Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 25, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ATHN | |
Entity Registrant Name | ATHENAHEALTH INC | |
Entity Central Index Key | 1,131,096 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 39,263,333 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 100,591 | $ 141,927 |
Accounts receivable, net | 147,254 | 148,157 |
Prepaid expenses and other current assets | 35,283 | 30,176 |
Total current assets | 283,128 | 320,260 |
Property and equipment, net | 323,094 | 321,524 |
Capitalized software costs, net | 115,832 | 107,517 |
Purchased intangible assets, net | 119,933 | 126,239 |
Goodwill | 229,157 | 229,157 |
Investments and other assets | 14,168 | 13,965 |
Total assets | 1,085,312 | 1,118,662 |
Current liabilities: | ||
Accounts payable | 5,956 | 10,768 |
Accrued compensation | 51,721 | 88,122 |
Accrued expenses | 56,760 | 51,452 |
Long-term debt | 14,517 | 10,762 |
Deferred revenue | 32,368 | 32,593 |
Total current liabilities | 161,322 | 193,697 |
Deferred rent, net of current portion | 31,514 | 31,118 |
Long-term debt, net of current portion | 283,721 | 287,353 |
Deferred revenue, net of current portion | 55,452 | 55,946 |
Long-term deferred tax liability, net | 2,306 | 1,254 |
Other long-term liabilities | 5,324 | 5,988 |
Total liabilities | $ 539,639 | $ 575,356 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value: 5,000 shares authorized; no shares issued and outstanding at March 31, 2016 and December 31, 2015 | $ 0 | $ 0 |
Common stock, $0.01 par value: 125,000 shares authorized; 40,520 shares issued and 39,243 shares outstanding at March 31, 2016; 40,209 shares issued and 38,931 shares outstanding at December 31, 2015 | 406 | 403 |
Additional paid-in capital | 525,611 | 522,443 |
Treasury stock, at cost, 1,278 shares | (1,200) | (1,200) |
Accumulated other comprehensive loss | (819) | (848) |
Retained earnings | 21,675 | 22,508 |
Total stockholders’ equity | 545,673 | 543,306 |
Total liabilities and stockholders’ equity | $ 1,085,312 | $ 1,118,662 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 40,520,000 | 40,209,000 |
Common stock, shares outstanding | 39,243,000 | 38,931,000 |
Treasury stock, shares | 1,278,000 | 1,278,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue: | ||
Business services | $ 247,529 | $ 197,763 |
Implementation and other | 8,620 | 8,671 |
Total revenue | 256,149 | 206,434 |
Expense: | ||
Direct operating | 105,389 | 84,557 |
Selling and marketing | 57,590 | 53,365 |
Research and development | 25,147 | 23,728 |
General and administrative | 40,925 | 36,212 |
Depreciation and amortization | 26,774 | 20,352 |
Total expense | 255,825 | 218,214 |
Operating income (loss) | 324 | (11,780) |
Other (expense) income: | ||
Interest expense | (1,930) | (1,059) |
Other income | 42 | 44 |
Total other (expense) income | (1,888) | (1,015) |
Loss before income tax benefit | (1,564) | (12,795) |
Income tax benefit | 731 | 3,963 |
Net loss | $ (833) | $ (8,832) |
Net loss per share - Basic (in dollars per share) | $ (0.02) | $ (0.23) |
Net loss per share - Diluted (in dollars per share) | $ (0.02) | $ (0.23) |
Weighted average shares used in computing net loss per share: | ||
Basic (shares) | 39,034 | 38,278 |
Diluted (shares) | 39,034 | 38,278 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (833) | $ (8,832) |
Other comprehensive income (loss) | ||
Unrealized loss on securities, net of tax of $5,194 for the three months ended March 31, 2015 | 0 | (8,596) |
Unrealized gain (loss) on change in fair value of interest rate swap, net of tax of $10 and $140 for the three months ended March 31, 2016 and 2015, respectively | 17 | (231) |
Foreign currency translation adjustment | 12 | 129 |
Total other comprehensive income (loss) | 29 | (8,698) |
Comprehensive loss | $ (804) | $ (17,530) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Unrealized gain (loss) on securities, tax expense (benefit) | $ (5,194) | |
Unrealized (loss) gain on interest rate derivative, tax expense (benefit) | $ 10 | $ (140) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (833) | $ (8,832) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 33,055 | 26,541 |
Deferred income tax | (1,020) | (4,219) |
Stock-based compensation expense | 15,166 | 15,874 |
Other reconciling adjustments | 56 | 102 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 903 | 4,183 |
Prepaid expenses and other current assets | (5,108) | (4,491) |
Other long-term assets | (203) | 58 |
Accounts payable | (4,439) | 1,139 |
Accrued expenses and other long-term liabilities | 9,566 | 6,683 |
Accrued compensation | (38,777) | (30,027) |
Deferred revenue | (719) | 3,314 |
Deferred rent | 658 | 2,599 |
Net cash provided by operating activities | 8,305 | 12,924 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capitalized software costs | (20,843) | (38,492) |
Purchases of property and equipment | (18,673) | (22,815) |
Payments on acquisitions, net of cash acquired | 0 | (40,165) |
Net cash used in investing activities | (39,516) | (101,472) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock under stock plans and warrants | 5,752 | 6,287 |
Taxes paid related to net share settlement of stock awards | (15,928) | (15,310) |
Proceeds from line of credit | 0 | 60,000 |
Payments on long-term debt | 0 | (3,750) |
Proceeds from (Payments for) Other Financing Activities | (23) | 0 |
Net cash (used in) provided by financing activities | (10,199) | 47,227 |
Effect of exchange rate changes on cash and cash equivalents | 74 | 127 |
Net decrease in cash and cash equivalents | (41,336) | (41,194) |
Cash and cash equivalents at beginning of period | 141,927 | 73,787 |
Cash and cash equivalents at end of period | 100,591 | 32,593 |
Non-cash transactions | ||
Property, equipment, and purchased software recorded in accounts payable and accrued expenses | 9,477 | 9,557 |
Non-cash leasehold improvements | 0 | 105 |
Additional disclosures | ||
Cash paid for interest, net | 1,842 | 252 |
Cash paid for taxes | $ 91 | $ 136 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION General – The accompanying unaudited condensed consolidated financial statements have been prepared by athenahealth, Inc. (the “Company,” “we,” “us,” or “our”) in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and as required by Regulation S-X, Rule 10-01. The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP for complete financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of items of a normal and recurring nature) necessary to fairly present the financial position as of March 31, 2016 , the results of operations for the three months ended March 31, 2016 and 2015 , and cash flows for the three months ended March 31, 2016 and 2015 . The results of operations for the three month period ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year. When preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material. We consider events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these financial statements. Related Party Transaction – We have a long-term investment in a vendor. The total expense related to this vendor for the three months ended March 31, 2016 and 2015 was $8.1 million and $4.3 million , respectively, and the total amount payable to this vendor at March 31, 2016 and December 31, 2015 was $3.3 million and $2.3 million , respectively. New Accounting Pronouncements – In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation – Stock Compensation (Topic 718) . ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. Under this guidance, a company recognizes all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement. This change eliminates the notion of the additional paid-in capital pool and reduces the complexity in accounting for excess tax benefits and tax deficiencies. ASU 2016-09 is effective for public companies for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods; however, early adoption is allowed. We are assessing the impact that adopting this new accounting standard will have on our consolidated financial statements and footnote disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . ASU 2016-02 most significantly impacts lessee accounting and disclosures. First, this guidance requires lessees to identify arrangements that should be accounted for as leases. Under ASU 2016-02, for lease arrangements exceeding a 12-month term, a right-of-use asset and lease obligation is recorded by the lessee for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of ASU 2016-02 must be calculated using the applicable incremental borrowing rate at the date of adoption. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. In addition, ASU 2016-02 requires the use of the modified retrospective method, which will require adjustment to all comparative periods presented in the consolidated financial statements. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. We are assessing the impact that adopting this new accounting standard will have on our consolidated financial statements and footnote disclosures. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers, which defers the effective date of ASU 2014-09 for all entities by one year. ASU 2014-09 is now effective for public companies for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the current revenue recognition guidance, including industry-specific guidance. In addition, ASU 2014-09 provides guidance on accounting for certain revenue-related costs including, but not limited to, when to capitalize costs associated with obtaining and fulfilling a contract. ASU 2014-09 provides companies with two implementation methods. Companies can choose to apply the standard retrospectively to each prior reporting period presented (full retrospective application) or retrospectively with the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings of the annual reporting period that includes the date of initial application (modified retrospective application). We continue to evaluate the expected impact of this new guidance and available adoption methods. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS Razor Insights On January 13, 2015 , we acquired Razor Insights, LLC (“RazorInsights”) for $39.9 million in cash after net working capital adjustments. We acquired RazorInsights for the assembled workforce, technology, customer base, and to accelerate our entry into the inpatient market. The fair value of net assets acquired, after measurement period adjustments totaling $1.0 million , was $8.9 million , including purchased intangible assets of $7.0 million related to technology acquired and $4.0 million related to customer relationships. The $31.1 million excess of purchase consideration over the fair value of net assets acquired was allocated to goodwill, which is deductible for U.S. income tax purposes. We incurred transaction costs in connection with the acquisition of $0.3 million , which are included in general and administrative expenses. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NET LOSS PER SHARE The following table reconciles the weighted average shares outstanding for basic and diluted net loss per share for the periods indicated: Three Months Ended March 31, 2016 2015 Net loss $ (833 ) $ (8,832 ) Weighted average shares used in computing basic net loss per share 39,034 38,278 Net loss per share – Basic $ (0.02 ) $ (0.23 ) Net loss $ (833 ) $ (8,832 ) Weighted average shares used in computing diluted net loss per share 39,034 38,278 Net loss per share – Diluted $ (0.02 ) $ (0.23 ) |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT On May 5, 2015 , we entered into an amended and restated credit agreement (the “2015 Credit Agreement”). The 2015 Credit Agreement amended and restated our previous credit agreement, dated as of May 10, 2013 (the “2013 Credit Agreement”), and provides for a $500.0 million senior credit facility consisting of a $300.0 million unsecured term loan facility and a $200.0 million unsecured revolving credit facility (the “2015 Senior Credit Facility”). As of both March 31, 2016 and December 31, 2015, $300.0 million was outstanding on the unsecured term loan facility. A portion of the proceeds received from the 2015 Senior Credit Facility were used to repay the outstanding revolving loans under the 2013 Credit Agreement such that there were no revolving loans outstanding on the closing of the 2015 Credit Agreement. The 2015 Credit Agreement contains terms and conditions that are customary to credit facilities of this nature; it may be used to refinance existing indebtedness, and for working capital and other general corporate purposes. We may increase the revolving credit facility up to an additional $100.0 million and may increase the term loan facility to the extent that such amount will not cause us to be in breach of our financial covenants, subject to certain conditions, including obtaining lender commitments. The 2015 Senior Credit Facility matures on May 5, 2020 , although we may prepay the 2015 Senior Credit Facility in whole or in part at any time without premium or penalty, and the unutilized portion of the commitments may be irrevocably reduced or terminated by us in whole or in part without penalty or premium. At our option, any loans under the 2015 Senior Credit Facility (other than swing line loans) will bear interest at a rate equal to (i) the British Bankers Association London Interbank Offered Rate (“LIBOR”) plus an interest margin based on our consolidated leverage ratio, or (ii) the base rate (which is the highest of (a) the Bank of America prime rate, (b) the Federal Funds rate plus 0.50% , and (c) one month LIBOR plus 1.00% ) plus an interest margin based on our consolidated leverage ratio. The interest rate for the 2015 Senior Credit Facility as of March 31, 2016 was 1.94% . We will pay a commitment fee during the term of the 2015 Senior Credit Facility, which varies between 0.20% and 0.40% based on our consolidated leverage ratio. We incurred financing fees of $1.0 million for the 2015 Senior Credit Facility, which are being amortized as interest expense in the Condensed Consolidated Statements of Income over the five -year term of the agreement. Future principal payments of the unsecured term loan facility at March 31, 2016 are as follows: Amount 2016 $ 11,250 2017 15,000 2018 20,625 2019 28,125 2020 225,000 Total $ 300,000 Less current portion 15,000 Long-term portion $ 285,000 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS As of March 31, 2016 and December 31, 2015 , the carrying amounts of cash and cash equivalents, receivables, accounts payable, and accrued expenses approximated their estimated fair values because of the short-term nature of these financial instruments. Derivatives are carried at fair value, as determined using standard valuation models, and adjusted when necessary for credit risk. As of March 31, 2016 and December 31, 2015, we had $300.0 million outstanding on our term loan facility under the 2015 Credit Agreement. As of March 31, 2016 and December 31, 2015 , we had not drawn on our revolving credit facility under the 2015 Credit Agreement. The credit facility carries a variable interest rate set at current market rates, and as such, the carrying value approximates fair value. Our More Disruption Please (“MDP”) Accelerator portfolio is a program designed to cultivate health care information technology start-ups and expand services offered to our physician network. Portfolio investments as of March 31, 2016 and December 31, 2015 are in the form of convertible notes receivable and equity, and are included in investments and other assets on our Condensed Consolidated Balance Sheets. At March 31, 2016 , as there is no indication of performance risk, and while conversion is contemplated for certain investments, we currently estimate that the fair value of the notes receivable approximates cost, based on inputs including the original transaction prices, our own recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investments, subsequent rounds of financing, and changes in financial ratios or cash flows (Level 3). Marketable equity securities and money market funds are valued using a market approach based upon the quoted market prices of identical instruments when available or other observable inputs such as trading prices of identical instruments in inactive markets or similar securities. Derivative financial instruments are used to manage certain of our interest rate exposures. We do not enter into derivatives for trading or speculative purposes. Our interest rate swap agreement was designed to manage exposure to interest rates on our variable rate indebtedness. We have designated the interest rate swap agreement as a cash flow hedge. Changes in the fair value of the interest rate swap are recognized, net of taxes, in other comprehensive income (loss) (“OCI”) until the hedged items are recognized in earnings. Hedge ineffectiveness associated with the interest rate swap, if any, will be reported in interest expense. For the three months ended March 31, 2016 and December 31, 2015, no amount was recognized in earnings for our interest rate swap. There was no ineffectiveness associated with the interest rate swap during the three months ended March 31, 2016 and December 31, 2015, nor was any amount excluded from ineffectiveness testing. We do not expect that any of the $0.2 million of pre-tax unrealized losses included in accumulated other comprehensive loss at March 31, 2016 will be reclassified into earnings within the next 12 months. This amount will vary due to fluctuations in interest rates. We are exposed to credit loss in the event of non-performance by the swap counterparty. The estimated fair value of our interest rate swap agreement with a certain financial institution at March 31, 2016 and December 31, 2015 was a liability of $0.2 million and $0.2 million , respectively, based on inputs other than quoted prices that are observable for the interest rate swap (Level 2). Inputs include present value of fixed and projected floating rate cash flows over the term of the swap contract. The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 , and indicates the fair value hierarchy of the valuation techniques we utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices in active markets for identical assets or liabilities, and fair values determined by Level 2 inputs utilize quoted prices in inactive markets for identical assets or liabilities obtained from readily available pricing sources for similar instruments. The fair values determined by Level 3 inputs are unobservable values which are supported by little or no market activity. It is our policy to recognize transfers between levels of the fair value hierarchy, if any, at the end of the reporting period; however, there have been no such transfers during any of the periods presented. Fair Value Measurements as of March 31, 2016, Using Level 1 Level 2 Level 3 Total Cash and cash equivalents: Money market $ 10,011 $ — $ — $ 10,011 Debt securities: MDP Accelerator portfolio — — 1,250 1,250 Total assets $ 10,011 $ — $ 1,250 $ 11,261 Interest rate swap liability (a) $ — $ (183 ) $ — $ (183 ) Total liabilities $ — $ (183 ) $ — $ (183 ) Fair Value Measurements as of December 31, 2015, Using Level 1 Level 2 Level 3 Total Cash and cash equivalents: Money market $ 10,006 $ — $ — $ 10,006 Debt securities: MDP Accelerator portfolio — — 1,250 1,250 Total assets $ 10,006 $ — $ 1,250 $ 11,256 Interest rate swap liability (a) $ — $ (210 ) $ — $ (210 ) Total liabilities $ — $ (210 ) $ — $ (210 ) (a) Recorded in other short-term liabilities on the Condensed Consolidated Balance Sheets. The following table presents our financial instruments measured at fair value using unobservable inputs (Level 3) as of the three months ended March 31, 2016 and March 31, 2015: Fair Value Measurements Using Unobservable Inputs (Level 3) Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 Balance, beginning of period $ 1,250 $ 750 Conversion — — Additions — — Balance, end of period $ 1,250 $ 750 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES We are engaged from time to time in certain legal disputes arising in the ordinary course of business, including employment discrimination claims and challenges to our intellectual property. We believe that we have adequate legal defenses and that the likelihood of a loss contingency relating to the ultimate disposition of any of these disputes is remote. When the likelihood of a loss contingency becomes at least reasonably possible with respect to any of these disputes, or, as applicable in the future, if there is at least a reasonable possibility that a loss exceeding amounts already recognized may have been incurred, we will revise our disclosures in accordance with the relevant authoritative guidance. Additionally, we will accrue a liability for loss contingencies when we believe that it is both probable that a liability has been incurred and that we can reasonably estimate the amount of the loss. We will review these accruals and adjust them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel, and other relevant information. To the extent new information is obtained, and our views on the probable outcomes of claims, suits, assessments, investigations, or legal proceedings change, changes in our accrued liabilities would be recorded in the period in which such determination is made. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | General – The accompanying unaudited condensed consolidated financial statements have been prepared by athenahealth, Inc. (the “Company,” “we,” “us,” or “our”) in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and as required by Regulation S-X, Rule 10-01. The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP for complete financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of items of a normal and recurring nature) necessary to fairly present the financial position as of March 31, 2016 , the results of operations for the three months ended March 31, 2016 and 2015 , and cash flows for the three months ended March 31, 2016 and 2015 . The results of operations for the three month period ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year. When preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material. We consider events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these financial statements. |
New Accounting Pronouncements | New Accounting Pronouncements – In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation – Stock Compensation (Topic 718) . ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. Under this guidance, a company recognizes all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement. This change eliminates the notion of the additional paid-in capital pool and reduces the complexity in accounting for excess tax benefits and tax deficiencies. ASU 2016-09 is effective for public companies for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods; however, early adoption is allowed. We are assessing the impact that adopting this new accounting standard will have on our consolidated financial statements and footnote disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . ASU 2016-02 most significantly impacts lessee accounting and disclosures. First, this guidance requires lessees to identify arrangements that should be accounted for as leases. Under ASU 2016-02, for lease arrangements exceeding a 12-month term, a right-of-use asset and lease obligation is recorded by the lessee for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of ASU 2016-02 must be calculated using the applicable incremental borrowing rate at the date of adoption. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. In addition, ASU 2016-02 requires the use of the modified retrospective method, which will require adjustment to all comparative periods presented in the consolidated financial statements. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. We are assessing the impact that adopting this new accounting standard will have on our consolidated financial statements and footnote disclosures. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers, which defers the effective date of ASU 2014-09 for all entities by one year. ASU 2014-09 is now effective for public companies for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the current revenue recognition guidance, including industry-specific guidance. In addition, ASU 2014-09 provides guidance on accounting for certain revenue-related costs including, but not limited to, when to capitalize costs associated with obtaining and fulfilling a contract. ASU 2014-09 provides companies with two implementation methods. Companies can choose to apply the standard retrospectively to each prior reporting period presented (full retrospective application) or retrospectively with the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings of the annual reporting period that includes the date of initial application (modified retrospective application). We continue to evaluate the expected impact of this new guidance and available adoption methods. |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles the weighted average shares outstanding for basic and diluted net loss per share for the periods indicated: Three Months Ended March 31, 2016 2015 Net loss $ (833 ) $ (8,832 ) Weighted average shares used in computing basic net loss per share 39,034 38,278 Net loss per share – Basic $ (0.02 ) $ (0.23 ) Net loss $ (833 ) $ (8,832 ) Weighted average shares used in computing diluted net loss per share 39,034 38,278 Net loss per share – Diluted $ (0.02 ) $ (0.23 ) |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | Future principal payments of the unsecured term loan facility at March 31, 2016 are as follows: Amount 2016 $ 11,250 2017 15,000 2018 20,625 2019 28,125 2020 225,000 Total $ 300,000 Less current portion 15,000 Long-term portion $ 285,000 |
FAIR VALUE OF FINANCIAL INSTR17
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 , and indicates the fair value hierarchy of the valuation techniques we utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices in active markets for identical assets or liabilities, and fair values determined by Level 2 inputs utilize quoted prices in inactive markets for identical assets or liabilities obtained from readily available pricing sources for similar instruments. The fair values determined by Level 3 inputs are unobservable values which are supported by little or no market activity. It is our policy to recognize transfers between levels of the fair value hierarchy, if any, at the end of the reporting period; however, there have been no such transfers during any of the periods presented. Fair Value Measurements as of March 31, 2016, Using Level 1 Level 2 Level 3 Total Cash and cash equivalents: Money market $ 10,011 $ — $ — $ 10,011 Debt securities: MDP Accelerator portfolio — — 1,250 1,250 Total assets $ 10,011 $ — $ 1,250 $ 11,261 Interest rate swap liability (a) $ — $ (183 ) $ — $ (183 ) Total liabilities $ — $ (183 ) $ — $ (183 ) Fair Value Measurements as of December 31, 2015, Using Level 1 Level 2 Level 3 Total Cash and cash equivalents: Money market $ 10,006 $ — $ — $ 10,006 Debt securities: MDP Accelerator portfolio — — 1,250 1,250 Total assets $ 10,006 $ — $ 1,250 $ 11,256 Interest rate swap liability (a) $ — $ (210 ) $ — $ (210 ) Total liabilities $ — $ (210 ) $ — $ (210 ) (a) Recorded in other short-term liabilities on the Condensed Consolidated Balance Sheets. |
Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents our financial instruments measured at fair value using unobservable inputs (Level 3) as of the three months ended March 31, 2016 and March 31, 2015: Fair Value Measurements Using Unobservable Inputs (Level 3) Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 Balance, beginning of period $ 1,250 $ 750 Conversion — — Additions — — Balance, end of period $ 1,250 $ 750 |
BASIS OF PRESENTATION - Narrati
BASIS OF PRESENTATION - Narrative (Details) - Long-Term Investment in Vendor - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||
Total related party expense | $ 8.1 | $ 4.3 | |
Total amount payable to related parties | $ 3.3 | $ 2.3 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Thousands | Jan. 13, 2015 | Mar. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||
Goodwill | $ 229,157 | $ 229,157 | |
RazorInsights | |||
Business Acquisition [Line Items] | |||
Payments to acquire businesses, gross | $ 39,900 | ||
Measurement period adjustments | (1,000) | ||
Fair value of assets acquired | 8,900 | ||
Goodwill | 31,100 | ||
Transaction costs associated with the acquisition | 300 | ||
RazorInsights | Technology-Based Intangible Assets | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired | 7,000 | ||
RazorInsights | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired | $ 4,000 |
NET LOSS PER SHARE - Schedule o
NET LOSS PER SHARE - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (833) | $ (8,832) |
Weighted average shares used in computing basic net income (loss) per share (shares) | 39,034 | 38,278 |
Net income (loss) per share - Basic (in dollars per share) | $ (0.02) | $ (0.23) |
Net loss | $ (833) | $ (8,832) |
Weighted average shares used in computing diluted net income (loss) per share (shares) | 39,034 | 38,278 |
Net income (loss) per share - Diluted (in dollars per share) | $ (0.02) | $ (0.23) |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) | May. 05, 2015 | Mar. 31, 2016 | Dec. 31, 2015 |
Senior Credit Facility, 2015 | |||
Line of Credit Facility [Line Items] | |||
Current borrowing capacity | $ 500,000,000 | ||
Interest rate, effective percentage (percent) | 1.94% | ||
Debt issuance costs | $ 1,000,000 | ||
Line of credit term (years) | 5 years | ||
Senior Credit Facility, 2015 | Minimum | |||
Line of Credit Facility [Line Items] | |||
Commitment fee percentage (percent) | 0.20% | ||
Senior Credit Facility, 2015 | Maximum | |||
Line of Credit Facility [Line Items] | |||
Commitment fee percentage (percent) | 0.40% | ||
Senior Credit Facility, 2015 | Federal Funds rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (percent) | 0.50% | ||
Senior Credit Facility, 2015 | Monthly Libor Interbank Offered Rate (LIBOR) | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (percent) | 1.00% | ||
Senior Credit Facility, 2015 | Unsecured Debt | |||
Line of Credit Facility [Line Items] | |||
Current borrowing capacity | $ 300,000,000 | ||
Long-term line of credit | $ 300,000,000 | $ 300,000,000 | |
Senior Credit Facility, 2015 | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Current borrowing capacity | 200,000,000 | ||
Additional borrowing capacity (up to) | 100,000,000 | ||
Senior Credit Facility, 2013 | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Long-term line of credit | $ 0 |
DEBT - Schedule of Debt Maturit
DEBT - Schedule of Debt Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Less current portion | $ 14,517 | $ 10,762 |
Long-term portion | 283,721 | $ 287,353 |
Unsecured Debt | Senior Credit Facility, 2015 | ||
Debt Instrument [Line Items] | ||
2,016 | 11,250 | |
2,017 | 15,000 | |
2,018 | 20,625 | |
2,019 | 28,125 | |
2,020 | 225,000 | |
Total | 300,000 | |
Less current portion | 15,000 | |
Long-term portion | $ 285,000 |
FAIR VALUE OF FINANCIAL INSTR23
FAIR VALUE OF FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash flow hedge gain (loss) amount reclassified to earnings | $ 0 | $ 0 |
Cash flow hedge gain (loss) on hedge ineffectiveness | 0 | 0 |
Fair Value, Measurements, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swap liability | 183,000 | 210,000 |
Level 2 | Fair Value, Measurements, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swap liability | 183,000 | 210,000 |
Unsecured Debt | Senior Credit Facility, 2015 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term line of credit | 300,000,000 | 300,000,000 |
Revolving Credit Facility | Senior Credit Facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term line of credit | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR24
FAIR VALUE OF FINANCIAL INSTRUMENTS - Financial Assets and Liabilities that Are Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 11,261 | $ 11,256 |
Interest rate swap liability | (183) | (210) |
Total liabilities | (183) | (210) |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 10,011 | 10,006 |
Interest rate swap liability | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Interest rate swap liability | (183) | (210) |
Total liabilities | (183) | (210) |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 1,250 | 1,250 |
Interest rate swap liability | 0 | 0 |
Total liabilities | 0 | 0 |
Money Market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents: | 10,011 | 10,006 |
Money Market Funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents: | 10,011 | 10,006 |
Money Market Funds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents: | 0 | 0 |
Money Market Funds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents: | 0 | 0 |
MDP Accelerator portfolio | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities: | 1,250 | 1,250 |
MDP Accelerator portfolio | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities: | 0 | 0 |
MDP Accelerator portfolio | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities: | 0 | 0 |
MDP Accelerator portfolio | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities: | $ 1,250 | $ 1,250 |
FAIR VALUE OF FINANCIAL INSTR25
FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - Fair Value, Measurements, Recurring - Level 3 - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, beginning of period | $ 1,250 | $ 750 |
Conversion | 0 | 0 |
Additions | 0 | 0 |
Balance, end of period | $ 1,250 | $ 750 |