Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 01, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | AMN HEALTHCARE SERVICES INC | |
Entity Central Index Key | 1,142,750 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (excluding treasury shares) | 47,772,333 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 19,625 | $ 10,622 |
Accounts receivable, net of allowances of $11,381 and $11,376 at September 30, 2017 and December 31, 2016, respectively | 343,596 | 341,977 |
Accounts receivable, subcontractor | 37,200 | 49,233 |
Prepaid expenses | 15,832 | 14,189 |
Other current assets | 26,220 | 34,607 |
Total current assets | 442,473 | 450,628 |
Restricted cash, cash equivalents and investments | 34,380 | 31,287 |
Fixed assets, net of accumulated depreciation of $94,531 and $84,865 at September 30, 2017 and December 31, 2016, respectively | 68,188 | 59,954 |
Other assets | 73,962 | 57,534 |
Goodwill | 340,596 | 341,754 |
Intangible assets, net of accumulated amortization of $85,990 and $72,057 at September 30, 2017 and December 31, 2016, respectively | 231,791 | 245,724 |
Total assets | 1,191,390 | 1,186,881 |
Current liabilities: | ||
Accounts payable and accrued expenses | 117,934 | 137,512 |
Accrued compensation and benefits | 111,984 | 107,993 |
Current portion of notes payable, less unamortized fees | 0 | 3,750 |
Deferred revenue | 9,609 | 8,924 |
Other current liabilities | 5,440 | 16,611 |
Total current liabilities | 244,967 | 274,790 |
Notes payable, less unamortized fees | 319,652 | 359,192 |
Deferred income taxes, net | 11,899 | 21,420 |
Other long-term liabilities | 82,673 | 82,096 |
Total liabilities | 659,191 | 737,498 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value; 10,000 shares authorized; none issued and outstanding at September 30, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $0.01 par value; 200,000 shares authorized; 48,402 issued and 47,772 outstanding, respectively, at September 30, 2017 and 48,055 issued and 47,612 outstanding, respectively, at December 31, 2016 | 484 | 481 |
Additional paid-in capital | 451,136 | 452,491 |
Treasury stock, at cost (630 and 443 shares at September 30, 2017 and December 31, 2016, respectively) | (20,358) | (13,261) |
Retained earnings | 101,062 | 9,671 |
Accumulated other comprehensive income (loss) | (125) | 1 |
Total stockholders’ equity | 532,199 | 449,383 |
Total liabilities and stockholders’ equity | $ 1,191,390 | $ 1,186,881 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 11,381 | $ 11,376 |
Accumulated depreciation | 94,531 | 84,865 |
Accumulated amortization | $ 85,990 | $ 72,057 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 48,402,000 | 48,055,000 |
Common stock, shares outstanding (in shares) | 47,772,000 | 47,612,000 |
Treasury stock (in shares) | 630,000 | 443,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Revenue | $ 494,406 | $ 472,636 | $ 1,479,378 | $ 1,414,367 |
Cost of revenue | 334,867 | 318,169 | 997,051 | 953,249 |
Gross profit | 159,539 | 154,467 | 482,327 | 461,118 |
Operating expenses: | ||||
Selling, general and administrative | 100,579 | 99,995 | 299,325 | 297,359 |
Depreciation and amortization | 8,132 | 7,789 | 23,759 | 21,888 |
Total operating expenses | 108,711 | 107,784 | 323,084 | 319,247 |
Income from operations | 50,828 | 46,683 | 159,243 | 141,871 |
Interest expense, net, and other | 4,837 | 3,016 | 14,895 | 9,065 |
Income before income taxes | 45,991 | 43,667 | 144,348 | 132,806 |
Income tax expense | 17,863 | 16,371 | 52,957 | 53,319 |
Net income | 28,128 | 27,296 | 91,391 | 79,487 |
Other comprehensive income (loss): | ||||
Foreign currency translation and other | (73) | 40 | (111) | 165 |
Cash flow hedge, net of income taxes | 0 | 231 | (15) | (343) |
Other comprehensive income (loss) | (73) | 271 | (126) | (178) |
Comprehensive income | $ 28,055 | $ 27,567 | $ 91,265 | $ 79,309 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 0.59 | $ 0.57 | $ 1.91 | $ 1.66 |
Diluted (in dollars per share) | $ 0.57 | $ 0.55 | $ 1.85 | $ 1.61 |
Weighted average common shares outstanding: | ||||
Basic (shares) | 47,912 | 48,049 | 47,870 | 47,993 |
Diluted (shares) | 49,445 | 49,410 | 49,480 | 49,287 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 91,391 | $ 79,487 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 23,759 | 21,888 |
Non-cash interest expense and other | 1,718 | 1,180 |
Change in fair value of contingent consideration | 66 | (88) |
Increase in allowances for doubtful accounts and sales credits | 9,012 | 6,746 |
Provision for deferred income taxes | (9,512) | (3,209) |
Share-based compensation | 7,720 | 8,795 |
Excess tax benefits from share-based compensation | 0 | (2,764) |
Loss on disposal or sale of fixed assets | 130 | 45 |
Amortization of discount on investments | (112) | 0 |
Changes in assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable | (10,631) | (42,594) |
Accounts receivable, subcontractor | 12,033 | 8,681 |
Income taxes receivable | (1,854) | 6,160 |
Prepaid expenses | (1,643) | (195) |
Other current assets | 10,155 | (10,109) |
Other assets | (5,204) | (4,295) |
Accounts payable and accrued expenses | (20,442) | (791) |
Accrued compensation and benefits | 3,991 | 10,761 |
Other liabilities | (5,112) | 5,736 |
Deferred revenue | 678 | 256 |
Restricted cash, cash equivalents and investments balance | (9,761) | (870) |
Net cash provided by operating activities | 96,382 | 84,820 |
Cash flows from investing activities: | ||
Purchase and development of fixed assets | (17,168) | (17,705) |
Purchase of investments | (11,021) | 0 |
Proceeds from maturity of investments | 17,200 | 0 |
Change in restricted cash, cash equivalents and investments balance | 601 | 0 |
Payments to fund deferred compensation plan | (10,056) | (5,665) |
Equity investment | (2,000) | 0 |
Cash paid for acquisitions, net of cash received | 0 | (216,553) |
Cash paid for working capital adjustments and holdback liability for prior year acquisitions | (1,000) | (1,348) |
Net cash used in investing activities | (23,444) | (241,271) |
Cash flows from financing activities: | ||
Capital lease repayments | 0 | (6) |
Payments on term loans | (44,063) | (8,438) |
Proceeds from term loans | 0 | 75,000 |
Payments on revolving credit facility | 0 | (24,000) |
Proceeds from revolving credit facility | 0 | 124,000 |
Repurchase of common stock | (7,097) | 0 |
Payment of financing costs | 0 | (448) |
Earn-out payments for prior acquisitions | (3,677) | (900) |
Proceeds from termination of derivative contract | 85 | 0 |
Cash paid for shares withheld for taxes | (9,072) | (5,554) |
Excess tax benefits from equity awards vested and exercised | 0 | 2,764 |
Net cash provided by (used in) financing activities | (63,824) | 162,418 |
Effect of exchange rate changes on cash | (111) | 165 |
Net increase in cash and cash equivalents | 9,003 | 6,132 |
Cash and cash equivalents at beginning of period | 10,622 | 9,576 |
Cash and cash equivalents at end of period | 19,625 | 15,708 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest (net of $113 and $158 capitalized for the nine months ended September 30, 2017 and 2016, respectively) | 9,395 | 7,106 |
Cash paid for income taxes | 65,998 | 52,684 |
Acquisitions: | ||
Fair value of tangible assets acquired in acquisitions, net of cash received | 0 | 18,789 |
Goodwill | 0 | 136,521 |
Intangible assets | 0 | 89,064 |
Liabilities assumed | 0 | (21,921) |
Holdback provision | 0 | (1,830) |
Earn-out liabilities | 0 | (4,070) |
Supplemental disclosures of non-cash investing and financing activities: | ||
Purchase of fixed assets recorded in accounts payable and accrued expenses | $ 3,156 | $ 1,370 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Cash Flows [Abstract] | ||
Interest capitalized | $ 113 | $ 158 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The condensed consolidated balance sheets and related condensed consolidated statements of comprehensive income and cash flows contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”), which are unaudited, include the accounts of AMN Healthcare Services, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all entries necessary for a fair presentation of such unaudited condensed consolidated financial statements have been included. These entries consisted of all normal recurring items. The results of operations for the interim period are not necessarily indicative of the results to be expected for any other interim period or for the entire fiscal year or for any future period. The unaudited condensed consolidated financial statements do not include all information and notes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States. Please refer to the Company’s audited consolidated financial statements and the related notes for the fiscal year ended December 31, 2016 , contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 , filed with the Securities and Exchange Commission on February 17, 2017 (“ 2016 Annual Report”). The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates, including those related to asset impairments, accruals for self-insurance, compensation and related benefits, accounts receivable, contingencies and litigation, earn-out liabilities, and income taxes. Actual results could differ from those estimates under different assumptions or conditions. Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Stock Compensation - Improvements to Employee Share-Based Payment Accounting.” The guidance attempts to simplify the accounting for share-based payment transactions in several areas, including the following: income tax consequences, classification of awards as either equity or liabilities, forfeitures, expected term, and statement of cash flows classification. The Company adopted this pronouncement prospectively beginning January 1, 2017. Accordingly, the prior period has not been adjusted and the primary effects of the adoption for the current period are as follows: • The Company recorded $56 and $5,381 of tax benefits within income tax expense for the three and nine months ended September 30, 2017 , respectively, related to the excess tax benefit on share-based compensation. Prior to adoption, this amount would have been recorded as additional paid-in capital; • The Company continued to estimate the number of awards expected to be forfeited in accordance with its existing accounting policy, which is to estimate forfeitures when recording share-based compensation expense; • The Company excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of its diluted earnings per share for the three and nine months ended September 30, 2017 . The effect of this change on its diluted earnings per share was not significant; and • For the nine months ended September 30, 2017 , cash flows related to excess tax benefits were classified as an operating activity. There were no other material impacts to the Company's consolidated financial statements as a result of adopting this updated standard. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS As set forth below, the Company completed three acquisitions during 2016. The Company accounted for each acquisition using the acquisition method of accounting. Accordingly, it recorded the tangible and intangible assets acquired and liabilities assumed at their estimated fair values as of the applicable date of acquisition. For each acquisition, the Company did not incur any material acquisition-related costs. Peak Provider Solutions Acquisition On June 3, 2016, the Company completed its acquisition of Peak Provider Solutions (“Peak”), which provides remote medical coding and consulting solutions to hospitals and physician medical groups nationwide. The addition of Peak has expanded the Company’s workforce solutions and enables the Company to offer services in coding diagnosis and procedure codes, which is critical to clinical quality reporting and the financial health of healthcare organizations. The initial purchase price of $52,125 included (1) $51,645 cash consideration paid upon acquisition, funded through cash-on-hand, net of cash received, and borrowings under the Company’s revolving credit facility, and (2) a contingent earn-out payment of up to $3,000 with an estimated fair value of $480 as of the acquisition date. The contingent earn-out payment was based on the operating results of Peak for the year ending December 31, 2016, which resulted in no earn-out payment. As the acquisition was not considered significant, pro forma information has not been provided. The results of Peak have been included in the Company’s other workforce solutions segment since the date of acquisition. During the third quarter of 2016, an additional $275 of cash consideration was paid to the selling shareholders for the final working capital settlement. The allocation of the $52,400 purchase price, which included the additional cash consideration paid for the final working capital settlement, consisted of (1) $5,658 of fair value of tangible assets acquired, (2) $9,346 of liabilities assumed, (3) $19,220 of identified intangible assets, and (4) $36,868 of goodwill, none of which is deductible for tax purposes. The fair value of intangible assets primarily includes $7,600 of trademarks and $11,500 of customer relationships with a weighted average useful life of approximately thirteen years. HealthSource Global Staffing Acquisition On January 11, 2016, the Company completed its acquisition of HealthSource Global Staffing (“HSG”), which provides labor disruption and rapid response staffing. The acquisition helps the Company expand its service lines and provide clients with rapid response staffing services. The initial purchase price of $8,511 included (1) $2,799 cash consideration paid upon acquisition, funded through cash-on-hand, net of cash received, and settlement of the pre-existing relationship between AMN and HSG, (2) $2,122 cash holdback for potential indemnification claims, and (3) a tiered contingent earn-out payment of up to $4,000 with an estimated fair value of $3,590 as of the acquisition date. The contingent earn-out payment is comprised of (A) up to $2,000 based on the operating results of HSG for the year ending December 31, 2016, of which, $1,930 was paid in March 2017, and (B) up to $2,000 based on the operating results of HSG for the year ending December 31, 2017. As the acquisition was not considered significant, pro forma information has not been provided. The results of HSG have been included in the Company’s nurse and allied solutions segment since the date of acquisition. During the third quarter of 2016, the final working capital settlement resulted in $292 due from the selling shareholders to the Company, which was settled through a reduction to a cash holdback. The allocation of the $8,219 purchase price, which was reduced by the final working capital settlement, consisted of (1) $1,025 of fair value of tangible assets acquired, (2) $3,698 of liabilities assumed, (3) $3,944 of identified intangible assets, and (4) $6,948 of goodwill, none of which is deductible for tax purposes. The intangible assets include the fair value of trademarks, customer relationships, staffing databases, and covenants not to compete with a weighted average useful life of approximately eight years. B.E. Smith Acquisition On January 4, 2016, the Company completed its acquisition of B.E. Smith (“BES”), a full-service healthcare interim leadership placement and executive search firm, for $162,232 in cash, net of cash received, and settlement of the pre-existing relationship between AMN and BES. BES places interim leaders and executives across all healthcare settings, including acute care hospitals, academic medical and children’s hospitals, physician practices, and post-acute care providers. The acquisition provides the Company additional access to healthcare executives and enhances its integrated services to hospitals, health systems, and other healthcare facilities across the nation. To help finance the acquisition, the Company entered into the First Amendment to the Credit Agreement (the “First Amendment”), which provided $125,000 of additional available borrowings to the Company. The First Amendment was more fully described in “Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Notes Payable and Credit Agreement” of our 2016 Annual Report. The results of BES have been included in the Company’s other workforce solutions segment since the date of acquisition. During the second quarter of 2016, $524 was returned to the Company for the final working capital settlement. The allocation of the $161,708 purchase price, which was reduced by the final working capital settlement, consisted of (1) $11,953 of fair value of tangible assets acquired, (2) $7,272 of liabilities assumed, (3) $65,900 of identified intangible assets, and (4) $91,127 of goodwill, most of which is deductible for tax purposes. The intangible assets acquired have a weighted average useful life of approximately fifteen years. The following table summarizes the fair value and useful life of each intangible asset acquired: Fair Value Useful Life (in years) Identifiable intangible assets Tradenames and Trademarks $ 26,300 20 Customer Relationships 25,700 12 Staffing Database 13,000 10 Non-Compete Agreements 900 5 $ 65,900 |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2017 | |
Revenue Recognition [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Revenue consists of fees earned from the temporary and permanent placement of healthcare professionals and executives as well as from the Company’s SaaS-based technology, including its vendor management systems and its scheduling software. Revenue from temporary staffing services is recognized as the services are rendered by the healthcare professional or executive. Under the Company’s managed services program arrangements, the Company manages all or a part of a customer’s supplemental workforce needs utilizing its own pool of healthcare professionals along with those of third-party subcontractors. When the Company uses subcontractors, revenue is recorded net of the related subcontractor’s expense. Payables to subcontractors of $38,167 and $51,973 were included in accounts payable and accrued expenses in the unaudited condensed consolidated balance sheet as of September 30, 2017 and the consolidated balance sheet as of December 31, 2016 , respectively. Revenue from recruitment and permanent placement services is recognized as the services are provided and upon successful placements. The Company’s SaaS-based revenue is recognized ratably over the applicable arrangement’s service period. Fees billed in advance of being earned are recorded as deferred revenue. |
Net Income Per Common Share
Net Income Per Common Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
NET INCOME PER COMMON SHARE | NET INCOME PER COMMON SHARE Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period. The following table sets forth the computation of basic and diluted net income per common share for the three months and nine months ended September 30, 2017 and 2016 , respectively: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net income $ 28,128 $ 27,296 $ 91,391 $ 79,487 Net income per common share - basic $ 0.59 $ 0.57 $ 1.91 $ 1.66 Net income per common share - diluted $ 0.57 $ 0.55 $ 1.85 $ 1.61 Weighted average common shares outstanding - basic 47,912 48,049 47,870 47,993 Plus dilutive effect of potential common shares 1,533 1,361 1,610 1,294 Weighted average common shares outstanding - diluted 49,445 49,410 49,480 49,287 Share-based awards to purchase 10 and 14 shares of common stock were not included in the above calculation of diluted net income per common share for the three and nine months ended September 30, 2017 , respectively, because the effect of these instruments was anti-dilutive. Share-based awards to purchase 11 and 18 shares of common stock were not included in the above calculation of diluted net income per common share for the three and nine months ended September 30, 2016 because the effect of these instruments was anti-dilutive. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company has three reportable segments: nurse and allied solutions, locum tenens solutions, and other workforce solutions. The Company’s chief operating decision maker relies on internal management reporting processes that provide revenue and operating income by reportable segment for making financial decisions and allocating resources. Segment operating income represents income before income taxes plus depreciation, amortization of intangible assets, share-based compensation, interest expense, net, and other, and unallocated corporate overhead. The Company’s management does not evaluate, manage or measure performance of segments using asset information; accordingly, asset information by segment is not prepared or disclosed. The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated results and was derived from each segment’s internal financial information as used for corporate management purposes: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Revenue Nurse and allied solutions $ 302,933 $ 286,810 $ 917,183 $ 877,197 Locum tenens solutions 111,415 108,553 322,473 320,420 Other workforce solutions 80,058 77,273 239,722 216,750 $ 494,406 $ 472,636 $ 1,479,378 $ 1,414,367 Segment operating income Nurse and allied solutions $ 40,807 $ 37,396 $ 134,638 $ 118,517 Locum tenens solutions 14,438 14,026 39,028 43,634 Other workforce solutions 19,890 20,867 61,788 56,311 75,135 72,289 235,454 218,462 Unallocated corporate overhead 13,698 15,113 44,732 45,908 Depreciation and amortization 8,132 7,789 23,759 21,888 Share-based compensation 2,477 2,704 7,720 8,795 Interest expense, net, and other 4,837 3,016 14,895 9,065 Income before income taxes $ 45,991 $ 43,667 $ 144,348 $ 132,806 The following table summarizes the activity related to the carrying value of goodwill by reportable segment: Nurse and Allied Solutions Locum Tenens Solutions Other Workforce Solutions Total Balance, January 1, 2017 $ 104,306 $ 19,743 $ 217,705 $ 341,754 Goodwill adjustment for HSG acquisition (1,199 ) — — (1,199 ) Goodwill adjustment for Peak acquisition — — 41 41 Balance, September 30, 2017 $ 103,107 $ 19,743 $ 217,746 $ 340,596 Accumulated impairment loss as of December 31, 2016 and September 30, 2017 $ 154,444 $ 53,940 $ 6,555 $ 214,939 |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENT The Company’s valuation techniques and inputs used to measure fair value and the definition of the three levels (Level 1, Level 2, and Level 3) of the fair value hierarchy are disclosed in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 4—Fair Value Measurement” of the 2016 Annual Report. The Company has not changed the valuation techniques or inputs it uses for its fair value measurement during the nine months ended September 30, 2017 . Assets and Liabilities Measured on a Recurring Basis The Company’s restricted cash equivalents that serve as collateral for the Company’s outstanding letters of credit typically consist of money market funds that are measured at fair value based on quoted prices, which are Level 1 inputs. The Company’s restricted cash equivalents and investments that serve as collateral for the Company’s captive insurance company primarily consist of commercial paper that is measured at observable market prices for identical securities that are traded in less active markets, which are Level 2 inputs. Of the $28,538 commercial paper issued and outstanding as of September 30, 2017 , $5,076 had original maturities greater than three months, which were considered available-for-sale securities. As of December 31, 2016 , the Company had $25,610 commercial paper issued and outstanding, of which $11,152 had original maturities greater than three months and were considered available-for-sale securities. The Company’s interest rate swap was measured at fair value using a discounted cash flow analysis that includes the contractual terms, including the period to maturity, and Level 2 observable market-based inputs, including interest rate curves. The fair value of the swap was determined by netting the discounted future fixed cash receipts payments and the discounted expected variable cash receipts. The variable cash receipts were based on an expectation of future interest rates (forward curves) derived from observable market interest rate yield curves. The valuation also considered credit risk adjustments that were necessary to reflect the probability of default by the counterparty or the Company, which were considered Level 3 inputs. On May 3, 2017, the Company terminated the remaining interest rate swap. The Company’s contingent consideration liabilities are measured at fair value using probability-weighted discounted cash flow analysis for the acquired companies, which are Level 3 inputs. The following tables present information about the above-referenced assets and liabilities and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value: Fair Value Measurements as of September 30, 2017 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Money market funds $ 4,026 $ 4,026 $ — $ — Commercial paper 28,538 — 28,538 — Acquisition contingent consideration earn-out liabilities (1,952 ) — — (1,952 ) Fair Value Measurements as of December 31, 2016 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Money market funds $ 4,627 $ 4,627 $ — $ — Commercial paper 25,610 — 25,610 — Interest rate swap asset 24 — 24 — Acquisition contingent consideration earn-out liabilities (6,816 ) — — (6,816 ) Level 3 Information The following table sets forth a reconciliation of changes in the fair value of contingent consideration liabilities classified as Level 3 in the fair value hierarchy: Three Months Ended September 30, 2017 2016 Balance as of July 1, $ (1,932 ) $ (7,054 ) Change in fair value of contingent consideration earn-out liability from Peak acquisition — 480 Change in fair value of contingent consideration earn-out liability from TFS acquisition — (94 ) Change in fair value of contingent consideration earn-out liability from HSG acquisition (20 ) (84 ) Balance as of September 30, $ (1,952 ) $ (6,752 ) Nine Months Ended September 30, 2017 2016 Balance as of January 1, $ (6,816 ) $ (3,770 ) Settlement of TFS earn-out for year ended December 31, 2015 — 1,000 Contingent consideration earn-out liability from HSG acquisition on January 11, 2016 — (3,590 ) Contingent consideration earn-out liability from Peak acquisition on June 3, 2016 — (480 ) Change in fair value of contingent consideration earn-out liability from Avantas acquisition — 660 Change in fair value of contingent consideration earn-out liability from TFS acquisition — (859 ) Change in fair value of contingent consideration earn-out liability from HSG acquisition (66 ) (193 ) Change in fair value of contingent consideration earn-out liability from Peak acquisition — 480 Settlement of TFS earn-out for year ended December 31, 2016 3,000 — Settlement of HSG earn-out for year ended December 31, 2016 1,930 — Balance as of September 30, $ (1,952 ) $ (6,752 ) Assets Measured on a Non-Recurring Basis The Company applies fair value techniques on a non-recurring basis associated with valuing potential impairment losses related to its goodwill, indefinite-lived intangible assets, long-lived assets, and equity investments. The Company evaluates goodwill and indefinite-lived intangible assets annually for impairment and whenever circumstances occur indicating that goodwill might be impaired. The Company determines the fair value of its reporting units based on a combination of inputs, including the market capitalization of the Company, as well as Level 3 inputs such as discounted cash flows, which are not observable from the market, directly or indirectly. The Company determines the fair value of its indefinite-lived intangible assets using the income approach (relief-from-royalty method) based on Level 3 inputs. There were no triggering events identified and no indication of impairment of the Company’s goodwill, indefinite-lived intangible assets, long-lived assets, or equity investments during the nine months ended September 30, 2017 and 2016 . Fair Value of Financial Instruments The carrying amount of the Company’s senior notes approximate their fair values. The senior notes were issued in October 2016 and have a fixed rate of 5.125% . There have been no changes in available rates for similar debt since the date of issuance. See additional information in “Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Notes Payable and Credit Agreement” of our 2016 Annual Report. The fair value of the Company’s long-term self-insurance accruals cannot be estimated as the Company cannot reasonably determine the timing of future payments. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. With few exceptions, as of September 30, 2017 , the Company is no longer subject to state, local or foreign examinations by tax authorities for tax years before 2006, and the Company is no longer subject to U.S. federal income or payroll tax examinations for tax years before 2011. The Company’s tax years 2007, 2008, 2009 and 2010 had been under audit by the Internal Revenue Service (“IRS”) for several years and in 2014, the IRS issued the Company its Revenue Agent Report (“RAR”) and an Employment Tax Examination Report (“ETER”). The RAR proposed adjustments to the Company’s taxable income for 2007-2010 and net operating loss carryforwards for 2005 and 2006, resulting from the proposed disallowance of certain per diems paid to the Company’s healthcare professionals, and the ETER proposed assessments for additional payroll tax liabilities and penalties for tax years 2009 and 2010 related to the Company’s treatment of certain non-taxable per diem allowances and travel benefits. The positions in the RAR and ETER were mutually exclusive, and contained multiple tax positions, some of which were contrary to each other. The Company filed a Protest Letter for both the RAR and ETER positions in 2014 and the Company received a final determination from the IRS in July 2015 on both the RAR adjustments and ETER assessments, effectively settling these audits with the IRS for $7,200 (including interest) during the third quarter of 2015. As a result of the settlement, the Company recorded federal income tax benefits of approximately $12,200 during the quarter ended September 30, 2015, state income tax benefits (net of federal tax impact) of $568 for the year ended December 31, 2016, and expects to record state income tax benefits (net of federal tax impact) of approximately $1,200 by fiscal year 2019, when the various state statutes are projected to lapse. The IRS conducted and completed a separate audit of the Company’s 2011 and 2012 tax years that focused on income and employment tax issues similar to those raised in the 2007 through 2010 examination. The IRS completed its audit during the quarter ended March 31, 2015, and issued its RAR and ETER to the Company with proposed adjustments to the Company’s taxable income for 2011 and 2012 and net operating loss carryforwards from 2010 and assessments for additional payroll tax liabilities and penalties for 2011 and 2012 related to the Company’s treatment of certain non-taxable per diem allowances and travel benefits. The positions in the RAR and ETER for the 2011 and 2012 years are mutually exclusive and contain multiple tax positions, some of which are contrary to each other. The Company filed a Protest Letter for both the RAR and ETER in April 2015 and the matter is currently at IRS Appeals. The Company has been meeting and working with the IRS Appeals office and anticipates a resolution within the next twelve months. The IRS began an audit of the Company’s 2013 tax year during the quarter ended June 30, 2015. The Company believes its reserve for unrecognized tax benefits and contingent tax issues is adequate with respect to all open years. Notwithstanding the foregoing, the Company could adjust its provision for income taxes and contingent tax liability based on future developments. |
Commitments and Contingencies_
Commitments and Contingencies: Legal | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES: LEGAL | COMMITMENTS AND CONTINGENCIES: LEGAL From time to time, the Company is involved in various lawsuits, claims, investigations, and proceedings that arise in the ordinary course of business. These matters typically relate to professional liability, tax, payroll, contract, competitor disputes and employee-related matters and include individual and collective lawsuits, as well as inquiries and investigations by governmental agencies regarding the Company’s employment practices. Additionally, some of the Company’s clients may also become subject to claims, governmental inquiries and investigations, and legal actions relating to services provided by the Company’s healthcare professionals. Depending upon the particular facts and circumstances, the Company may also be subject to indemnification obligations under its contracts with such clients relating to these matters. The Company records a liability when management believes an adverse outcome from a loss contingency is both probable and the amount, or a range, can be reasonably estimated. Significant judgment is required to determine both probability of loss and the estimated amount. The Company reviews its loss contingencies at least quarterly and adjusts its accruals and/or disclosures to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, or other new information, as deemed necessary. The most significant matters for which the Company has established loss contingencies are class actions related to wage and hour claims. Management currently believes the probable loss related to these wage and hour claims is not material and the amount accrued by the Company for such claims is not material as of September 30, 2017 . However, losses ultimately incurred for such claims could materially differ from amounts already accrued by the Company. With regards to outstanding loss contingencies as of September 30, 2017 , which are included in accounts payable and accrued expenses in the consolidated balance sheet, the Company believes that such matters will not, either individually or in the aggregate, have a material adverse effect on its business, consolidated financial position, results of operations, or cash flows. |
Balance Sheet Details
Balance Sheet Details | 9 Months Ended |
Sep. 30, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
BALANCE SHEET DETAILS | BALANCE SHEET DETAILS The consolidated balance sheets detail is as follows as of September 30, 2017 and December 31, 2016 : September 30, 2017 December 31, 2016 Other current assets: Restricted cash and cash equivalents $ 16,215 $ 20,271 Other 10,005 14,336 Other current assets $ 26,220 $ 34,607 Fixed assets: Furniture and equipment $ 28,202 $ 25,582 Software 126,492 112,405 Leasehold improvements 8,025 6,832 162,719 144,819 Accumulated depreciation (94,531 ) (84,865 ) Fixed assets, net $ 68,188 $ 59,954 Other assets: Life insurance cash surrender value $ 45,835 $ 32,190 Other 28,127 25,344 Other assets $ 73,962 $ 57,534 Accounts payable and accrued expenses: Trade accounts payable $ 24,166 $ 33,392 Subcontractor payable 38,167 51,973 Accrued expenses 45,690 37,251 Professional liability reserve 7,048 10,254 Other 2,863 4,642 Accounts payable and accrued expenses $ 117,934 $ 137,512 Accrued compensation and benefits: Accrued payroll $ 31,840 $ 30,917 Accrued bonuses 16,755 26,992 Accrued travel expense 3,488 2,972 Accrued health insurance reserve 3,708 3,189 Accrued workers compensation reserve 8,301 8,406 Deferred compensation 45,771 32,690 Other 2,121 2,827 Accrued compensation and benefits $ 111,984 $ 107,993 Other current liabilities: Acquisition related liabilities $ 2,981 $ 6,921 Other 2,459 9,690 Other current liabilities $ 5,440 $ 16,611 Other long-term liabilities: Workers’ compensation reserve $ 18,475 $ 18,708 Professional liability reserve 40,033 37,338 Deferred rent 14,602 13,274 Unrecognized tax benefits 7,240 8,464 Other 2,323 4,312 Other long-term liabilities $ 82,673 $ 82,096 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates, including those related to asset impairments, accruals for self-insurance, compensation and related benefits, accounts receivable, contingencies and litigation, earn-out liabilities, and income taxes. Actual results could differ from those estimates under different assumptions or conditions. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Stock Compensation - Improvements to Employee Share-Based Payment Accounting.” The guidance attempts to simplify the accounting for share-based payment transactions in several areas, including the following: income tax consequences, classification of awards as either equity or liabilities, forfeitures, expected term, and statement of cash flows classification. The Company adopted this pronouncement prospectively beginning January 1, 2017. Accordingly, the prior period has not been adjusted and the primary effects of the adoption for the current period are as follows: • The Company recorded $56 and $5,381 of tax benefits within income tax expense for the three and nine months ended September 30, 2017 , respectively, related to the excess tax benefit on share-based compensation. Prior to adoption, this amount would have been recorded as additional paid-in capital; • The Company continued to estimate the number of awards expected to be forfeited in accordance with its existing accounting policy, which is to estimate forfeitures when recording share-based compensation expense; • The Company excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of its diluted earnings per share for the three and nine months ended September 30, 2017 . The effect of this change on its diluted earnings per share was not significant; and • For the nine months ended September 30, 2017 , cash flows related to excess tax benefits were classified as an operating activity. There were no other material impacts to the Company's consolidated financial statements as a result of adopting this updated standard. |
Revenue Recognition | Revenue consists of fees earned from the temporary and permanent placement of healthcare professionals and executives as well as from the Company’s SaaS-based technology, including its vendor management systems and its scheduling software. Revenue from temporary staffing services is recognized as the services are rendered by the healthcare professional or executive. Under the Company’s managed services program arrangements, the Company manages all or a part of a customer’s supplemental workforce needs utilizing its own pool of healthcare professionals along with those of third-party subcontractors. When the Company uses subcontractors, revenue is recorded net of the related subcontractor’s expense. |
Net Income per Common Share | Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period. |
Segment Information | The Company’s chief operating decision maker relies on internal management reporting processes that provide revenue and operating income by reportable segment for making financial decisions and allocating resources. Segment operating income represents income before income taxes plus depreciation, amortization of intangible assets, share-based compensation, interest expense, net, and other, and unallocated corporate overhead. The Company’s management does not evaluate, manage or measure performance of segments using asset information; accordingly, asset information by segment is not prepared or disclosed. |
Fair Value of Financial Instruments | Assets Measured on a Non-Recurring Basis The Company applies fair value techniques on a non-recurring basis associated with valuing potential impairment losses related to its goodwill, indefinite-lived intangible assets, long-lived assets, and equity investments. The Company evaluates goodwill and indefinite-lived intangible assets annually for impairment and whenever circumstances occur indicating that goodwill might be impaired. The Company determines the fair value of its reporting units based on a combination of inputs, including the market capitalization of the Company, as well as Level 3 inputs such as discounted cash flows, which are not observable from the market, directly or indirectly. The Company determines the fair value of its indefinite-lived intangible assets using the income approach (relief-from-royalty method) based on Level 3 inputs. Fair Value of Financial Instruments The carrying amount of the Company’s senior notes approximate their fair values. The senior notes were issued in October 2016 and have a fixed rate of 5.125% . There have been no changes in available rates for similar debt since the date of issuance. See additional information in “Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Notes Payable and Credit Agreement” of our 2016 Annual Report. The fair value of the Company’s long-term self-insurance accruals cannot be estimated as the Company cannot reasonably determine the timing of future payments. Assets and Liabilities Measured on a Recurring Basis The Company’s restricted cash equivalents that serve as collateral for the Company’s outstanding letters of credit typically consist of money market funds that are measured at fair value based on quoted prices, which are Level 1 inputs. The Company’s restricted cash equivalents and investments that serve as collateral for the Company’s captive insurance company primarily consist of commercial paper that is measured at observable market prices for identical securities that are traded in less active markets, which are Level 2 inputs. Of the $28,538 commercial paper issued and outstanding as of September 30, 2017 , $5,076 had original maturities greater than three months, which were considered available-for-sale securities. As of December 31, 2016 , the Company had $25,610 commercial paper issued and outstanding, of which $11,152 had original maturities greater than three months and were considered available-for-sale securities. The Company’s interest rate swap was measured at fair value using a discounted cash flow analysis that includes the contractual terms, including the period to maturity, and Level 2 observable market-based inputs, including interest rate curves. The fair value of the swap was determined by netting the discounted future fixed cash receipts payments and the discounted expected variable cash receipts. The variable cash receipts were based on an expectation of future interest rates (forward curves) derived from observable market interest rate yield curves. The valuation also considered credit risk adjustments that were necessary to reflect the probability of default by the counterparty or the Company, which were considered Level 3 inputs |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Summary of Fair Value and Useful Life of Each Intangible Asset Acquired | The following table summarizes the fair value and useful life of each intangible asset acquired: Fair Value Useful Life (in years) Identifiable intangible assets Tradenames and Trademarks $ 26,300 20 Customer Relationships 25,700 12 Staffing Database 13,000 10 Non-Compete Agreements 900 5 $ 65,900 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted net income per common share | The following table sets forth the computation of basic and diluted net income per common share for the three months and nine months ended September 30, 2017 and 2016 , respectively: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net income $ 28,128 $ 27,296 $ 91,391 $ 79,487 Net income per common share - basic $ 0.59 $ 0.57 $ 1.91 $ 1.66 Net income per common share - diluted $ 0.57 $ 0.55 $ 1.85 $ 1.61 Weighted average common shares outstanding - basic 47,912 48,049 47,870 47,993 Plus dilutive effect of potential common shares 1,533 1,361 1,610 1,294 Weighted average common shares outstanding - diluted 49,445 49,410 49,480 49,287 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of reconciliation of revenue and segment operating income by reportable segment to consolidated results | The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated results and was derived from each segment’s internal financial information as used for corporate management purposes: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Revenue Nurse and allied solutions $ 302,933 $ 286,810 $ 917,183 $ 877,197 Locum tenens solutions 111,415 108,553 322,473 320,420 Other workforce solutions 80,058 77,273 239,722 216,750 $ 494,406 $ 472,636 $ 1,479,378 $ 1,414,367 Segment operating income Nurse and allied solutions $ 40,807 $ 37,396 $ 134,638 $ 118,517 Locum tenens solutions 14,438 14,026 39,028 43,634 Other workforce solutions 19,890 20,867 61,788 56,311 75,135 72,289 235,454 218,462 Unallocated corporate overhead 13,698 15,113 44,732 45,908 Depreciation and amortization 8,132 7,789 23,759 21,888 Share-based compensation 2,477 2,704 7,720 8,795 Interest expense, net, and other 4,837 3,016 14,895 9,065 Income before income taxes $ 45,991 $ 43,667 $ 144,348 $ 132,806 |
Schedule of goodwill | The following table summarizes the activity related to the carrying value of goodwill by reportable segment: Nurse and Allied Solutions Locum Tenens Solutions Other Workforce Solutions Total Balance, January 1, 2017 $ 104,306 $ 19,743 $ 217,705 $ 341,754 Goodwill adjustment for HSG acquisition (1,199 ) — — (1,199 ) Goodwill adjustment for Peak acquisition — — 41 41 Balance, September 30, 2017 $ 103,107 $ 19,743 $ 217,746 $ 340,596 Accumulated impairment loss as of December 31, 2016 and September 30, 2017 $ 154,444 $ 53,940 $ 6,555 $ 214,939 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities measured at fair value on recurring basis | The following tables present information about the above-referenced assets and liabilities and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value: Fair Value Measurements as of September 30, 2017 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Money market funds $ 4,026 $ 4,026 $ — $ — Commercial paper 28,538 — 28,538 — Acquisition contingent consideration earn-out liabilities (1,952 ) — — (1,952 ) Fair Value Measurements as of December 31, 2016 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Money market funds $ 4,627 $ 4,627 $ — $ — Commercial paper 25,610 — 25,610 — Interest rate swap asset 24 — 24 — Acquisition contingent consideration earn-out liabilities (6,816 ) — — (6,816 ) |
Reconciliations of changes in the fair value of contingent consideration liabilities | The following table sets forth a reconciliation of changes in the fair value of contingent consideration liabilities classified as Level 3 in the fair value hierarchy: Three Months Ended September 30, 2017 2016 Balance as of July 1, $ (1,932 ) $ (7,054 ) Change in fair value of contingent consideration earn-out liability from Peak acquisition — 480 Change in fair value of contingent consideration earn-out liability from TFS acquisition — (94 ) Change in fair value of contingent consideration earn-out liability from HSG acquisition (20 ) (84 ) Balance as of September 30, $ (1,952 ) $ (6,752 ) Nine Months Ended September 30, 2017 2016 Balance as of January 1, $ (6,816 ) $ (3,770 ) Settlement of TFS earn-out for year ended December 31, 2015 — 1,000 Contingent consideration earn-out liability from HSG acquisition on January 11, 2016 — (3,590 ) Contingent consideration earn-out liability from Peak acquisition on June 3, 2016 — (480 ) Change in fair value of contingent consideration earn-out liability from Avantas acquisition — 660 Change in fair value of contingent consideration earn-out liability from TFS acquisition — (859 ) Change in fair value of contingent consideration earn-out liability from HSG acquisition (66 ) (193 ) Change in fair value of contingent consideration earn-out liability from Peak acquisition — 480 Settlement of TFS earn-out for year ended December 31, 2016 3,000 — Settlement of HSG earn-out for year ended December 31, 2016 1,930 — Balance as of September 30, $ (1,952 ) $ (6,752 ) |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Supplemental Balance Sheet Disclosures | The consolidated balance sheets detail is as follows as of September 30, 2017 and December 31, 2016 : September 30, 2017 December 31, 2016 Other current assets: Restricted cash and cash equivalents $ 16,215 $ 20,271 Other 10,005 14,336 Other current assets $ 26,220 $ 34,607 Fixed assets: Furniture and equipment $ 28,202 $ 25,582 Software 126,492 112,405 Leasehold improvements 8,025 6,832 162,719 144,819 Accumulated depreciation (94,531 ) (84,865 ) Fixed assets, net $ 68,188 $ 59,954 Other assets: Life insurance cash surrender value $ 45,835 $ 32,190 Other 28,127 25,344 Other assets $ 73,962 $ 57,534 Accounts payable and accrued expenses: Trade accounts payable $ 24,166 $ 33,392 Subcontractor payable 38,167 51,973 Accrued expenses 45,690 37,251 Professional liability reserve 7,048 10,254 Other 2,863 4,642 Accounts payable and accrued expenses $ 117,934 $ 137,512 Accrued compensation and benefits: Accrued payroll $ 31,840 $ 30,917 Accrued bonuses 16,755 26,992 Accrued travel expense 3,488 2,972 Accrued health insurance reserve 3,708 3,189 Accrued workers compensation reserve 8,301 8,406 Deferred compensation 45,771 32,690 Other 2,121 2,827 Accrued compensation and benefits $ 111,984 $ 107,993 Other current liabilities: Acquisition related liabilities $ 2,981 $ 6,921 Other 2,459 9,690 Other current liabilities $ 5,440 $ 16,611 Other long-term liabilities: Workers’ compensation reserve $ 18,475 $ 18,708 Professional liability reserve 40,033 37,338 Deferred rent 14,602 13,274 Unrecognized tax benefits 7,240 8,464 Other 2,323 4,312 Other long-term liabilities $ 82,673 $ 82,096 |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Income tax benefit | $ 56 | $ 5,381 |
Business Combinations (Details)
Business Combinations (Details) | Jun. 03, 2016USD ($) | Jan. 11, 2016USD ($) | Jan. 04, 2016USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)aquisition |
Business Acquisition [Line Items] | |||||||||
Number of acquisitions | aquisition | 3 | ||||||||
Business Combination, Description | |||||||||
Additional cash consideration paid | $ 1,000,000 | $ 1,348,000 | |||||||
Earn-out payments for prior acquisitions | 3,677,000 | $ 900,000 | |||||||
Allocation of Purchase Price | |||||||||
Goodwill | 340,596,000 | $ 341,754,000 | |||||||
Nurse and Allied Solutions | |||||||||
Allocation of Purchase Price | |||||||||
Goodwill | 103,107,000 | 104,306,000 | |||||||
Other Workforce Solutions | |||||||||
Allocation of Purchase Price | |||||||||
Goodwill | $ 217,746,000 | $ 217,705,000 | |||||||
Peak | |||||||||
Business Combination, Description | |||||||||
Total purchase price of the acquisition | $ 52,400,000 | ||||||||
Cash consideration | 51,645,000 | ||||||||
Contingent earn-out based on future operating performance | 3,000,000 | ||||||||
Fair value of contingent earn-out | 480,000 | ||||||||
Additional cash consideration paid | $ 275,000 | ||||||||
Allocation of Purchase Price | |||||||||
Fair value of assets acquired | 5,658,000 | ||||||||
Liabilities assumed | 9,346,000 | ||||||||
Identified intangible assets | $ 19,220,000 | ||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||||||
Weighted average useful life of intangible assets | 13 years | ||||||||
Peak | Other Workforce Solutions | |||||||||
Allocation of Purchase Price | |||||||||
Goodwill | $ 36,868,000 | ||||||||
Peak | Trademarks | |||||||||
Allocation of Purchase Price | |||||||||
Identified intangible assets | 7,600,000 | ||||||||
Peak | Customer Relationships | |||||||||
Allocation of Purchase Price | |||||||||
Identified intangible assets | 11,500,000 | ||||||||
Peak | Scenario, Previously Reported | |||||||||
Business Combination, Description | |||||||||
Total purchase price of the acquisition | $ 52,125,000 | ||||||||
HSG | |||||||||
Business Combination, Description | |||||||||
Total purchase price of the acquisition | $ 8,219,000 | ||||||||
Cash consideration | 2,799,000 | ||||||||
Contingent earn-out based on future operating performance | 4,000,000 | ||||||||
Fair value of contingent earn-out | 3,590,000 | ||||||||
Indemnification assets, amount as of acquisition date | 2,122,000 | ||||||||
Working capital settlement received | $ 292,000 | ||||||||
Allocation of Purchase Price | |||||||||
Fair value of assets acquired | 1,025,000 | ||||||||
Liabilities assumed | 3,698,000 | ||||||||
Identified intangible assets | $ 3,944,000 | ||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||||||
Weighted average useful life of intangible assets | 8 years | ||||||||
HSG | Nurse and Allied Solutions | |||||||||
Allocation of Purchase Price | |||||||||
Goodwill | $ 6,948,000 | ||||||||
HSG | Scenario, Previously Reported | |||||||||
Business Combination, Description | |||||||||
Total purchase price of the acquisition | 8,511,000 | ||||||||
HSG | Earn-Out Payment, Based on Operating Results for 2016 | |||||||||
Business Combination, Description | |||||||||
Contingent earn-out based on future operating performance | 2,000,000 | ||||||||
Earn-out payments for prior acquisitions | $ 1,930,000 | ||||||||
HSG | Earn-Out Payment, Based on Operating Results for 2017 | |||||||||
Business Combination, Description | |||||||||
Contingent earn-out based on future operating performance | $ 2,000,000 | ||||||||
BES | |||||||||
Business Combination, Description | |||||||||
Cash consideration | $ 161,708,000 | ||||||||
Working capital settlement received | $ 524,000 | ||||||||
Allocation of Purchase Price | |||||||||
Fair value of assets acquired | 11,953,000 | ||||||||
Liabilities assumed | 7,272,000 | ||||||||
Identified intangible assets | $ 65,900,000 | ||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||||||
Weighted average useful life of intangible assets | 15 years | ||||||||
BES | Other Workforce Solutions | |||||||||
Allocation of Purchase Price | |||||||||
Goodwill | $ 91,127,000 | ||||||||
BES | Tradenames and Trademarks | |||||||||
Allocation of Purchase Price | |||||||||
Identified intangible assets | $ 26,300,000 | ||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||||||
Useful life | 20 years | ||||||||
BES | Customer Relationships | |||||||||
Allocation of Purchase Price | |||||||||
Identified intangible assets | $ 25,700,000 | ||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||||||
Useful life | 12 years | ||||||||
BES | Staffing Database | |||||||||
Allocation of Purchase Price | |||||||||
Identified intangible assets | $ 13,000,000 | ||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||||||
Useful life | 10 years | ||||||||
BES | Non-Compete Agreements | |||||||||
Allocation of Purchase Price | |||||||||
Identified intangible assets | $ 900,000 | ||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||||||
Useful life | 5 years | ||||||||
BES | Scenario, Previously Reported | |||||||||
Business Combination, Description | |||||||||
Cash consideration | $ 162,232,000 | ||||||||
BES | Line of Credit | |||||||||
Business Combination, Description | |||||||||
Maximum borrowing capacity | $ 125,000,000 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Revenue Recognition [Abstract] | ||
Payables to subcontractor | $ 38,167 | $ 51,973 |
Net Income Per Common Share (De
Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Computation of basic and diluted net income per common share | ||||
Net income | $ 28,128 | $ 27,296 | $ 91,391 | $ 79,487 |
Net income per common share - basic (in dollars per share) | $ 0.59 | $ 0.57 | $ 1.91 | $ 1.66 |
Net income per common share - diluted (in dollars per share) | $ 0.57 | $ 0.55 | $ 1.85 | $ 1.61 |
Weighted average common shares outstanding - basic (in shares) | 47,912 | 48,049 | 47,870 | 47,993 |
Plus dilutive effect of potential common shares (in shares) | 1,533 | 1,361 | 1,610 | 1,294 |
Weighted average common shares outstanding - diluted (in shares) | 49,445 | 49,410 | 49,480 | 49,287 |
Common stock excluded from calculation of EPS (in shares) | 10 | 11 | 14 | 18 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Number of reportable segments | segment | 3 | |||
Schedule of reconciliation of revenue and segment operating income by reportable segment to consolidated results | ||||
Revenue | $ 494,406 | $ 472,636 | $ 1,479,378 | $ 1,414,367 |
Segment operating income | 50,828 | 46,683 | 159,243 | 141,871 |
Depreciation and amortization | 8,132 | 7,789 | 23,759 | 21,888 |
Share-based compensation | 2,477 | 2,704 | 7,720 | 8,795 |
Interest expense, net, and other | 4,837 | 3,016 | 14,895 | 9,065 |
Income before income taxes | 45,991 | 43,667 | 144,348 | 132,806 |
Operating segments | ||||
Schedule of reconciliation of revenue and segment operating income by reportable segment to consolidated results | ||||
Revenue | 494,406 | 472,636 | 1,479,378 | 1,414,367 |
Segment operating income | 75,135 | 72,289 | 235,454 | 218,462 |
Operating segments | Nurse and Allied Solutions | ||||
Schedule of reconciliation of revenue and segment operating income by reportable segment to consolidated results | ||||
Revenue | 302,933 | 286,810 | 917,183 | 877,197 |
Segment operating income | 40,807 | 37,396 | 134,638 | 118,517 |
Operating segments | Locum Tenens Solutions | ||||
Schedule of reconciliation of revenue and segment operating income by reportable segment to consolidated results | ||||
Revenue | 111,415 | 108,553 | 322,473 | 320,420 |
Segment operating income | 14,438 | 14,026 | 39,028 | 43,634 |
Operating segments | Other Workforce Solutions | ||||
Schedule of reconciliation of revenue and segment operating income by reportable segment to consolidated results | ||||
Revenue | 80,058 | 77,273 | 239,722 | 216,750 |
Segment operating income | 19,890 | 20,867 | 61,788 | 56,311 |
Unallocated corporate overhead | ||||
Schedule of reconciliation of revenue and segment operating income by reportable segment to consolidated results | ||||
Unallocated corporate overhead | $ 13,698 | $ 15,113 | $ 44,732 | $ 45,908 |
Segment Information - Goodwill
Segment Information - Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 341,754 | |
Ending balance | 340,596 | |
Accumulated impairment loss | 214,939 | $ 214,939 |
HSG | ||
Goodwill [Roll Forward] | ||
Goodwill adjustment for acquisition | (1,199) | |
Peak | ||
Goodwill [Roll Forward] | ||
Goodwill adjustment for acquisition | 41 | |
Nurse and Allied Solutions | ||
Goodwill [Roll Forward] | ||
Beginning balance | 104,306 | |
Ending balance | 103,107 | |
Accumulated impairment loss | 154,444 | 154,444 |
Nurse and Allied Solutions | HSG | ||
Goodwill [Roll Forward] | ||
Goodwill adjustment for acquisition | (1,199) | |
Nurse and Allied Solutions | Peak | ||
Goodwill [Roll Forward] | ||
Goodwill adjustment for acquisition | 0 | |
Locum Tenens Solutions | ||
Goodwill [Roll Forward] | ||
Beginning balance | 19,743 | |
Ending balance | 19,743 | |
Accumulated impairment loss | 53,940 | 53,940 |
Locum Tenens Solutions | HSG | ||
Goodwill [Roll Forward] | ||
Goodwill adjustment for acquisition | 0 | |
Locum Tenens Solutions | Peak | ||
Goodwill [Roll Forward] | ||
Goodwill adjustment for acquisition | 0 | |
Other Workforce Solutions | ||
Goodwill [Roll Forward] | ||
Beginning balance | 217,705 | |
Ending balance | 217,746 | |
Accumulated impairment loss | 6,555 | $ 6,555 |
Other Workforce Solutions | HSG | ||
Goodwill [Roll Forward] | ||
Goodwill adjustment for acquisition | 0 | |
Other Workforce Solutions | Peak | ||
Goodwill [Roll Forward] | ||
Goodwill adjustment for acquisition | $ 41 |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Oct. 31, 2016 |
Commercial paper | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Commercial paper | $ 28,538 | $ 25,610 | |
Commercial paper | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Commercial paper | 28,538 | 25,610 | |
Available for sale securities | $ 5,076 | $ 11,152 | |
5.125% Senior Notes Due 2024 | Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate | 5.125% |
Fair Value Measurement - Financ
Fair Value Measurement - Financial Assets and Liabilities (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Money market funds | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | $ 4,026 | $ 4,627 |
Money market funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | 4,026 | 4,627 |
Money market funds | Significant Other Observable Inputs (Level 2) | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | 0 | 0 |
Money market funds | Significant Unobservable Inputs (Level 3) | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | 0 | 0 |
Commercial paper | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | 28,538 | 25,610 |
Commercial paper | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | 0 | 0 |
Commercial paper | Significant Other Observable Inputs (Level 2) | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | 28,538 | 25,610 |
Commercial paper | Significant Unobservable Inputs (Level 3) | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | 0 | 0 |
Interest rate swap asset | Interest Rate Swap | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | 24 | |
Interest rate swap asset | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest Rate Swap | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | 0 | |
Interest rate swap asset | Significant Other Observable Inputs (Level 2) | Interest Rate Swap | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | 24 | |
Interest rate swap asset | Significant Unobservable Inputs (Level 3) | Interest Rate Swap | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | 0 | |
Acquisition contingent consideration earn-out liabilities | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | (1,952) | (6,816) |
Acquisition contingent consideration earn-out liabilities | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | 0 | 0 |
Acquisition contingent consideration earn-out liabilities | Significant Other Observable Inputs (Level 2) | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | 0 | 0 |
Acquisition contingent consideration earn-out liabilities | Significant Unobservable Inputs (Level 3) | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | $ (1,952) | $ (6,816) |
Fair Value Measurement - Reconc
Fair Value Measurement - Reconciliation of Changes in Contingent Consideration Liabilities (Details) - Significant Unobservable Inputs (Level 3) - Acquisition contingent consideration earn-out liabilities - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ (1,932) | $ (7,054) | $ (6,816) | $ (3,770) |
Ending balance | (1,952) | (6,752) | (1,952) | (6,752) |
Peak | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Change in fair value of contingent consideration earn-out liability from acquisition | 0 | 480 | 0 | 480 |
Contingent consideration earn-out liability from acquisition | 0 | (480) | ||
TFS | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Change in fair value of contingent consideration earn-out liability from acquisition | 0 | (94) | 0 | (859) |
Settlement of earn-outs | 3,000 | 1,000 | ||
HSG | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Change in fair value of contingent consideration earn-out liability from acquisition | $ (20) | $ (84) | (66) | (193) |
Settlement of earn-outs | 1,930 | 0 | ||
Contingent consideration earn-out liability from acquisition | 0 | (3,590) | ||
Avantas | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Change in fair value of contingent consideration earn-out liability from acquisition | $ 0 | $ 660 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2019 | Dec. 31, 2016 | |
Federal Tax Authority | |||
Income Tax Examination [Line Items] | |||
Income tax benefits to be recorded in connection with settlement | $ 12,200 | ||
Federal Tax Authority | Internal Revenue Service (IRS) | |||
Income Tax Examination [Line Items] | |||
Tax settlement amount | $ 7,200 | ||
State Jurisdiction | |||
Income Tax Examination [Line Items] | |||
Income tax benefits to be recorded in connection with settlement | $ 568 | ||
Scenario, Forecast | State Jurisdiction | |||
Income Tax Examination [Line Items] | |||
Income tax benefits to be recorded in connection with settlement | $ 1,200 |
Balance Sheet Details (Details)
Balance Sheet Details (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Other current assets: | ||
Restricted cash and cash equivalents | $ 16,215 | $ 20,271 |
Other | 10,005 | 14,336 |
Other current assets | 26,220 | 34,607 |
Fixed assets: | ||
Furniture and equipment | 28,202 | 25,582 |
Software | 126,492 | 112,405 |
Leasehold improvements | 8,025 | 6,832 |
Fixed assets, gross | 162,719 | 144,819 |
Accumulated depreciation | (94,531) | (84,865) |
Fixed assets, net | 68,188 | 59,954 |
Other assets: | ||
Life insurance cash surrender value | 45,835 | 32,190 |
Other | 28,127 | 25,344 |
Other assets | 73,962 | 57,534 |
Accounts payable and accrued expenses: | ||
Trade accounts payable | 24,166 | 33,392 |
Subcontractor payable | 38,167 | 51,973 |
Accrued expenses | 45,690 | 37,251 |
Professional liability reserve | 7,048 | 10,254 |
Other | 2,863 | 4,642 |
Accounts payable and accrued expenses | 117,934 | 137,512 |
Accrued compensation and benefits: | ||
Accrued payroll | 31,840 | 30,917 |
Accrued bonuses | 16,755 | 26,992 |
Accrued travel expense | 3,488 | 2,972 |
Accrued health insurance reserve | 3,708 | 3,189 |
Accrued workers compensation reserve | 8,301 | 8,406 |
Deferred compensation | 45,771 | 32,690 |
Other | 2,121 | 2,827 |
Accrued compensation and benefits | 111,984 | 107,993 |
Other current liabilities: | ||
Acquisition related liabilities | 2,981 | 6,921 |
Other | 2,459 | 9,690 |
Other current liabilities | 5,440 | 16,611 |
Other long-term liabilities: | ||
Workers’ compensation reserve | 18,475 | 18,708 |
Professional liability reserve | 40,033 | 37,338 |
Deferred rent | 14,602 | 13,274 |
Unrecognized tax benefits | 7,240 | 8,464 |
Other | 2,323 | 4,312 |
Other long-term liabilities | $ 82,673 | $ 82,096 |