Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
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 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (excluding treasury shares) | 46,867,877 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 18,614 | $ 15,147 |
Accounts receivable, net of allowances of $9,741 and $9,801 at September 30, 2018 and December 31, 2017, respectively | 366,436 | 350,496 |
Accounts receivable, subcontractor | 44,891 | 41,012 |
Prepaid expenses | 14,540 | 16,505 |
Other current assets | 35,358 | 50,993 |
Total current assets | 479,839 | 474,153 |
Restricted cash, cash equivalents and investments | 59,453 | 64,315 |
Fixed assets, net of accumulated depreciation of $109,846 and $97,889 at September 30, 2018 and December 31, 2017, respectively | 86,817 | 73,431 |
Other assets | 93,206 | 74,366 |
Goodwill | 438,299 | 340,596 |
Intangible assets, net of accumulated amortization of $108,283 and $90,685 at September 30, 2018 and December 31, 2017, respectively | 332,788 | 227,096 |
Total assets | 1,490,402 | 1,253,957 |
Current liabilities: | ||
Accounts payable and accrued expenses | 142,543 | 130,319 |
Accrued compensation and benefits | 135,632 | 121,423 |
Deferred revenue | 13,107 | 8,384 |
Other current liabilities | 11,806 | 5,146 |
Total current liabilities | 303,088 | 265,272 |
Revolving credit facility | 150,000 | 0 |
Notes payable, less unamortized fees | 320,416 | 319,843 |
Deferred income taxes, net | 24,651 | 27,036 |
Other long-term liabilities | 77,527 | 79,279 |
Total liabilities | 875,682 | 691,430 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value; 10,000 shares authorized; none issued and outstanding at September 30, 2018 and December 31, 2017 | 0 | 0 |
Common stock, $0.01 par value; 200,000 shares authorized; 48,809 issued and 46,914 outstanding at September 30, 2018 and 48,411 issued and 47,481 outstanding at December 31, 2017 | 488 | 484 |
Additional paid-in capital | 449,868 | 453,351 |
Treasury stock, at cost (1,895 and 930 shares at September 30, 2018 and December 31, 2017, respectively) | (86,175) | (33,425) |
Retained earnings | 250,446 | 142,229 |
Accumulated other comprehensive income (loss) | 93 | (112) |
Total stockholders’ equity | 614,720 | 562,527 |
Total liabilities and stockholders’ equity | $ 1,490,402 | $ 1,253,957 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 9,741 | $ 9,801 |
Accumulated depreciation | 109,846 | 97,889 |
Accumulated amortization | $ 108,283 | $ 90,685 |
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) | 48,809,000 | 48,411,000 |
Common stock, shares outstanding (in shares) | 46,914,000 | 47,481,000 |
Treasury stock (in shares) | 1,895,000 | 930,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Statement of Comprehensive Income [Abstract] | |||||
Revenue | $ 526,842 | $ 494,406 | $ 1,607,439 | $ 1,479,378 | |
Cost of revenue | 351,695 | 334,867 | 1,083,512 | 997,051 | |
Gross profit | 175,147 | 159,539 | 523,927 | 482,327 | |
Operating expenses: | |||||
Selling, general and administrative | 121,216 | 100,579 | 341,488 | 299,325 | |
Depreciation and amortization | 11,296 | 8,132 | 29,788 | 23,759 | [1] |
Total operating expenses | 132,512 | 108,711 | 371,276 | 323,084 | |
Income from operations | 42,635 | 50,828 | 152,651 | 159,243 | |
Interest expense, net, and other | 4,649 | 4,837 | 16,360 | 14,895 | |
Income before income taxes | 37,986 | 45,991 | 136,291 | 144,348 | |
Income tax expense | 10,068 | 17,863 | 30,163 | 52,957 | |
Net income | 27,918 | 28,128 | 106,128 | 91,391 | [1] |
Other comprehensive income (loss): | |||||
Foreign currency translation and other | 133 | (73) | 205 | (111) | |
Cash flow hedge, net of income taxes | 0 | 0 | 0 | (15) | |
Other comprehensive income (loss) | 133 | (73) | 205 | (126) | |
Comprehensive income | $ 28,051 | $ 28,055 | $ 106,333 | $ 91,265 | |
Net income per common share: | |||||
Basic (in dollars per share) | $ 0.59 | $ 0.59 | $ 2.23 | $ 1.91 | |
Diluted (in dollars per share) | $ 0.58 | $ 0.57 | $ 2.17 | $ 1.85 | |
Weighted average common shares outstanding: | |||||
Basic (shares) | 47,286 | 47,912 | 47,556 | 47,870 | |
Diluted (shares) | 48,529 | 49,445 | 48,859 | 49,480 | |
[1] | See Note (1) for a summary of adjustments. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | [1] | |
Cash flows from operating activities: | |||
Net income | $ 106,128 | $ 91,391 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 29,788 | 23,759 | |
Non-cash interest expense and other | 591 | 1,718 | |
Write-off of fees on the prior credit facilities | 574 | 0 | |
Change in fair value of contingent consideration | (1,307) | 66 | |
Increase in allowances for doubtful accounts and sales credits | 6,240 | 9,012 | |
Provision for deferred income taxes | (2,384) | (9,512) | |
Share-based compensation | 7,954 | 7,720 | |
Loss on disposal or sale of fixed assets | 40 | 130 | |
Amortization of discount on investments | (78) | (112) | |
Changes in assets and liabilities, net of effects from acquisitions: | |||
Accounts receivable | 743 | (10,631) | |
Accounts receivable, subcontractor | (3,879) | 12,033 | |
Income taxes receivable | 12,997 | (1,854) | |
Prepaid expenses | 2,334 | (1,643) | |
Other current assets | 446 | 6,100 | |
Other assets | (1,019) | (5,204) | |
Accounts payable and accrued expenses | 7,311 | (20,442) | |
Accrued compensation and benefits | 11,014 | 3,991 | |
Other liabilities | (10,423) | (5,112) | |
Deferred revenue | 1,062 | 678 | |
Restricted investments balance | (86) | 8 | |
Net cash provided by operating activities | 168,046 | 102,096 | |
Cash flows from investing activities: | |||
Purchase and development of fixed assets | (23,922) | (17,168) | |
Purchase of investments | (27,185) | (11,021) | |
Proceeds from maturity of investments | 10,400 | 17,200 | |
Payments to fund deferred compensation plan | (7,800) | (10,056) | |
Equity investment | (4,600) | (2,000) | |
Cash paid for acquisitions, net of cash received | 217,361 | 0 | |
Cash paid for other intangibles | (1,180) | 0 | |
Cash paid for working capital adjustments and holdback liability for prior year acquisitions | 0 | (1,000) | |
Net cash used in investing activities | (271,648) | (24,045) | |
Cash flows from financing activities: | |||
Payments on term loans | 0 | (44,063) | |
Payments on revolving credit facility | (45,000) | 0 | |
Proceeds from revolving credit facility | 195,000 | 0 | |
Repurchase of common stock | (52,750) | (7,097) | |
Payment of financing costs | (2,331) | 0 | |
Earn-out payments for prior acquisitions | (1,713) | (3,677) | |
Proceeds from termination of derivative contract | 0 | 85 | |
Cash paid for shares withheld for taxes | (11,432) | (9,072) | |
Net cash provided by (used in) financing activities | 81,774 | (63,824) | |
Effect of exchange rate changes on cash | 205 | (111) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | (21,623) | 14,116 | |
Cash, cash equivalents and restricted cash at the beginning of period | 98,894 | 51,028 | |
Cash, cash equivalents and restricted cash at the end of period | 77,271 | 65,144 | |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest (net of $368 and $113 capitalized for the nine months ended September 30, 2018 and 2017, respectively) | 11,521 | 9,395 | |
Cash paid for income taxes | 21,223 | 65,998 | |
Acquisitions: | |||
Fair value of tangible assets acquired in acquisitions, net of cash received | 24,027 | 0 | |
Goodwill | 97,703 | 0 | |
Intangible assets | 122,111 | 0 | |
Liabilities assumed | (16,380) | 0 | |
Earn-out liabilities | (10,100) | 0 | |
Supplemental disclosures of non-cash investing and financing activities: | |||
Purchase of fixed assets recorded in accounts payable and accrued expenses | $ 4,504 | $ 3,156 | |
[1] | See Note (1) for a summary of adjustments. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Cash Flows [Abstract] | ||
Interest capitalized | $ 368 | $ 113 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
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 ("U.S. GAAP"). Please refer to the Company’s audited consolidated financial statements and the related notes for the fiscal year ended December 31, 2017 , contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 , filed with the Securities and Exchange Commission on February 16, 2018 (“ 2017 Annual Report”). The preparation of financial statements in conformity with U.S. GAAP 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 May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606).” The FASB also issued a series of other ASUs, which update ASU 2014-09 (collectively, the “new revenue recognition standard”). This new standard replaces all previous U.S. GAAP guidance on this topic and eliminates all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The Company adopted this standard effective January 1, 2018, using the modified retrospective transition method applied to those contracts which were not completed as of that date. Revenue from substantially all of our contracts with customers continues to be recognized over time as services are rendered. The Company recognized the cumulative effect of adopting this guidance as an adjustment to its opening balance of retained earnings of $2,089 , net of tax, primarily related to capitalization of contract costs. Prior period amounts are not retrospectively adjusted and continue to be reported in accordance with the accounting standards in effect for those periods. The impact of the adoption of the new standard was not material to the Company’s condensed consolidated financial statements for the three and nine months ended September 30, 2018 . The Company expects the impact to be immaterial on an ongoing basis. See additional information regarding revenue recognition and disaggregated revenue in Note (3), “Revenue Recognition” and Note (5), “Segment Information,” respectively. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities.” The FASB also subsequently issued ASU 2018-03, which provides amendments to ASU 2016-01. These standards require equity investments, except those accounted for using the equity method of accounting, to be measured at fair value with changes in fair value recognized through net income. The new guidance also provides a measurement alternative for equity investments that do not have readily determinable fair values, which were previously accounted for under the cost method of accounting, to be recorded at cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. For public entities, these standards are effective for fiscal years beginning after December 15, 2017, and interim periods within those annual periods. The Company adopted the standards prospectively effective January 1, 2018 and elected to use the measurement alternative. See additional information in Note (7), “Fair Value Measurement.” In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” The standard provides guidance on how certain cash receipts and payments are presented and classified in the statement of cash flows. For public entities, ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those annual periods, and requires a retrospective approach. The Company adopted this standard effective January 1, 2018 and the adoption did not have a material effect on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” The standard requires that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents (collectively, “restricted cash”). Therefore, restricted cash should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for interim and annual periods beginning after December 15, 2017. The Company adopted this standard retrospectively effective January 1, 2018 and included certain restricted cash amounts for the period ended September 30, 2017 within the accompanying condensed consolidated statements of cash flows. These adjustments had no effect on previously reported results of operations or retained earnings. The following table provides a summary of the adjustments from amounts previously reported. Nine Months Ended September 30, 2017 As Previously Reported Adjustments As Adjusted Cash flows from operating activities: Changes in assets and liabilities: Other current assets 10,155 (4,055 ) 6,100 Restricted cash, cash equivalents and investments balance (9,761 ) 9,769 8 Net cash provided by operating activities 96,382 5,714 102,096 Cash flows from investing activities Change in restricted cash, cash equivalents and investments balance 601 (601 ) — Net cash used in investing activities (23,444 ) (601 ) (24,045 ) Net increase in cash, cash equivalents and restricted cash $ 9,003 $ 5,113 $ 14,116 Cash, cash equivalents and restricted cash at the beginning of period 10,622 40,406 51,028 Cash, cash equivalents and restricted cash at the end of period $ 19,625 $ 45,519 $ 65,144 The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated balance sheets and related notes to the amounts presented in the accompanying condensed consolidated statements of cash flows. September 30, 2018 December 31, 2017 Cash and cash equivalents $ 18,614 $ 15,147 Restricted cash and cash equivalents (included in other current assets) 22,227 25,506 Restricted cash, cash equivalents and investments 59,453 64,315 Total cash, cash equivalents and restricted cash and investments 100,294 104,968 Less restricted investments (23,023 ) (6,074 ) Total cash, cash equivalents and restricted cash $ 77,271 $ 98,894 There were no other material impacts to the Company's consolidated financial statements as a result of adopting these updated standards. Reclassification To conform to the current year presentation, certain reclassifications that are not material have been made to the prior year's balances in Note (10), “Balance Sheet Details." |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS | As set forth below, the Company completed two acquisitions during the nine months ended September 30, 2018 . 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. MedPartners Acquisition On April 9, 2018, the Company completed its acquisition of MedPartners HIM (“MedPartners”), which provides case management, clinical documentation improvement, medical coding and registry services to hospitals and physician medical groups nationwide. The initial purchase price of $200,711 included (1) $196,533 cash consideration paid upon acquisition, funded through borrowings under the Company’s $400,000 secured revolving credit facility (the “Senior Credit Facility”), provided for under a credit agreement (the “New Credit Agreement”), dated as of February 9, 2018, by and among the Company and several lenders, and (2) a contingent earn-out payment of up to $20,000 with an estimated fair value of $4,400 as of the acquisition date. The contingent earn-out payment is based on (A) up to $10,000 based on the operating results of MedPartners for the twelve months ending December 31, 2018, and (B) up to $10,000 based on the operating results of MedPartners for the six months ending June 30, 2019. As the acquisition’s operations are not considered material, pro forma information is not provided. The results of MedPartners have been included in the Company’s other workforce solutions segment since the date of acquisition. During the third quarter of 2018, $222 was returned to the Company for the final working capital settlement. The preliminary allocation of the $200,711 purchase price consisted of (1) $28,425 of fair value of tangible assets acquired, which included $8,403 cash received, (2) $11,809 of liabilities assumed, (3) $103,000 of identified intangible assets, and (4) $81,095 of goodwill, all of which is deductible for tax purposes. The fair value of intangible assets includes $46,000 of trademarks and $57,000 of customer relationships with a weighted average useful life of approximately sixteen years. Phillips DiPisa and Leaders For Today Acquisition On April 6, 2018, the Company completed its acquisition of two related entities, Phillips DiPisa and Leaders For Today (“PDA and LFT”), which offer a range of leadership staffing and permanent placement solutions for the healthcare industry. The initial purchase price of $35,503 included (1) $30,268 cash consideration paid upon acquisition, funded through cash on hand, and (2) a contingent earn-out payment of up to $7,000 with an estimated fair value of $5,700 as of the acquisition date. The contingent earn-out payment is based on the operating results of PDA and LFT for the twelve months ending December 31, 2018. As the acquisition’s operations are not considered material, pro forma information is not provided. The results of PDA and LFT have been included in the Company’s other workforce solutions segment since the date of acquisition. During the third quarter of 2018, $465 was returned to the Company for the final working capital settlement. The preliminary allocation of the $35,503 purchase price consisted of (1) $4,356 of fair value of tangible assets acquired, which included $351 cash received, (2) $4,571 of liabilities assumed, (3) $19,110 of identified intangible assets, and (4) $16,608 of goodwill, all of which is deductible for tax purposes. The fair value of intangible assets includes $5,400 of trademarks, $8,000 of customer relationships and $5,710 of staffing databases with a weighted average useful life of approximately twelve years. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION Revenue primarily 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 is recognized when control of these services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Revenue from temporary staffing services is recognized as the services are rendered by clinical and non-clinical healthcare professionals. 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 network of healthcare professionals along with those of third-party subcontractors. Revenue and the related direct costs under MSP arrangements are recorded in accordance with the accounting guidance on reporting revenue gross as a principal versus net as an agent. When the Company uses subcontractors and acts as an agent, revenue is recorded net of the related subcontractor’s expense. Revenue from executive search, physician permanent placement, and recruitment process outsourcing services is recognized as the services are rendered. The Company’s SaaS-based revenue is recognized ratably over the applicable arrangement’s service period. The Company’s customers are primarily billed as services are rendered. Any fees billed in advance of being earned are recorded as deferred revenue. During the nine months ended September 30, 2018 , the amount recognized as revenue that was previously deferred was not material. Under the new revenue recognition standard, the Company has elected to apply the following practical expedients and optional exemptions: • Recognize incremental costs of obtaining a contract with amortization periods of one year or less as expense when incurred. These costs are recorded within selling, general and administrative expenses. • Recognize revenue in the amount of consideration to which the Company has a right to invoice the customer if that amount corresponds directly with the value to the customer of the Company’s services completed to date. • Exemptions from disclosing the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which revenue is recognized in the amount of consideration to which the Company has a right to invoice for services performed and (iii) contracts for which variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation. See additional information regarding adoption of the new revenue standard in Note (1), “Basis of Presentation” and additional disclosures required by the new revenue standard in Note (5), “Segment Information.” |
Net Income Per Common Share
Net Income Per Common Share | 9 Months Ended |
Sep. 30, 2018 | |
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 and nine months ended September 30, 2018 and 2017 , respectively: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net income $ 27,918 $ 28,128 $ 106,128 $ 91,391 Net income per common share - basic $ 0.59 $ 0.59 $ 2.23 $ 1.91 Net income per common share - diluted $ 0.58 $ 0.57 $ 2.17 $ 1.85 Weighted average common shares outstanding - basic 47,286 47,912 47,556 47,870 Plus dilutive effect of potential common shares 1,243 1,533 1,303 1,610 Weighted average common shares outstanding - diluted 48,529 49,445 48,859 49,480 Share-based awards to purchase 36 and 27 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, 2018 , respectively, because the effect of these instruments was anti-dilutive. 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. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 2017 2018 2017 Revenue Nurse and allied solutions $ 306,292 $ 302,933 $ 977,199 $ 917,183 Locum tenens solutions 101,102 111,415 311,516 322,473 Other workforce solutions 119,448 80,058 318,724 239,722 $ 526,842 $ 494,406 $ 1,607,439 $ 1,479,378 Segment operating income Nurse and allied solutions $ 42,165 $ 40,807 $ 137,906 $ 134,638 Locum tenens solutions 10,992 14,438 34,321 39,028 Other workforce solutions 29,010 19,890 77,437 61,788 82,167 75,135 249,664 235,454 Unallocated corporate overhead 26,427 13,698 59,271 44,732 Depreciation and amortization 11,296 8,132 29,788 23,759 Share-based compensation 1,809 2,477 7,954 7,720 Interest expense, net, and other 4,649 4,837 16,360 14,895 Income before income taxes $ 37,986 $ 45,991 $ 136,291 $ 144,348 The Company offers a comprehensive managed services program, in which the Company manages all or a portion of a client's contingent staffing needs. This service includes both the placement of the Company's own healthcare professionals and the utilization of other staffing agencies to fulfill the client's staffing needs. See additional information in Note (3), “Revenue Recognition.” For the three months ended September 30, 2018 and 2017 , revenue under the Company’s managed services program arrangements comprised approximately 61% and 59% for nurse and allied solutions revenue, 17% and 13% for locum tenens solutions revenue and 5% and 7% for other workforce solutions revenue, respectively. For the nine months ended September 30, 2018 and 2017 , revenue under the Company’s managed services program arrangements comprised approximately 60% and 57% for nurse and allied solutions revenue, 16% and 12% for locum tenens solutions revenue and 7% and 7% for other workforce solutions revenue, respectively. 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, 2018 $ 103,107 $ 19,743 $ 217,746 $ 340,596 Goodwill from MedPartners acquisition — — 81,095 81,095 Goodwill from PDA and LFT acquisition — — 16,608 16,608 Balance, September 30, 2018 $ 103,107 $ 19,743 $ 315,449 $ 438,299 Accumulated impairment loss as of December 31, 2017 and September 30, 2018 $ 154,444 $ 53,940 $ 6,555 $ 214,939 |
New Credit Agreement
New Credit Agreement | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
New Credit Agreement | NEW CREDIT AGREEMENT On February 9, 2018, the Company entered into the New Credit Agreement with several lenders to provide for the $400,000 Senior Credit Facility to replace its then-existing credit facilities. The Senior Credit Facility includes a $50,000 sublimit for the issuance of letters of credit and a $50,000 sublimit for swingline loans. The obligations of the Company under the New Credit Agreement and the Senior Credit Facility are secured by substantially all of the assets of the Company. Borrowings under the Senior Credit Facility bear interest at floating rates, at the Company’s option, based upon either LIBOR plus a spread of 1.00% to 2.00% or a base rate plus a spread of 0.00% to 1.00% . The applicable spread is determined quarterly based upon the Company’s consolidated net leverage ratio. The Senior Credit Facility is available for working capital, capital expenditures, permitted acquisitions and general corporate purposes. The maturity date of the Senior Credit Facility is February 9, 2023. In connection with obtaining the New Credit Agreement, the Company incurred $2,331 in fees paid to lenders and other third parties, which were capitalized and are amortized to interest expense over the term of the New Credit Facility. In addition, the Company wrote off $574 of unamortized financing fees during the nine months ended September 30, 2018 relating to the prior credit facilities. |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2018 | |
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 2017 Annual Report. The Company has not changed the valuation techniques or inputs it uses for its fair value measurement, except for its adoption of ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities," during the nine months ended September 30, 2018 . See additional information regarding adoption of the new standard in Note (1), “Basis of Presentation” and additional disclosures below. 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 $61,567 commercial paper issued and outstanding as of September 30, 2018 , $23,023 had original maturities greater than three months, which were considered available-for-sale securities. As of December 31, 2017 , the Company had $28,708 commercial paper issued and outstanding, of which $6,074 had original maturities greater than three months and were considered available-for-sale securities. The increase in commercial paper issued and outstanding is due to additional restricted investments related to the captive insurance company. The Company’s contingent consideration liabilities are measured at fair value using a probability-weighted discounted cash flow analysis or a simulation-based methodology for the acquired companies, which are Level 3 inputs. The Company recognizes changes to the fair value of its contingent consideration liabilities in selling, general and administrative expenses in the condensed consolidated statements of comprehensive income. 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, 2018 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 $ 2,739 $ 2,739 $ — $ — Commercial paper 61,567 — 61,567 — Acquisition contingent consideration liabilities (8,793 ) — — (8,793 ) Fair Value Measurements as of December 31, 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 $ 2,713 $ 2,713 $ — $ — Commercial paper 28,708 — 28,708 — Acquisition contingent consideration liabilities (2,070 ) — — (2,070 ) Level 3 Information The following tables set 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, 2018 2017 Balance as of July 1, $ (10,119 ) $ (1,932 ) Change in fair value of contingent consideration liability from HealthSource Global Stafffing (“HSG”) acquisition — (20 ) Change in fair value of contingent consideration liability from PDA and LFT acquisition (1,194 ) — Change in fair value of contingent consideration liability from MedPartners acquisition 2,520 — Balance as of September 30, $ (8,793 ) $ (1,952 ) Nine Months Ended September 30, 2018 2017 Balance as of January 1, $ (2,070 ) $ (6,816 ) Settlement of The First String Healthcare contingent consideration liability for year ended December 31, 2016 — 3,000 Settlement of HSG contingent consideration liability for year ended December 31, 2016 70 1,930 Settlement of HSG contingent consideration liability for year ended December 31, 2017 2,000 — Contingent consideration liability from PDA and LFT acquisition on April 6, 2018 (5,700 ) — Contingent consideration liability from MedPartners acquisition on April 9, 2018 (4,400 ) — Change in fair value of contingent consideration liability from HSG acquisition — (66 ) Change in fair value of contingent consideration liability from PDA and LFT acquisition (1,213 ) — Change in fair value of contingent consideration liability from MedPartners acquisition 2,520 — Balance as of September 30, $ (8,793 ) $ (1,952 ) 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. The Company’s equity investment represents an investment in a non-controlled corporation without a readily determinable market value. The Company has elected to measure the investment at cost minus impairment, if any, plus or minus changes resulting from observable price changes. The fair value is determined by using quoted prices for identical or similar investments of the same issuer, which are Level 2 inputs. The Company recognizes changes to the fair value of its equity investment in interest expense, net, and other in the condensed consolidated statements of comprehensive income. The following tables set forth a reconciliation of changes in the balance of the equity investment classified as Level 2 in the fair value hierarchy: Three Months Ended September 30, 2018 2017 Balance as of July 1, $ 2,000 $ 2,000 Additional investment 4,600 — Change in fair value 1,359 — Balance as of September 30, $ 7,959 $ 2,000 Nine Months Ended September 30, 2018 2017 Balance as of January 1, $ 2,000 $ — Initial investment — 2,000 Additional investment 4,600 — Change in fair value 1,359 — Balance as of September 30, $ 7,959 $ 2,000 There were no triggering events identified, no indication of impairment of the Company’s goodwill, indefinite-lived intangible assets, long-lived assets, or equity investments, and no impairment charges recorded during the nine months ended September 30, 2018 and 2017 . Fair Value of Financial Instruments The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate the value, even though these instruments are not recognized at fair value in the consolidated balance sheets. As of September 30, 2018 , the Company's senior notes have a carrying amount of $325,000 and an estimated fair value of $314,438 . As of December 31, 2017 , the senior notes had a carrying amount of $325,000 and an estimated fair value of $335,156 . Quoted market prices in active markets for identical liabilities based inputs (Level 1) were used to estimate fair value. The senior notes were issued in October 2016 and have a fixed rate of 5.125% . 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 2017 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, 2018 | |
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, 2018 , the Company is no longer subject to state, local or foreign examinations by tax authorities for tax years before 2009, and the Company is no longer subject to U.S. federal income or payroll tax examinations for tax years before 2015. The IRS conducted, completed, and settled audits of the Company’s 2011-2012 and 2013 tax years related to income and employment tax issues for the Company’s treatment of certain non-taxable per diem allowances and travel benefits in November 2017 and May 2018, respectively. 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. Immaterial Tax Correction Related to Prior Periods During the first quarter of 2018, the Company identified an error related to the income tax treatment of fair value changes in the cash surrender value of its Company Owned Life Insurance (COLI) for prior years. These fair value changes had not previously been included as a net tax benefit in the provision for prior periods. In accordance with ASC 250, Accounting Changes and Error Corrections , management evaluated the materiality of the error from qualitative and quantitative perspectives, and concluded that the error was not material to the consolidated financial statements of prior years, nor is it believed to be material to 2018’s full year consolidated financial statements. As a result, the Company recorded a net tax benefit of $2,501 in the first quarter of 2018 to adjust for this immaterial error correction. Tax Cuts and Jobs Act On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, reducing the U.S. federal corporate tax rate from 35 % to 21 %. The Tax Act changes that affected the Company in 2017 are primarily tax rate changes on certain deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”). The staff of the Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. The Tax Act also establishes new tax laws that will affect 2018 and beyond, including, but not limited to, (1) reduction of the U.S. federal corporate tax rate; (2) the repeal of the domestic production activity deduction; (3) limitations on the deductibility of certain executive compensation; and (4) limitations on various entertainment and meals deductions. The Company's accounting for the Tax Act is incomplete, primarily relating to executive compensation. However, the Company was able to make reasonable estimates of these elements and, therefore, recorded provisional adjustments for these items. Final adjustments will be made in the quarter ended December 31, 2018 and are not expected to be material. |
Commitments and Contingencies_
Commitments and Contingencies: Legal Proceedings | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES: LEGAL PROCEEDINGS | COMMITMENTS AND CONTINGENCIES: LEGAL PROCEEDINGS 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, compensation, contract, competitor disputes and employee-related matters and include individual and class action lawsuits, as well as inquiries and investigations by governmental agencies regarding the Company’s employment and compensation 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 under California and Federal law. Specifically, among other claims in these lawsuits, it is alleged that employees were not afforded required breaks or compensated for all time worked, employees' wage statements are not sufficiently clear, and certain expense reimbursements should be included in the regular rate of pay for purposes of calculating overtime rates. The Company believes that its wage and hour practices conform with law in all material respects, but litigation is always subject to inherent uncertainty. As a result, the Company entered into settlement agreements relating to claims in two wage and hour class actions during September and October 2018. The settlement agreements are subject to court approval, which is considered probable. The Company recorded increases to its accruals established in connection with these matters amounting to $12,140 during the three months ended September 30, 2018 . With regard to outstanding loss contingencies as of September 30, 2018 , which are included in accounts payable and accrued expenses in the condensed 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, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
BALANCE SHEET DETAILS | BALANCE SHEET DETAILS The consolidated balance sheets detail is as follows as of September 30, 2018 and December 31, 2017 : September 30, 2018 December 31, 2017 Other current assets: Restricted cash and cash equivalents $ 22,227 $ 25,506 Income tax receivable 2,901 15,898 Other 10,230 9,589 Other current assets $ 35,358 $ 50,993 Fixed assets: Furniture and equipment $ 32,814 $ 29,494 Software 155,534 132,770 Leasehold improvements 8,315 9,056 196,663 171,320 Accumulated depreciation (109,846 ) (97,889 ) Fixed assets, net $ 86,817 $ 73,431 Other assets: Life insurance cash surrender value $ 58,576 $ 48,145 Other 34,630 26,221 Other assets $ 93,206 $ 74,366 Accounts payable and accrued expenses: Trade accounts payable $ 21,217 $ 31,420 Subcontractor payable 46,276 41,786 Accrued expenses 37,802 29,238 Loss contingencies 25,042 12,548 Professional liability reserve 8,510 7,672 Other 3,696 7,655 Accounts payable and accrued expenses $ 142,543 $ 130,319 Accrued compensation and benefits: Accrued payroll $ 39,665 $ 33,923 Accrued bonuses 18,795 19,489 Accrued travel expense 3,618 3,256 Health insurance reserve 3,820 3,658 Workers compensation reserve 7,789 8,553 Deferred compensation 59,502 49,330 Other 2,443 3,214 Accrued compensation and benefits $ 135,632 $ 121,423 Other long-term liabilities: Workers compensation reserve $ 19,387 $ 19,074 Professional liability reserve 37,847 38,964 Deferred rent 15,053 14,744 Unrecognized tax benefits 4,221 5,270 Deferred revenue 994 960 Other 25 267 Other long-term liabilities $ 77,527 $ 79,279 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP 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 May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606).” The FASB also issued a series of other ASUs, which update ASU 2014-09 (collectively, the “new revenue recognition standard”). This new standard replaces all previous U.S. GAAP guidance on this topic and eliminates all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The Company adopted this standard effective January 1, 2018, using the modified retrospective transition method applied to those contracts which were not completed as of that date. Revenue from substantially all of our contracts with customers continues to be recognized over time as services are rendered. The Company recognized the cumulative effect of adopting this guidance as an adjustment to its opening balance of retained earnings of $2,089 , net of tax, primarily related to capitalization of contract costs. Prior period amounts are not retrospectively adjusted and continue to be reported in accordance with the accounting standards in effect for those periods. The impact of the adoption of the new standard was not material to the Company’s condensed consolidated financial statements for the three and nine months ended September 30, 2018 . The Company expects the impact to be immaterial on an ongoing basis. See additional information regarding revenue recognition and disaggregated revenue in Note (3), “Revenue Recognition” and Note (5), “Segment Information,” respectively. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities.” The FASB also subsequently issued ASU 2018-03, which provides amendments to ASU 2016-01. These standards require equity investments, except those accounted for using the equity method of accounting, to be measured at fair value with changes in fair value recognized through net income. The new guidance also provides a measurement alternative for equity investments that do not have readily determinable fair values, which were previously accounted for under the cost method of accounting, to be recorded at cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. For public entities, these standards are effective for fiscal years beginning after December 15, 2017, and interim periods within those annual periods. The Company adopted the standards prospectively effective January 1, 2018 and elected to use the measurement alternative. See additional information in Note (7), “Fair Value Measurement.” In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” The standard provides guidance on how certain cash receipts and payments are presented and classified in the statement of cash flows. For public entities, ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those annual periods, and requires a retrospective approach. The Company adopted this standard effective January 1, 2018 and the adoption did not have a material effect on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” The standard requires that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents (collectively, “restricted cash”). Therefore, restricted cash should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for interim and annual periods beginning after December 15, 2017. The Company adopted this standard retrospectively effective January 1, 2018 and included certain restricted cash amounts for the period ended September 30, 2017 within the accompanying condensed consolidated statements of cash flows. These adjustments had no effect on previously reported results of operations or retained earnings. The following table provides a summary of the adjustments from amounts previously reported. Nine Months Ended September 30, 2017 As Previously Reported Adjustments As Adjusted Cash flows from operating activities: Changes in assets and liabilities: Other current assets 10,155 (4,055 ) 6,100 Restricted cash, cash equivalents and investments balance (9,761 ) 9,769 8 Net cash provided by operating activities 96,382 5,714 102,096 Cash flows from investing activities Change in restricted cash, cash equivalents and investments balance 601 (601 ) — Net cash used in investing activities (23,444 ) (601 ) (24,045 ) Net increase in cash, cash equivalents and restricted cash $ 9,003 $ 5,113 $ 14,116 Cash, cash equivalents and restricted cash at the beginning of period 10,622 40,406 51,028 Cash, cash equivalents and restricted cash at the end of period $ 19,625 $ 45,519 $ 65,144 The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated balance sheets and related notes to the amounts presented in the accompanying condensed consolidated statements of cash flows. September 30, 2018 December 31, 2017 Cash and cash equivalents $ 18,614 $ 15,147 Restricted cash and cash equivalents (included in other current assets) 22,227 25,506 Restricted cash, cash equivalents and investments 59,453 64,315 Total cash, cash equivalents and restricted cash and investments 100,294 104,968 Less restricted investments (23,023 ) (6,074 ) Total cash, cash equivalents and restricted cash $ 77,271 $ 98,894 There were no other material impacts to the Company's consolidated financial statements as a result of adopting these updated standards. |
Revenue Recognition | Revenue primarily 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 is recognized when control of these services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Revenue from temporary staffing services is recognized as the services are rendered by clinical and non-clinical healthcare professionals. 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 network of healthcare professionals along with those of third-party subcontractors. Revenue and the related direct costs under MSP arrangements are recorded in accordance with the accounting guidance on reporting revenue gross as a principal versus net as an agent. When the Company uses subcontractors and acts as an agent, revenue is recorded net of the related subcontractor’s expense. Revenue from executive search, physician permanent placement, and recruitment process outsourcing services is recognized as the services are rendered. The Company’s SaaS-based revenue is recognized ratably over the applicable arrangement’s service period. The Company’s customers are primarily billed as services are rendered. Any fees billed in advance of being earned are recorded as deferred revenue. During the nine months ended September 30, 2018 , the amount recognized as revenue that was previously deferred was not material. Under the new revenue recognition standard, the Company has elected to apply the following practical expedients and optional exemptions: • Recognize incremental costs of obtaining a contract with amortization periods of one year or less as expense when incurred. These costs are recorded within selling, general and administrative expenses. • Recognize revenue in the amount of consideration to which the Company has a right to invoice the customer if that amount corresponds directly with the value to the customer of the Company’s services completed to date. • Exemptions from disclosing the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which revenue is recognized in the amount of consideration to which the Company has a right to invoice for services performed and (iii) contracts for which variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation. |
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. 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 $61,567 commercial paper issued and outstanding as of September 30, 2018 , $23,023 had original maturities greater than three months, which were considered available-for-sale securities. As of December 31, 2017 , the Company had $28,708 commercial paper issued and outstanding, of which $6,074 had original maturities greater than three months and were considered available-for-sale securities. The increase in commercial paper issued and outstanding is due to additional restricted investments related to the captive insurance company. Fair Value of Financial Instruments The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate the value, even though these instruments are not recognized at fair value in the consolidated balance sheets. As of September 30, 2018 , the Company's senior notes have a carrying amount of $325,000 and an estimated fair value of $314,438 . As of December 31, 2017 , the senior notes had a carrying amount of $325,000 and an estimated fair value of $335,156 . Quoted market prices in active markets for identical liabilities based inputs (Level 1) were used to estimate fair value. The senior notes were issued in October 2016 and have a fixed rate of 5.125% . 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 2017 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. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block] | These adjustments had no effect on previously reported results of operations or retained earnings. The following table provides a summary of the adjustments from amounts previously reported. Nine Months Ended September 30, 2017 As Previously Reported Adjustments As Adjusted Cash flows from operating activities: Changes in assets and liabilities: Other current assets 10,155 (4,055 ) 6,100 Restricted cash, cash equivalents and investments balance (9,761 ) 9,769 8 Net cash provided by operating activities 96,382 5,714 102,096 Cash flows from investing activities Change in restricted cash, cash equivalents and investments balance 601 (601 ) — Net cash used in investing activities (23,444 ) (601 ) (24,045 ) Net increase in cash, cash equivalents and restricted cash $ 9,003 $ 5,113 $ 14,116 Cash, cash equivalents and restricted cash at the beginning of period 10,622 40,406 51,028 Cash, cash equivalents and restricted cash at the end of period $ 19,625 $ 45,519 $ 65,144 The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated balance sheets and related notes to the amounts presented in the accompanying condensed consolidated statements of cash flows. September 30, 2018 December 31, 2017 Cash and cash equivalents $ 18,614 $ 15,147 Restricted cash and cash equivalents (included in other current assets) 22,227 25,506 Restricted cash, cash equivalents and investments 59,453 64,315 Total cash, cash equivalents and restricted cash and investments 100,294 104,968 Less restricted investments (23,023 ) (6,074 ) Total cash, cash equivalents and restricted cash $ 77,271 $ 98,894 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 and nine months ended September 30, 2018 and 2017 , respectively: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net income $ 27,918 $ 28,128 $ 106,128 $ 91,391 Net income per common share - basic $ 0.59 $ 0.59 $ 2.23 $ 1.91 Net income per common share - diluted $ 0.58 $ 0.57 $ 2.17 $ 1.85 Weighted average common shares outstanding - basic 47,286 47,912 47,556 47,870 Plus dilutive effect of potential common shares 1,243 1,533 1,303 1,610 Weighted average common shares outstanding - diluted 48,529 49,445 48,859 49,480 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 2017 2018 2017 Revenue Nurse and allied solutions $ 306,292 $ 302,933 $ 977,199 $ 917,183 Locum tenens solutions 101,102 111,415 311,516 322,473 Other workforce solutions 119,448 80,058 318,724 239,722 $ 526,842 $ 494,406 $ 1,607,439 $ 1,479,378 Segment operating income Nurse and allied solutions $ 42,165 $ 40,807 $ 137,906 $ 134,638 Locum tenens solutions 10,992 14,438 34,321 39,028 Other workforce solutions 29,010 19,890 77,437 61,788 82,167 75,135 249,664 235,454 Unallocated corporate overhead 26,427 13,698 59,271 44,732 Depreciation and amortization 11,296 8,132 29,788 23,759 Share-based compensation 1,809 2,477 7,954 7,720 Interest expense, net, and other 4,649 4,837 16,360 14,895 Income before income taxes $ 37,986 $ 45,991 $ 136,291 $ 144,348 |
Summary of goodwill by reportable segment | 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, 2018 $ 103,107 $ 19,743 $ 217,746 $ 340,596 Goodwill from MedPartners acquisition — — 81,095 81,095 Goodwill from PDA and LFT acquisition — — 16,608 16,608 Balance, September 30, 2018 $ 103,107 $ 19,743 $ 315,449 $ 438,299 Accumulated impairment loss as of December 31, 2017 and September 30, 2018 $ 154,444 $ 53,940 $ 6,555 $ 214,939 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 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 $ 2,739 $ 2,739 $ — $ — Commercial paper 61,567 — 61,567 — Acquisition contingent consideration liabilities (8,793 ) — — (8,793 ) Fair Value Measurements as of December 31, 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 $ 2,713 $ 2,713 $ — $ — Commercial paper 28,708 — 28,708 — Acquisition contingent consideration liabilities (2,070 ) — — (2,070 ) |
Reconciliations of changes in the fair value of contingent consideration liabilities | The following tables set 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, 2018 2017 Balance as of July 1, $ (10,119 ) $ (1,932 ) Change in fair value of contingent consideration liability from HealthSource Global Stafffing (“HSG”) acquisition — (20 ) Change in fair value of contingent consideration liability from PDA and LFT acquisition (1,194 ) — Change in fair value of contingent consideration liability from MedPartners acquisition 2,520 — Balance as of September 30, $ (8,793 ) $ (1,952 ) |
Reconciliations of equity investments included in net income | The following tables set forth a reconciliation of changes in the balance of the equity investment classified as Level 2 in the fair value hierarchy: Three Months Ended September 30, 2018 2017 Balance as of July 1, $ 2,000 $ 2,000 Additional investment 4,600 — Change in fair value 1,359 — Balance as of September 30, $ 7,959 $ 2,000 Nine Months Ended September 30, 2018 2017 Balance as of January 1, $ 2,000 $ — Initial investment — 2,000 Additional investment 4,600 — Change in fair value 1,359 — Balance as of September 30, $ 7,959 $ 2,000 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Supplemental Balance Sheet Disclosures | The consolidated balance sheets detail is as follows as of September 30, 2018 and December 31, 2017 : September 30, 2018 December 31, 2017 Other current assets: Restricted cash and cash equivalents $ 22,227 $ 25,506 Income tax receivable 2,901 15,898 Other 10,230 9,589 Other current assets $ 35,358 $ 50,993 Fixed assets: Furniture and equipment $ 32,814 $ 29,494 Software 155,534 132,770 Leasehold improvements 8,315 9,056 196,663 171,320 Accumulated depreciation (109,846 ) (97,889 ) Fixed assets, net $ 86,817 $ 73,431 Other assets: Life insurance cash surrender value $ 58,576 $ 48,145 Other 34,630 26,221 Other assets $ 93,206 $ 74,366 Accounts payable and accrued expenses: Trade accounts payable $ 21,217 $ 31,420 Subcontractor payable 46,276 41,786 Accrued expenses 37,802 29,238 Loss contingencies 25,042 12,548 Professional liability reserve 8,510 7,672 Other 3,696 7,655 Accounts payable and accrued expenses $ 142,543 $ 130,319 Accrued compensation and benefits: Accrued payroll $ 39,665 $ 33,923 Accrued bonuses 18,795 19,489 Accrued travel expense 3,618 3,256 Health insurance reserve 3,820 3,658 Workers compensation reserve 7,789 8,553 Deferred compensation 59,502 49,330 Other 2,443 3,214 Accrued compensation and benefits $ 135,632 $ 121,423 Other long-term liabilities: Workers compensation reserve $ 19,387 $ 19,074 Professional liability reserve 37,847 38,964 Deferred rent 15,053 14,744 Unrecognized tax benefits 4,221 5,270 Deferred revenue 994 960 Other 25 267 Other long-term liabilities $ 77,527 $ 79,279 |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Retained earnings | $ 250,446 | $ 142,229 | |||
Cash flows from operating activities: | |||||
Other current assets | 446 | $ 6,100 | [1] | ||
Restricted cash, cash equivalents and investments balance | (86) | 8 | [1] | ||
Net cash provided by operating activities | 168,046 | 102,096 | [1] | ||
Cash flows from investing activities | |||||
Change in restricted cash, cash equivalents and investments balance | 0 | ||||
Net cash used in investing activities | (271,648) | (24,045) | [1] | ||
Net increase in cash, cash equivalents and restricted cash | (21,623) | 14,116 | [1] | ||
Cash, cash equivalents and restricted cash at the beginning of period | 98,894 | 51,028 | [1] | ||
Cash, cash equivalents and restricted cash at the end of period | 77,271 | 65,144 | [1] | ||
Cash and cash equivalents | 18,614 | 15,147 | |||
Restricted cash and cash equivalents (included in other current assets) | 22,227 | 25,506 | |||
Restricted cash, cash equivalents and investments | 59,453 | 64,315 | |||
Total cash, cash equivalents and restricted cash and investments | 100,294 | 104,968 | |||
Less restricted investments | $ (23,023) | $ (6,074) | |||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Retained earnings | $ 2,089 | ||||
As Previously Reported | |||||
Cash flows from operating activities: | |||||
Other current assets | 10,155 | ||||
Restricted cash, cash equivalents and investments balance | (9,761) | ||||
Net cash provided by operating activities | 96,382 | ||||
Cash flows from investing activities | |||||
Change in restricted cash, cash equivalents and investments balance | 601 | ||||
Net cash used in investing activities | (23,444) | ||||
Net increase in cash, cash equivalents and restricted cash | 9,003 | ||||
Cash, cash equivalents and restricted cash at the beginning of period | 10,622 | ||||
Cash, cash equivalents and restricted cash at the end of period | 19,625 | ||||
Adjustments | Accounting Standards Update 2016-18 [Member] | |||||
Cash flows from operating activities: | |||||
Other current assets | (4,055) | ||||
Restricted cash, cash equivalents and investments balance | 9,769 | ||||
Net cash provided by operating activities | 5,714 | ||||
Cash flows from investing activities | |||||
Change in restricted cash, cash equivalents and investments balance | (601) | ||||
Net cash used in investing activities | (601) | ||||
Net increase in cash, cash equivalents and restricted cash | 5,113 | ||||
Cash, cash equivalents and restricted cash at the beginning of period | 40,406 | ||||
Cash, cash equivalents and restricted cash at the end of period | $ 45,519 | ||||
[1] | See Note (1) for a summary of adjustments. |
Acquisitions (Details)
Acquisitions (Details) | Apr. 09, 2018USD ($) | Apr. 06, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($)aquisition | Sep. 30, 2017USD ($) | [1] | Feb. 09, 2018USD ($) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | ||||||||
Number of acquisitions | aquisition | 2 | |||||||
Proceeds from line of credit | $ 195,000,000 | $ 0 | ||||||
Goodwill | $ 438,299,000 | $ 438,299,000 | $ 340,596,000 | |||||
MedPartners | ||||||||
Business Acquisition [Line Items] | ||||||||
Initial purchase price | $ 200,711,000 | |||||||
Cash consideration | 196,533,000 | |||||||
Tiered contingent earn-out payment | 20,000,000 | |||||||
Estimated fair value of contingent earn-out payment | 4,400,000 | |||||||
Working capital settlement received | 222,000 | |||||||
Tangible assets acquired, including cash received | 28,425,000 | |||||||
Cash received | 8,403,000 | |||||||
Liabilities assumed | 11,809,000 | |||||||
Intangible assets acquired | 103,000,000 | |||||||
Goodwill | $ 81,095,000 | |||||||
Intangible assets, weighted-average useful life (in years) | 16 years | |||||||
MedPartners | Based on operating results for the twelve months ending December 31, 2018 | ||||||||
Business Acquisition [Line Items] | ||||||||
Tiered contingent earn-out payment | $ 10,000,000 | |||||||
MedPartners | Based on operating results for the six months ending June 30, 2019 | ||||||||
Business Acquisition [Line Items] | ||||||||
Tiered contingent earn-out payment | 10,000,000 | |||||||
MedPartners | Trademarks | ||||||||
Business Acquisition [Line Items] | ||||||||
Intangible assets acquired | 46,000,000 | |||||||
MedPartners | Customer Relationships | ||||||||
Business Acquisition [Line Items] | ||||||||
Intangible assets acquired | $ 57,000,000 | |||||||
PDA and LFT | ||||||||
Business Acquisition [Line Items] | ||||||||
Initial purchase price | $ 35,503,000 | |||||||
Cash consideration | 30,268,000 | |||||||
Tiered contingent earn-out payment | 7,000,000 | |||||||
Estimated fair value of contingent earn-out payment | 5,700,000 | |||||||
Working capital settlement received | $ 465,000 | |||||||
Tangible assets acquired, including cash received | 4,356,000 | |||||||
Cash received | 351,000 | |||||||
Liabilities assumed | 4,571,000 | |||||||
Intangible assets acquired | 19,110,000 | |||||||
Goodwill | $ 16,608,000 | |||||||
Intangible assets, weighted-average useful life (in years) | 12 years | |||||||
PDA and LFT | Trademarks | ||||||||
Business Acquisition [Line Items] | ||||||||
Intangible assets acquired | $ 5,400,000 | |||||||
PDA and LFT | Customer Relationships | ||||||||
Business Acquisition [Line Items] | ||||||||
Intangible assets acquired | 8,000,000 | |||||||
PDA and LFT | Staffing Databases | ||||||||
Business Acquisition [Line Items] | ||||||||
Intangible assets acquired | $ 5,710,000 | |||||||
Revolving Credit Facility | Line of Credit | ||||||||
Business Acquisition [Line Items] | ||||||||
Maximum borrowing capacity | $ 400,000,000 | |||||||
[1] | See Note (1) for a summary of adjustments. |
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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Computation of basic and diluted net income per common share | |||||
Net income | $ 27,918 | $ 28,128 | $ 106,128 | $ 91,391 | [1] |
Net income per common share - basic (in dollars per share) | $ 0.59 | $ 0.59 | $ 2.23 | $ 1.91 | |
Net income per common share - diluted (in dollars per share) | $ 0.58 | $ 0.57 | $ 2.17 | $ 1.85 | |
Weighted average common shares outstanding - basic (in shares) | 47,286 | 47,912 | 47,556 | 47,870 | |
Plus dilutive effect of potential common shares (in shares) | 1,243 | 1,533 | 1,303 | 1,610 | |
Weighted average common shares outstanding - diluted (in shares) | 48,529 | 49,445 | 48,859 | 49,480 | |
Common stock excluded from calculation of EPS (in shares) | 36 | 10 | 27 | 14 | |
[1] | See Note (1) for a summary of adjustments. |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) | ||
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 | $ 526,842 | $ 494,406 | $ 1,607,439 | $ 1,479,378 | |
Segment operating income | 42,635 | 50,828 | 152,651 | 159,243 | |
Depreciation and amortization | 11,296 | 8,132 | 29,788 | 23,759 | [1] |
Share-based compensation | 1,809 | 2,477 | 7,954 | 7,720 | [1] |
Interest expense, net, and other | 4,649 | 4,837 | 16,360 | 14,895 | |
Income before income taxes | 37,986 | 45,991 | 136,291 | 144,348 | |
Operating segments | |||||
Schedule of reconciliation of revenue and segment operating income by reportable segment to consolidated results | |||||
Revenue | 526,842 | 494,406 | 1,607,439 | 1,479,378 | |
Segment operating income | 82,167 | 75,135 | 249,664 | 235,454 | |
Operating segments | Nurse and Allied Solutions | |||||
Schedule of reconciliation of revenue and segment operating income by reportable segment to consolidated results | |||||
Revenue | 306,292 | 302,933 | 977,199 | 917,183 | |
Segment operating income | 42,165 | 40,807 | 137,906 | 134,638 | |
Operating segments | Locum Tenens Solutions | |||||
Schedule of reconciliation of revenue and segment operating income by reportable segment to consolidated results | |||||
Revenue | 101,102 | 111,415 | 311,516 | 322,473 | |
Segment operating income | 10,992 | 14,438 | 34,321 | 39,028 | |
Operating segments | Other Workforce Solutions | |||||
Schedule of reconciliation of revenue and segment operating income by reportable segment to consolidated results | |||||
Revenue | 119,448 | 80,058 | 318,724 | 239,722 | |
Segment operating income | 29,010 | 19,890 | 77,437 | 61,788 | |
Unallocated corporate overhead | |||||
Schedule of reconciliation of revenue and segment operating income by reportable segment to consolidated results | |||||
Unallocated corporate overhead | $ 26,427 | $ 13,698 | $ 59,271 | $ 44,732 | |
Product concentration risk | Sales revenue, net | Managed Services Program Arrangements | Nurse and Allied Solutions | |||||
Schedule of reconciliation of revenue and segment operating income by reportable segment to consolidated results | |||||
Revenue from contract with customer, percent | 61.00% | 59.00% | 60.00% | 57.00% | |
Product concentration risk | Sales revenue, net | Managed Services Program Arrangements | Locum Tenens Solutions | |||||
Schedule of reconciliation of revenue and segment operating income by reportable segment to consolidated results | |||||
Revenue from contract with customer, percent | 17.00% | 13.00% | 16.00% | 12.00% | |
Product concentration risk | Sales revenue, net | Managed Services Program Arrangements | Other Workforce Solutions | |||||
Schedule of reconciliation of revenue and segment operating income by reportable segment to consolidated results | |||||
Revenue from contract with customer, percent | 5.00% | 7.00% | 7.00% | 7.00% | |
[1] | See Note (1) for a summary of adjustments. |
Segment Information - Goodwill
Segment Information - Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 340,596 | |
Goodwill, ending balance | 438,299 | |
Accumulated impairment loss | 214,939 | $ 214,939 |
Nurse and Allied Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 103,107 | |
Goodwill, ending balance | 103,107 | |
Accumulated impairment loss | 154,444 | 154,444 |
Locum Tenens Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 19,743 | |
Goodwill, ending balance | 19,743 | |
Accumulated impairment loss | 53,940 | 53,940 |
Other Workforce Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 217,746 | |
Goodwill, ending balance | 315,449 | |
Accumulated impairment loss | 6,555 | $ 6,555 |
MedPartners | ||
Goodwill [Roll Forward] | ||
Goodwill acquired | 81,095 | |
MedPartners | Nurse and Allied Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill acquired | 0 | |
MedPartners | Locum Tenens Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill acquired | 0 | |
MedPartners | Other Workforce Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill acquired | 81,095 | |
PDA and LFT | ||
Goodwill [Roll Forward] | ||
Goodwill acquired | 16,608 | |
PDA and LFT | Nurse and Allied Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill acquired | 0 | |
PDA and LFT | Locum Tenens Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill acquired | 0 | |
PDA and LFT | Other Workforce Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill acquired | $ 16,608 |
New Credit Agreement (Details)
New Credit Agreement (Details) - Line of Credit - USD ($) | Feb. 09, 2018 | Sep. 30, 2018 |
Debt Instrument [Line Items] | ||
Fees paid to lenders and other third parties | $ 2,331,000 | |
Unamortized financing fees written off | $ 574,000 | |
Letter of Credit | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 50,000,000 | |
Revolving Credit Facility, Swing Line Loan | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 50,000,000 | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 400,000,000 | |
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.00% | |
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.00% | |
Revolving Credit Facility | Base Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.00% | |
Revolving Credit Facility | Base Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.00% |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Oct. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment charges | $ 0 | $ 0 | ||
Commercial paper | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Commercial paper | 61,567,000 | $ 28,708,000 | ||
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 | 61,567,000 | 28,708,000 | ||
Available for sale securities | 23,023,000 | 6,074,000 | ||
5.125% Senior Notes due 2024 [Member] | Senior Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying amount of senior notes | 325,000,000 | 325,000,000 | ||
Estimated fair value of senior notes | $ 314,438,000 | $ 335,156,000 | ||
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, 2018 | Dec. 31, 2017 |
Money market funds | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | $ 2,739 | $ 2,713 |
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 | 2,739 | 2,713 |
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 | 61,567 | 28,708 |
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 | 61,567 | 28,708 |
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 |
Acquisition contingent consideration liabilities | ||
Schedule of financial assets and liabilities measured at fair value on recurring basis | ||
Financial assets and liabilities measured at fair value | (8,793) | (2,070) |
Acquisition contingent consideration 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 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 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 | $ (8,793) | $ (2,070) |
Fair Value Measurement - Reconc
Fair Value Measurement - Reconciliation of Changes in Contingent Consideration Liabilities (Details) - Significant Unobservable Inputs (Level 3) - Acquisition contingent consideration liabilities - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ (10,119) | $ (1,932) | $ (2,070) | $ (6,816) |
Ending balance | (8,793) | (1,952) | (8,793) | (1,952) |
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 | 0 | (20) | 0 | (66) |
PDA and LFT | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Contingent consideration earn-out liability | (5,700) | 0 | ||
Change in fair value of contingent consideration earn-out liability from acquisition | (1,194) | 0 | (1,213) | 0 |
MedPartners | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Contingent consideration earn-out liability | (4,400) | 0 | ||
Change in fair value of contingent consideration earn-out liability from acquisition | $ 2,520 | $ 0 | 2,520 | 0 |
TFS | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Settlement of earn-out | 0 | 3,000 | ||
2016 Earn-out | HSG | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Settlement of earn-out | 70 | 1,930 | ||
2017 Earn-out | HSG | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Settlement of earn-out | $ 2,000 | $ 0 |
Fair Value Measurement - Reco_2
Fair Value Measurement - Reconciliation of Equity Investments Included in Net Income (Details) - Fair Value, Measurements, Nonrecurring - Significant Other Observable Inputs (Level 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Equity Securities without a Readily Determinable Fair Value [Roll Forward] | ||||
Equity investment, beginning balance | $ 2,000 | $ 2,000 | $ 2,000 | $ 0 |
Cash investment | 4,600 | 0 | 4,600 | 2,000 |
Change in fair value | 1,359 | 0 | 1,359 | 0 |
Equity investment, ending balance | $ 7,959 | $ 2,000 | $ 7,959 | $ 2,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Income tax benefit | $ (10,068) | $ (17,863) | $ (30,163) | $ (52,957) | |
Adjustments | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Income tax benefit | $ 2,501 |
Commitments and Contingencies_2
Commitments and Contingencies: Legal Proceedings (Details) - Wage and Hour claims - Pending Litigation $ in Thousands | 3 Months Ended | |
Sep. 30, 2018USD ($) | Oct. 31, 2018claim | |
Loss Contingencies [Line Items] | ||
Increase to loss contingency accruals | $ | $ 12,140 | |
Subsequent Event | ||
Loss Contingencies [Line Items] | ||
Number of class actions related to wage and hour claims | claim | 2 |
Balance Sheet Details (Details)
Balance Sheet Details (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Other current assets: | ||
Restricted cash and cash equivalents | $ 22,227 | $ 25,506 |
Income tax receivable | 2,901 | 15,898 |
Other | 10,230 | 9,589 |
Other current assets | 35,358 | 50,993 |
Fixed assets: | ||
Furniture and equipment | 32,814 | 29,494 |
Software | 155,534 | 132,770 |
Leasehold improvements | 8,315 | 9,056 |
Fixed assets, gross | 196,663 | 171,320 |
Accumulated depreciation | (109,846) | (97,889) |
Fixed assets, net | 86,817 | 73,431 |
Other assets: | ||
Life insurance cash surrender value | 58,576 | 48,145 |
Other | 34,630 | 26,221 |
Other assets | 93,206 | 74,366 |
Accounts payable and accrued expenses: | ||
Trade accounts payable | 21,217 | 31,420 |
Subcontractor payable | 46,276 | 41,786 |
Accrued expenses | 37,802 | 29,238 |
Loss contingencies | 25,042 | 12,548 |
Professional liability reserve | 8,510 | 7,672 |
Other | 3,696 | 7,655 |
Accounts payable and accrued expenses | 142,543 | 130,319 |
Accrued compensation and benefits: | ||
Accrued payroll | 39,665 | 33,923 |
Accrued bonuses | 18,795 | 19,489 |
Accrued travel expense | 3,618 | 3,256 |
Health insurance reserve | 3,820 | 3,658 |
Workers compensation reserve | 7,789 | 8,553 |
Deferred compensation | 59,502 | 49,330 |
Other | 2,443 | 3,214 |
Accrued compensation and benefits | 135,632 | 121,423 |
Other long-term liabilities: | ||
Workers compensation reserve | 19,387 | 19,074 |
Professional liability reserve | 37,847 | 38,964 |
Deferred rent | 15,053 | 14,744 |
Unrecognized tax benefits | 4,221 | 5,270 |
Deferred revenue | 994 | 960 |
Other | 25 | 267 |
Other long-term liabilities | $ 77,527 | $ 79,279 |