and discount rates incorporate management’s best estimates, using appropriate and customary assumptions and projections at the date of evaluation. Management periodically evaluates whether the carrying value of long-lived assets, including intangible assets, property and equipment, capitalized software development, deferred commissions, and other assets will be recoverable. There were no long-lived asset impairments identified or recorded for the years ended December 31, 2018, 2017, or 2016. Non-Marketable Equity Investments Non-marketable equity investments are accounted for using the equity method when the Company can exercise significant influence over the investee. Investments for which the Company is not able to exercise significant influence over the investee are accounted for under the cost method, and measured at fair value with changes in fair value recognized in net income. The proportionate share of income or loss from equity method investments and any changes in fair value of cost method investments are recorded under the caption “other income, net” in the accompanying consolidated statements of income. Financial Instruments The Company has various financial instruments, including cash and cash equivalents, accounts receivable, accounts receivable-unbilled, accounts payable, accrued liabilities, and deferred revenue. The carrying amounts of these financial instruments approximate fair value because of the short term maturity or short term nature of such instruments. The Company also has marketable securities, which are recorded at approximate fair value based on quoted market prices or alternative pricing sources (see Note 4 – Marketable Securities). Advertising The Company expenses the costs of advertising as incurred. Advertising expense for the years ended December 31, 2018, 2017, and 2016 was approximately $721,000, $868,000, and $824,000, respectively, and is included under the caption “sales and marketing expense” in the accompanying consolidated statements of income. Shipping and Handling Costs Shipping and handling costs that are associated with our products and services are included in cost of revenues. Income Taxes Income taxes are accounted for using the asset and liability method, whereby deferred tax assets and liabilities are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities measured at tax rates that will be in effect for the year in which the differences are expected to affect taxable income. Management evaluates all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance is needed. Future realization of the tax benefit of an existing deductible temporary difference or carryforward ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryback or carryforward period available under the tax law. There are four possible sources of taxable income that may be available under the tax law to realize a tax benefit for deductible temporary differences and carryforwards: 1) future reversals of existing taxable temporary differences, 2) future taxable income exclusive of reversing temporary differences and carryforwards, 3) taxable income in prior carryback year(s) if carryback is permitted under the tax law, and 4) tax-planning strategies that would, if necessary, be implemented to realize deductible temporary differences or carryforwards prior to their expiration. Management reviews the realizability of its deferred tax assets each reporting period to identify whether any significant changes in circumstances or assumptions have occurred that could materially affect the realizability of deferred tax assets. As of December 31, 2018, the Company had established a valuation allowance of $311,000 for the portion of its net deferred tax assets that are not more likely than not expected to be realized.The Company accounts for income tax uncertainties using a more-likely-than-not recognition threshold based on the technical merits of the tax position taken. Tax positions that meet the more-likely-than-not recognition threshold are measured in order to determine the tax benefit to be recognized in the financial statements. The Company expenses any penalties or interest associated with tax obligations as general and administrative expenses and interest expense, respectively. Earnings per Share Basic earnings per share is computed by dividing the net income available to common shareholders for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing the net income for the period by the weighted average number of common and common equivalent shares outstanding during the period. Common equivalent shares are composed of incremental common shares issuable upon the exercise of stock options and restricted share units subject to vesting. The dilutive effect of common equivalent shares is included in diluted earnings per share by application of the treasury stock method. Common equivalent shares that have an anti-dilutive effect on diluted net income per share were excluded from the calculation of diluted weighted average shares outstanding for the years ended December 31, 2018, 2017, and 2016. Concentrations of Credit Risk and Significant Customers The Company’s credit risks relate primarily to cash and cash equivalents, marketable securities, and accounts receivable. The Company places its temporary excess cash investments in high quality, short-term money market instruments. At times, such investments may be in excess of the FDIC insurance limits. Marketable securities consist primarily of investment grade corporate debt securities and government sponsored enterprise debt securities. The Company sells its products and services to various companies in the healthcare industry that are primarily located in the United States. Customer credit worthiness evaluations are performed on an ongoing basis, and the Company generally requires no collateral from customers. An allowance for doubtful accounts is maintained for potentially uncollectible accounts receivable. The Company did not have any single customer representing over 10% of net revenues or accounts receivable during 2018, 2017, or 2016. Stock Based Compensation As of December 31, 2018, the Company maintains two stock based compensation plans under which awards are outstanding, as described in Note 11. The Company accounts for stock based compensation using the fair-value based method for costs related to share-based payments, including stock options and restricted share units. The Company uses the Black Scholes option pricing model for calculating the fair value of option awards issued under its stock based compensation plan. The Company measures compensation cost of restricted share units based on the closing fair market value of the Company’s stock on the date of grant. Stock based compensation cost is measured at the grant date, based on the fair value of the award that is ultimately expected to vest, and is recognized as an expense over the requisite service period. The Company recognizes tax benefits from stock based compensation if an excess tax benefit is realized. Excess tax benefits are reflected in the statement of income as a component of the provision for income taxes when realized. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (ASC 842) , which supersedes the lease requirements in ASC 840, Leases . ASC 842 requires lessees to recognize assets and liabilities for most leases and provide enhanced disclosures. The Company will adopt ASC 842 effective January 1, 2019 using a modified retrospective approach. As permitted under the transition guidance, we will carry forward the assessment of whether our contracts contain or are leases, classification of our leases, and remaining lease terms. Based on our portfolio of leases as of January 1, 2019, approximately $5.0 million of lease assets and liabilities relating to real estate will be recognized on our balance sheet upon adoption. Additionally, we anticipate recording a material lease asset and liability upon the commencement date of our new corporate headquarters of approximately $24 million. Except as set forth above, we do not anticipate that the adoption of ASC 842 will have any significant impact on the Company’s consolidated financial position and results of operations. We are substantially complete with our implementation efforts. In June 2016, the FASB issued ASU 2016-03, Financial Instruments—Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | 2. SHAREHOLDERS’ EQUITY Common Stock The Company is authorized to issue up to 75 million shares of common stock. The number of common shares issued and outstanding as of December 31, 2018 and 2017 was approximately 32.3 million and 31.9 million, respectively. Preferred Stock The Company is authorized to issue up to 10 million shares of preferred stock in one or more series, having the relative voting powers, designations, preferences, rights and qualifications, limitations or restrictions, and other terms as the Board of Directors may fix in providing for the issuance of such series, without any vote or action of the shareholders. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 3. EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for the three years ended December 31, 2018 (in thousands, except per share amounts): Year Ended December 31, 2018 2017 2016 Numerator: Income from continuing operations $ 13,251 $ 8,838 $ 4,791 Income (loss) from discontinued operations 18,966 1,166 (1,036 ) Net income $ 32,217 $ 10,004 $ 3,755 Denominator: Weighted-average shares outstanding 32,264 31,861 31,721 Effect of dilutive shares 71 335 347 Weighted-average diluted shares 32,335 32,196 32,068 Earnings (loss) per share – basic: Continuing operations $ 0.41 $ 0.27 $ 0.15 Discontinued operations 0.59 0.04 (0.03 ) Earnings per share - basic $ 1.00 $ 0.31 $ 0.12 Earnings (loss) per share – diluted: Continuing operations $ 0.41 $ 0.27 $ 0.15 Discontinued operations 0.59 0.04 (0.03 ) Earnings per share - diluted $ 1.00 $ 0.31 $ 0.12 Potentially dilutive shares representing approximately 91,000, 58,000, and 38,000 shares of common stock for the years ended December 31, 2018, 2017, and 2016, respectively, were excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive. |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Marketable Securities | 4. MARKETABLE SECURITIES At December 31, 2018 and 2017, the fair value of marketable securities, which were all classified as available for sale, included the following (in thousands): December 31, 2018 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Level 2: Corporate debt securities $ 31,521 $ — $ (23 ) $ 31,498 Government-sponsored enterprise debt securities 2,999 — — 2,999 Total $ 34,520 $ — $ (23 ) $ 34,497 December 31, 2017 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Level 2: Corporate debt securities $ 41,900 $ 1 $ (39 ) $ 41,862 Government-sponsored enterprise debt securities 4,488 1 (1 ) 4,488 Total $ 46,388 $ 2 $ (40 ) $ 46,350 The carrying amounts of the marketable securities reported in the consolidated balance sheets approximate fair value based on quoted market prices or alternative pricing sources and models utilizing market observable inputs. As of December 31, 2018, the Company does not consider any of its marketable securities to be other than temporarily impaired. During the years ended December 31, 2018 and 2017, the Company did not reclassify any items out of accumulated other comprehensive income to net income. All investments in marketable securities are classified as a current asset on the balance sheet because the underlying securities mature within one year from the balance sheet date. |
Revenue Recognition And Sales C
Revenue Recognition And Sales Commissions | 12 Months Ended |
Dec. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition And Sales Commissions | 5. REVENUE RECOGNITION AND SALES COMMISSIONS Adoption of ASC 606, Revenue from Contracts with Customers On January 1, 2018, the Company adopted ASC 606 using the modified retrospective approach applied to contracts not completed as of January 1, 2018. As such, results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts continue to be reported in accordance with ASC 605. The cumulative effect of the changes made to the Company’s consolidated January 1, 2018 balance sheet in connection with the adoption of ASC 606 was as follows (in thousands): Balance Sheet Balance at December 31, 2017 ASC 606 Adjustments Balance at January 1, 2018 Assets Unbilled receivables $ 1,327 $ 31 $ 1,358 Prepaid royalties, net 16,137 (902 ) 15,235 Other prepaid expenses and other current assets 8,330 (2,900 ) 5,430 Current assets of discontinued operations 6,125 (274 ) 5,851 Deferred commissions — 12,552 12,552 Deferred tax assets 45 (45 ) — Non-current assets of discontinued operations 28,073 3,166 31,239 Liabilities Deferred revenue, current 64,938 (4,488 ) 60,450 Current liabilities of discontinued operations 6,772 (1,374 ) 5,398 Deferred tax liabilities — 5,205 5,205 Deferred revenue, noncurrent 6,287 (2,848 ) 3,439 Shareholders’ equity Retained earnings 17,542 15,132 32,674 The impact of adopting ASC 606 on the Company’s consolidated balance sheet as of December 31, 2018 and statements of income for the year ended December 31, 2018 was as follows (in thousands): December 31, 2018 Balance Sheet As reported Balances without Adoption of ASC 606 Effect of Change Higher/(Lower) Assets Prepaid royalties, net $ 13,596 $ 14,801 $ (1,205 ) Other prepaid expenses and other current assets 18,016 20,167 (2,151 ) Deferred commissions 16,470 — 16,470 Liabilities Deferred revenue, current 66,061 70,796 (4,735 ) Deferred revenue, noncurrent 2,868 6,210 (3,342 ) Shareholders’ equity Retained earnings 32,373 29,382 2,991 Year Ended December 31, 2018 Income Statement As reported Balances without Adoption of ASC 606 Effect of Change Higher/(Lower) Revenues, net $ 231,616 $ 230,876 $ 740 Costs and expenses Cost of revenues (excluding depreciation and amortization) 96,014 95,711 303 Sales and marketing 35,698 39,008 (3,310 ) Operating income 15,491 11,744 3,747 Income from continuing operations before income tax provision 16,575 12,828 3,747 Income tax provision 3,324 2,568 756 Income from continuing operations 13,251 10,260 2,991 Net income 32,217 29,226 2,991 Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled in exchange for transferring those goods or services. Revenue is recognized based on the following five step model: • Identification of the contract with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation The following table represents revenues included in continuing operations disaggregated by revenue source for the year ended December 31, 2018 (in thousands). Sales taxes are excluded from revenues. Year Ended December 31, 2018 Business Segments Workforce Solutions Provider Solutions Consolidated Subscription/SaaS $ 184,926 $ 35,542 $ 220,468 Professional services 5,213 5,935 11,148 Total revenues, net $ 190,139 $ 41,477 $ 231,616 Subscription/SaaS services Professional services revenues primarily consist of fees for implementation services, consulting, custom courseware development, and training. The majority of our professional services contracts are billed in advance based on a fixed price basis, and revenue is recognized over time as the services are performed. For both subscription/SaaS services and professional services, the time between billing the customer and when performance obligations are satisfied is not significant. Our contracts with customers often contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The contract price, which represents transaction price, is allocated to the separate performance obligations on a relative standalone selling price basis. We generally determine standalone selling prices based on the standard list price for each product, taking into consideration certain factors, including contract length and the number of subscribers within the contract. We receive payments from customers based on billing schedules established in our contracts. Accounts receivable - unbilled represent contract assets related to our conditional right to consideration for subscription/SaaS and professional services contracts where performance has occurred under the contract. Accounts receivable are primarily comprised of trade receivables that are recorded at the invoice amount, net of an allowance for doubtful accounts, when the right to consideration becomes unconditional. Other receivables, which are included within Accounts Receivable, include receivables from certain content partners and are not material. For the years ended December 31, 2018 and 2017, the Company recognized $1.0 million and $1.6 million, respectively, in impairment losses on receivables and contract assets arising from the Company’s contracts with customers. Deferred revenue represents contract liabilities that are recorded when cash payments are received or are due in advance of our satisfaction of performance obligations. During the year ended December 31, 2018, we recognized revenues of approximately $63.7 million from amounts included in deferred revenue at the beginning of the period. As of December 31, 2018, approximately $447 million of revenue is expected to be recognized from remaining performance obligations under contracts with customers. We expect to recognize revenue on approximately 48% of these remaining performance obligations over the 12 months ending December 31, 2019, with the remaining amounts recognized thereafter. Sales Commissions Sales commissions earned by our sales organization are considered incremental and recoverable costs of obtaining a contract with a customer. The Company’s sales commission plans for 2018 typically include multiple payments, including initial payments in the period a customer contract is obtained and subsequent payments either 15 or 27 months after the initial payment. Under ASC 606, costs to acquire contracts with customers, such as the initial sales commission payment, are capitalized and amortized consistent with the pattern of revenue recognition, whereas subsequent sales commission payments which require a substantive performance condition of the employee are expensed ratably through the payment date. In contrast, under ASC 605, initial sales commission payments were expensed in the period earned. Under ASC 606, the initial commission payments are capitalized in the period a customer contract is obtained and are amortized consistent with the transfer of the goods or services to the customer over the expected period of benefit. The capitalized contract cost is included under the caption “deferred commissions” in the accompanying consolidated balance sheet. The expected period of benefit is the contract term, except when the capitalized commission is expected to provide economic benefit to the Company for a period longer than the contract term, such as for new customer or incremental sales where renewals are expected and renewal commissions are not commensurate with initial commissions. Non-commensurate commissions are amortized over the greater of the contract term or expected customer relationship period, limited by the technological obsolescence period of approximately three years. The Company recorded amortization of deferred commissions of $7.7 million for the year ended December 31, 2018, which is included in Sales and marketing expenses in the accompanying consolidated statement of income. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 6. PROPERTY AND EQUIPMENT Property and equipment consist of the following (in thousands): December 31, 2018 2017 Equipment $ 21,129 $ 23,776 Leasehold improvements 11,572 4,951 Furniture and fixtures 3,992 3,757 Gross property and equipment 36,693 32,484 Accumulated depreciation and amortization (20,827 ) (24,392 ) Property and equipment, net $ 15,866 $ 8,092 Depreciation of property and equipment totaled approximately $5.5 million, $5.9 million, and $6.1 million for the years ended December 31, 2018, 2017, and 2016, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 7. GOODWILL AND INTANGIBLE ASSETS The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 are as follows (in thousands): Workforce Solutions Provider Solutions Total Balance at January 1, 2018 $ 16,381 $ 69,763 $ 86,144 Changes in carrying amount — — — Balance at December 31, 2018 $ 16,381 $ 69,763 $ 86,144 Workforce Solutions Provider Solutions Total Balance at January 1, 2017 $ 16,381 $ 69,230 $ 85,611 Acquisition of Morrisey Associates, Inc. — 533 533 Balance at December 31, 2017 $ 16,381 $ 69,763 $ 86,144 During the year ended December 31, 2017, the Company recorded a measurement period adjustment of approximately $533,000 of additional goodwill in relation to the August 2016 acquisition of Morrisey Associates, Inc. Intangible assets other than goodwill are considered to have finite useful lives. Customer-related intangibles include customer relationships and are amortized over their estimated useful lives ranging from five to thirteen years. Other intangible assets include technology and patents and trade names and are amortized over their estimated useful lives ranging from five to nine years. Amortization of intangible assets was approximately $9.1 million, $9.2 million, and $7.4 million for the years ended December 31, 2018, 2017, and 2016, respectively. Identifiable intangible assets are comprised of the following (in thousands): As of December 31, 2018 As of December 31, 2017 Gross Amount Accumulated Amortization Net Gross Amount Accumulated Amortization Net Customer related $ 76,714 $ (23,245 ) $ 53,469 $ 76,714 $ (17,033 ) $ 59,681 Other 15,572 (9,663 ) 5,909 16,524 (7,708 ) 8,816 Total $ 92,286 $ (32,908 ) $ 59,378 $ 93,238 $ (24,741 ) $ 68,497 The expected future annual amortization expense for the years ending December 31, is as follows (in thousands): 2019 $ 8,792 2020 8,139 2021 7,356 2022 6,277 2023 5,649 Thereafter 23,165 Total $ 59,378 |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Discontinued Operations | 8. DISCONTINUED OPERATIONS On February 12, 2018, the Company divested its PX business to Press Ganey for $65.2 million in cash (after giving effect to the post-closing working capital adjustment), resulting in a gain, net of tax, of $19.0 million. Approximately $6.55 million of the proceeds are being held in escrow for a period of time following the closing as a source of recovery for any indemnification claims by Press Ganey. The Company estimated the fair value of the contingent consideration asset based on the likelihood of receiving cash proceeds from the escrow. Such contingent consideration is remeasured at fair value based on changes in facts each period and are recorded within the “Gain on sale of discontinued operations” caption within the consolidated statements of income. The sale of the PX business was effected (i) by the contribution by the Company of specified assets and certain liabilities used in the PX business to a newly-formed wholly-owned subsidiary of the Company, and (ii) immediately thereafter, the sale by the Company to Press Ganey of all the outstanding equity interests of such wholly-owned subsidiary. In connection with such contribution, the Company retained certain liabilities related to the PX business. This sale of the PX business resulted in the divestiture of the Company’s patient experience solutions business segment. The Company has classified the results of its PX business segment as discontinued operations in its consolidated statements of income and cash flows for all periods presented. Additionally, the related assets and liabilities are reported as assets and liabilities of discontinued operations in the Company’s consolidated balance sheet as of December 31, 2017. The financial results of the PX business for the period prior to divestiture during the years ended December 31, 2018, 2017, and 2016 are presented in discontinued operations in the Company’s consolidated statements of income. The following table presents the financial results of the PX business (in thousands): Year Ended December 31, 2018 2017 2016 Revenues, net $ 3,342 $ 32,763 $ 33,850 Operating costs and expenses: Cost of revenues (excluding depreciation and amortization) 1,982 18,792 21,668 Product development 554 3,751 4,664 Sales and marketing 460 4,310 4,074 Other general and administrative expenses 229 3,282 3,208 Depreciation and amortization 181 2,235 1,840 Total operating costs and expenses 3,406 32,370 35,454 Operating (loss) income (64 ) 393 (1,604 ) Other income — — — (Loss) income from discontinued operations before income tax provision (64 ) 393 (1,604 ) Income tax benefit — (773 ) (568 ) (Loss) income from discontinued operations, net of income taxes $ (64 ) $ 1,166 $ (1,036 ) The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations as of December 31, 2017 (in thousands): Carrying amounts of assets included as part of discontinued operations: Accounts receivable, net $ 4,158 Accounts receivable – unbilled 1,275 Prepaid royalties, net of amortization 37 Other prepaid expenses and other current assets 655 Current assets of discontinued operations 6,125 Property and equipment, net 901 Capitalized software development, net 2,683 Goodwill 24,154 Customer-related intangibles, net 276 Other intangible assets, net 42 Other assets 17 Long-term assets of discontinued operations 28,073 Total assets of discontinued operations in the consolidated balance sheet $ 34,198 Carrying amounts of liabilities included as part of discontinued operations: Accounts payable and accrued expenses $ 2,728 Accrued royalties 27 Deferred revenue 4,017 Current liabilities of discontinued operations 6,772 Deferred tax liabilities 1,971 Deferred revenue, noncurrent 15 Other long term liabilities 562 Long-term liabilities of discontinued operations 2,548 Total liabilities of discontinued operations in the consolidated balance sheet $ 9,320 |
Business Segments
Business Segments | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Business Segments | 9. BUSINESS SEGMENTS The Company provides services to healthcare organizations and other members within the healthcare industry. The Company’s services are focused on the delivery of workforce development products and services (HealthStream Workforce Solutions) and provider credentialing, privileging, call center, and enrollment products and services (HealthStream Provider Solutions). The Company measures segment performance based on operating income before income taxes and prior to the allocation of certain corporate overhead expenses, interest income, interest expense, gains and losses from equity investments, and depreciation. The Unallocated component below includes corporate functions, such as accounting, human resources, legal, investor relations, administrative and executive personnel, depreciation, a portion of amortization, and certain other expenses, which are not currently allocated in measuring segment performance. The following is the Company’s business segment information as of and for the years ended December 31, 2018, 2017, and 2016 (in thousands). Revenues, net: 2018 2017 2016 Workforce Solutions $ 190,139 $ 178,061 $ 168,040 Provider Solutions 41,477 36,838 24,084 Total revenues, net $ 231,616 $ 214,899 $ 192,124 Operating income: 2018 2017 2016 Workforce Solutions $ 38,834 $ 33,579 $ 37,329 Provider Solutions 3,474 879 (2,443 ) Unallocated (26,817 ) (25,051 ) (27,715 ) Total operating income $ 15,491 $ 9,407 $ 7,171 Segment assets * December 31, 2018 December 31, 2017 Workforce Solutions $ 104,668 $ 90,055 Provider Solutions 145,637 150,797 Discontinued operations — 34,198 Unallocated 191,643 136,069 Total assets $ 441,948 $ 411,119 * Segment assets include accounts and unbilled receivables, prepaid royalties, prepaid and other current assets, other assets, capitalized software development, deferred commissions, certain property and equipment, and intangible assets. Cash and cash equivalents and marketable securities are not allocated to individual segments, and are included within Unallocated. A significant portion of property and equipment assets are included within Unallocated. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. INCOME TAXES The provision (benefit) for income taxes is comprised of the following (in thousands): Year Ended December 31, 2018 2017 2016 Current federal $ (79 ) $ 1,819 $ 514 Current state 386 923 1,032 Deferred federal 2,661 (1,464 ) 1,176 Deferred state 356 24 239 Provision for income taxes $ 3,324 $ 1,302 $ 2,961 A reconciliation of income taxes at the statutory federal income tax rate to the provision for income taxes included in the accompanying consolidated statements of income is as follows (in thousands): Year Ended December 31, 2018 2017 2016 Federal tax provision at the statutory rate $ 3,482 $ 3,549 $ 2,713 State income tax provision, net of federal benefit 658 491 757 Tax credits (509 ) (583 ) (560 ) Change in state valuation allowance 2 151 132 Tax Act revaluation of deferred tax balances — (1,680 ) — Stock compensation (560 ) (626 ) (9 ) Other 251 — (72 ) Provision for income taxes $ 3,324 $ 1,302 $ 2,961 Management periodically assesses the realizability of its deferred tax assets, and to the extent that a recovery is not likely, a valuation allowance is established to reduce the deferred tax asset to the amount estimated to be recoverable. At December 31, 2018, a valuation allowance of $311,000 exists. As of December 31, 2018, the Company had state net operating loss carryforwards of $4.8 million. These loss carryforwards will expire in years 2030 through 2038. The Company is subject to income taxation at the federal and various state levels. The Company is subject to U.S. federal tax examinations for tax years 2015 through 2018. Loss carryforwards and credit carryforwards generated or utilized in years earlier than 2015 are also subject to examination and adjustment. The Company has completed examinations with the Internal Revenue Service for tax years 2013 and 2014. On December 22, 2017, the President signed into law the Tax Cuts and Jobs Act (the Tax Act), reducing the U.S. corporate income tax rate to 21% effective January 1, 2018. Under ASC 740, the effects of new legislation are recognized in the period that includes the date of enactment. Subsequent to the enactment of the Tax Act, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allows companies to record provisional amounts related to the effects of the Tax Act to the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but the company is able to determine a reasonable estimate during a measurement period not to extend beyond one year from the enactment date. The Company previously made provisional estimates for the impact of the Tax Act as of and for the year ended December 31, 2017 related to the remeasurement of our deferred tax liability. The impact was to remeasure our deferred tax liability by $1.7 million as of December 31, 2017, which has been reflected in our effect tax rate reconciliation. As of December 31, 2018, we have completed our accounting and measurement analyses related to the income tax effects of the Tax Act, and no significant adjustments to the provisional amounts were recorded during the year ended December 31, 2018. A reconciliation of the beginning and ending liability for gross unrecognized tax benefits at December 31, 2018 and 2017 are as follows (in thousands): December 31, 2018 2017 Balance at beginning of year $ 360 $ 397 Additions for tax positions in the current year 2 10 Reductions for tax positions of prior years (23 ) (47 ) Balance at end of year $ 339 $ 360 The Company recognized Deferred federal and state income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of deferred tax assets and deferred tax liabilities are as follows (in thousands): December 31, 2018 2017 Deferred tax assets: Allowance for doubtful accounts $ 297 $ 488 Accrued liabilities 2,276 1,580 Tax credits — 3,115 Stock based compensation 623 743 Deferred revenue 135 1,467 Depreciation — 621 Basis difference on investments 396 327 Net operating loss carryforwards 291 215 Total deferred tax assets 4,018 8,556 Less: Valuation allowance (311 ) (310 ) Deferred tax assets, net of valuation allowance 3,707 8,246 Deferred tax liabilities: Deductible goodwill 1,760 1,212 Nondeductible intangible assets 1,049 1,330 Prepaid assets 5,698 1,784 Capitalized software development 4,746 3,875 Depreciation 659 — PX sale deferral 718 — Total deferred tax liabilities 14,630 8,201 Net deferred tax liabilities (assets) $ 10,923 $ (45 ) The Company realized approximately $540,000 of excess tax benefits related to stock based awards during the year ended December 31, 2018, which was reflected in the statement of income as a component of the provision for income taxes. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Based Compensation | 11. STOCK BASED COMPENSATION Stock Incentive Plans The Company has outstanding equity-based awards under its 2016 Omnibus Incentive Plan (2016 Plan) and 2010 Stock Incentive Plan (2010 Plan) (collectively, the 2016 Plan and the 2010 Plan, referred to as the Plans). In addition, the 2016 Plan authorizes the grant of options, restricted share units (RSUs), or other forms of stock based compensation to employees, officers, directors, and others, and such grants must be approved by the Compensation Committee of the Board of Directors. Options which have been granted under the Plans have terms of no more than ten years, with certain restrictions. The 2016 Plan allows the Compensation Committee of the Board of Directors to determine the vesting period and parameters of each grant. The vesting period of the options and RSUs granted has historically ranged from immediate vesting to annual vesting up to four years, generally beginning one year after the grant date. As of December 31, 2018, approximately 1.1 million shares of unissued common stock remained reserved for future stock incentive grants under the 2016 Plan. The Company issues new shares of common stock when options are exercised or when RSUs become vested. Stock Option Activity A summary of activity and various other information relative to stock options for the year ended December 31, 2018 is presented in the tables below (in thousands, except exercise price). Weighted- Common Average Aggregate Shares Exercise Price Intrinsic Value Outstanding at beginning of period 376 $ 7.44 Granted — — Exercised (357 ) 7.23 Expired — — Forfeited — — Outstanding at end of period 19 $ 11.27 $ 245 Exercisable at end of period 19 $ 11.27 $ 245 The aggregate intrinsic value for stock options in the table above represents the total difference between the Company’s closing stock price on December 31, 2018 (the last trading day of the year) of $24.15 per share and the option exercise price, multiplied by the number of in-the-money options as of December 31, 2018. The weighted average remaining contractual term of options outstanding at December 31, 2018 was 0.3 years. Options exercisable at December 31, 2018 have a weighted average remaining contractual term of 0.3 years. Other information relative to option activity during the three years ended December 31, 2018 is as follows (in thousands): 2018 2017 2016 Total grant date fair value of stock options vested $ — $ — $ — Total intrinsic value of stock options exercised $ 6,130 $ 1,973 $ 820 Cash proceeds from exercise of stock options $ 2,582 $ 413 $ 145 Restricted Share Unit Activity A summary of activity relative to RSUs for the year ended December 31, 2018 is as follows (in thousands, except weighted average grant date fair value): Weighted- Number of Average Grant Date Aggregate RSU’s Fair Value Intrinsic Value Outstanding at beginning of period 254 $ 23.13 Granted 163 25.65 Vested (73 ) 23.94 Forfeited (55 ) 23.28 Outstanding at end of period 289 $ 24.31 $ 6,975 The aggregate fair value of RSUs that vested during the year ended December 31, 2018 and 2017, as of the respective vesting dates, was approximately $1.8 million and $1.9 million, respectively. A portion of RSUs that vested in 2018 and 2017 were net-share settled such that the Company withheld shares with value equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld for RSUs during 2018 and 2017 were 13,300 and 17,122, respectively, and were based on the value of the RSUs on their respective settlement dates as determined by the Company’s closing stock price. Total payments related to RSUs for the employees’ tax obligations to taxing authorities were approximately $338,000 in 2018, $412,000 in 2017, and $316,000 in 2016, and are reflected as a financing activity within the consolidated statements of cash flows. These net-share settlements had the effect of share repurchases by the Company as they reduced and retired the number of shares that would have otherwise been issued as a result of the vesting and did not represent an expense to the Company. Stock Based Compensation Total stock based compensation expense, which is recorded in our consolidated statements of income, recorded for the years ended December 31, is as follows (in thousands): Years Ended December 31, 2018 2017 2016 Cost of revenues (excluding depreciation and amortization) $ 37 $ 29 $ 62 Product development 296 228 174 Sales and marketing 183 244 274 Other general and administrative 1,261 1,235 1,385 Total stock based compensation expense $ 1,777 $ 1,736 $ 1,895 The Company amortizes the fair value of all stock based awards, net of estimated forfeitures, on a straight-line basis over the requisite service period, which generally is the vesting period. As of December 31, 2018, total unrecognized compensation expense related to non-vested stock options and RSUs was approximately $3.2 million, net of estimated forfeitures, with a weighted average expense recognition period remaining of 2.2 years. The Company realized approximately $540,000 of excess tax benefits related to stock based awards during the year ended December 31, 2018, which was reflected in the statement of income as a component of the provision for income taxes. Stock based compensation cost for RSUs is measured based on the closing fair market value of the Company’s stock on the date of grant. Stock based compensation cost for stock options is estimated at the grant date based on the fair value calculated using the Black-Scholes method. The Company did not grant any stock options during the years ended December 31, 2018, 2017, or 2016. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plan | 12. EMPLOYEE BENEFIT PLAN 401(k) Plan The Company has a defined-contribution employee benefit plan (401(k) Plan) incorporating provisions of Section 401(k) of the Internal Revenue Code. Employees must have attained the age of 21 and have completed thirty days of service to be eligible to participate in the 401(k) Plan. Under the provisions of the 401(k) Plan, a plan member may make contributions, on a tax-deferred basis, subject to IRS limitations. The Company elected to provide eligible employees with matching contributions totaling approximately $1.3 million, $764,000, and $311,000 for the years ended December 31, 2018, 2017, and 2016, respectively. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 13. DEBT At December 31, 2018 and 2017, the Company had no debt outstanding. Revolving Credit Facility The Company entered into a Second Amendment to Revolving Credit Agreement (Revolving Credit Facility), amending the Revolving Credit Facility, dated as of December 31, 2018 with SunTrust Bank (SunTrust), extending the maturity date to November 24, 2020. Under the Revolving Credit Facility, the Company may borrow up to $50.0 million, which includes a $5.0 million swing line sub-facility and a $5.0 million letter of credit sub-facility, as well as an accordion feature that allows the Company to increase the Revolving Credit Facility by a total of up to $25.0 million, subject to securing additional commitments from existing lenders or new lending institutions. The obligations under the Revolving Credit Facility are guaranteed by each of the Company’s subsidiaries. At the Company’s election, the borrowings under the Revolving Credit Facility bear interest at either (1) a rate per annum equal to the highest of SunTrust’s prime rate or 0.5% in excess of the Federal Funds Rate or 1.0% in excess of one-month LIBOR (the Base Rate), plus an applicable margin, or (2) the one, two, three, or six-month per annum LIBOR for deposits in the applicable currency (the Eurocurrency Rate), as selected by the Company, plus an applicable margin. The applicable margin for Eurocurrency Rate loans depends on the Company’s funded debt leverage ratio and varies from 1.50% to 2.00%. The applicable margin for Base Rate loans depends on the Company’s funded debt leverage ratio and varies from 0.50% to 1.50%. Commitment fees and letter of credit fees are also payable under the Revolving Credit Facility. Principal is payable in full at maturity on November 24, 2020, and there are no scheduled principal payments prior to maturity. The Company is required to pay a commitment fee ranging between 20 and 30 basis points per annum of the average daily unused portion of the Revolving Credit Facility, depending on the Company’s funded debt leverage ratio. The purpose of the Revolving Credit Facility is for general working capital needs, permitted acquisitions (as defined in the Loan Agreement), and for stock repurchase and/or redemption transactions that the Company may authorize. The Revolving Credit Facility contains certain covenants that, among other things, restrict additional indebtedness, liens and encumbrances, changes to the character of the Company’s business, acquisitions, asset dispositions, mergers and consolidations, sale or discount of receivables, creation or acquisitions of additional subsidiaries, and other matters customarily restricted in such agreements. In addition, the Revolving Credit Facility requires the Company to meet certain financial tests, including, without limitation: • a funded debt leverage ratio (consolidated debt/consolidated EBITDA) of not greater than 3.0 to 1.0; and • an interest coverage ratio (consolidated EBITDA/consolidated interest expense) of not less than 3.0 to 1.0. As of December 31, 2018, the Company was in compliance with all covenants. There were no balances outstanding on the Revolving Credit Facility as of December 31, 2018 and there were no borrowings under the Revolving Credit Facility during the year ended December 31, 2018. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Leases | 14. LEASES The Company has non-cancellable operating leases primarily for office space and hosting facilities. Some lease agreements contain provisions for escalating rent payments over the initial terms of the lease. The Company accounts for these leases by recognizing rent expense on a straight-line basis and adjusting the deferred rent expense liability for the difference between the straight-line rent expense and the amount of rent paid. The terms of the lease agreements generally provide the Company the option to renew. Total rent expense under all operating leases was approximately $7.4 million, $6.6 million, and $4.1 million for the years ended December 31, 2018, 2017, and 2016, respectively. Future rental payment commitments at December 31, 2018 under non-cancelable operating leases, with initial terms of one year or more, are as follows (in thousands): 2019 $ 2,156 2020 4,013 2021 3,766 2022 3,602 2023 3,678 Thereafter 26,085 Total minimum lease payments $ 43,300 |
Collaborative Arrangement
Collaborative Arrangement | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Collaborative Arrangement | 15. COLLABORATIVE ARRANGEMENT The Company participated in a collaborative arrangement, SimVentures TM |
Litigation
Litigation | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Litigation | 16. LITIGATION In connection with its business, the Company is from time to time involved in various legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon the financial condition and/or results of operations of the Company. However, in the opinion of the Company’s management, matters currently pending or threatened against the Company are not expected to have a material adverse effect on the financial position or results of operations of the Company. |
Non-Marketable Equity Investmen
Non-Marketable Equity Investments | 12 Months Ended |
Dec. 31, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Non-Marketable Equity Investments | 17. NON-MARKETABLE EQUITY INVESTMENTS Non-marketable equity investments are accounted for using the equity method when the Company can exercise significant influence over the investee. Non-marketable equity investments where the Company is not able to exercise significant influence over the investee are accounted for under the cost method. ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. SUBSEQUENT EVENTS On January 10, 2019, the Company acquired the outstanding equity of Providigm, LLC, a Denver-based company focused on quality assurance and performance improvement in healthcare, primarily serving skilled nursing facilities, for $18.0 million in cash, subject to a post-closing working capital adjustment. Business Combinations |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Reporting Entity and Segments | Reporting Entity and Segments HealthStream, Inc. (the Company) was incorporated in 1990 as a Tennessee corporation and is headquartered in Nashville, Tennessee. As of December 31, 2018, the Company operated in two segments: HealthStream Workforce Solutions and HealthStream Provider Solutions. Workforce Solutions products consist of software-as-a-service (SaaS) based services and subscription-based solutions to meet the ongoing training, certification, assessment, and development needs of the healthcare community. These solutions provide, deliver, and track online education for our customers in the United States through our SaaS model. Provider Solutions products offer healthcare organizations software applications for administering and tracking provider credentialing, privileging, call center, and enrollment activities. On February 12, 2018, the Company divested its Patient Experience (PX) business to Press Ganey Associates (Press Ganey) for $65.2 million in cash (after giving effect to the post-closing working capital adjustment). This sale of the PX business resulted in the divestiture of the Company’s patient experience solutions business segment. The results of operations for PX are presented as discontinued operations within the notes to consolidated financial statements herein. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards The Company adopted the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Sub Topic 825-10) |
Recognition of Revenue | Recognition of Revenue Revenues are recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled in exchange for transferring those goods or services. Revenue is recognized based on the following five step model: • Identification of the contract with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation Subscription/SaaS services revenues primarily consist of fees in consideration of providing customers access to one or more of our SaaS-based solutions and/or courseware subscriptions, as well as fees related to licensing agreements, all of which include routine customer support and technology enhancements. Revenue is generally recognized over time during the contract term beginning when the service is made available to the customer. Subscription/SaaS contracts are generally non-cancelable, one to five years in length, and billed annually, semi-annually, quarterly, or monthly in advance. Professional services revenues primarily consist of fees for implementation services, consulting, custom courseware development, and training. The majority of our professional services contracts are billed in advance based on a fixed price basis, and revenue is recognized over time as the services are performed. For both subscription/SaaS services and professional services, the time between billing the customer and when performance obligations are satisfied is generally not significant. Our contracts with customers often contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The contract price, which represents transaction price, is allocated to the separate performance obligations on a relative standalone selling price basis. We generally determine standalone selling prices based on the standard list price for each product, taking into consideration certain factors, including contract length and the number of subscribers within the contract. We receive payments from customers based on billing schedules established in our contracts. Accounts receivable - unbilled represent contract assets related to our conditional right to consideration for subscription/SaaS and professional services contracts where performance has occurred under the contract. Accounts receivable are primarily comprised of trade receivables that are recorded at the invoice amount, net of an allowance for doubtful accounts, when the right to consideration becomes unconditional. Other receivables, which are included within Accounts Receivable, include receivables from certain content partners and are not material. Deferred revenue represents contract liabilities that are recorded when cash payments are received or are due in advance of our satisfaction of performance obligations. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. These accounting principles require management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates and such differences could be material to the consolidated financial statements. |
Cash Equivalents | Cash Equivalents The Company considers cash equivalents to be unrestricted, highly liquid investments with initial maturities of less than three months. |
Marketable Securities | Marketable Securities Marketable securities are classified as available for sale and are stated at fair market value, with the unrealized gains and losses, net of tax, reported in other accumulated comprehensive income (loss) on the accompanying consolidated balance sheets. Realized gains and losses and declines in market value judged to be other than temporary on investments in marketable securities are included in interest and other income on the accompanying consolidated statements of income. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available for sale are included in other income (expense) on the accompanying consolidated statements of income. Premiums and discounts are amortized over the life of the related available for sale security as an adjustment to the yield using the effective interest method. |
Deferred Commissions | Deferred Commissions Deferred commissions represent costs to acquire contracts with customers, such as the initial sales commission payment, which are capitalized and amortized consistent with the transfer of the goods or services to the customer over the expected period of benefit. The capitalized contract cost is included under the caption “deferred commissions” in the accompanying consolidated balance sheet. The expected period of benefit is the contract term, except when the capitalized commission is expected to provide economic benefit to the Company for a period longer than the contract term, such as for new customer or incremental sales where renewals are expected and renewal commissions are not commensurate with initial commissions. Non-commensurate commissions are amortized over the greater of the contract term or expected customer relationship period, limited by the technological obsolescence period of approximately three years. |
Prepaid Royalties | Prepaid Royalties Prepaid royalties represents advance payments associated with the sale of third party products, such as courseware subscriptions. Royalties are typically paid in advance at the commencement of the revenue cycle or periodically throughout the revenue cycle, such as quarterly, bi-annual, or annual installments. Royalty payments are amortized over the term of the underlying contracts, which generally range from 12 to 60 months, in order to match the direct royalty costs to the same period the subscription revenue is recognized. Amortization of royalties is included under the caption “cost of revenues (excluding depreciation and amortization)” in the accompanying consolidated statements of income. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company estimates its allowance for doubtful accounts to include accounts that may become uncollectible in the future, along with using a specific identification method in which management considers the facts and circumstances surrounding each potentially uncollectible receivable. Uncollectible receivables are written-off in the period management believes it has exhausted its ability to collect payment from the customer. Bad debt expense is recorded when events or circumstances indicate an additional allowance is required. Changes in the allowance for doubtful accounts and the amounts charged to bad debt expense from continuing operations for the years ended December 31 were as follows (in thousands): Allowance Balance at Beginning of Period Charged to Costs and Expenses Write-offs Allowance Balance at End of Period 2018 $ 1,979 $ 1,033 $ (1,851 ) $ 1,161 2017 839 1,568 (428 ) 1,979 2016 292 590 (43 ) 839 |
Capitalized Software Development | Capitalized Software Development Capitalized software development is stated on the basis of cost and is presented net of accumulated amortization. The Company capitalizes costs incurred during the software development phase for projects when such costs are material. These assets are generally amortized using the straight-line method over three years. The Company capitalized approximately $11.9 million and $10.2 million during 2018 and 2017, respectively. Amortization of capitalized software development from continuing operations was approximately $9.6 million, $8.9 million, and $6.8 million during 2018, 2017, and 2016, respectively. Maintenance and operating costs are expensed as incurred. As of December 31, 2018 and 2017, there were no capitalized software development costs for external computer software developed for resale. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used in measuring fair value. There are three levels to the fair value hierarchy based on the reliability of inputs, as follows: Level 1 Level 2 Level 3 The Company evaluates assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them for each reporting period. This determination requires significant judgments to be made by the Company. At December 31, 2018 and 2017, our assets measured at fair value on a recurring basis consisted of marketable securities, which are classified as available for sale (see Note 4 – Marketable Securities). |
Property and Equipment | Property and Equipment Property and equipment are stated on the basis of cost. Depreciation is provided on the straight-line method over the following estimated useful lives, except for assets under capital leases and leasehold improvements, which are amortized over the shorter of the estimated useful life or their respective lease term. Years Furniture and fixtures 5 - 7 Equipment 3 |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of purchase price in a business combination over the fair value of the net identifiable assets acquired. The carrying amount of our goodwill is evaluated for impairment at least annually during the fourth quarter and whenever events or changes in facts or circumstances indicate that impairment may exist. In accordance with ASC 350, Intangibles – Goodwill and Other As of December 31, 2018, intangible assets include customer relationships, internally-developed technology and patents, non-competition agreements, and trade names. These intangible assets are considered to have definite useful lives and are being amortized on a straight-line basis over periods ranging between five and thirteen years. The weighted average amortization period for definite lived intangible assets as of December 31, 2018 was 11.3 years. Intangible assets are reviewed for impairment whenever events or changes in facts or circumstances indicate that the carrying amount of the assets may not be recoverable. There were no intangible asset impairments identified or recorded for the years ended December 31, 2018, 2017, or 2016. |
Long-Lived Assets | Long-Lived Assets Long-lived assets to be held for use are reviewed for events or changes in facts and circumstances, both internally and externally, which may indicate that an impairment of long-lived assets held for use is present. The Company measures any impairment using observable market values or discounted future cash flows from the related long-lived assets. The cash flow estimates and discount rates incorporate management’s best estimates, using appropriate and customary assumptions and projections at the date of evaluation. Management periodically evaluates whether the carrying value of long-lived assets, including intangible assets, property and equipment, capitalized software development, deferred commissions, and other assets will be recoverable. There were no long-lived asset impairments identified or recorded for the years ended December 31, 2018, 2017, or 2016. |
Non-Marketable Equity Investments | Non-Marketable Equity Investments Non-marketable equity investments are accounted for using the equity method when the Company can exercise significant influence over the investee. Investments for which the Company is not able to exercise significant influence over the investee are accounted for under the cost method, and measured at fair value with changes in fair value recognized in net income. The proportionate share of income or loss from equity method investments and any changes in fair value of cost method investments are recorded under the caption “other income, net” in the accompanying consolidated statements of income. |
Financial Instruments | Financial Instruments The Company has various financial instruments, including cash and cash equivalents, accounts receivable, accounts receivable-unbilled, accounts payable, accrued liabilities, and deferred revenue. The carrying amounts of these financial instruments approximate fair value because of the short term maturity or short term nature of such instruments. The Company also has marketable securities, which are recorded at approximate fair value based on quoted market prices or alternative pricing sources (see Note 4 – Marketable Securities). |
Advertising | Advertising The Company expenses the costs of advertising as incurred. Advertising expense for the years ended December 31, 2018, 2017, and 2016 was approximately $721,000, $868,000, and $824,000, respectively, and is included under the caption “sales and marketing expense” in the accompanying consolidated statements of income. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs that are associated with our products and services are included in cost of revenues. |
Income Taxes | Income Taxes Income taxes are accounted for using the asset and liability method, whereby deferred tax assets and liabilities are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities measured at tax rates that will be in effect for the year in which the differences are expected to affect taxable income. Management evaluates all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance is needed. Future realization of the tax benefit of an existing deductible temporary difference or carryforward ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryback or carryforward period available under the tax law. There are four possible sources of taxable income that may be available under the tax law to realize a tax benefit for deductible temporary differences and carryforwards: 1) future reversals of existing taxable temporary differences, 2) future taxable income exclusive of reversing temporary differences and carryforwards, 3) taxable income in prior carryback year(s) if carryback is permitted under the tax law, and 4) tax-planning strategies that would, if necessary, be implemented to realize deductible temporary differences or carryforwards prior to their expiration. Management reviews the realizability of its deferred tax assets each reporting period to identify whether any significant changes in circumstances or assumptions have occurred that could materially affect the realizability of deferred tax assets. As of December 31, 2018, the Company had established a valuation allowance of $311,000 for the portion of its net deferred tax assets that are not more likely than not expected to be realized.The Company accounts for income tax uncertainties using a more-likely-than-not recognition threshold based on the technical merits of the tax position taken. Tax positions that meet the more-likely-than-not recognition threshold are measured in order to determine the tax benefit to be recognized in the financial statements. The Company expenses any penalties or interest associated with tax obligations as general and administrative expenses and interest expense, respectively. |
Earnings Per Share | Earnings per Share Basic earnings per share is computed by dividing the net income available to common shareholders for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing the net income for the period by the weighted average number of common and common equivalent shares outstanding during the period. Common equivalent shares are composed of incremental common shares issuable upon the exercise of stock options and restricted share units subject to vesting. The dilutive effect of common equivalent shares is included in diluted earnings per share by application of the treasury stock method. Common equivalent shares that have an anti-dilutive effect on diluted net income per share were excluded from the calculation of diluted weighted average shares outstanding for the years ended December 31, 2018, 2017, and 2016. |
Concentrations of Credit Risk and Significant Customers | Concentrations of Credit Risk and Significant Customers The Company’s credit risks relate primarily to cash and cash equivalents, marketable securities, and accounts receivable. The Company places its temporary excess cash investments in high quality, short-term money market instruments. At times, such investments may be in excess of the FDIC insurance limits. Marketable securities consist primarily of investment grade corporate debt securities and government sponsored enterprise debt securities. The Company sells its products and services to various companies in the healthcare industry that are primarily located in the United States. Customer credit worthiness evaluations are performed on an ongoing basis, and the Company generally requires no collateral from customers. An allowance for doubtful accounts is maintained for potentially uncollectible accounts receivable. The Company did not have any single customer representing over 10% of net revenues or accounts receivable during 2018, 2017, or 2016. |
Stock Based Compensation | Stock Based Compensation As of December 31, 2018, the Company maintains two stock based compensation plans under which awards are outstanding, as described in Note 11. The Company accounts for stock based compensation using the fair-value based method for costs related to share-based payments, including stock options and restricted share units. The Company uses the Black Scholes option pricing model for calculating the fair value of option awards issued under its stock based compensation plan. The Company measures compensation cost of restricted share units based on the closing fair market value of the Company’s stock on the date of grant. Stock based compensation cost is measured at the grant date, based on the fair value of the award that is ultimately expected to vest, and is recognized as an expense over the requisite service period. The Company recognizes tax benefits from stock based compensation if an excess tax benefit is realized. Excess tax benefits are reflected in the statement of income as a component of the provision for income taxes when realized. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (ASC 842) , which supersedes the lease requirements in ASC 840, Leases . ASC 842 requires lessees to recognize assets and liabilities for most leases and provide enhanced disclosures. The Company will adopt ASC 842 effective January 1, 2019 using a modified retrospective approach. As permitted under the transition guidance, we will carry forward the assessment of whether our contracts contain or are leases, classification of our leases, and remaining lease terms. Based on our portfolio of leases as of January 1, 2019, approximately $5.0 million of lease assets and liabilities relating to real estate will be recognized on our balance sheet upon adoption. Additionally, we anticipate recording a material lease asset and liability upon the commencement date of our new corporate headquarters of approximately $24 million. Except as set forth above, we do not anticipate that the adoption of ASC 842 will have any significant impact on the Company’s consolidated financial position and results of operations. We are substantially complete with our implementation efforts. In June 2016, the FASB issued ASU 2016-03, Financial Instruments—Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Changes in the Allowance for Doubtful Accounts and the Amounts Charged to Bad Debt Expense | Changes in the allowance for doubtful accounts and the amounts charged to bad debt expense from continuing operations for the years ended December 31 were as follows (in thousands): Allowance Balance at Beginning of Period Charged to Costs and Expenses Write-offs Allowance Balance at End of Period 2018 $ 1,979 $ 1,033 $ (1,851 ) $ 1,161 2017 839 1,568 (428 ) 1,979 2016 292 590 (43 ) 839 |
Estimated Useful Lives of Property and Equipment | Years Furniture and fixtures 5 - 7 Equipment 3 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share for the three years ended December 31, 2018 (in thousands, except per share amounts): Year Ended December 31, 2018 2017 2016 Numerator: Income from continuing operations $ 13,251 $ 8,838 $ 4,791 Income (loss) from discontinued operations 18,966 1,166 (1,036 ) Net income $ 32,217 $ 10,004 $ 3,755 Denominator: Weighted-average shares outstanding 32,264 31,861 31,721 Effect of dilutive shares 71 335 347 Weighted-average diluted shares 32,335 32,196 32,068 Earnings (loss) per share – basic: Continuing operations $ 0.41 $ 0.27 $ 0.15 Discontinued operations 0.59 0.04 (0.03 ) Earnings per share - basic $ 1.00 $ 0.31 $ 0.12 Earnings (loss) per share – diluted: Continuing operations $ 0.41 $ 0.27 $ 0.15 Discontinued operations 0.59 0.04 (0.03 ) Earnings per share - diluted $ 1.00 $ 0.31 $ 0.12 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Fair Value of Available for Sale Marketable Securities | At December 31, 2018 and 2017, the fair value of marketable securities, which were all classified as available for sale, included the following (in thousands): December 31, 2018 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Level 2: Corporate debt securities $ 31,521 $ — $ (23 ) $ 31,498 Government-sponsored enterprise debt securities 2,999 — — 2,999 Total $ 34,520 $ — $ (23 ) $ 34,497 December 31, 2017 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Level 2: Corporate debt securities $ 41,900 $ 1 $ (39 ) $ 41,862 Government-sponsored enterprise debt securities 4,488 1 (1 ) 4,488 Total $ 46,388 $ 2 $ (40 ) $ 46,350 |
Revenue Recognition And Sales_2
Revenue Recognition And Sales Commissions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Cumulative Effect for the Adoption of ASC 606 | The cumulative effect of the changes made to the Company’s consolidated January 1, 2018 balance sheet in connection with the adoption of ASC 606 was as follows (in thousands): Balance Sheet Balance at December 31, 2017 ASC 606 Adjustments Balance at January 1, 2018 Assets Unbilled receivables $ 1,327 $ 31 $ 1,358 Prepaid royalties, net 16,137 (902 ) 15,235 Other prepaid expenses and other current assets 8,330 (2,900 ) 5,430 Current assets of discontinued operations 6,125 (274 ) 5,851 Deferred commissions — 12,552 12,552 Deferred tax assets 45 (45 ) — Non-current assets of discontinued operations 28,073 3,166 31,239 Liabilities Deferred revenue, current 64,938 (4,488 ) 60,450 Current liabilities of discontinued operations 6,772 (1,374 ) 5,398 Deferred tax liabilities — 5,205 5,205 Deferred revenue, noncurrent 6,287 (2,848 ) 3,439 Shareholders’ equity Retained earnings 17,542 15,132 32,674 |
Schedule of Impact of Adopting of ASC 606 on Condensed Consolidated Balance Sheet and Statements of Income | The impact of adopting ASC 606 on the Company’s consolidated balance sheet as of December 31, 2018 and statements of income for the year ended December 31, 2018 was as follows (in thousands): December 31, 2018 Balance Sheet As reported Balances without Adoption of ASC 606 Effect of Change Higher/(Lower) Assets Prepaid royalties, net $ 13,596 $ 14,801 $ (1,205 ) Other prepaid expenses and other current assets 18,016 20,167 (2,151 ) Deferred commissions 16,470 — 16,470 Liabilities Deferred revenue, current 66,061 70,796 (4,735 ) Deferred revenue, noncurrent 2,868 6,210 (3,342 ) Shareholders’ equity Retained earnings 32,373 29,382 2,991 Year Ended December 31, 2018 Income Statement As reported Balances without Adoption of ASC 606 Effect of Change Higher/(Lower) Revenues, net $ 231,616 $ 230,876 $ 740 Costs and expenses Cost of revenues (excluding depreciation and amortization) 96,014 95,711 303 Sales and marketing 35,698 39,008 (3,310 ) Operating income 15,491 11,744 3,747 Income from continuing operations before income tax provision 16,575 12,828 3,747 Income tax provision 3,324 2,568 756 Income from continuing operations 13,251 10,260 2,991 Net income 32,217 29,226 2,991 |
Schedule of Revenues Included in Continuing Operations Disaggregated by Revenue Source | The following table represents revenues included in continuing operations disaggregated by revenue source for the year ended December 31, 2018 (in thousands). Sales taxes are excluded from revenues. Year Ended December 31, 2018 Business Segments Workforce Solutions Provider Solutions Consolidated Subscription/SaaS $ 184,926 $ 35,542 $ 220,468 Professional services 5,213 5,935 11,148 Total revenues, net $ 190,139 $ 41,477 $ 231,616 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment consist of the following (in thousands): December 31, 2018 2017 Equipment $ 21,129 $ 23,776 Leasehold improvements 11,572 4,951 Furniture and fixtures 3,992 3,757 Gross property and equipment 36,693 32,484 Accumulated depreciation and amortization (20,827 ) (24,392 ) Property and equipment, net $ 15,866 $ 8,092 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 are as follows (in thousands): Workforce Solutions Provider Solutions Total Balance at January 1, 2018 $ 16,381 $ 69,763 $ 86,144 Changes in carrying amount — — — Balance at December 31, 2018 $ 16,381 $ 69,763 $ 86,144 Workforce Solutions Provider Solutions Total Balance at January 1, 2017 $ 16,381 $ 69,230 $ 85,611 Acquisition of Morrisey Associates, Inc. — 533 533 Balance at December 31, 2017 $ 16,381 $ 69,763 $ 86,144 |
Identifiable Intangible Assets | Identifiable intangible assets are comprised of the following (in thousands): As of December 31, 2018 As of December 31, 2017 Gross Amount Accumulated Amortization Net Gross Amount Accumulated Amortization Net Customer related $ 76,714 $ (23,245 ) $ 53,469 $ 76,714 $ (17,033 ) $ 59,681 Other 15,572 (9,663 ) 5,909 16,524 (7,708 ) 8,816 Total $ 92,286 $ (32,908 ) $ 59,378 $ 93,238 $ (24,741 ) $ 68,497 |
Expected Annual Amortization Expense | The expected future annual amortization expense for the years ending December 31, is as follows (in thousands): 2019 $ 8,792 2020 8,139 2021 7,356 2022 6,277 2023 5,649 Thereafter 23,165 Total $ 59,378 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Schedule of Discontinued Operations, Income Statement and Balance Sheet | The following table presents the financial results of the PX business (in thousands): Year Ended December 31, 2018 2017 2016 Revenues, net $ 3,342 $ 32,763 $ 33,850 Operating costs and expenses: Cost of revenues (excluding depreciation and amortization) 1,982 18,792 21,668 Product development 554 3,751 4,664 Sales and marketing 460 4,310 4,074 Other general and administrative expenses 229 3,282 3,208 Depreciation and amortization 181 2,235 1,840 Total operating costs and expenses 3,406 32,370 35,454 Operating (loss) income (64 ) 393 (1,604 ) Other income — — — (Loss) income from discontinued operations before income tax provision (64 ) 393 (1,604 ) Income tax benefit — (773 ) (568 ) (Loss) income from discontinued operations, net of income taxes $ (64 ) $ 1,166 $ (1,036 ) The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations as of December 31, 2017 (in thousands): Carrying amounts of assets included as part of discontinued operations: Accounts receivable, net $ 4,158 Accounts receivable – unbilled 1,275 Prepaid royalties, net of amortization 37 Other prepaid expenses and other current assets 655 Current assets of discontinued operations 6,125 Property and equipment, net 901 Capitalized software development, net 2,683 Goodwill 24,154 Customer-related intangibles, net 276 Other intangible assets, net 42 Other assets 17 Long-term assets of discontinued operations 28,073 Total assets of discontinued operations in the consolidated balance sheet $ 34,198 Carrying amounts of liabilities included as part of discontinued operations: Accounts payable and accrued expenses $ 2,728 Accrued royalties 27 Deferred revenue 4,017 Current liabilities of discontinued operations 6,772 Deferred tax liabilities 1,971 Deferred revenue, noncurrent 15 Other long term liabilities 562 Long-term liabilities of discontinued operations 2,548 Total liabilities of discontinued operations in the consolidated balance sheet $ 9,320 |
Business Segments (Tables)
Business Segments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Business Segment Information Based on Net Revenues | The following is the Company’s business segment information as of and for the years ended December 31, 2018, 2017, and 2016 (in thousands). Revenues, net: 2018 2017 2016 Workforce Solutions $ 190,139 $ 178,061 $ 168,040 Provider Solutions 41,477 36,838 24,084 Total revenues, net $ 231,616 $ 214,899 $ 192,124 |
Business Segment Information Based on Operating Income | Operating income: 2018 2017 2016 Workforce Solutions $ 38,834 $ 33,579 $ 37,329 Provider Solutions 3,474 879 (2,443 ) Unallocated (26,817 ) (25,051 ) (27,715 ) Total operating income $ 15,491 $ 9,407 $ 7,171 |
Business Segment Information Based on Assets | Segment assets * December 31, 2018 December 31, 2017 Workforce Solutions $ 104,668 $ 90,055 Provider Solutions 145,637 150,797 Discontinued operations — 34,198 Unallocated 191,643 136,069 Total assets $ 441,948 $ 411,119 * Segment assets include accounts and unbilled receivables, prepaid royalties, prepaid and other current assets, other assets, capitalized software development, deferred commissions, certain property and equipment, and intangible assets. Cash and cash equivalents and marketable securities are not allocated to individual segments, and are included within Unallocated. A significant portion of property and equipment assets are included within Unallocated. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Summary of Provision (Benefit) for Income Taxes | The provision (benefit) for income taxes is comprised of the following (in thousands): Year Ended December 31, 2018 2017 2016 Current federal $ (79 ) $ 1,819 $ 514 Current state 386 923 1,032 Deferred federal 2,661 (1,464 ) 1,176 Deferred state 356 24 239 Provision for income taxes $ 3,324 $ 1,302 $ 2,961 |
Reconciliation of Income Taxes at the Statutory Federal Income Tax Rate to the Provision for Income Taxes | A reconciliation of income taxes at the statutory federal income tax rate to the provision for income taxes included in the accompanying consolidated statements of income is as follows (in thousands): Year Ended December 31, 2018 2017 2016 Federal tax provision at the statutory rate $ 3,482 $ 3,549 $ 2,713 State income tax provision, net of federal benefit 658 491 757 Tax credits (509 ) (583 ) (560 ) Change in state valuation allowance 2 151 132 Tax Act revaluation of deferred tax balances — (1,680 ) — Stock compensation (560 ) (626 ) (9 ) Other 251 — (72 ) Provision for income taxes $ 3,324 $ 1,302 $ 2,961 |
Reconciliation of the Beginning and Ending liability for Gross Unrecognized Tax Benefits | A reconciliation of the beginning and ending liability for gross unrecognized tax benefits at December 31, 2018 and 2017 are as follows (in thousands): December 31, 2018 2017 Balance at beginning of year $ 360 $ 397 Additions for tax positions in the current year 2 10 Reductions for tax positions of prior years (23 ) (47 ) Balance at end of year $ 339 $ 360 |
Significant Components of Deferred Tax Assets and Deferred Tax Liabilities | Significant components of deferred tax assets and deferred tax liabilities are as follows (in thousands): December 31, 2018 2017 Deferred tax assets: Allowance for doubtful accounts $ 297 $ 488 Accrued liabilities 2,276 1,580 Tax credits — 3,115 Stock based compensation 623 743 Deferred revenue 135 1,467 Depreciation — 621 Basis difference on investments 396 327 Net operating loss carryforwards 291 215 Total deferred tax assets 4,018 8,556 Less: Valuation allowance (311 ) (310 ) Deferred tax assets, net of valuation allowance 3,707 8,246 Deferred tax liabilities: Deductible goodwill 1,760 1,212 Nondeductible intangible assets 1,049 1,330 Prepaid assets 5,698 1,784 Capitalized software development 4,746 3,875 Depreciation 659 — PX sale deferral 718 — Total deferred tax liabilities 14,630 8,201 Net deferred tax liabilities (assets) $ 10,923 $ (45 ) |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Activity and Various Other Information Relative to Stock Options | A summary of activity and various other information relative to stock options for the year ended December 31, 2018 is presented in the tables below (in thousands, except exercise price). Weighted- Common Average Aggregate Shares Exercise Price Intrinsic Value Outstanding at beginning of period 376 $ 7.44 Granted — — Exercised (357 ) 7.23 Expired — — Forfeited — — Outstanding at end of period 19 $ 11.27 $ 245 Exercisable at end of period 19 $ 11.27 $ 245 |
Other Information Relative to Option Activity | Other information relative to option activity during the three years ended December 31, 2018 is as follows (in thousands): 2018 2017 2016 Total grant date fair value of stock options vested $ — $ — $ — Total intrinsic value of stock options exercised $ 6,130 $ 1,973 $ 820 Cash proceeds from exercise of stock options $ 2,582 $ 413 $ 145 |
Summary of Activity Relative to RSU's | A summary of activity relative to RSUs for the year ended December 31, 2018 is as follows (in thousands, except weighted average grant date fair value): Weighted- Number of Average Grant Date Aggregate RSU’s Fair Value Intrinsic Value Outstanding at beginning of period 254 $ 23.13 Granted 163 25.65 Vested (73 ) 23.94 Forfeited (55 ) 23.28 Outstanding at end of period 289 $ 24.31 $ 6,975 |
Stock Based Compensation Expense Recorded in Consolidated Statements of Income | Total stock based compensation expense, which is recorded in our consolidated statements of income, recorded for the years ended December 31, is as follows (in thousands): Years Ended December 31, 2018 2017 2016 Cost of revenues (excluding depreciation and amortization) $ 37 $ 29 $ 62 Product development 296 228 174 Sales and marketing 183 244 274 Other general and administrative 1,261 1,235 1,385 Total stock based compensation expense $ 1,777 $ 1,736 $ 1,895 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Future Rental Payment Commitments under Non-Cancelable Operating Leases | Future rental payment commitments at December 31, 2018 under non-cancelable operating leases, with initial terms of one year or more, are as follows (in thousands): 2019 $ 2,156 2020 4,013 2021 3,766 2022 3,602 2023 3,678 Thereafter 26,085 Total minimum lease payments $ 43,300 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) | Feb. 12, 2018USD ($) | Dec. 31, 2018USD ($)SegmentSourcesofTaxableIncomePlan | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jan. 01, 2019USD ($) |
Business And Basis Of Presentation [Line Items] | |||||
Number of operating segments | Segment | 2 | ||||
Maturity of unrestricted cash equivalent | Less than three months | ||||
Deferred commissions, amortization period | 3 years | ||||
Assets amortized cost | 3 years | ||||
Capitalized software development amount | $ 11,900,000 | $ 10,200,000 | |||
Amortization of capitalized software development from continuing operations | 9,600,000 | 8,900,000 | $ 6,800,000 | ||
Capitalized software development costs for external computer software developed for resale | 0 | 0 | |||
Goodwill impairments identified or recorded | 0 | 0 | 0 | ||
Impairments identified or recorded | 0 | 0 | 0 | ||
Impairments identified or recorded for long-lived assets | $ 0 | 0 | 0 | ||
Number of sources of taxable income | SourcesofTaxableIncome | 4 | ||||
Valuation allowance | $ 311,000 | 310,000 | |||
Concentration risk, customer | The Company did not have any single customer representing over 10% of net revenues or accounts receivable during 2018, 2017, or 2016 | ||||
Number of stock based compensation plans | Plan | 2 | ||||
Subsequent Event [Member] | |||||
Business And Basis Of Presentation [Line Items] | |||||
Lease assets | $ 5,000,000 | ||||
Lease liability | 5,000,000 | ||||
Subsequent Event [Member] | New Corporate Headquarters [Member] | |||||
Business And Basis Of Presentation [Line Items] | |||||
Lease assets | 24,000,000 | ||||
Lease liability | $ 24,000,000 | ||||
Sales and Marketing Expense [Member] | |||||
Business And Basis Of Presentation [Line Items] | |||||
Advertising expense | $ 721,000 | $ 868,000 | $ 824,000 | ||
Minimum [Member] | |||||
Business And Basis Of Presentation [Line Items] | |||||
Royalty payments amortization period | 12 months | ||||
Finite lived intangible assets amortization period | 5 years | ||||
Maximum [Member] | |||||
Business And Basis Of Presentation [Line Items] | |||||
Royalty payments amortization period | 60 months | ||||
Finite lived intangible assets amortization period | 13 years | ||||
Weighted Average [Member] | |||||
Business And Basis Of Presentation [Line Items] | |||||
Finite lived intangible assets amortization period | 11 years 3 months 18 days | ||||
Patient Experience Solutions [Member] | |||||
Business And Basis Of Presentation [Line Items] | |||||
Consideration received | $ 65,200,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Changes in the Allowance for Doubtful Accounts and the Amounts Charged to Bad Debt Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Allowance Balance at Beginning of Period | $ 1,979 | $ 839 | $ 292 |
Charged to Costs and Expenses | 1,033 | 1,568 | 590 |
Write-offs | (1,851) | (428) | (43) |
Allowance Balance at End of Period | $ 1,161 | $ 1,979 | $ 839 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Estimated Useful Lives of Property and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment useful life | 5 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment useful life | 7 years |
Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment useful life | 3 years |
Shareholders Equity - Additiona
Shareholders Equity - Additional Information (Detail) - shares | Dec. 31, 2018 | Dec. 31, 2017 |
Class of Stock [Line Items] | ||
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 32,325,000 | 31,908,000 |
Common stock, shares outstanding | 32,325,000 | 31,908,000 |
Maximum [Member] | ||
Class of Stock [Line Items] | ||
Common stock, shares authorized | 75,000,000 | |
Preferred stock, shares authorized | 10,000,000 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | |||
Income from continuing operations | $ 13,251 | $ 8,838 | $ 4,791 |
Income (loss) from discontinued operations | 18,966 | 1,166 | (1,036) |
Net Income | $ 32,217 | $ 10,004 | $ 3,755 |
Denominator: | |||
Weighted-average shares outstanding | 32,264 | 31,861 | 31,721 |
Effect of dilutive shares | 71 | 335 | 347 |
Weighted-average diluted shares | 32,335 | 32,196 | 32,068 |
Earnings (loss) per share – basic: | |||
Continuing operations | $ 0.41 | $ 0.27 | $ 0.15 |
Discontinued operations | 0.59 | 0.04 | (0.03) |
Net income per share - basic | 1 | 0.31 | 0.12 |
Earnings (loss) per share – diluted: | |||
Continuing operations | 0.41 | 0.27 | 0.15 |
Discontinued operations | 0.59 | 0.04 | (0.03) |
Net income per share - diluted | $ 1 | $ 0.31 | $ 0.12 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||
Total number of common equivalent shares excluded from the calculations of diluted earnings per share | 91,000 | 58,000 | 38,000 |
Marketable Securities - Fair Va
Marketable Securities - Fair Value of Available for Sale Marketable Securities (Detail) - Level 2 [Member] - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Available for sale securities, Adjusted Cost | $ 34,520 | $ 46,388 |
Available for sale securities, Unrealized Gains | 2 | |
Available for sale securities, Unrealized Losses | (23) | (40) |
Available for sale securities, Fair Value | 34,497 | 46,350 |
Corporate Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available for sale securities, Adjusted Cost | 31,521 | 41,900 |
Available for sale securities, Unrealized Gains | 1 | |
Available for sale securities, Unrealized Losses | (23) | (39) |
Available for sale securities, Fair Value | 31,498 | 41,862 |
Government-Sponsored Enterprises Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available for sale securities, Adjusted Cost | 2,999 | 4,488 |
Available for sale securities, Unrealized Gains | 1 | |
Available for sale securities, Unrealized Losses | (1) | |
Available for sale securities, Fair Value | $ 2,999 | $ 4,488 |
Revenue Recognition and Sales_3
Revenue Recognition and Sales Commissions - Schedule of Cumulative Effect for the Adoption of ASC 606 (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Unbilled receivables | $ 2,880 | $ 1,327 | |
Prepaid royalties, net | 13,596 | 16,137 | |
Other prepaid expenses and other current assets | 18,016 | 8,330 | |
Current assets of discontinued operations | 6,125 | ||
Deferred commissions | 16,470 | ||
Deferred tax assets | 145 | 45 | |
Non-current assets of discontinued operations | 28,073 | ||
Liabilities | |||
Deferred revenue, current | 66,061 | 64,938 | |
Current liabilities of discontinued operations | 6,772 | ||
Deferred tax liabilities | 11,068 | ||
Deferred revenue, noncurrent | 2,868 | 6,287 | |
Shareholders’ equity | |||
Retained earnings | 32,373 | $ 17,542 | |
Accounting Standards Update 2014-09 [Member] | |||
Assets | |||
Unbilled receivables | $ 1,358 | ||
Prepaid royalties, net | 15,235 | ||
Other prepaid expenses and other current assets | 5,430 | ||
Current assets of discontinued operations | 5,851 | ||
Deferred commissions | 12,552 | ||
Non-current assets of discontinued operations | 31,239 | ||
Liabilities | |||
Deferred revenue, current | 60,450 | ||
Current liabilities of discontinued operations | 5,398 | ||
Deferred tax liabilities | 5,205 | ||
Deferred revenue, noncurrent | 3,439 | ||
Shareholders’ equity | |||
Retained earnings | 32,674 | ||
ASC 606 Adjustments [Member] | Accounting Standards Update 2014-09 [Member] | |||
Assets | |||
Unbilled receivables | 31 | ||
Prepaid royalties, net | (1,205) | (902) | |
Other prepaid expenses and other current assets | (2,151) | (2,900) | |
Current assets of discontinued operations | (274) | ||
Deferred commissions | 16,470 | 12,552 | |
Deferred tax assets | (45) | ||
Non-current assets of discontinued operations | 3,166 | ||
Liabilities | |||
Deferred revenue, current | (4,735) | (4,488) | |
Current liabilities of discontinued operations | (1,374) | ||
Deferred tax liabilities | 5,205 | ||
Deferred revenue, noncurrent | (3,342) | (2,848) | |
Shareholders’ equity | |||
Retained earnings | $ 2,991 | $ 15,132 |
Revenue Recognition and Sales_4
Revenue Recognition and Sales Commissions - Schedule of Impact of Adopting of ASC 606 on Condensed Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Prepaid royalties, net | $ 13,596 | $ 16,137 | |
Other prepaid expenses and other current assets | 18,016 | 8,330 | |
Deferred commissions | 16,470 | ||
Liabilities | |||
Deferred revenue, current | 66,061 | 64,938 | |
Deferred revenue, noncurrent | 2,868 | 6,287 | |
Shareholders’ equity | |||
Retained earnings | 32,373 | $ 17,542 | |
Accounting Standards Update 2014-09 [Member] | |||
Assets | |||
Prepaid royalties, net | $ 15,235 | ||
Other prepaid expenses and other current assets | 5,430 | ||
Deferred commissions | 12,552 | ||
Liabilities | |||
Deferred revenue, current | 60,450 | ||
Deferred revenue, noncurrent | 3,439 | ||
Shareholders’ equity | |||
Retained earnings | 32,674 | ||
Balances without Adoption of ASC 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||
Assets | |||
Prepaid royalties, net | 14,801 | ||
Other prepaid expenses and other current assets | 20,167 | ||
Liabilities | |||
Deferred revenue, current | 70,796 | ||
Deferred revenue, noncurrent | 6,210 | ||
Shareholders’ equity | |||
Retained earnings | 29,382 | ||
ASC 606 Adjustments [Member] | Accounting Standards Update 2014-09 [Member] | |||
Assets | |||
Prepaid royalties, net | (1,205) | (902) | |
Other prepaid expenses and other current assets | (2,151) | (2,900) | |
Deferred commissions | 16,470 | 12,552 | |
Liabilities | |||
Deferred revenue, current | (4,735) | (4,488) | |
Deferred revenue, noncurrent | (3,342) | (2,848) | |
Shareholders’ equity | |||
Retained earnings | $ 2,991 | $ 15,132 |
Revenue Recognition and Sales_5
Revenue Recognition and Sales Commissions - Schedule of Impact of Adopting of ASC 606 on Condensed Consolidated Statements of Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Revenues, net | $ 231,616 | $ 214,899 | $ 192,124 |
Costs and expenses | |||
Cost of revenues (excluding depreciation and amortization) | 96,014 | 87,208 | 74,966 |
Sales and marketing | 35,698 | 38,606 | 34,929 |
Operating income | 15,491 | 9,407 | 7,171 |
Income from continuing operations before income tax provision | 16,575 | 10,140 | 7,752 |
Income tax provision | 3,324 | 1,302 | 2,961 |
Income from continuing operations | 13,251 | 8,838 | 4,791 |
Net income | 32,217 | $ 10,004 | $ 3,755 |
Balances without Adoption of ASC 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Revenues, net | 230,876 | ||
Costs and expenses | |||
Cost of revenues (excluding depreciation and amortization) | 95,711 | ||
Sales and marketing | 39,008 | ||
Operating income | 11,744 | ||
Income from continuing operations before income tax provision | 12,828 | ||
Income tax provision | 2,568 | ||
Income from continuing operations | 10,260 | ||
Net income | 29,226 | ||
ASC 606 Adjustments [Member] | Accounting Standards Update 2014-09 [Member] | |||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Revenues, net | 740 | ||
Costs and expenses | |||
Cost of revenues (excluding depreciation and amortization) | 303 | ||
Sales and marketing | (3,310) | ||
Operating income | 3,747 | ||
Income from continuing operations before income tax provision | 3,747 | ||
Income tax provision | 756 | ||
Income from continuing operations | 2,991 | ||
Net income | $ 2,991 |
Revenue Recognition and Sales_6
Revenue Recognition and Sales Commissions - Schedule of Revenues Included in Continuing Operations Disaggregated by Revenue Source (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation Of Revenue [Line Items] | |||
Total revenues, net | $ 231,616 | $ 214,899 | $ 192,124 |
Workforce Solutions [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues, net | 190,139 | ||
Provider Solutions [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues, net | 41,477 | ||
Subscription SaaS Services [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues, net | 220,468 | ||
Subscription SaaS Services [Member] | Workforce Solutions [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues, net | 184,926 | ||
Subscription SaaS Services [Member] | Provider Solutions [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues, net | 35,542 | ||
Professional Services [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues, net | 11,148 | ||
Professional Services [Member] | Workforce Solutions [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues, net | 5,213 | ||
Professional Services [Member] | Provider Solutions [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues, net | $ 5,935 |
Revenue Recognition and Sales_7
Revenue Recognition and Sales Commissions - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue Recognition and Sales Commissions [Line Items] | ||
Revenues recognized in period, included in deferred revenue at beginning of the period | $ 63,700 | |
Estimated revenue expected to be recognized in future under contract with customers | $ 447,000 | |
Description of sales commission plan | Sales commissions earned by our sales organization are considered incremental and recoverable costs of obtaining a contract with a customer. The Company’s sales commission plans for 2018 typically include multiple payments, including initial payments in the period a customer contract is obtained and subsequent payments either 15 or 27 months after the initial payment. | |
Sales Commissions, amortization term description | Non-commensurate commissions are amortized over the greater of the contract term or expected customer relationship period, limited by the technological obsolescence period of approximately three years. | |
Sales Commissions, amortization period | 3 years | |
Amortization of deferred commissions | $ 7,659 | |
Customer Contracts [Member] | ||
Revenue Recognition and Sales Commissions [Line Items] | ||
Impairment losses on receivables and contract asset | $ 1,000 | $ 1,600 |
Subscription SaaS Services [Member] | ||
Revenue Recognition and Sales Commissions [Line Items] | ||
Description of contracts with customer | Subscription/SaaS contracts are generally non-cancelable, one to five years in length, and billed annually, semi-annually, quarterly, or monthly in advance. | |
Subscription SaaS Services [Member] | Minimum [Member] | ||
Revenue Recognition and Sales Commissions [Line Items] | ||
Period of contract with customer | 1 year | |
Subscription SaaS Services [Member] | Maximum [Member] | ||
Revenue Recognition and Sales Commissions [Line Items] | ||
Period of contract with customer | 5 years |
Revenue Recognition and Sales_8
Revenue Recognition and Sales Commissions - Additional Information (Detail 1) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-01-01 | Dec. 31, 2018 |
Revenue Recognition and Sales Commissions [Line Items] | |
Estimated revenue, expected recognition period | 12 months |
Percentage of remaining performance obligations expects revenue | 48.00% |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 36,693 | $ 32,484 |
Accumulated depreciation and amortization | (20,827) | (24,392) |
Property and equipment, net | 15,866 | 8,092 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 21,129 | 23,776 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 11,572 | 4,951 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 3,992 | $ 3,757 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |||
Depreciation of property and equipment | $ 5.5 | $ 5.9 | $ 6.1 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | ||
Goodwill, beginning balance | $ 86,144 | $ 85,611 |
Changes in carrying amount | 0 | |
Goodwill, ending balance | 86,144 | 86,144 |
Morrisey Associates Inc [Member] | ||
Goodwill [Line Items] | ||
Goodwill acquired | 533 | |
Workforce Solutions [Member] | ||
Goodwill [Line Items] | ||
Goodwill, beginning balance | 16,381 | 16,381 |
Changes in carrying amount | 0 | |
Goodwill, ending balance | 16,381 | 16,381 |
Provider Solutions [Member] | ||
Goodwill [Line Items] | ||
Goodwill, beginning balance | 69,763 | 69,230 |
Changes in carrying amount | 0 | |
Goodwill, ending balance | $ 69,763 | 69,763 |
Provider Solutions [Member] | Morrisey Associates Inc [Member] | ||
Goodwill [Line Items] | ||
Goodwill acquired | $ 533 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Line Items] | |||
Amortization of intangible assets | $ 9,100 | $ 9,200 | $ 7,400 |
Minimum [Member] | |||
Goodwill [Line Items] | |||
Finite lived intangible assets amortization period | 5 years | ||
Minimum [Member] | Customer Relationships [Member] | |||
Goodwill [Line Items] | |||
Finite lived intangible assets amortization period | 5 years | ||
Minimum [Member] | Other Intangible Assets [Member] | |||
Goodwill [Line Items] | |||
Finite lived intangible assets amortization period | 3 years | ||
Maximum [Member] | |||
Goodwill [Line Items] | |||
Finite lived intangible assets amortization period | 13 years | ||
Maximum [Member] | Customer Relationships [Member] | |||
Goodwill [Line Items] | |||
Finite lived intangible assets amortization period | 13 years | ||
Maximum [Member] | Other Intangible Assets [Member] | |||
Goodwill [Line Items] | |||
Finite lived intangible assets amortization period | 9 years | ||
Morrisey Associates Inc [Member] | |||
Goodwill [Line Items] | |||
Adjustment to goodwill | $ 533,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Identifiable Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 92,286 | $ 93,238 |
Accumulated Amortization | (32,908) | (24,741) |
Net | 59,378 | 68,497 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Amount | 76,714 | 76,714 |
Accumulated Amortization | (23,245) | (17,033) |
Net | 53,469 | 59,681 |
Other Intangible Assets [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Amount | 15,572 | 16,524 |
Accumulated Amortization | (9,663) | (7,708) |
Net | $ 5,909 | $ 8,816 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Expected Annual Amortization Expense (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2,019 | $ 8,792 | |
2,020 | 8,139 | |
2,021 | 7,356 | |
2,022 | 6,277 | |
2,023 | 5,649 | |
Thereafter | 23,165 | |
Net | $ 59,378 | $ 68,497 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) - Patient Experience Solutions [Member] $ in Thousands | Feb. 12, 2018USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Consideration received | $ 65,200 |
Gain on sale of business, net of tax | 19,000 |
Escrow deposit | $ 6,550 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Discontinued Operations Income Statement (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating costs and expenses: | |||
(Loss) income from discontinued operations before income tax provision | $ (64) | $ 393 | $ (1,604) |
Income tax benefit | 10,459 | (773) | (568) |
Income (loss) from discontinued operations | 18,966 | 1,166 | (1,036) |
Patient Experience Solutions [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenues, net | 3,342 | 32,763 | 33,850 |
Operating costs and expenses: | |||
Cost of revenues (excluding depreciation and amortization) | 1,982 | 18,792 | 21,668 |
Product development | 554 | 3,751 | 4,664 |
Sales and marketing | 460 | 4,310 | 4,074 |
Other general and administrative expenses | 229 | 3,282 | 3,208 |
Depreciation and amortization | 181 | 2,235 | 1,840 |
Total operating costs and expenses | 3,406 | 32,370 | 35,454 |
Operating (loss) income | (64) | 393 | (1,604) |
(Loss) income from discontinued operations before income tax provision | (64) | 393 | (1,604) |
Income tax benefit | (773) | (568) | |
Income (loss) from discontinued operations | $ (64) | $ 1,166 | $ (1,036) |
Discontinued Operations - Sch_2
Discontinued Operations - Schedule of Discontinued Operations Balance Sheet (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Carrying amounts of assets included as part of discontinued operations: | |
Current assets of discontinued operations | $ 6,125 |
Long-term assets of discontinued operations | 28,073 |
Carrying amounts of liabilities included as part of discontinued operations: | |
Current liabilities of discontinued operations | 6,772 |
Long-term liabilities of discontinued operations | 2,548 |
Patient Experience Solutions [Member] | |
Carrying amounts of assets included as part of discontinued operations: | |
Accounts receivable, net | 4,158 |
Accounts receivable – unbilled | 1,275 |
Prepaid royalties, net of amortization | 37 |
Other prepaid expenses and other current assets | 655 |
Current assets of discontinued operations | 6,125 |
Property and equipment, net | 901 |
Capitalized software development, net | 2,683 |
Goodwill | 24,154 |
Customer-related intangibles, net | 276 |
Other intangible assets, net | 42 |
Other assets | 17 |
Long-term assets of discontinued operations | 28,073 |
Total assets of discontinued operations in the consolidated balance sheet | 34,198 |
Carrying amounts of liabilities included as part of discontinued operations: | |
Accounts payable and accrued expenses | 2,728 |
Accrued royalties | 27 |
Deferred revenue | 4,017 |
Current liabilities of discontinued operations | 6,772 |
Deferred tax liabilities | 1,971 |
Deferred revenue, noncurrent | 15 |
Other long term liabilities | 562 |
Long-term liabilities of discontinued operations | 2,548 |
Total liabilities of discontinued operations in the consolidated balance sheet | $ 9,320 |
Business Segments - Business Se
Business Segments - Business Segment Information Based on Net Revenues and Operating Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues, net: | |||
Revenues, net | $ 231,616 | $ 214,899 | $ 192,124 |
Operating income: | |||
Operating income | 15,491 | 9,407 | 7,171 |
Workforce Solutions [Member] | |||
Revenues, net: | |||
Revenues, net | 190,139 | ||
Provider Solutions [Member] | |||
Revenues, net: | |||
Revenues, net | 41,477 | ||
Operating Segments [Member] | Workforce Solutions [Member] | |||
Revenues, net: | |||
Revenues, net | 190,139 | 178,061 | 168,040 |
Operating income: | |||
Operating income | 38,834 | 33,579 | 37,329 |
Operating Segments [Member] | Provider Solutions [Member] | |||
Revenues, net: | |||
Revenues, net | 41,477 | 36,838 | 24,084 |
Operating income: | |||
Operating income | 3,474 | 879 | (2,443) |
Unallocated [Member] | |||
Operating income: | |||
Operating income | $ (26,817) | $ (25,051) | $ (27,715) |
Business Segments - Business _2
Business Segments - Business Segment Information Based on Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 441,948 | $ 411,119 |
Operating Segments [Member] | Workforce Solutions [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 104,668 | 90,055 |
Operating Segments [Member] | Provider Solutions [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 145,637 | 150,797 |
Unallocated [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 191,643 | 136,069 |
Discontinued Operations [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 34,198 |
Income Taxes - Summary of Provi
Income Taxes - Summary of Provision (Benefit) for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Current federal | $ (79) | $ 1,819 | $ 514 |
Current state | 386 | 923 | 1,032 |
Deferred federal | 2,661 | (1,464) | 1,176 |
Deferred state | 356 | 24 | 239 |
Provision for income taxes | $ 3,324 | $ 1,302 | $ 2,961 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes at the Statutory Federal Income Tax Rate to the Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Federal tax provision at the statutory rate | $ 3,482 | $ 3,549 | $ 2,713 |
State income tax provision, net of federal benefit | 658 | 491 | 757 |
Tax credits | (509) | (583) | (560) |
Change in state valuation allowance | 2 | 151 | 132 |
Tax Act revaluation of deferred tax balances | (1,680) | ||
Stock compensation | (560) | (626) | (9) |
Other | 251 | (72) | |
Provision for income taxes | $ 3,324 | $ 1,302 | $ 2,961 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes Disclosure [Line Items] | ||
Valuation allowance | $ 311,000 | $ 310,000 |
U.S. federal corporate income tax rate | 21.00% | |
2017 Tax Act, reduction in deferred tax liability | 1,680,000 | |
Unrecognized tax benefits | $ 339,000 | $ 337,000 |
Excess tax benefits related to stock based awards | 540,000 | |
State [Member] | ||
Income Taxes Disclosure [Line Items] | ||
Net operating loss carryforwards | $ 4,800,000 | |
Earliest Tax Year [Member] | ||
Income Taxes Disclosure [Line Items] | ||
Loss carryforwards will expire in years | Dec. 31, 2030 | |
Latest Tax Year [Member] | ||
Income Taxes Disclosure [Line Items] | ||
Loss carryforwards will expire in years | Dec. 31, 2038 | |
Federal [Member] | Earliest Tax Year [Member] | ||
Income Taxes Disclosure [Line Items] | ||
U.S. federal tax examinations for tax period | 2,015 | |
Federal [Member] | Latest Tax Year [Member] | ||
Income Taxes Disclosure [Line Items] | ||
U.S. federal tax examinations for tax period | 2,018 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of the Beginning and Ending Liability for Gross Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Balance at beginning of year | $ 360 | $ 397 |
Additions for tax positions in the current year | 2 | 10 |
Reductions for tax positions of prior years | (23) | (47) |
Balance at end of year | $ 339 | $ 360 |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets and Deferred Tax Liabilities (Detail) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 297,000 | $ 488,000 |
Accrued liabilities | 2,276,000 | 1,580,000 |
Tax credits | 3,115,000 | |
Stock based compensation | 623,000 | 743,000 |
Deferred revenue | 135,000 | 1,467,000 |
Depreciation | 621,000 | |
Basis difference on investments | 396,000 | 327,000 |
Net operating loss carryforwards | 291,000 | 215,000 |
Total deferred tax assets | 4,018,000 | 8,556,000 |
Less: Valuation allowance | (311,000) | (310,000) |
Deferred tax assets, net of valuation allowance | 3,707,000 | 8,246,000 |
Deferred tax liabilities: | ||
Deductible goodwill | 1,760,000 | 1,212,000 |
Nondeductible intangible assets | 1,049,000 | 1,330,000 |
Prepaid assets | 5,698,000 | 1,784,000 |
Capitalized software development | 4,746,000 | 3,875,000 |
Depreciation | 659,000 | |
PX sale deferral | 718,000 | |
Total deferred tax liabilities | 14,630,000 | 8,201,000 |
Net deferred tax liabilities | $ 10,923,000 | |
Net deferred tax (assets) | $ (45,000) |
Stock Based Compensation - Addi
Stock Based Compensation - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unissued common stock reserved for future stock option grants | 1,100,000 | ||
Closing stock price | $ 24.15 | ||
Weighted average remaining contractual term of options, outstanding | 3 months 18 days | ||
Weighted average remaining contractual term of options, exercisable | 3 months 18 days | ||
Payments related to RSUs and stock options for the employees' tax obligations to taxing authorities | $ 338,000 | $ 412,000 | $ 316,000 |
Excess tax benefits related to stock based awards | $ 540,000 | ||
Stock options granted | 0 | ||
Stock Options and RSUs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total unrecognized compensation expense related to non-vested stock options and RSUs | $ 3,200,000 | ||
Weighted average expense recognition period | 2 years 2 months 12 days | ||
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted | 0 | 0 | 0 |
RSUs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Aggregate fair value of RSU awards that vested | $ 1,800,000 | $ 1,900,000 | |
Shares withheld for RSUs | 13,300 | 17,122 | |
Payments related to RSUs and stock options for the employees' tax obligations to taxing authorities | $ 338,000 | $ 412,000 | $ 316,000 |
Maximum [Member] | Stock Options and RSUs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of the options and RSU's granted | 4 years | ||
Maximum [Member] | Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Term of options granted | 10 years |
Stock Based Compensation - Summ
Stock Based Compensation - Summary of Activity and Various Other Information Relative to Stock Options (Detail) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Outstanding at beginning of period, Common Shares | shares | 376 |
Granted, Common Shares | shares | 0 |
Exercised, Common Shares | shares | (357) |
Expired, Common Shares | shares | 0 |
Forfeited, Common Shares | shares | 0 |
Outstanding at end of period, Common Shares | shares | 19 |
Exercisable at end of period, Common Shares | shares | 19 |
Outstanding at beginning of period, Weighted-Average Exercise Price | $ / shares | $ 7.44 |
Granted, Weighted-Average Exercise Price | $ / shares | 0 |
Exercised, Weighted-Average Exercise Price | $ / shares | 7.23 |
Expired, Weighted-Average Exercise Price | $ / shares | 0 |
Forfeited, Weighted-Average Exercise Price | $ / shares | 0 |
Outstanding at end of period, Weighted-Average Exercise Price | $ / shares | 11.27 |
Exercisable at end of period, Weighted-Average Exercise Price | $ / shares | $ 11.27 |
Outstanding at end of period, Aggregate Intrinsic Value | $ | $ 245 |
Exercisable at end of period, Aggregate Intrinsic Value | $ | $ 245 |
Stock Based Compensation - Othe
Stock Based Compensation - Other Information Relative to Option Activity (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Total intrinsic value of stock options exercised | $ 6,130 | $ 1,973 | $ 820 |
Cash proceeds from exercise of stock options | $ 2,582 | $ 413 | $ 145 |
Stock Based Compensation - Su_2
Stock Based Compensation - Summary of Activity Relative to RSU's (Detail) - RSUs [Member] $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at beginning of period, shares | shares | 254 |
Granted | shares | 163 |
Vested | shares | (73) |
Forfeited | shares | (55) |
Outstanding at end of period, shares | shares | 289 |
Outstanding at beginning of period, Weighted-Average Grant Date Fair Value | $ / shares | $ 23.13 |
Granted, Weighted-Average Grant Date Fair Value | $ / shares | 25.65 |
Vested, Weighted-Average Grant Date Fair Value | $ / shares | 23.94 |
Forfeited, Weighted-Average Grant Date Fair Value | $ / shares | 23.28 |
Outstanding at end of period, Weighted-Average Grant Date Fair Value | $ / shares | $ 24.31 |
Aggregate intrinsic Value | $ | $ 6,975 |
Stock Based Compensation - Stoc
Stock Based Compensation - Stock Based Compensation Expense Recorded in Consolidated Statements of Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock based compensation expense | $ 1,777 | $ 1,736 | $ 1,895 |
Cost of Revenues (Excluding Depreciation and Amortization) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock based compensation expense | 37 | 29 | 62 |
Product Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock based compensation expense | 296 | 228 | 174 |
Sales and Marketing [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock based compensation expense | 183 | 244 | 274 |
Other General and Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock based compensation expense | $ 1,261 | $ 1,235 | $ 1,385 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Sale Of Subsidiary [Abstract] | |||
Employees minimum age eligibility to participate in plan | 21 years | ||
Minimum number of days required to be eligible for participation in plan | 30 days | ||
Defined contribution plan, employer matching contribution amount | $ 1,300,000 | $ 764,000 | $ 311,000 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Line of Credit Facility [Line Items] | ||
Debt outstanding | $ 0 | $ 0 |
SunTrust Bank [Member] | ||
Line of Credit Facility [Line Items] | ||
Description of Line of credit facility Covenant | A funded debt leverage ratio (consolidated debt/consolidated EBITDA) of not greater than 3.0 to 1.0; and an interest coverage ratio (consolidated EBITDA/consolidated interest expense) of not less than 3.0 to 1.0. | |
SunTrust Bank [Member] | Minimum [Member] | ||
Line of Credit Facility [Line Items] | ||
Commitment fee paid per annum | 0.20% | |
SunTrust Bank [Member] | Maximum [Member] | ||
Line of Credit Facility [Line Items] | ||
Commitment fee paid per annum | 0.30% | |
Revolving Credit Facility [Member] | Minimum [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest coverage ratio | 300.00% | |
Revolving Credit Facility [Member] | SunTrust Bank [Member] | ||
Line of Credit Facility [Line Items] | ||
Maturity date of Loan agreement | Nov. 24, 2020 | |
Interest rate under credit facility | The borrowings under the Revolving Credit Facility bear interest at either (1) a rate per annum equal to the highest of SunTrust’s prime rate or 0.5% in excess of the Federal Funds Rate or 1.0% in excess of one-month LIBOR (the “Base Rate”), plus an applicable margin, or (2) the one, two, three, or six-month per annum LIBOR for deposits in the applicable currency (the “Eurocurrency Rate”), as selected by the Company, plus an applicable margin. The applicable margin for Eurocurrency Rate loans depends on the Company’s funded debt leverage ratio and varies from 1.50% to 2.00%. The applicable margin for Base Rate loans depends on the Company’s funded debt leverage ratio and varies from 0.50% to 1.50% | |
Maximum borrowing capacity under credit facility | $ 50,000,000 | |
Increase in revolving credit facility | 25,000,000 | |
Principal payments prior to maturity | 0 | |
Outstanding balance on revolving credit facility | 0 | |
Revolving credit facility borrowings | 0 | |
Revolving Credit Facility [Member] | SunTrust Bank [Member] | Swing Line Sub Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity under credit facility | 5,000,000 | |
Revolving Credit Facility [Member] | SunTrust Bank [Member] | Letter of Credit Subfacility [Member] | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity under credit facility | $ 5,000,000 | |
Revolving Credit Facility [Member] | SunTrust Bank [Member] | Federal Funds Effective Swap Rate [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Interest Rate During Period | 0.50% | |
Revolving Credit Facility [Member] | SunTrust Bank [Member] | Base Rate [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Interest Rate During Period | 1.00% | |
Revolving Credit Facility [Member] | SunTrust Bank [Member] | Minimum [Member] | Base Rate [Member] | ||
Line of Credit Facility [Line Items] | ||
Applicable margin for loans | 0.50% | |
Revolving Credit Facility [Member] | SunTrust Bank [Member] | Minimum [Member] | Eurodollar [Member] | ||
Line of Credit Facility [Line Items] | ||
Applicable margin for loans | 1.50% | |
Revolving Credit Facility [Member] | SunTrust Bank [Member] | Maximum [Member] | ||
Line of Credit Facility [Line Items] | ||
Maximum total leverage ratio | 300.00% | |
Revolving Credit Facility [Member] | SunTrust Bank [Member] | Maximum [Member] | Base Rate [Member] | ||
Line of Credit Facility [Line Items] | ||
Applicable margin for loans | 1.50% | |
Revolving Credit Facility [Member] | SunTrust Bank [Member] | Maximum [Member] | Eurodollar [Member] | ||
Line of Credit Facility [Line Items] | ||
Applicable margin for loans | 2.00% |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Leases [Abstract] | |||
Total rent expense under all operating leases | $ 7.4 | $ 6.6 | $ 4.1 |
Leases - Future Rental Payment
Leases - Future Rental Payment Commitments under Non-Cancelable Operating Leases (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2,019 | $ 2,156 |
2,020 | 4,013 |
2,021 | 3,766 |
2,022 | 3,602 |
2,023 | 3,678 |
Thereafter | 26,085 |
Total minimum lease payments | $ 43,300 |
Collaborative Arrangement - Add
Collaborative Arrangement - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 28, 2018 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Collaborative arrangement profit/loss sharing percentage | 50.00% | |||
Expenses related to collaborative arrangement | $ 187,000 | $ 1,200,000 | $ 1,400,000 | |
Collaborative Arrangement, Product [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Collaborative arrangement revenues | $ 391,000 | $ 2,200,000 | $ 2,700,000 |
Non-Marketable Equity Investm_2
Non-Marketable Equity Investments - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Investments Debt And Equity Securities [Abstract] | ||
Reduction to carrying value of cost method investment due to change in fair value | $ 1,271 | |
Aggregate carrying amount of cost method investments | $ 2,100 | $ 2,500 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Providigmn, LLC [Member] - Subsequent Event [Member] | Jan. 10, 2019USD ($) |
Subsequent Event [Line Items] | |
Consideration paid for acquisition in cash | $ 18,000,000 |
Additional contingent consideration | $ 500,000 |