Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Jun. 30, 2014 | Aug. 01, 2014 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Jun-14 | ' |
Document Fiscal Year Focus | '2015 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Entity Registrant Name | 'ADVISORY BOARD CO | ' |
Entity Central Index Key | '0001157377 | ' |
Current Fiscal Year End Date | '--03-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 36,295,565 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $41,057 | $23,129 |
Marketable securities, current | 2,427 | 2,452 |
Membership fees receivable, net | 476,985 | 447,897 |
Prepaid expenses and other current assets | 29,032 | 27,212 |
Deferred income taxes, current | 10,864 | 5,511 |
Total current assets | 560,365 | 506,201 |
Property and equipment, net | 108,869 | 102,457 |
Intangible assets, net | 34,220 | 33,755 |
Deferred incentive compensation and other charges | 81,249 | 86,147 |
Marketable securities, net of current portion | 88,883 | 161,944 |
Goodwill | 152,748 | 129,424 |
Investments in and advances to unconsolidated entities | 13,707 | 15,857 |
Other non-current assets | 5,370 | 5,550 |
Total assets | 1,045,411 | 1,041,335 |
Current liabilities: | ' | ' |
Deferred revenue, current | 462,544 | 459,827 |
Accounts payable and accrued liabilities | 75,730 | 77,815 |
Accrued incentive compensation | 11,583 | 28,471 |
Total current liabilities | 549,857 | 566,113 |
Deferred revenue, net of current portion | 147,705 | 127,532 |
Deferred income taxes, net of current portion | 9,956 | 1,556 |
Other long-term liabilities | 9,514 | 8,975 |
Total liabilities | 717,032 | 704,176 |
Redeemable noncontrolling interest | 7,113 | 100 |
The Advisory Board Company’s stockholders’ equity: | ' | ' |
Preferred stock, par value $0.01; 5,000,000 shares authorized, zero shares issued and outstanding | 0 | 0 |
Common stock, par value $0.01; 135,000,000 shares authorized, 36,287,021 and 36,321,825 shares issued and outstanding as of June 30, 2014 and March 31, 2014, respectively | 363 | 363 |
Additional paid-in capital | 427,249 | 429,932 |
Accumulated deficit | -105,615 | -91,468 |
Accumulated other comprehensive (loss) income | -731 | -1,541 |
Total stockholders’ equity controlling interest | 321,266 | 337,286 |
Equity attributable to noncontrolling interest | 0 | -227 |
Total stockholders’ equity | 321,266 | 337,059 |
Total liabilities and stockholders’ equity | $1,045,411 | $1,041,335 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
Statement of Financial Position [Abstract] | ' | ' |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 135,000,000 | 135,000,000 |
Common stock, shares issued | 36,287,021 | 36,321,825 |
Common stock, shares outstanding | 36,287,021 | 36,321,825 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Income Statement [Abstract] | ' | ' |
Revenue | $141,820 | $123,216 |
Costs and expenses: | ' | ' |
Cost of services, excluding depreciation and amortization | 74,218 | 65,950 |
Member relations and marketing | 26,576 | 22,188 |
General and administrative | 22,712 | 17,986 |
Depreciation and amortization | 9,078 | 6,354 |
Operating income | 9,236 | 10,738 |
Other income, net | 710 | 523 |
Income before provision for income taxes and equity in loss of unconsolidated entities | 9,946 | 11,261 |
Provision for income taxes | -3,933 | -4,335 |
Equity in loss of unconsolidated entities | -2,150 | -3,233 |
Net income before allocation to noncontrolling interest | 3,863 | 3,693 |
Net loss and accretion to redemption value of noncontrolling interest | -7,040 | 0 |
Net (loss) income attributable to common stockholders | ($3,177) | $3,693 |
Earnings per share | ' | ' |
Net (loss) income attributable to common stockholders per share—basic | ($0.09) | $0.10 |
Net (loss) income attributable to common stockholders per share—diluted | ($0.09) | $0.10 |
Weighted average number of shares outstanding: | ' | ' |
Basic | 36,413 | 35,488 |
Diluted | 36,413 | 36,618 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' |
Net (loss) income attributable to common stockholders | ($3,177) | $3,693 |
Other comprehensive income: | ' | ' |
Net unrealized gains (losses) on available-for-sale securities, net of income taxes of $531 and ($1,801) for the three months ended June 31, 2014 and 2013, respectively | 810 | -3,334 |
Comprehensive (loss) income | ($2,367) | $359 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' |
Net unrealized (losses) gains on marketable securities, tax | $531 | ($1,801) |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Cash flows from operating activities: | ' | ' |
Net income before allocation to noncontrolling interest | $3,863 | $3,693 |
Adjustments to reconcile net income before allocation to noncontrolling interest to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 9,078 | 6,354 |
Deferred income taxes | 1,427 | -907 |
Excess tax benefits from stock-based awards | -5,007 | -8,314 |
Stock-based compensation expense | 5,541 | 4,659 |
Amortization of marketable securities premiums | 589 | 692 |
Loss on investment in common stock warrants | 180 | 0 |
Equity in loss of unconsolidated entities | 2,150 | 3,233 |
Changes in operating assets and liabilities: | ' | ' |
Membership fees receivable | -27,573 | -16,896 |
Prepaid expenses and other current assets | 3,187 | 3,894 |
Deferred incentive compensation and other charges | 4,898 | -3,957 |
Deferred revenue | 22,318 | 19,936 |
Accounts payable and accrued liabilities | 713 | -4,766 |
Acquisition-related earn-out payments | -2,798 | -1,412 |
Accrued incentive compensation | -16,888 | -11,412 |
Other long-term liabilities | 539 | 1,599 |
Net cash provided by (used in) operating activities | 2,217 | -3,604 |
Cash flows from investing activities: | ' | ' |
Purchases of property and equipment | -11,965 | -10,718 |
Capitalized external use software development costs | -1,340 | -955 |
Investment in and loans to unconsolidated entities | 0 | -5,664 |
Cash paid for acquisition, net of cash acquired | -25,830 | 0 |
Redemptions of marketable securities | 73,844 | 7,800 |
Purchases of marketable securities | 0 | -19,824 |
Net cash provided by (used in) investing activities | 34,709 | -29,361 |
Cash flows from financing activities: | ' | ' |
Proceeds from issuance of common stock from exercise of stock options | 1,265 | 7,692 |
Withholding of shares to satisfy minimum employee tax withholding for vested restricted stock units | -7,611 | -5,786 |
Proceeds from issuance of common stock under employee stock purchase plan | 155 | 126 |
Excess tax benefits from stock-based awards | 5,007 | 8,314 |
Contributions from noncontrolling interest | 200 | 0 |
Purchases of treasury stock | -18,014 | -6,159 |
Net cash (used in) provided by financing activities | -18,998 | 4,187 |
Net increase (decrease) in cash and cash equivalents | 17,928 | -28,778 |
Cash and cash equivalents, beginning of period | 23,129 | 57,829 |
Cash and cash equivalents, end of period | $41,057 | $29,051 |
Business_Description_and_Basis
Business Description and Basis of Presentation | 3 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Business description and basis of presentation | ' |
Business description and basis of presentation | |
The Advisory Board Company (individually and collectively with its subsidiaries, the “Company”) provides best practices research and analysis, business intelligence and performance technology software, and consulting and management services through discrete programs to hospitals, health systems, pharmaceutical and biotechnology companies, health care insurers, medical device companies, and colleges, universities, and other health care-focused organizations and educational institutions. Members of each renewable membership program are typically charged a fixed annual fee and have access to an integrated set of services that may include best practices research studies, executive education seminars, customized research briefs, cloud-based access to the program’s content database, and performance technology software. | |
The unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes as reported in the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2014. | |
The unaudited consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and a consolidated variable interest entity. The Company uses the equity method to account for equity investments in instances in which it owns common stock or securities deemed to be in-substance common stock and has the ability to exercise significant influence, but not control, over the investee and for all investments in partnerships or limited liability companies where the investee maintains separate capital accounts for each investor. Investments in which the Company holds securities that are not in-substance common stock, or holds common stock or in-substance common stock but has little or no influence, are accounted for using the cost method. All significant intercompany transactions and balances have been eliminated. Certain prior-period amounts have been reclassified to conform to the current-period presentation. | |
In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the consolidated financial position, results of operations, and cash flows as of the dates and for the periods presented have been included. The consolidated balance sheet presented as of March 31, 2014 has been derived from the financial statements that have been audited by the Company’s independent registered public accounting firm. The consolidated results of operations for the three months ended June 30, 2014 may not be indicative of the results that may be expected for the Company’s fiscal year ending March 31, 2015, or any other period. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 3 Months Ended |
Jun. 30, 2014 | |
Accounting Changes and Error Corrections [Abstract] | ' |
Recent Accounting Pronouncements | ' |
Recent accounting pronouncements | |
Recently adopted | |
In July 2013, the Financial Accounting Standards Board (“FASB”) issued accounting guidance related to income taxes, which requires entities to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward when settlement in this manner is available under the tax law. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, with early adoption permitted. The Company adopted this guidance on April 1, 2014. Adoption did not have a material effect on the Company's financial position or results of operations. | |
Recently issued | |
In May 2014, the FASB issued accounting guidance related to revenue recognition. The new standard supersedes most of the existing revenue recognition guidance under GAAP, and requires revenue to be recognized when goods or services are transferred to a customer in an amount that reflects the consideration a company expects to receive. The new standard may require more judgment and estimates while recognizing revenue, which could result in additional disclosures to the financial statements. The standard is effective for the Company in fiscal 2018. The Company is currently evaluating the revenue recognition impact this guidance will have once implemented. |
Acquisitions
Acquisitions | 3 Months Ended |
Jun. 30, 2014 | |
Business Combinations [Abstract] | ' |
Acquisitions | ' |
Acquisitions | |
HealthPost, Inc. | |
On May 5, 2014, the Company completed the acquisition for cash of all of the issued and outstanding capital stock of HealthPost, Inc. (“HealthPost”), a technology firm with a cloud-based ambulatory scheduling solution, that will supplement the Company's existing suite of Crimson® programs. The total purchase price, net of cash acquired, was $25.8 million. | |
The total purchase price was preliminarily allocated to the assets acquired, including intangible assets and liabilities assumed, based on their estimated fair values as of May 5, 2014. The Company’s fair value of identifiable tangible and intangible assets was determined by using estimates and assumptions in combination with a valuation using an income approach from a market participant perspective. Of the total estimated purchase price, $1.5 million was allocated to accounts receivable and $1.7 million was allocated to assumed liabilities, which consists of $0.6 million of acquired current deferred revenue and $1.1 million of deferred tax liabilities. Of the total estimated purchase price, $2.7 million was allocated to intangible assets, which consist of the value assigned to acquired technology related intangibles of $1.2 million, customer relationship related intangibles of $0.9 million, employee related intangibles of $0.4 million, and existing customer contracts of $0.2 million. The acquired intangible assets have estimated lives ranging from one year to seven years based on the cash flow estimates used to create the valuation models of each identifiable asset with a weighted average amortization period of 4.2 years. Approximately $23.3 million of the total purchase price was allocated to goodwill, which represents synergistic benefits expected to be generated from scaling HealthPost’s offerings across the Company’s large membership base. Goodwill is not deductible for tax purposes. The Company is in the process of finalizing the purchase price allocation. The final allocation of purchase price may result in different values being assigned to amortizing assets which would also change the amount of amortization expense related to these assets in future periods. | |
The financial results of HealthPost are included in the Company’s consolidated financial statements from the date of acquisition. Pro forma financial information for this acquisition has not been presented because the effects were not material to the Company’s historical consolidated financial statements. | |
Care Team Connect, Inc. | |
On October 7, 2013, the Company completed the acquisition for cash of all of the issued and outstanding capital stock of Care Team Connect, Inc. (“Care Team Connect”), a provider of comprehensive care management workflow solutions. The acquisition enhances the Company’s existing suite of population health technologies and service offerings. The total purchase price, net of cash acquired, was $34.6 million. | |
The total purchase price was allocated to the assets acquired, including intangible assets and liabilities assumed, based on their estimated fair values as of October 7, 2013. The Company’s fair value of identifiable tangible and intangible assets was determined by using estimates and assumptions in combination with a valuation using an income approach from a market participant perspective. Of the total estimated purchase price, $13.8 million was allocated to accounts receivable, $0.2 million to fixed assets, and $13.5 million was allocated to assumed liabilities, which consists of $4.2 million of acquired current deferred revenue, $7.7 million of acquired long-term deferred revenue, $0.9 million of accounts payable, and $0.7 million of deferred tax liabilities. Of the total estimated purchase price, $9.3 million was allocated to intangible assets, which consist of the value assigned to acquired technology related intangibles of $5.4 million, customer relationship related intangibles of $2.8 million, and existing customer contracts of $1.1 million. The acquired intangible assets have estimated lives ranging from three years to twelve years based on the cash flow estimates used to create the valuation models of each identifiable asset with a weighted average amortization period of 8.2 years. Approximately $24.8 million of the total purchase price was allocated to goodwill, which represents synergistic benefits expected to be generated from scaling Care Team Connect’s offerings across the Company’s large membership base. Goodwill is not deductible for tax purposes. | |
The financial results of Care Team Connect are included in the Company’s consolidated financial statements from the date of acquisition. Pro forma financial information for this acquisition has not been presented because the effects were not material to the Company’s historical consolidated financial statements. | |
Medical Referral Source, Inc. | |
On July 8, 2013, the Company completed the acquisition for cash of all of the issued and outstanding capital stock of Medical Referral Source, Inc. (“MRS”) to supplement its existing physician referral programs and to provide new growth opportunities. The total purchase price, net of cash acquired, was $11.5 million. | |
The total purchase price was allocated to the assets acquired, including intangible assets and liabilities assumed, based on their estimated fair values as of July 8, 2013. The Company’s fair value of identifiable tangible and intangible assets was determined by using estimates and assumptions in combination with a valuation using an income approach from a market participant perspective. Of the total estimated purchase price, $0.7 million was allocated to accounts receivable, $0.2 million to deferred tax assets, and $0.4 million to assumed liabilities, which consists of $0.3 million of acquired deferred revenue and $0.1 million of accounts payable. Of the total estimated purchase price, $2.1 million was allocated to intangible assets, which consist of the value assigned to acquired technology related intangibles of $1.7 million and customer relationship related intangibles of $0.4 million. The acquired intangible assets have estimated lives ranging from three years to eight years based on the cash flow estimates used to create the valuation models of each identifiable asset with a weighted average amortization period of 4.0 years. Approximately $8.9 million was allocated to goodwill, which represents synergistic benefits expected to be generated from scaling MRS’s offerings across the Company’s large membership base. Goodwill is not deductible for tax purposes. | |
The financial results of MRS are included in the Company’s consolidated financial statements from the date of acquisition. Pro forma financial information for this acquisition has not been presented because the effects were not material to the Company’s historical consolidated financial statements. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair value measurements | ' | |||||||||||||||
Fair value measurements | ||||||||||||||||
Financial assets and liabilities | ||||||||||||||||
The estimated fair values of financial instruments are determined based on relevant market information. These estimates involve uncertainty and cannot be determined with precision. The Company’s financial instruments consist primarily of cash, cash equivalents, marketable securities, and common stock warrants. In addition, contingent earn-out liabilities resulting from business combinations are recorded at fair value. The following methods and assumptions are used to estimate the fair value of each class of financial assets or liabilities that is valued on a recurring basis. | ||||||||||||||||
Cash and cash equivalents. This includes all cash and liquid investments with an original maturity of three months or less from the date acquired. The carrying amount approximates fair value because of the short maturity of these instruments. Cash equivalents consist of money market funds with original maturity dates of less than three months for which the fair value is based on quoted market prices. The Company’s cash and cash equivalents are held at major commercial banks. | ||||||||||||||||
Marketable securities. The Company’s marketable securities, consisting of U.S. government-sponsored enterprise obligations and various state tax-exempt notes and bonds, are classified as available-for-sale and are carried at fair market value based on quoted market prices. | ||||||||||||||||
Common stock warrants. The Company holds warrants to purchase common stock in an entity that provides technology tools and support services to health care providers, including the Company’s members. The warrants are exercisable for up to 6,015,000 shares of the entity if and as certain performance criteria are met. The warrants meet the definition of a derivative and are carried at fair value in other non-current assets on the accompanying consolidated balance sheets. Gains or losses from changes in the fair value of the warrants are recognized in other income, net on the accompanying consolidated statements of operations. See Note 10, “Other non-current assets,” for additional information. The fair value of the warrants is determined using a Black-Scholes-Merton model. Key inputs into this methodology are the estimate of the underlying value of the common shares of the entity that issued the warrants and the estimate of the level of performance criteria that will be achieved. The entity that issued the warrants is privately held and the estimate of performance criteria to be met is specific to the Company. These inputs are unobservable and are considered key estimates made by the Company. | ||||||||||||||||
Contingent earn-out liabilities. This class of financial liabilities represents the Company’s estimated fair value of the contingent earn-out liabilities related to acquisitions based on probability assessments of certain performance achievements during the earn-out periods. The performance targets are specific to the operation of the acquired company subsequent to the acquisition. These inputs are unobservable and are considered key estimates made by the Company. Contingent earn-out liabilities are included in accounts payable and accrued liabilities and other long-term liabilities on the accompanying consolidated balance sheets. | ||||||||||||||||
Measurements | ||||||||||||||||
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The valuation can be determined using widely accepted valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). As a basis for applying a market-based approach in fair value measurements, GAAP establishes a fair value hierarchy that prioritizes into three broad levels the inputs to valuation techniques used to measure fair value. The following is a brief description of those three levels: | ||||||||||||||||
• | Level 1—Quoted prices in active markets for identical assets or liabilities. | |||||||||||||||
• | Level 2—Observable market-based inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. | |||||||||||||||
• | Level 3—Unobservable inputs that are supported by little or no market activity, such as discounted cash flow methodologies. | |||||||||||||||
Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. There were no significant transfers between Level 1, Level 2, or Level 3 during the three months ended June 30, 2014 or 2013. | ||||||||||||||||
The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the necessary disclosures are as follows (in thousands): | ||||||||||||||||
Fair value | Fair value measurement as of June 30, 2014 | |||||||||||||||
as of June 30, | using fair value hierarchy | |||||||||||||||
2014 | Level 1 | Level 2 | Level 3 | |||||||||||||
Financial assets | ||||||||||||||||
Cash and cash equivalents | $ | 41,057 | $ | 41,057 | $ | — | $ | — | ||||||||
Available-for-sale marketable securities | 91,310 | — | 91,310 | — | ||||||||||||
Common stock warrants (1) | 370 | — | — | 370 | ||||||||||||
Financial liabilities | ||||||||||||||||
Contingent earn-out liabilities (2) | 5,850 | — | — | 5,850 | ||||||||||||
Fair value | Fair value measurement as of March 31, 2014 | |||||||||||||||
as of March 31, | using fair value hierarchy | |||||||||||||||
2014 | Level 1 | Level 2 | Level 3 | |||||||||||||
Financial assets | ||||||||||||||||
Cash and cash equivalents | $ | 23,129 | $ | 23,129 | $ | — | $ | — | ||||||||
Available-for-sale marketable securities | 164,396 | — | 164,396 | — | ||||||||||||
Common stock warrants (1) | 550 | — | — | 550 | ||||||||||||
Financial liabilities | ||||||||||||||||
Contingent earn-out liabilities (2) | 8,750 | — | — | 8,750 | ||||||||||||
-1 | The fair value of the common stock warrants as of June 30, 2014 and March 31, 2014 was calculated to be $0.21 and $0.31 per share, respectively, per share using a Black-Scholes-Merton model. The significant assumptions as of June 30, 2014 were as follows: risk-free interest rate of 1.6%; expected term of 4.97 years; expected volatility of 70.00%; dividend yield of 0.0%; weighted average share price of $0.49 per share; and expected warrants to become exercisable of approximately 1,776,500 shares. The significant assumptions as of March 31, 2014 were as follows: risk-free interest rate of 1.7%; expected term of 5.22 years; expected volatility of 67.55%; dividend yield of 0.0%; weighted average share price of $0.49 per share; and expected warrants to become exercisable of approximately 1,776,500 shares. | |||||||||||||||
-2 | This fair value measurement is based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value using the income approach. In developing these estimates, the Company considered certain performance projections, historical results, and general macroeconomic environment and industry trends. | |||||||||||||||
Common stock warrants | ||||||||||||||||
The Company’s fair value estimate of the common stock warrants received in connection with its June 2009 investment was zero as of the investment date. Changes in the fair value of the common stock warrants subsequent to the investment date are recognized in earnings in the periods during which the estimated fair value changes. The change in the fair value of the common stock warrants during the three months ended June 30, 2014 was driven primarily by a decrease in the underlying value of the common stock, partially offset by the net impact of an extension in the term of the warrant and an increase in the volatility estimate. There was no change in the fair value of the common stock warrants during the three months ended June 30, 2013. The following table represents a reconciliation of the change in the fair value of the common stock warrants for the three months ended June 30, 2014 and 2013, (in thousands): | ||||||||||||||||
Three Months Ended | ||||||||||||||||
June 30, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Beginning balance | $ | 550 | $ | 550 | ||||||||||||
Fair value change in common stock warrants (1) | (180 | ) | — | |||||||||||||
Ending balance | $ | 370 | $ | 550 | ||||||||||||
-1 | Amounts were recognized in other income, net on the accompanying consolidated statements of operations. | |||||||||||||||
Contingent earn-out liabilities | ||||||||||||||||
The Company entered into an earn-out agreement in connection with its acquisition of Southwind Health Partners, L.L.C. and Southwind Navigator, LLC (together, “Southwind”) on December 31, 2009. The additional contingent payments, which have no maximum, become due and payable to the former owners of the Southwind business if certain milestones are met over the evaluation periods beginning at the acquisition date and extending through December 31, 2014. The fair value of the Southwind earn-out liability is impacted by changes in estimates regarding expected operating results and an applied discount rate, which was 15% as of June 30, 2014. The Company’s fair value estimate of the Southwind earn-out liability was $5.6 million as of the date of acquisition. On October 31, 2012, the Company transferred 112,408 shares of its common stock to the former owners of Southwind to satisfy the component of the contingent obligation payable in the Company’s common stock, which reduced the related earn-out liability by $5.4 million. As of June 30, 2014, $17.5 million had been earned and paid in cash and shares to the former owners of the Southwind business. As of June 30, 2014, based on current facts and circumstances, the estimated aggregate fair value of the remaining contingent obligation was $3.3 million, which will be paid at various intervals, if earned, over evaluation periods which extend through December 31, 2014, with the final payment to occur in February 2016. | ||||||||||||||||
The Company entered into an earn-out agreement in connection with its acquisition of PivotHealth, LLC (“PivotHealth”) on August 1, 2011. The additional contingent cash payments, which have no guaranteed minimum or maximum, will become due and payable to the former owner of the PivotHealth business if certain revenue targets are achieved over evaluation periods beginning at the acquisition date and extending through August 31, 2014. Final payment of the earn-out, if any, will occur in November 2014. The Company’s fair value estimate of the PivotHealth earn-out liability was $2.9 million as of the date of acquisition. The estimated aggregate fair value of the contingent obligation for PivotHealth as of June 30, 2014 was $0. The fair value of the PivotHealth earn-out liability is impacted by changes in estimates regarding expected operating results as of June 30, 2014. | ||||||||||||||||
The Company entered into an earn-out agreement in connection with its acquisition of 360Fresh, Inc. (“360Fresh”) on November 15, 2012. The contingent cash payments, which will not exceed $8.0 million and have no guaranteed minimum, will become due and payable to the former stockholders of 360Fresh if certain revenue targets are achieved over evaluation periods beginning at the acquisition date through December 31, 2015. Final payment of the earn-out, if any, will occur in February 2016. The Company’s fair value estimate of the 360Fresh earn-out liability was $2.5 million as of the date of acquisition. The estimated aggregate fair value of the contingent obligation for 360Fresh as of June 30, 2014 was $2.5 million. The fair value of the 360Fresh earn-out liability is impacted by changes in estimates regarding expected operating results and a discount rate, which was 19.0% as of June 30, 2014. | ||||||||||||||||
Changes in the fair value of the contingent earn-out liabilities subsequent to the acquisition date, including changes arising from events that occurred after the acquisition date, such as changes in the Company’s estimate of performance achievements, discount rates, and stock price, are recognized in earnings in the periods during which the estimated fair value changes. The following table represents a reconciliation of the change in the contingent earn-out liabilities for the three months ended June 30, 2014 and 2013 (in thousands): | ||||||||||||||||
Three Months Ended | ||||||||||||||||
June 30, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Beginning balance | $ | 8,750 | $ | 15,200 | ||||||||||||
Fair value change in Southwind contingent earn-out liability (1) | — | 400 | ||||||||||||||
Fair value change in 360Fresh contingent earn-out liability (1) | (100 | ) | 300 | |||||||||||||
Southwind earn-out payments | (2,800 | ) | (1,400 | ) | ||||||||||||
Ending balance | $ | 5,850 | $ | 14,500 | ||||||||||||
-1 | Amounts were recognized in cost of services on the accompanying consolidated statements of operations. | |||||||||||||||
Non-financial assets and liabilities | ||||||||||||||||
Certain assets and liabilities are not measured at fair value on an ongoing basis but instead are measured at fair value on a non-recurring basis, so that such assets and liabilities are subject to fair value adjustments in certain circumstances (e.g., when there is evidence of impairment). During the three months ended June 30, 2014 and 2013, no fair value adjustments or material fair value measurements were required for non-financial assets or liabilities. |
Marketable_Securities
Marketable Securities | 3 Months Ended | |||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||||||||||||||
Marketable securities | ' | |||||||||||||||||||||||
Marketable securities | ||||||||||||||||||||||||
The aggregate fair value, amortized cost, gross unrealized gains, and gross unrealized losses on available-for-sale marketable securities are as follows (in thousands): | ||||||||||||||||||||||||
As of June 30, 2014 | ||||||||||||||||||||||||
Fair | Amortized | Gross | Gross | |||||||||||||||||||||
value | cost | unrealized | unrealized | |||||||||||||||||||||
gains | losses | |||||||||||||||||||||||
U.S. government-sponsored enterprises | $ | 9,875 | $ | 10,500 | $ | — | $ | 625 | ||||||||||||||||
Tax exempt obligations of states | 81,435 | 82,040 | 601 | 1,206 | ||||||||||||||||||||
$ | 91,310 | $ | 92,540 | $ | 601 | $ | 1,831 | |||||||||||||||||
As of March 31, 2014 | ||||||||||||||||||||||||
Fair | Amortized | Gross | Gross | |||||||||||||||||||||
value | cost | unrealized | unrealized | |||||||||||||||||||||
gains | losses | |||||||||||||||||||||||
U.S. government-sponsored enterprises | $ | 29,291 | $ | 30,344 | $ | — | $ | 1,053 | ||||||||||||||||
Tax exempt obligations of states | 135,105 | 136,653 | 1,060 | 2,608 | ||||||||||||||||||||
$ | 164,396 | $ | 166,997 | $ | 1,060 | $ | 3,661 | |||||||||||||||||
The following table summarizes marketable securities maturities (in thousands): | ||||||||||||||||||||||||
As of June 30, 2014 | ||||||||||||||||||||||||
Fair market | Amortized | |||||||||||||||||||||||
value | cost | |||||||||||||||||||||||
Matures in less than 1 year | $ | 2,427 | $ | 2,411 | ||||||||||||||||||||
Matures after 1 year through 5 years | 16,958 | 16,724 | ||||||||||||||||||||||
Matures after 5 years through 10 years | 52,390 | 53,067 | ||||||||||||||||||||||
Matures after 10 years through 20 years | 19,535 | 20,338 | ||||||||||||||||||||||
$ | 91,310 | $ | 92,540 | |||||||||||||||||||||
The following table shows the gross unrealized losses and fair value of the Company’s investments as of June 30, 2014 with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands): | ||||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||
Fair | Gross | Fair | Gross | Fair | Gross | |||||||||||||||||||
value | unrealized | value | unrealized | value | unrealized | |||||||||||||||||||
losses | losses | losses | ||||||||||||||||||||||
U.S. government-sponsored enterprises | $ | — | $ | — | $ | 9,875 | $ | 625 | $ | 9,875 | $ | 625 | ||||||||||||
Tax exempt obligations of states | — | — | 53,204 | 1,206 | 53,204 | 1,206 | ||||||||||||||||||
$ | — | $ | — | $ | 63,079 | $ | 1,831 | $ | 63,079 | $ | 1,831 | |||||||||||||
There was $0.7 million in gross realized gains on sales of available-for-sale investments and $0.4 million in gross realized losses on sales of available-for-sale investments during the three months ended June 30, 2014. There were no gross realized gains or losses on sales of available-for-sale investments during the three months ended June 30, 2013. The weighted average maturity on all marketable securities held by the Company as of June 30, 2014 was approximately 8.0 years. Pre-tax unrealized losses on the Company’s investments of $1.8 million as indicated above were caused by the increase in market interest rates compared to the average interest rate of the Company’s marketable securities portfolio. The Company purchased certain of its investments at a premium or discount to their relative face values. The Company does not intend to sell these investments and it is not more likely than not that it will be required to sell the investments before recovery of the amortized cost bases, which may be maturity. There are nineteen tax exempt obligations of states and four tax exempt obligations of U.S. government-sponsored enterprises with unrealized losses that have existed for less than one year. The Company does not consider these investments to be other-than-temporarily impaired as of June 30, 2014. The Company has reflected the net unrealized gains and losses, net of tax, in accumulated other comprehensive income on the accompanying consolidated balance sheets. The Company uses the specific identification method to determine the cost of marketable securities that are sold. |
Property_and_Equipment
Property and Equipment | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property and equipment | ' | |||||||
Property and equipment | ||||||||
Property and equipment consists of leasehold improvements, furniture, fixtures, equipment, capitalized internal use software development costs, and acquired developed technology. Property and equipment is stated at cost, less accumulated depreciation and amortization. In certain membership programs, the Company provides software applications under a hosting arrangement where the software application resides on the Company’s or its service providers’ hardware. The members do not take delivery of the software and only receive access to the software during the term of their membership agreement. Software development costs that are incurred in the preliminary project stage are expensed as incurred. During the development stage, direct consulting costs and payroll and payroll-related costs for employees that are directly associated with each project are capitalized and amortized over the estimated useful life of the software once placed into operation. Capitalized software is amortized using the straight-line method over its estimated useful life, which is generally five years. Replacements and major improvements are capitalized, while maintenance and repairs are charged to expense as incurred. | ||||||||
The acquired developed technology is classified as software within property and equipment because the developed software application resides on the Company’s or its service providers’ hardware. Amortization for acquired developed software is included in depreciation and amortization on the Company’s consolidated statements of operations. Developed software obtained through acquisitions is amortized over its useful life based on the cash flow estimates used to determine the value of the assets at acquisition. As of June 30, 2014 the weighted average useful life of existing acquired developed software was approximately six years. The amount of acquired developed software amortization included in depreciation and amortization for the three months ended June 30, 2014 and 2013 was approximately $0.6 million and $0.2 million, respectively. | ||||||||
Furniture, fixtures, and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Leasehold improvements are depreciated using the straight-line method over the shorter of the estimated useful lives of the assets or the lease term. There are no capitalized leases included in property and equipment for the periods presented. The amount of depreciation expense recognized on plant, property, and equipment during the three months ended June 30, 2014 and 2013 was $3.3 million and $2.4 million, respectively. | ||||||||
Internally developed capitalized software is classified as software within property and equipment and has an estimated useful life of five years. As of June 30, 2014 and March 31, 2014, the carrying value of internally developed capitalized software was $51.2 million and $46.0 million, respectively. Amortization expense for internally developed capitalized software for the three months ended June 30, 2014 and 2013, recorded in depreciation and amortization on the accompanying consolidated statements of operations, was approximately $2.8 million and $1.9 million, respectively. Property and equipment consists of the following (in thousands): | ||||||||
As of | ||||||||
June 30, 2014 | 31-Mar-14 | |||||||
Leasehold improvements | $ | 41,202 | $ | 39,425 | ||||
Furniture, fixtures, and equipment | 44,910 | 43,112 | ||||||
Software | 110,415 | 100,808 | ||||||
Property and equipment, gross | 196,527 | 183,345 | ||||||
Accumulated depreciation and amortization | (87,658 | ) | (80,888 | ) | ||||
Property and equipment, net | $ | 108,869 | $ | 102,457 | ||||
The Company evaluates its long-lived assets for impairment when changes in circumstances exist that suggests the carrying value of a long-lived asset may not be fully recoverable. If an indication of impairment exists, and the Company’s net book value of the related assets is not fully recoverable based upon an analysis of its estimated undiscounted future cash flows, the assets are written down to their estimated fair value. The Company did not recognize any material impairment losses on any of its long-lived assets during the three months ended June 30, 2014 or 2013. |
Goodwill_and_Intangibles
Goodwill and Intangibles | 3 Months Ended | |||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||||||||
Goodwill and intangibles | ' | |||||||||||||||||||||||||
Goodwill and intangibles | ||||||||||||||||||||||||||
Included in the Company’s goodwill and intangibles balances are goodwill and acquired intangibles and internally developed capitalized software for sale. Goodwill is not amortized because it has an estimated indefinite life. Goodwill is reviewed for impairment at least annually as of March 31, or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company believes that no such impairment indicators existed during the three months ended June 30, 2014 or 2013. There was no impairment of goodwill recorded in the three months ended June 30, 2014 or 2013. | ||||||||||||||||||||||||||
Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives, which range from six months to twelve years. As of June 30, 2014, the weighted average remaining useful life of acquired intangibles was approximately 5.5 years. As of June 30, 2014, the weighted average remaining useful life of internally developed intangibles was approximately 4.1 years. | ||||||||||||||||||||||||||
The gross and net carrying balances and accumulated amortization of intangibles are as follows (in thousands): | ||||||||||||||||||||||||||
As of June 30, 2014 | As of March 31, 2014 | |||||||||||||||||||||||||
Weighted | Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||||||
average | carrying | amortization | carrying | carrying | amortization | carrying | ||||||||||||||||||||
useful life | amount | amount | amount | amount | ||||||||||||||||||||||
Intangibles | ||||||||||||||||||||||||||
Internally developed intangible for sale: | ||||||||||||||||||||||||||
Capitalized software | 5 | $ | 12,831 | $ | (2,805 | ) | $ | 10,026 | $ | 11,508 | $ | (2,266 | ) | $ | 9,242 | |||||||||||
Acquired intangibles: | ||||||||||||||||||||||||||
Developed software | 6.1 | 19,250 | (8,663 | ) | 10,587 | 19,250 | (7,875 | ) | $ | 11,375 | ||||||||||||||||
Customer relationships | 8.1 | 16,860 | (7,372 | ) | 9,488 | 15,910 | (6,800 | ) | 9,110 | |||||||||||||||||
Trademarks | 6.2 | 4,200 | (2,789 | ) | 1,411 | 4,200 | (2,680 | ) | 1,520 | |||||||||||||||||
Non-compete agreements | 4.3 | 1,750 | (996 | ) | 754 | 1,400 | (900 | ) | 500 | |||||||||||||||||
Customer contracts | 4.7 | 6,449 | (4,495 | ) | 1,954 | 6,299 | (4,291 | ) | 2,008 | |||||||||||||||||
Total other intangibles | $ | 61,340 | $ | (27,120 | ) | $ | 34,220 | $ | 58,567 | $ | (24,812 | ) | $ | 33,755 | ||||||||||||
Amortization expense for intangible assets for the three months ended June 30, 2014 and 2013, recorded in depreciation and amortization on the accompanying consolidated statements of operations, was approximately $2.3 million and $1.8 million, respectively. The following approximates the aggregate amortization expense to be recorded in depreciation and amortization on the consolidated statements of operations for the remaining nine months of the fiscal year ending March 31, 2015 and for each of the following five fiscal years ending March 31, 2016 through 2019: $7.0 million, $6.6 million, $5.9 million, $5.3 million, and $4.0 million, respectively, and $5.4 million thereafter. |
Investment_in_and_Advances_to_
Investment in and Advances to Unconsolidated Entities | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Equity Method Investments and Joint Ventures [Abstract] | ' | |||||||
Investment in and advances to unconsolidated entities | ' | |||||||
Investments in and advances to unconsolidated entities | ||||||||
In August 2011, the Company entered into an agreement with UPMC to establish Evolent Health, Inc. (“Evolent”) for the purpose of driving provider-led, value-driven care with innovative technology, integrated data and analytics, and services. The Company provided $10.0 million and other non-cash contributions to Evolent for an initial equity interest of 44% in Series A convertible preferred stock of Evolent and the right to appoint one person to Evolent’s board of directors. The Company exercises significant influence over Evolent, but does not control Evolent and is not the primary beneficiary of Evolent’s activities. At the time of formation, the Series A convertible preferred shares of Evolent were deemed to be in-substance common stock. As a result, the Company’s investment in Evolent was accounted for under the equity method of accounting, with the Company’s proportionate share of the income or loss recognized in the consolidated statements of operations. In addition, a member of the Company’s Board of Directors serves as the chief executive officer of Evolent. | ||||||||
In September 2013, Evolent completed a reorganization in connection with a new round of equity financing (the “Series B Issuance”). Evolent’s reorganization included the creation of Evolent Health Holdings, Inc. ("Holdings") and the conversion of Evolent into Evolent Health LLC ("Evolent LLC"), a limited liability company that is treated as a partnership for tax purposes. As a result of the reorganization, Holdings owns 57% of the equity interests in Evolent LLC. Holdings has no other operations other than its investment in Evolent LLC. The Company, together with certain other investors, also holds direct equity interests in Evolent LLC, which is the operating company that conducts the Evolent business. The Company participated in the Series B Issuance by providing $9.6 million in cash and converting $10.1 million in principal and accrued interest of a convertible term note in exchange for 1,302,172 Series B convertible preferred shares in Evolent LLC and the right to appoint an additional person to the boards of directors of both Evolent LLC and Holdings. Immediately following the Series B Issuance and reorganization, the Company owned 23.6% of Holdings through its Series A convertible preferred stock investment and 11.5% of Evolent LLC through its Series B convertible preferred stock investment. As of June 30, 2014, the Company owned 23.1% of Holdings through its Series A convertible preferred stock investment and 11.3% of Evolent LLC through its Series B convertible preferred stock investment. | ||||||||
On the date of the Series B Issuance, the Company re-evaluated the accounting for its investment in Holdings’ Series A convertible preferred stock. The Company determined that its Series A convertible preferred stock investment in Holdings should be accounted for under the cost method instead of the equity method since the investment no longer qualified as in-substance common stock. The carrying balance of the Company’s Series A convertible preferred stock investment in Holdings was $0 as of June 30, 2014. Evolent LLC maintains separate capital accounts for each of its shareholders; therefore, the Company accounts for its Series B convertible preferred stock investment in Evolent LLC under the equity method. During the three months ended June 30, 2014 the Company’s proportionate share of the losses of Evolent LLC that was applied to the carrying value of its investment in Evolent LLC was $2.1 million, which includes $0.2 million related to amortization of basis differences related to identified intangible assets. The carrying balance of the Company’s investment in Series B convertible preferred shares of Evolent LLC was $13.7 million as of June 30, 2014. Because of Evolent LLC's treatment as a partnership for tax purposes, the losses of Evolent LLC pass through to the Company and the other shareholders. The Company's proportionate share of the losses of Evolent LLC are recorded net of the estimated tax benefit that the Company believes will be realized from the losses in equity in loss of unconsolidated entities on the consolidated statements of operations. Currently, the Company does not believe it is more likely than not that such tax benefits will be realized and as such, has provided a full valuation allowance against the deferred tax asset resulting from these benefits. | ||||||||
As of June 30, 2013, the Company's equity interest in Series A convertible preferred stock of Evolent was 31%. The Company’s proportionate share of the losses recognized by Evolent during the three months ended June 30, 2013 totaled $3.2 million and exceeded the Company's investment balance. As a result, a portion of the Company's proportionate losses was recognized at a rate consistent with the Company's interest in Evolent's outstanding debt as of June 30, 2013, or 44%. | ||||||||
Evolent LLC is in the early stages of its business plan and, as a result, the Company expects both Holdings and its majority-owned subsidiary, Evolent LLC, to continue to incur losses in the future. | ||||||||
The following is a summary of the financial position of Evolent LLC, as of the dates presented (unaudited, in thousands): | ||||||||
As of | ||||||||
30-Jun-14 | 31-Mar-14 | |||||||
Assets: | ||||||||
Current assets | $ | 74,553 | $ | 78,692 | ||||
Non-current assets | 23,852 | 20,151 | ||||||
Total assets | $ | 98,405 | $ | 98,843 | ||||
Liabilities and Members’ Equity: | ||||||||
Current liabilities | $ | 44,522 | $ | 35,333 | ||||
Non-current liabilities | 3,367 | 3,173 | ||||||
Total liabilities | 47,889 | 38,506 | ||||||
Redeemable equity | 78,360 | 78,360 | ||||||
Members’ equity | (27,844 | ) | (18,023 | ) | ||||
Total liabilities and members’ equity | $ | 98,405 | $ | 98,843 | ||||
The following is a summary of the operating results of Evolent LLC (or its predecessor) for the periods presented (unaudited, in thousands): | ||||||||
Three Months Ended | ||||||||
June 30, | ||||||||
2014 | 2013 | |||||||
Revenue | $ | 24,189 | $ | 7,526 | ||||
Operating expenses | (33,467 | ) | (16,029 | ) | ||||
Depreciation and amortization | (641 | ) | (396 | ) | ||||
Interest, net | 58 | (259 | ) | |||||
Taxes | (7 | ) | — | |||||
Net loss | $ | (9,868 | ) | $ | (9,158 | ) |
Other_NonCurrent_Assets
Other Non-Current Assets | 3 Months Ended |
Jun. 30, 2014 | |
Investments, All Other Investments [Abstract] | ' |
Other non-current assets | ' |
Other non-current assets | |
In June 2009, the Company invested in the convertible preferred stock of a private company that provides technology tools and support services to health care providers, including the Company’s members. In addition, the Company entered into a licensing agreement with that company. As part of its investment, the Company received warrants to purchase up to 6,015,000 shares of the company’s common stock at an exercise price of $1.00 per share as certain performance criteria are met. The warrants are exercisable through June 19, 2019. The warrants contain a net settlement feature and therefore are considered to be a derivative financial instrument. The warrants are recorded at their estimated fair value, which was $370,000 as of June 30, 2014 and $550,000 as of March 31, 2014, and are included in other non-current assets on the accompanying consolidated balance sheets. The change in the estimated fair value of the warrants is recorded in other income, net on the accompanying consolidated statements of operations. For additional information regarding the fair value of these warrants, see Note 4, “Fair value measurements.” The convertible preferred stock investment is recorded at cost, and the carrying amount of this investment of $5.0 million as of June 30, 2014 is included in other non-current assets on the accompanying consolidated balance sheets. The convertible preferred stock accrues dividends at an annual rate of 8% that are payable if and when declared by the investee’s board of directors. As of June 30, 2014, no dividends had been declared by the investee or recorded by the Company. This investment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of this asset may not be recoverable. The Company believes that no such impairment indicators existed during the three months ended June 30, 2014 or 2013. |
Noncontrolling_Interest
Noncontrolling Interest | 3 Months Ended |
Jun. 30, 2014 | |
Noncontrolling Interest [Abstract] | ' |
Noncontrolling interest | ' |
Noncontrolling interest | |
In July 2012, the Company entered into an agreement with an entity created for the sole purpose of providing consulting services for the Company on an exclusive basis. The Company’s relationship with the entity is governed by a services agreement and other documents that provide the entity’s owners the conditional right to require the Company to purchase their ownership interests (“Put Option”), for a price based on a formula set forth in the agreement, at any time after certain conditions have been satisfied through December 31, 2014. These agreements also provide the Company a conditional right to require the entity's owners to sell their ownership interests to the Company ("Call Option") over the same period. In April 2014, an amendment to these agreements provided for an extension of both the Put Option and Call Option to be exercisable through June 30, 2015. | |
As of June 30, 2014, these conditions had not been satisfied. The equity interest in this entity is classified as a redeemable noncontrolling interest, which is presented outside of permanent equity as the redemption is not solely within the Company’s control. During the three months ended June 30, 2014, management determined that it is probable that the Put Option will become exercisable prior to its expiration. As a result, the redeemable noncontrolling interest was increased to the estimated redemption amount of $7.1 million from its carrying value of $0.1 million. The accretion to the redemption value of $7.0 million was recorded in additional paid-in capital on the accompanying consolidated balance sheet as the Company had an accumulated deficit as of June 30, 2014. In addition, the accretion to redemption value was recorded as a reduction to net income available to common stockholders on the accompanying consolidated statements of operations in the three months ended June 30, 2014. Prior to June 30, 2014, management had determined that exercisability was not probable. Any change in the redemption value based on the formula set forth in the agreement will be accounted for as accretion in the period the change in redemption value occurs. The Company believes any additional change in the redemption value will not be material to the Company's financial statements. | |
The Company has determined that this entity meets the definition of a variable interest entity over which it has significant influence and, as a result, has consolidated the results of this entity into its consolidated financial statements. The noncontrolling interest represents the entity’s owners’ claims on consolidated investments where the Company owns less than a 100% interest. As of June 30, 2014, the Company had a 0% ownership interest in this entity. The Company records these interests at their initial fair value, adjusting the basis prospectively for the noncontrolling holders’ share of the respective consolidated investments’ results of operations and applicable changes in ownership. |
Revolving_Credit_Facility
Revolving Credit Facility | 3 Months Ended |
Jun. 30, 2014 | |
Debt Disclosure [Abstract] | ' |
Revolving credit facility | ' |
Revolving credit facility | |
In July 2012, the Company entered into a $150.0 million five-year senior secured revolving credit facility under a credit agreement with a syndicate of lenders. Under the revolving credit facility, up to $150.0 million principal amount of borrowings and other credit extensions may be outstanding at any time, subject to compliance with specified financial ratios and the satisfaction of other customary conditions to borrowing. The maximum principal amount available under the credit agreement may be increased by up to an additional $50.0 million in minimum increments of $10.0 million at the Company’s election upon the satisfaction of specified conditions. The credit agreement contains a sublimit for up to $5.0 million principal amount of swing line loans outstanding at any time and a sublimit for the issuance of up to $10.0 million of letters of credit outstanding at any time. The facility loans may be borrowed, repaid and reborrowed from time to time during the term of the facility and will mature and be payable in full on July 30, 2017. Consequently, the amount outstanding under the revolving credit facility at the end of a period may not be reflective of the total amounts outstanding during such period. | |
Amounts borrowed under the revolving credit facility generally will bear interest at an annual rate calculated, at the Company’s option, on the basis of either (a) an alternate base rate plus the applicable margin for alternate base rate loans under the credit agreement, which ranges from 0.75% to 1.50% based on the Company’s total leverage ratio, or (b) an adjusted LIBO rate plus the applicable margin for eurocurrency loans under the credit agreement, which ranges from 1.75% to 2.50% based on the Company’s total leverage ratio. The Company is required to pay a commitment fee on the unutilized portion of the facility at an annual rate of between 0.25% and 0.40% based on the Company’s total leverage ratio. | |
As of June 30, 2014, there were no amounts outstanding under the revolving credit facility and $150.0 million was available for borrowing. | |
The Company is required under the revolving credit facility to satisfy three financial ratios on a quarterly basis. The Company was in compliance with these financial covenants as of June 30, 2014. |
Stockholders_Equity
Stockholders' Equity | 3 Months Ended |
Jun. 30, 2014 | |
Equity [Abstract] | ' |
Stockholders' equity | ' |
Stockholders’ equity | |
On May 8, 2013, the Company’s Board of Directors authorized the Company to repurchase an additional $100 million of the Company’s common stock under its share repurchase program, bringing the total authorized repurchase amount under the program to $450 million since its inception. The Company repurchased 364,662 and 118,880 shares of its common stock at a total cost of approximately $18.0 million and $6.2 million in the three months ended June 30, 2014 and 2013, respectively, pursuant to its share repurchase program. The total amount of common stock purchased from inception under the program as of June 30, 2014 was 16,391,288 shares at a total cost of $380.8 million. All repurchases to date have been made in the open market, and all repurchased shares have been retired as of June 30, 2014. No minimum number of shares subject to repurchase has been fixed, and the share repurchase authorization has no expiration date. The Company has funded, and expects to continue to fund, its share repurchases with cash on hand, proceeds from the sale of marketable securities, and cash generated from operations. As of June 30, 2014, the remaining authorized repurchase amount was $69.2 million. | |
During the three months ended June 30, 2014, the Company retired 364,662 shares of its treasury stock. Upon retirement, these shares resumed the status of authorized but unissued stock. The treasury stock retirement resulted in reductions to common stock of $3,600, treasury stock of $18.0 million, and retained earnings of $17.9 million. A total of 16,391,288 shares of treasury stock have been retired to date. There was no effect on the total stockholders’ equity position as a result of the retirement. |
Stockbased_Compensation
Stock-based Compensation | 3 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||
Stock-based Compensation | ' | |||||||||||||
Stock-based compensation | ||||||||||||||
On June 23, 2014, the Compensation Committee of the Board of Directors approved a grant of 947,117 nonqualified stock options and 101,474 restricted stock units (“RSUs”) to certain executive officers of the Company. The awards are subject to both performance-based and market-based conditions and will vest based upon the achievement of specified levels of both sustained contract value and sustained stock price during the performance period, which could extend to May 30, 2019. The vesting of the RSUs is also subject to a one-year service condition, which requires the recipient to remain employed with the Company for at least the year following the date on which the applicable performance conditions were achieved. The estimated requisite service period is five years for the stock options and six years for the RSUs. The Company is in the process of finalizing the valuation and accounting for these awards. The final valuation may result in different fair values being assigned to the awards which would also change the amount of compensation expense related to these awards in future periods. The amount of expense recognized related to these awards for the three months ended June 30, 2014 was insignificant. | ||||||||||||||
The following table summarizes the changes in common stock options granted under the Company’s stock incentive plans during the three months ended June 30, 2014 and 2013: | ||||||||||||||
Three Months Ended June 30, | ||||||||||||||
2014 | 2013 | |||||||||||||
Number of | Weighted | Number of | Weighted | |||||||||||
options | average | options | average | |||||||||||
exercise | exercise | |||||||||||||
price | price | |||||||||||||
Outstanding, beginning of period | 1,830,323 | $ | 32.82 | 2,692,353 | $ | 21.06 | ||||||||
Granted | 1,144,973 | 52.28 | 418,440 | 47.87 | ||||||||||
Exercised | (72,454 | ) | 17.47 | (507,844 | ) | 15.16 | ||||||||
Forfeited | — | — | (31,116 | ) | 29.36 | |||||||||
Cancellations | — | — | — | — | ||||||||||
Outstanding, end of period | 2,902,842 | $ | 28.91 | 2,571,833 | $ | 26.49 | ||||||||
Exercisable, end of period | 1,003,345 | $ | 24.74 | |||||||||||
The weighted average fair value of the options granted during the three months ended June 30, 2014 is estimated at $16.97 per share on the date of grant using the following weighted average assumptions: risk-free interest rate of 2.1%; an expected life of approximately 4.9 years; volatility of 35.08%; and dividend yield of 0.0% over the expected life of the option. | ||||||||||||||
The following table summarizes the changes in restricted stock units granted under the Company’s stock incentive plans during the three months ended June 30, 2014 and 2013: | ||||||||||||||
Three Months Ended June 30, | ||||||||||||||
2014 | 2013 | |||||||||||||
Number of | Weighted | Number of | Weighted | |||||||||||
RSUs | average | RSUs | average | |||||||||||
grant | grant | |||||||||||||
date | date | |||||||||||||
fair | fair | |||||||||||||
value | value | |||||||||||||
Non-vested, beginning of period | 1,110,462 | $ | 42.05 | 943,206 | $ | 29.5 | ||||||||
Granted | 332,452 | 45.85 | 378,592 | 48.3 | ||||||||||
Forfeited | (3,084 | ) | 48.35 | (12,674 | ) | 29.72 | ||||||||
Vested | (387,377 | ) | 32.27 | (339,710 | ) | 26.5 | ||||||||
Non-vested, end of period | 1,052,453 | $ | 46.82 | 969,414 | $ | 37.89 | ||||||||
The Company recognized stock-based compensation expense in the following consolidated statements of operations line items for stock options and RSUs, for the three months ended June 30, 2014 and 2013 (in thousands, except per share amounts): | ||||||||||||||
Three Months Ended | ||||||||||||||
June 30, | ||||||||||||||
2014 | 2013 | |||||||||||||
Stock-based compensation expense included in: | ||||||||||||||
Costs and expenses: | ||||||||||||||
Cost of services | $ | 2,089 | $ | 1,405 | ||||||||||
Member relations and marketing | 1,081 | 976 | ||||||||||||
General and administrative | 2,371 | 2,278 | ||||||||||||
Depreciation and amortization | — | — | ||||||||||||
Total costs and expenses | 5,541 | 4,659 | ||||||||||||
Operating income | (5,541 | ) | (4,659 | ) | ||||||||||
Net income | $ | (3,352 | ) | $ | (2,865 | ) | ||||||||
Impact on diluted earnings per share | (0.09 | ) | (0.08 | ) | ||||||||||
There are no stock-based compensation costs capitalized as part of the cost of an asset. | ||||||||||||||
As of June 30, 2014, $71.7 million of total unrecognized compensation cost related to outstanding options and non-vested RSUs was expected to be recognized over a weighted average period of 3.5 years. |
Income_Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income taxes | ' |
Income taxes | |
The Company uses a more-likely-than-not recognition threshold based on the technical merits of the tax position taken for the financial statement recognition and measurement of a tax position. If a tax position does not meet the more-likely-than-not initial recognition threshold, no benefit is recorded in the financial statements. The Company does not currently anticipate that the total amounts of unrecognized tax benefits will significantly change within the next 12 months. The Company classifies interest and penalties on any unrecognized tax benefits as a component of the provision for income taxes. No interest or penalties were recognized in the consolidated statements of operations for the three months ended June 30, 2014 or 2013. The Company files income tax returns in U.S. federal and state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state, and local tax examinations for filings in major tax jurisdictions before 2010. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | |||||
Jun. 30, 2014 | ||||||
Earnings Per Share [Abstract] | ' | |||||
Earnings per share | ' | |||||
Earnings per share | ||||||
Basic earnings per share is computed by dividing net (loss) income attributable to common stockholders by the number of weighted average common shares outstanding during the period. Diluted earnings per share is computed by dividing net (loss) income attributable to common stockholders by the number of weighted average common shares and potentially dilutive common shares outstanding during the period. The number of potential common shares outstanding is determined in accordance with the treasury stock method, using the Company’s prevailing tax rates. Certain potential common share equivalents were not included in the computation because their effect was anti-dilutive. | ||||||
A reconciliation of basic to diluted weighted average common shares outstanding is as follows (in thousands): | ||||||
Three Months Ended | ||||||
June 30, | ||||||
2014 | 2013 | |||||
Basic weighted average common shares outstanding | 36,413 | 35,488 | ||||
Effect of dilutive outstanding stock-based awards | — | 1,130 | ||||
Diluted weighted average common shares outstanding | 36,413 | 36,618 | ||||
In the three months ended June 30, 2014 and 2013, 2.8 million and 0.7 million shares, respectively, related to share-based compensation awards have been excluded from the calculation of the effect of dilutive outstanding stock-based awards shown above because their effect was anti-dilutive. |
Recent_Accounting_Pronouncemen1
Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Jun. 30, 2014 | |
Accounting Changes and Error Corrections [Abstract] | ' |
Recent Accounting Pronouncements | ' |
Recently adopted | |
In July 2013, the Financial Accounting Standards Board (“FASB”) issued accounting guidance related to income taxes, which requires entities to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward when settlement in this manner is available under the tax law. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, with early adoption permitted. The Company adopted this guidance on April 1, 2014. Adoption did not have a material effect on the Company's financial position or results of operations. | |
Recently issued | |
In May 2014, the FASB issued accounting guidance related to revenue recognition. The new standard supersedes most of the existing revenue recognition guidance under GAAP, and requires revenue to be recognized when goods or services are transferred to a customer in an amount that reflects the consideration a company expects to receive. The new standard may require more judgment and estimates while recognizing revenue, which could result in additional disclosures to the financial statements. The standard is effective for the Company in fiscal 2018. The Company is currently evaluating the revenue recognition impact this guidance will have once implemented. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair Value Measurements of Financial Assets and Liabilities on Recurring Basis | ' | |||||||||||||||
The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the necessary disclosures are as follows (in thousands): | ||||||||||||||||
Fair value | Fair value measurement as of June 30, 2014 | |||||||||||||||
as of June 30, | using fair value hierarchy | |||||||||||||||
2014 | Level 1 | Level 2 | Level 3 | |||||||||||||
Financial assets | ||||||||||||||||
Cash and cash equivalents | $ | 41,057 | $ | 41,057 | $ | — | $ | — | ||||||||
Available-for-sale marketable securities | 91,310 | — | 91,310 | — | ||||||||||||
Common stock warrants (1) | 370 | — | — | 370 | ||||||||||||
Financial liabilities | ||||||||||||||||
Contingent earn-out liabilities (2) | 5,850 | — | — | 5,850 | ||||||||||||
Fair value | Fair value measurement as of March 31, 2014 | |||||||||||||||
as of March 31, | using fair value hierarchy | |||||||||||||||
2014 | Level 1 | Level 2 | Level 3 | |||||||||||||
Financial assets | ||||||||||||||||
Cash and cash equivalents | $ | 23,129 | $ | 23,129 | $ | — | $ | — | ||||||||
Available-for-sale marketable securities | 164,396 | — | 164,396 | — | ||||||||||||
Common stock warrants (1) | 550 | — | — | 550 | ||||||||||||
Financial liabilities | ||||||||||||||||
Contingent earn-out liabilities (2) | 8,750 | — | — | 8,750 | ||||||||||||
-1 | The fair value of the common stock warrants as of June 30, 2014 and March 31, 2014 was calculated to be $0.21 and $0.31 per share, respectively, per share using a Black-Scholes-Merton model. The significant assumptions as of June 30, 2014 were as follows: risk-free interest rate of 1.6%; expected term of 4.97 years; expected volatility of 70.00%; dividend yield of 0.0%; weighted average share price of $0.49 per share; and expected warrants to become exercisable of approximately 1,776,500 shares. The significant assumptions as of March 31, 2014 were as follows: risk-free interest rate of 1.7%; expected term of 5.22 years; expected volatility of 67.55%; dividend yield of 0.0%; weighted average share price of $0.49 per share; and expected warrants to become exercisable of approximately 1,776,500 shares. | |||||||||||||||
-2 | This fair value measurement is based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value using the income approach. In developing these estimates, the Company considered certain performance projections, historical results, and general macroeconomic environment and industry trends. | |||||||||||||||
Reconciliation of Change in Fair Value of Common Stock Warrants | ' | |||||||||||||||
The following table represents a reconciliation of the change in the fair value of the common stock warrants for the three months ended June 30, 2014 and 2013, (in thousands): | ||||||||||||||||
Three Months Ended | ||||||||||||||||
June 30, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Beginning balance | $ | 550 | $ | 550 | ||||||||||||
Fair value change in common stock warrants (1) | (180 | ) | — | |||||||||||||
Ending balance | $ | 370 | $ | 550 | ||||||||||||
-1 | Amounts were recognized in other income, net on the accompanying consolidated statements of operations. | |||||||||||||||
Reconciliation of Change in Contingent Earn-out Liabilities | ' | |||||||||||||||
The following table represents a reconciliation of the change in the contingent earn-out liabilities for the three months ended June 30, 2014 and 2013 (in thousands): | ||||||||||||||||
Three Months Ended | ||||||||||||||||
June 30, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Beginning balance | $ | 8,750 | $ | 15,200 | ||||||||||||
Fair value change in Southwind contingent earn-out liability (1) | — | 400 | ||||||||||||||
Fair value change in 360Fresh contingent earn-out liability (1) | (100 | ) | 300 | |||||||||||||
Southwind earn-out payments | (2,800 | ) | (1,400 | ) | ||||||||||||
Ending balance | $ | 5,850 | $ | 14,500 | ||||||||||||
-1 | Amounts were recognized in cost of services on the accompanying consolidated statements of operations. |
Marketable_Securities_Tables
Marketable Securities (Tables) | 3 Months Ended | |||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||||||||||||||
Aggregate Value, Amortized Cost, Gross Unrealized Gains, and Gross Unrealized Losses on Available-for-Sale Marketable Securities | ' | |||||||||||||||||||||||
The aggregate fair value, amortized cost, gross unrealized gains, and gross unrealized losses on available-for-sale marketable securities are as follows (in thousands): | ||||||||||||||||||||||||
As of June 30, 2014 | ||||||||||||||||||||||||
Fair | Amortized | Gross | Gross | |||||||||||||||||||||
value | cost | unrealized | unrealized | |||||||||||||||||||||
gains | losses | |||||||||||||||||||||||
U.S. government-sponsored enterprises | $ | 9,875 | $ | 10,500 | $ | — | $ | 625 | ||||||||||||||||
Tax exempt obligations of states | 81,435 | 82,040 | 601 | 1,206 | ||||||||||||||||||||
$ | 91,310 | $ | 92,540 | $ | 601 | $ | 1,831 | |||||||||||||||||
As of March 31, 2014 | ||||||||||||||||||||||||
Fair | Amortized | Gross | Gross | |||||||||||||||||||||
value | cost | unrealized | unrealized | |||||||||||||||||||||
gains | losses | |||||||||||||||||||||||
U.S. government-sponsored enterprises | $ | 29,291 | $ | 30,344 | $ | — | $ | 1,053 | ||||||||||||||||
Tax exempt obligations of states | 135,105 | 136,653 | 1,060 | 2,608 | ||||||||||||||||||||
$ | 164,396 | $ | 166,997 | $ | 1,060 | $ | 3,661 | |||||||||||||||||
Marketable Securities Maturities | ' | |||||||||||||||||||||||
The following table summarizes marketable securities maturities (in thousands): | ||||||||||||||||||||||||
As of June 30, 2014 | ||||||||||||||||||||||||
Fair market | Amortized | |||||||||||||||||||||||
value | cost | |||||||||||||||||||||||
Matures in less than 1 year | $ | 2,427 | $ | 2,411 | ||||||||||||||||||||
Matures after 1 year through 5 years | 16,958 | 16,724 | ||||||||||||||||||||||
Matures after 5 years through 10 years | 52,390 | 53,067 | ||||||||||||||||||||||
Matures after 10 years through 20 years | 19,535 | 20,338 | ||||||||||||||||||||||
$ | 91,310 | $ | 92,540 | |||||||||||||||||||||
Gross Unrealized Losses and Fair Value of Company's Investments | ' | |||||||||||||||||||||||
The following table shows the gross unrealized losses and fair value of the Company’s investments as of June 30, 2014 with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands): | ||||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||
Fair | Gross | Fair | Gross | Fair | Gross | |||||||||||||||||||
value | unrealized | value | unrealized | value | unrealized | |||||||||||||||||||
losses | losses | losses | ||||||||||||||||||||||
U.S. government-sponsored enterprises | $ | — | $ | — | $ | 9,875 | $ | 625 | $ | 9,875 | $ | 625 | ||||||||||||
Tax exempt obligations of states | — | — | 53,204 | 1,206 | 53,204 | 1,206 | ||||||||||||||||||
$ | — | $ | — | $ | 63,079 | $ | 1,831 | $ | 63,079 | $ | 1,831 | |||||||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Schedule of Property and Equipment | ' | |||||||
Property and equipment consists of the following (in thousands): | ||||||||
As of | ||||||||
June 30, 2014 | 31-Mar-14 | |||||||
Leasehold improvements | $ | 41,202 | $ | 39,425 | ||||
Furniture, fixtures, and equipment | 44,910 | 43,112 | ||||||
Software | 110,415 | 100,808 | ||||||
Property and equipment, gross | 196,527 | 183,345 | ||||||
Accumulated depreciation and amortization | (87,658 | ) | (80,888 | ) | ||||
Property and equipment, net | $ | 108,869 | $ | 102,457 | ||||
Goodwill_and_Intangibles_Table
Goodwill and Intangibles (Tables) | 3 Months Ended | |||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||||||||
Gross and Net Carrying Balances and Accumulated Amortization of Intangibles | ' | |||||||||||||||||||||||||
The gross and net carrying balances and accumulated amortization of intangibles are as follows (in thousands): | ||||||||||||||||||||||||||
As of June 30, 2014 | As of March 31, 2014 | |||||||||||||||||||||||||
Weighted | Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||||||
average | carrying | amortization | carrying | carrying | amortization | carrying | ||||||||||||||||||||
useful life | amount | amount | amount | amount | ||||||||||||||||||||||
Intangibles | ||||||||||||||||||||||||||
Internally developed intangible for sale: | ||||||||||||||||||||||||||
Capitalized software | 5 | $ | 12,831 | $ | (2,805 | ) | $ | 10,026 | $ | 11,508 | $ | (2,266 | ) | $ | 9,242 | |||||||||||
Acquired intangibles: | ||||||||||||||||||||||||||
Developed software | 6.1 | 19,250 | (8,663 | ) | 10,587 | 19,250 | (7,875 | ) | $ | 11,375 | ||||||||||||||||
Customer relationships | 8.1 | 16,860 | (7,372 | ) | 9,488 | 15,910 | (6,800 | ) | 9,110 | |||||||||||||||||
Trademarks | 6.2 | 4,200 | (2,789 | ) | 1,411 | 4,200 | (2,680 | ) | 1,520 | |||||||||||||||||
Non-compete agreements | 4.3 | 1,750 | (996 | ) | 754 | 1,400 | (900 | ) | 500 | |||||||||||||||||
Customer contracts | 4.7 | 6,449 | (4,495 | ) | 1,954 | 6,299 | (4,291 | ) | 2,008 | |||||||||||||||||
Total other intangibles | $ | 61,340 | $ | (27,120 | ) | $ | 34,220 | $ | 58,567 | $ | (24,812 | ) | $ | 33,755 | ||||||||||||
Investment_in_and_Advances_to_1
Investment in and Advances to Unconsolidated Entities (Tables) 10Q (Evolent LLC) | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Evolent LLC | ' | |||||||
Summary of Financial Position of Evolent LLC | ' | |||||||
The following is a summary of the financial position of Evolent LLC, as of the dates presented (unaudited, in thousands): | ||||||||
As of | ||||||||
30-Jun-14 | 31-Mar-14 | |||||||
Assets: | ||||||||
Current assets | $ | 74,553 | $ | 78,692 | ||||
Non-current assets | 23,852 | 20,151 | ||||||
Total assets | $ | 98,405 | $ | 98,843 | ||||
Liabilities and Members’ Equity: | ||||||||
Current liabilities | $ | 44,522 | $ | 35,333 | ||||
Non-current liabilities | 3,367 | 3,173 | ||||||
Total liabilities | 47,889 | 38,506 | ||||||
Redeemable equity | 78,360 | 78,360 | ||||||
Members’ equity | (27,844 | ) | (18,023 | ) | ||||
Total liabilities and members’ equity | $ | 98,405 | $ | 98,843 | ||||
Summary of Operating Results of Evolent LLC | ' | |||||||
The following is a summary of the operating results of Evolent LLC (or its predecessor) for the periods presented (unaudited, in thousands): | ||||||||
Three Months Ended | ||||||||
June 30, | ||||||||
2014 | 2013 | |||||||
Revenue | $ | 24,189 | $ | 7,526 | ||||
Operating expenses | (33,467 | ) | (16,029 | ) | ||||
Depreciation and amortization | (641 | ) | (396 | ) | ||||
Interest, net | 58 | (259 | ) | |||||
Taxes | (7 | ) | — | |||||
Net loss | $ | (9,868 | ) | $ | (9,158 | ) |
Stockbased_Compensation_Tables
Stock-based Compensation (Tables) | 3 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||
Summary of Changes in Common Stock Options | ' | |||||||||||||
The following table summarizes the changes in common stock options granted under the Company’s stock incentive plans during the three months ended June 30, 2014 and 2013: | ||||||||||||||
Three Months Ended June 30, | ||||||||||||||
2014 | 2013 | |||||||||||||
Number of | Weighted | Number of | Weighted | |||||||||||
options | average | options | average | |||||||||||
exercise | exercise | |||||||||||||
price | price | |||||||||||||
Outstanding, beginning of period | 1,830,323 | $ | 32.82 | 2,692,353 | $ | 21.06 | ||||||||
Granted | 1,144,973 | 52.28 | 418,440 | 47.87 | ||||||||||
Exercised | (72,454 | ) | 17.47 | (507,844 | ) | 15.16 | ||||||||
Forfeited | — | — | (31,116 | ) | 29.36 | |||||||||
Cancellations | — | — | — | — | ||||||||||
Outstanding, end of period | 2,902,842 | $ | 28.91 | 2,571,833 | $ | 26.49 | ||||||||
Exercisable, end of period | 1,003,345 | $ | 24.74 | |||||||||||
Summary of Changes in RSUs | ' | |||||||||||||
The following table summarizes the changes in restricted stock units granted under the Company’s stock incentive plans during the three months ended June 30, 2014 and 2013: | ||||||||||||||
Three Months Ended June 30, | ||||||||||||||
2014 | 2013 | |||||||||||||
Number of | Weighted | Number of | Weighted | |||||||||||
RSUs | average | RSUs | average | |||||||||||
grant | grant | |||||||||||||
date | date | |||||||||||||
fair | fair | |||||||||||||
value | value | |||||||||||||
Non-vested, beginning of period | 1,110,462 | $ | 42.05 | 943,206 | $ | 29.5 | ||||||||
Granted | 332,452 | 45.85 | 378,592 | 48.3 | ||||||||||
Forfeited | (3,084 | ) | 48.35 | (12,674 | ) | 29.72 | ||||||||
Vested | (387,377 | ) | 32.27 | (339,710 | ) | 26.5 | ||||||||
Non-vested, end of period | 1,052,453 | $ | 46.82 | 969,414 | $ | 37.89 | ||||||||
Summary of Stock-based Compensation Expense | ' | |||||||||||||
The Company recognized stock-based compensation expense in the following consolidated statements of operations line items for stock options and RSUs, for the three months ended June 30, 2014 and 2013 (in thousands, except per share amounts): | ||||||||||||||
Three Months Ended | ||||||||||||||
June 30, | ||||||||||||||
2014 | 2013 | |||||||||||||
Stock-based compensation expense included in: | ||||||||||||||
Costs and expenses: | ||||||||||||||
Cost of services | $ | 2,089 | $ | 1,405 | ||||||||||
Member relations and marketing | 1,081 | 976 | ||||||||||||
General and administrative | 2,371 | 2,278 | ||||||||||||
Depreciation and amortization | — | — | ||||||||||||
Total costs and expenses | 5,541 | 4,659 | ||||||||||||
Operating income | (5,541 | ) | (4,659 | ) | ||||||||||
Net income | $ | (3,352 | ) | $ | (2,865 | ) | ||||||||
Impact on diluted earnings per share | (0.09 | ) | (0.08 | ) | ||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | |||||
Jun. 30, 2014 | ||||||
Earnings Per Share [Abstract] | ' | |||||
Reconciliation of Basic to Diluted Weighted Average Common Shares Outstanding | ' | |||||
A reconciliation of basic to diluted weighted average common shares outstanding is as follows (in thousands): | ||||||
Three Months Ended | ||||||
June 30, | ||||||
2014 | 2013 | |||||
Basic weighted average common shares outstanding | 36,413 | 35,488 | ||||
Effect of dilutive outstanding stock-based awards | — | 1,130 | ||||
Diluted weighted average common shares outstanding | 36,413 | 36,618 | ||||
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) 10Q (USD $) | 3 Months Ended | 3 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | 5-May-14 | 5-May-14 | 5-May-14 | 5-May-14 | 5-May-14 | 5-May-14 | 5-May-14 | 5-May-14 | Oct. 07, 2013 | Oct. 07, 2013 | Oct. 07, 2013 | Oct. 07, 2013 | Oct. 07, 2013 | Oct. 07, 2013 | Oct. 07, 2013 | Jul. 08, 2013 | Jul. 08, 2013 | Jul. 08, 2013 | Jul. 08, 2013 | Jul. 08, 2013 | Jul. 08, 2013 | |
Minimum | Maximum | Customer relationships | Customer contracts | HealthPost, Inc. | HealthPost, Inc. | HealthPost, Inc. | HealthPost, Inc. | HealthPost, Inc. | HealthPost, Inc. | HealthPost, Inc. | HealthPost, Inc. | Care Team Connect Inc. | Care Team Connect Inc. | Care Team Connect Inc. | Care Team Connect Inc. | Care Team Connect Inc. | Care Team Connect Inc. | Care Team Connect Inc. | Medical Referral Source Inc | Medical Referral Source Inc | Medical Referral Source Inc | Medical Referral Source Inc | Medical Referral Source Inc | Medical Referral Source Inc | ||||
Minimum | Maximum | Developed Technology Rights | Customer relationships | Employee Related Intangibles | Customer contracts | Minimum | Maximum | Developed Technology Rights | Customer relationships | Customer contracts | Minimum | Maximum | Developed Technology Rights | Customer Relationship and Employee Related Intangibles | ||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total Purchase Price | $25,830,000 | $0 | ' | ' | ' | ' | ' | $25,800,000 | ' | ' | ' | ' | ' | ' | ' | $34,600,000 | ' | ' | ' | ' | ' | ' | $11,500,000 | ' | ' | ' | ' | ' |
Accounts receivable | ' | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | 13,800,000 | ' | ' | ' | ' | ' | ' | 700,000 | ' | ' | ' | ' |
Liabilities assumed | ' | ' | ' | ' | ' | ' | ' | ' | 1,700,000 | ' | ' | ' | ' | ' | ' | ' | 13,500,000 | ' | ' | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' |
Acquired current deferred revenue | ' | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' | ' | ' | ' | ' | 4,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax liabilities | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000 | ' | ' | ' | ' | ' | ' | ' | 700,000 | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' |
Finite-lived intangibles | ' | ' | ' | ' | ' | ' | ' | ' | 2,700,000 | ' | ' | 1,200,000 | 900,000 | 400,000 | 200,000 | ' | 9,300,000 | ' | ' | 5,400,000 | 2,800,000 | 1,100,000 | ' | 2,100,000 | ' | ' | 1,700,000 | 400,000 |
Estimated useful lives of intangible assets | '4 years 1 month 6 days | ' | ' | '6 months | '12 years | '8 years 1 month 6 days | '4 years 8 months 15 days | ' | ' | '1 year | '7 years | ' | ' | ' | ' | ' | ' | '3 years | '12 years | ' | ' | ' | ' | ' | '3 years | '8 years | ' | ' |
Weighted average useful life | '5 years 6 months | ' | ' | ' | ' | ' | ' | '4 years 2 months 13 days | ' | ' | ' | ' | ' | ' | ' | '8 years 2 months 12 days | ' | ' | ' | ' | ' | ' | '4 years | ' | ' | ' | ' | ' |
Goodwill | 152,748,000 | ' | 129,424,000 | ' | ' | ' | ' | ' | 23,300,000 | ' | ' | ' | ' | ' | ' | ' | 24,800,000 | ' | ' | ' | ' | ' | ' | 8,900,000 | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquired noncurrent deferred revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,700,000 | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' |
Accounts Payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $900,000 | ' | ' | ' | ' | ' | ' | $100,000 | ' | ' | ' | ' |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (USD $) | 3 Months Ended | 1 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | Jun. 30, 2009 | Jun. 30, 2014 | Aug. 01, 2011 | Oct. 31, 2012 | Jun. 30, 2014 | Dec. 31, 2009 | Jun. 30, 2014 | Nov. 15, 2012 | Jun. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | |
PivotHealth | PivotHealth | Southwind | Southwind | Southwind | 360 Fresh | 360 Fresh | Common Stock Warrants | Common Stock Warrants | Maximum | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock warrants | 6,015,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Significant transfers between Level 1, Level 2,or Level 3 | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of the common stock warrants | $0.21 | ' | $0.31 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Change during period in common stock warrants, fair value disclosure | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value Assumptions, Risk Free Interest Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.60% | 1.70% | ' |
Fair Value Assumptions, Expected Term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years 11 months 20 days | '5 years 2 months 19 days | ' |
Fair Value Assumptions, Expected Volatility Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 70.00% | 67.55% | ' |
Fair Value Assumptions, Expected Dividend Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | 0.00% | ' |
Fair Value Assumptions, Exercise Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.49 | $0.49 | ' |
Number Of Warrants Exercisable | 1,776,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,776,500 |
Fair value estimate discount rate | ' | ' | ' | ' | ' | ' | ' | 15.00% | ' | 19.00% | ' | ' | ' | ' |
Fair value of estimated additional contingent payments | ' | ' | ' | ' | 0 | 2,900,000 | ' | 3,300,000 | 5,600,000 | 2,500,000 | 2,500,000 | ' | ' | ' |
Maximum payment to acquire business | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,000,000 | ' | ' | ' |
Shares transferred to satisfy earn-out liability | ' | ' | ' | ' | ' | ' | 112,408 | ' | ' | ' | ' | ' | ' | ' |
Earn-out liability | ' | ' | ' | ' | ' | ' | 5,400,000 | 17,500,000 | ' | ' | ' | ' | ' | ' |
Fair value adjustments | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_Measurements_Fair_V
Fair Value Measurements - Fair Value Measurements of Financial Assets and Liabilities on Recurring Basis (Detail) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 | ||
Financial assets | ' | ' | ||
Available-for-sale marketable securities | $91,310,000 | $164,396,000 | ||
Recurring | ' | ' | ||
Financial assets | ' | ' | ||
Cash and cash equivalents | 41,057,000 | 23,129,000 | ||
Available-for-sale marketable securities | 91,310,000 | 164,396,000 | ||
Common stock warrants | 370,000 | [1] | 550,000 | [1] |
Financial liabilities | ' | ' | ||
Contingent earn-out liabilities | 5,850,000 | [2] | 8,750,000 | [2] |
Recurring | Level 1 | ' | ' | ||
Financial assets | ' | ' | ||
Cash and cash equivalents | 41,057,000 | 23,129,000 | ||
Available-for-sale marketable securities | 0 | 0 | ||
Common stock warrants | 0 | [1] | 0 | [1] |
Financial liabilities | ' | ' | ||
Contingent earn-out liabilities | 0 | [2] | 0 | [2] |
Recurring | Level 2 | ' | ' | ||
Financial assets | ' | ' | ||
Cash and cash equivalents | 0 | 0 | ||
Available-for-sale marketable securities | 91,310,000 | 164,396,000 | ||
Common stock warrants | 0 | [1] | 0 | [1] |
Financial liabilities | ' | ' | ||
Contingent earn-out liabilities | 0 | [2] | 0 | [2] |
Recurring | Level 3 | ' | ' | ||
Financial assets | ' | ' | ||
Cash and cash equivalents | 0 | 0 | ||
Available-for-sale marketable securities | 0 | 0 | ||
Common stock warrants | 370,000 | [1] | 550,000 | [1] |
Financial liabilities | ' | ' | ||
Contingent earn-out liabilities | $5,850,000 | [2] | $8,750,000 | [2] |
[1] | The fair value of the common stock warrants as of June 30, 2014 and March 31, 2014 was calculated to be $0.21 and $0.31 per share, respectively, per share using a Black-Scholes-Merton model. The significant assumptions as of June 30, 2014 were as follows: risk-free interest rate of 1.6%; expected term of 4.97 years; expected volatility of 70.00%; dividend yield of 0.0%; weighted average share price of $0.49 per share; and expected warrants to become exercisable of approximately 1,776,500 shares. The significant assumptions as of March 31, 2014 were as follows: risk-free interest rate of 1.7%; expected term of 5.22 years; expected volatility of 67.55%; dividend yield of 0.0%; weighted average share price of $0.49 per share; and expected warrants to become exercisable of approximately 1,776,500 shares. | |||
[2] | This fair value measurement is based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value using the income approach. In developing these estimates, the Company considered certain performance projections, historical results, and general macroeconomic environment and industry trends. |
Fair_Value_Measurements_Reconc
Fair Value Measurements - Reconciliation of Change in Fair Value of Common Stock Warrants (Detail) (Common Stock Warrants, USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | ||
Common Stock Warrants | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Beginning balance | $550 | $550 | ||
Fair value change in common stock warrants | -180 | [1] | 0 | [1] |
Ending balance | $370 | $550 | ||
[1] | Amounts were recognized in other income, net on the accompanying consolidated statements of operations. |
Fair_Value_Measurements_Reconc1
Fair Value Measurements - Reconciliation of Change in Contingent Earn-out Liabilities (Detail) (Contingent Earn-Out Liabilities, USD $) | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
In Thousands, unless otherwise specified | Southwind | Southwind | 360 Fresh | 360 Fresh | ||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Beginning balance | $5,850 | $8,750 | $14,500 | $15,200 | ' | ' | ' | ' | ||||
Adjustment made to the fair value of contingent liability | ' | ' | ' | ' | 0 | [1] | 400 | [1] | -100 | [1] | 300 | [1] |
Earn out payments | ' | ' | ' | ' | -2,800 | -1,400 | ' | ' | ||||
Ending balance | $5,850 | $8,750 | $14,500 | $15,200 | ' | ' | ' | ' | ||||
[1] | Amounts were recognized in cost of services on the accompanying consolidated statements of operations. |
Marketable_Securities_Aggregat
Marketable Securities - Aggregate Value, Amortized Cost, Gross Unrealized Gains, and Gross Unrealized Losses on Available-for-Sale Marketable Securities (Detail) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value | $91,310 | $164,396 |
Amortized cost | 92,540 | 166,997 |
Gross unrealized gains | 601 | 1,060 |
Gross unrealized losses | 1,831 | 3,661 |
U.S. Government-Sponsored Enterprises | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value | 9,875 | 29,291 |
Amortized cost | 10,500 | 30,344 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 625 | 1,053 |
Tax Exempt Obligations of States | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair value | 81,435 | 135,105 |
Amortized cost | 82,040 | 136,653 |
Gross unrealized gains | 601 | 1,060 |
Gross unrealized losses | $1,206 | $2,608 |
Marketable_Securities_Marketab
Marketable Securities - Marketable Securities Maturities (Detail) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Investments, Debt and Equity Securities [Abstract] | ' | ' |
Matures in less than 1 year, Fair market value | $2,427 | ' |
Matures after 1 year through 5 years, Fair market value | 16,958 | ' |
Matures after 5 years through 10 years, Fair market value | 52,390 | ' |
Matures after 10 years through 20 years, Fair market value | 19,535 | ' |
Fair value | 91,310 | 164,396 |
Matures in less than 1 year, Amortized cost | 2,411 | ' |
Matures after 1 year through 5 years, Amortized cost | 16,724 | ' |
Matures after 5 years through 10 years, Amortized cost | 53,067 | ' |
Matures after 10 years through 20 years, Amortized cost | 20,338 | ' |
Amortized cost | $92,540 | $166,997 |
Marketable_Securities_Gross_Un
Marketable Securities - Gross Unrealized Losses and Fair Value of Company's Investments (Detail) (USD $) | Jun. 30, 2014 |
In Thousands, unless otherwise specified | |
Schedule of Available-for-sale Securities [Line Items] | ' |
Less than 12 months, Fair value | $0 |
Less than 12 months, Gross unrealized losses | 0 |
12 months or more, Fair value | 63,079 |
12 months or more, Gross unrealized losses | 1,831 |
Total, Fair value | 63,079 |
Gross unrealized losses | 1,831 |
U.S. Government-Sponsored Enterprises | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Less than 12 months, Fair value | 0 |
Less than 12 months, Gross unrealized losses | 0 |
12 months or more, Fair value | 9,875 |
12 months or more, Gross unrealized losses | 625 |
Total, Fair value | 9,875 |
Gross unrealized losses | 625 |
Tax Exempt Obligations of States | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Less than 12 months, Fair value | 0 |
Less than 12 months, Gross unrealized losses | 0 |
12 months or more, Fair value | 53,204 |
12 months or more, Gross unrealized losses | 1,206 |
Total, Fair value | 53,204 |
Gross unrealized losses | $1,206 |
Marketable_Securities_Addition
Marketable Securities - Additional Information (Detail) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Gross realized gains on sales of available-for-sale investments | $700,000 | $0 |
Gross realized losses on sales of available-for-sale investments | 400,000 | 0 |
Weighted average maturity of marketable securities | '8 years 0 months 5 days | ' |
Gross unrealized losses | 1,831,000 | ' |
Tax Exempt Obligations of States | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Gross unrealized losses | 1,206,000 | ' |
Unrealized losses existed for less than one year | 19 | ' |
U.S. Government-Sponsored Enterprises | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Gross unrealized losses | $625,000 | ' |
Unrealized losses existed for less than one year | 4 | ' |
Property_and_Equipment_Additio
Property and Equipment - Additional Information (Detail) (USD $) | 3 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Depreciation and amortization | $9,078,000 | $6,354,000 | ' |
Capitalized leases included in property and equipment | 0 | ' | ' |
Property and equipment, net | 108,869,000 | ' | 102,457,000 |
Software Development | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Estimated useful lives of Property and equipment | '5 years | ' | ' |
Capitalized software | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Estimated useful lives of Property and equipment | '6 years | ' | ' |
Depreciation and amortization | 600,000 | 200,000 | ' |
Furniture, Fixtures and Equipment | Minimum | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Estimated useful lives of Property and equipment | '3 years | ' | ' |
Furniture, Fixtures and Equipment | Maximum | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Estimated useful lives of Property and equipment | '7 years | ' | ' |
Plant, Property and Equipment | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Depreciation and amortization | 3,300,000 | 2,400,000 | ' |
Developed software | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Estimated useful lives of Property and equipment | '5 years | ' | ' |
Depreciation and amortization | 2,800,000 | 1,900,000 | ' |
Property and equipment, net | $51,200,000 | ' | $46,000,000 |
Property_and_Equipment_Schedul
Property and Equipment - Schedule of Property and Equipment (Detail) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Abstract] | ' | ' |
Leasehold improvements | $41,202 | $39,425 |
Furniture, fixtures, and equipment | 44,910 | 43,112 |
Software | 110,415 | 100,808 |
Property and equipment, gross | 196,527 | 183,345 |
Accumulated depreciation and amortization | -87,658 | -80,888 |
Property and equipment, net | $108,869 | $102,457 |
Goodwill_and_Intangibles_Addit
Goodwill and Intangibles - Additional Information (Detail) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Goodwill And Intangible Assets [Line Items] | ' | ' |
Impairment of goodwill | $0 | $0 |
Estimated useful lives of intangible assets | '4 years 1 month 6 days | ' |
Weighted average remaining useful life of acquired intangibles, years | '5 years 6 months | ' |
Amortization expense for intangible assets | 9,078,000 | 6,354,000 |
Future amortization expense remainder of fiscal year ending 2015 | 7,000,000 | ' |
Future amortization expense to be recorded in 2016 | 6,600,000 | ' |
Future amortization expense to be recorded in 2017 | 5,900,000 | ' |
Future amortization expense to be recorded in 2018 | 5,300,000 | ' |
Future amortization expense to be recorded in 2019 | 4,000,000 | ' |
Future amortization expense to be recorded thereafter | 5,400,000 | ' |
Intangible Assets | ' | ' |
Goodwill And Intangible Assets [Line Items] | ' | ' |
Amortization expense for intangible assets | $2,300,000 | $1,800,000 |
Minimum | ' | ' |
Goodwill And Intangible Assets [Line Items] | ' | ' |
Estimated useful lives of intangible assets | '6 months | ' |
Maximum | ' | ' |
Goodwill And Intangible Assets [Line Items] | ' | ' |
Estimated useful lives of intangible assets | '12 years | ' |
Goodwill_and_Intangibles_Gross
Goodwill and Intangibles - Gross and Net Carrying Balances and Accumulated Amortization of Intangibles (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Mar. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted average useful life | '4 years 1 month 6 days | ' |
Gross carrying amount | $61,340 | $58,567 |
Accumulated amortization | -27,120 | -24,812 |
Net carrying amount | 34,220 | 33,755 |
Capitalized software | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted average useful life | '5 years | ' |
Gross carrying amount | 12,831 | 11,508 |
Accumulated amortization | -2,805 | -2,266 |
Net carrying amount | 10,026 | 9,242 |
Developed software | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted average useful life | '6 years 1 month 6 days | ' |
Gross carrying amount | 19,250 | 19,250 |
Accumulated amortization | -8,663 | -7,875 |
Net carrying amount | 10,587 | 11,375 |
Customer relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted average useful life | '8 years 1 month 6 days | ' |
Gross carrying amount | 16,860 | 15,910 |
Accumulated amortization | -7,372 | -6,800 |
Net carrying amount | 9,488 | 9,110 |
Trademarks | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted average useful life | '6 years 2 months 13 days | ' |
Gross carrying amount | 4,200 | 4,200 |
Accumulated amortization | -2,789 | -2,680 |
Net carrying amount | 1,411 | 1,520 |
Non-compete agreements | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted average useful life | '4 years 3 months 18 days | ' |
Gross carrying amount | 1,750 | 1,400 |
Accumulated amortization | -996 | -900 |
Net carrying amount | 754 | 500 |
Customer contracts | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted average useful life | '4 years 8 months 15 days | ' |
Gross carrying amount | 6,449 | 6,299 |
Accumulated amortization | -4,495 | -4,291 |
Net carrying amount | $1,954 | $2,008 |
Investments_in_and_Advances_to
Investments in and Advances to Unconsolidated Entities - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 3 Months Ended | 1 Months Ended | 1 Months Ended | 9 Months Ended | |||||||||
Aug. 31, 2011 | Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Aug. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | |
people | Series A Preferred Stock | Series A Preferred Stock | Series A Preferred Stock | Evolent | Evolent | Evolent | Evolent LLC | Evolent LLC | Evolent LLC | Evolent LLC | Evolent LLC | ||||
Evolent Health Holdings Inc | Evolent Health Holdings Inc | Evolent Health Holdings Inc | Series A Preferred Stock | Series A Preferred Stock | Evolent Health Holdings Inc | Series B Preferred Stock | Series B Preferred Stock | Series B Preferred Stock | |||||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial contribution | $10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity interest | ' | ' | ' | ' | 23.10% | ' | 23.60% | 44.00% | 31.00% | 44.00% | ' | 57.00% | 11.50% | ' | 11.30% |
Equity method investment, number of people allowed to be appointed to board of directors | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment to acquire series B preferred shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,600,000 | ' | ' | ' | ' |
Principal and accrued interest of the convertible term note | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,100,000 | ' | ' | ' | ' |
Series B convertible preferred shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,302,172 | ' | ' |
Carrying balance of the company's Series A convertible preferred investment | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss on carry value of equity investment | ' | 2,150,000 | 3,233,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,100,000 | ' |
Amortization Related to Intangible Assets Basis Difference | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' |
Carrying balance of the company's investment in Series B convertible preferred shares | ' | 13,707,000 | ' | 15,857,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,700,000 |
Proportionate share of the losses | ' | ' | ' | ' | ' | ' | ' | $3,200,000 | ' | ' | ' | ' | ' | ' | ' |
Investments_in_and_Advances_to1
Investments in and Advances to Unconsolidated Entities - Summary of Financial Position of Evolent (Detail) 10Q (Evolent LLC, USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Evolent LLC | ' | ' |
Assets: | ' | ' |
Current assets | $74,553 | $78,692 |
Non-current assets | 23,852 | 20,151 |
Total assets | 98,405 | 98,843 |
Liabilities and Members' Equity: | ' | ' |
Current liabilities | 44,522 | 35,333 |
Non-current liabilities | 3,367 | 3,173 |
Total liabilities | 47,889 | 38,506 |
Redeemable equity | 78,360 | 78,360 |
Members’ equity | -27,844 | -18,023 |
Total liabilities and members’ equity | $98,405 | $98,843 |
Investments_in_and_Advances_to2
Investments in and Advances to Unconsolidated Entities - Summary of Operating Results of Evolent (Detail) 10Q (Evolent LLC, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Evolent LLC | ' | ' |
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract] | ' | ' |
Revenue | $24,189 | $7,526 |
Operating expenses | -33,467 | -16,029 |
Depreciation and amortization | -641 | -396 |
Interest, net | 58 | -259 |
Taxes | -7 | 0 |
Net loss | ($9,868) | ($9,158) |
Other_NonCurrent_Assets_Additi
Other Non-Current Assets - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | |
Jun. 30, 2009 | Jun. 30, 2014 | Mar. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Warrants to purchase shares of company's common stock | 6,015,000 | ' | ' |
Exercise price | $1 | ' | ' |
Warrants recorded at their fair value | ' | $370,000 | $550,000 |
Convertible preferred stock carries a dividend rate | ' | 8.00% | ' |
Dividends declared | ' | $0 | ' |
Convertible Preferred Stock of Private Company | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Convertible preferred stock investment is recorded at cost | ' | $5,000,000 | ' |
Noncontrolling_Interest_Additi
Noncontrolling Interest - Additional Information (Detail) (USD $) | 3 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | |
Noncontrolling Interest [Abstract] | ' | ' | ' |
Redeemable noncontrolling interest | $7,113,000 | ' | $100,000 |
Redeemable noncontrolling interest, fair value | 100,000 | ' | ' |
Change in redemption value | ($7,040,000) | $0 | ' |
Noncontrolling interest ownership percentage | 100.00% | ' | ' |
Ownership interest | 0.00% | ' | ' |
Revolving_Credit_Facility_Addi
Revolving Credit Facility - Additional Information (Detail) (USD $) | 1 Months Ended | |
Jul. 31, 2012 | Jun. 30, 2014 | |
Line of Credit Facility [Line Items] | ' | ' |
Amount of revolving credit facility | $150,000,000 | ' |
Duration of senior secured revolving credit facility | '5 years | ' |
Additional borrowings under the revolving credit facility | 50,000,000 | ' |
Minimum increments under the credit agreement | 10,000,000 | ' |
Maximum principal amount of swing line loans | 5,000,000 | ' |
Issuance of letters of credit under sublimit | 10,000,000 | ' |
Debt instrument basis spread on variable rate minimum | 1.75% | ' |
Debt instrument basis spread on variable rate maximum | 2.50% | ' |
Amounts outstanding on the revolving credit facility | ' | 0 |
Amounts available for borrowing | ' | 150,000,000 |
Revolving credit facility matures | 30-Jul-17 | ' |
Secured Debt | ' | ' |
Line of Credit Facility [Line Items] | ' | ' |
Amount of revolving credit facility | $150,000,000 | ' |
Minimum | ' | ' |
Line of Credit Facility [Line Items] | ' | ' |
Alternate base rate loans under credit agreement | 0.75% | ' |
Commitment fee percentage on unutilized portion | 0.25% | ' |
Maximum | ' | ' |
Line of Credit Facility [Line Items] | ' | ' |
Alternate base rate loans under credit agreement | 1.50% | ' |
Commitment fee percentage on unutilized portion | 0.40% | ' |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 126 Months Ended | |
8-May-13 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | |
Equity [Abstract] | ' | ' | ' | ' |
Increased share repurchase program | $100,000,000 | ' | ' | ' |
Total amount authorized under repurchase program | 450,000,000 | ' | ' | ' |
Number of shares repurchased under stock repurchase program | ' | 364,662 | 118,880 | 16,391,288 |
Purchases of treasury stock | ' | 18,000,000 | 6,200,000 | 380,800,000 |
Number of shares subject to repurchase | ' | 0 | ' | ' |
Remaining authorized repurchase amount | ' | 69,200,000 | ' | ' |
Number of shares retired by the Company | ' | 364,662 | ' | 16,391,288 |
Treasury stock retirement reductions in common stock, par value | ' | 3,600 | ' | ' |
Treasury stock retirement resulted in reductions to treasury stock | ' | 18,000,000 | ' | ' |
Treasury stock retirement resulted in reductions to retained earnings | ' | ' | ' | $17,900,000 |
Stockbased_Compensation_Additi
Stock-based Compensation - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | |
Jun. 23, 2014 | Jun. 30, 2014 | Jun. 23, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Stock-based compensation costs capitalized as part of the cost of an asset | ' | $0 | ' |
Compensation cost related to stock-based compensation | ' | $71,700,000 | ' |
Weighted average period of stock-based compensation | ' | '3 years 5 months 13 days | ' |
Stock Options | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Shares authorized | ' | ' | 947,117 |
Award requisite service period | '5 years | ' | ' |
Stock option awards, valued on the date of grant | ' | $16.97 | ' |
Stock option awards, risk-free interest rate | ' | 2.10% | ' |
Stock option awards, expected term | ' | '4 years 10 months 15 days | ' |
Stock option awards, expected volatility | ' | 35.08% | ' |
Stock option awards, dividend yield | ' | 0.00% | ' |
Restricted Stock Units | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Shares authorized | ' | ' | 101,474 |
Award requisite service period | '6 years | ' | ' |
Award minimum requisite service period | '1 year | ' | ' |
Stockbased_Compensation_Summar
Stock-based Compensation - Summary of Changes in Common Stock Options (Detail) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' |
Number of Options, Outstanding, beginning of period | 1,830,323 | 2,692,353 |
Number of Options, Granted | 1,144,973 | 418,440 |
Number of Options, Exercised | -72,454 | -507,844 |
Number of Options, Forfeited | 0 | -31,116 |
Number of Options, Cancellations | 0 | 0 |
Number of Options, Outstanding, end of period | 2,902,842 | 2,571,833 |
Number of Options, Exercisable, end of period | 1,003,345 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ' | ' |
Weighted Average Exercise Price, Outstanding, beginning of period | $32.82 | $21.06 |
Weighted Average Exercise Price, Granted | $52.28 | $47.87 |
Weighted Average Exercise Price, Exercised | $17.47 | $15.16 |
Weighted Average Exercise Price, Forfeited | $0 | $29.36 |
Weighted Average Exercise Price, Cancellations | $0 | $0 |
Weighted Average Exercise Price, Outstanding, end of period | $28.91 | $26.49 |
Weighted Average Exercise Price, Exercisable, end of period | $24.74 | ' |
Stockbased_Compensation_Summar1
Stock-based Compensation - Summary of Changes in RSUs (Detail) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ' | ' |
Number of RSUs, Non-vested, beginning of period | 1,110,462 | 943,206 |
Number of RSUs, Granted | 332,452 | 378,592 |
Number of RSUs, Forfeited | -3,084 | -12,674 |
Number of RSUs, Vested | -387,377 | -339,710 |
Number of RSUs, Non-vested, end of period | 1,052,453 | 969,414 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ' | ' |
Weighted Average Grant Date Fair Value Non-vested, beginning of Period | $42.05 | $29.50 |
Weighted Average Grant Date Fair Value, Granted | $45.85 | $48.30 |
Weighted Average Grant Date Fair Value, Forfeited | $48.35 | $29.72 |
Weighted Average Grant Date Fair Value, Vested | $32.27 | $26.50 |
Weighted Average Grant Date Fair Value Non-vested, end of Period | $46.82 | $37.89 |
Stockbased_Compensation_Summar2
Stock-based Compensation - Summary of Stock-based Compensation Expense (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Stock-based compensation expense included in Costs and expenses | ' | ' |
Operating income | $9,236 | $10,738 |
Net income | 3,863 | 3,693 |
Stock Option and RSUs | ' | ' |
Stock-based compensation expense included in Costs and expenses | ' | ' |
Total costs and expenses | 5,541 | 4,659 |
Operating income | -5,541 | -4,659 |
Net income | -3,352 | -2,865 |
Impact on diluted earnings per share | ($0.09) | ($0.08) |
Cost of Services | ' | ' |
Stock-based compensation expense included in Costs and expenses | ' | ' |
Total costs and expenses | 2,089 | 1,405 |
Member Relations and Marketing | ' | ' |
Stock-based compensation expense included in Costs and expenses | ' | ' |
Total costs and expenses | 1,081 | 976 |
General and Administrative | ' | ' |
Stock-based compensation expense included in Costs and expenses | ' | ' |
Total costs and expenses | 2,371 | 2,278 |
Depreciation and Amortization | ' | ' |
Stock-based compensation expense included in Costs and expenses | ' | ' |
Total costs and expenses | $0 | $0 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' |
Interest or penalties on unrecognized tax benefits | $0 | $0 |
Earnings_Per_Share_Reconciliat
Earnings Per Share - Reconciliation of Basic to Diluted Weighted Average Common Shares Outstanding (Detail) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Earnings Per Share [Abstract] | ' | ' |
Basic weighted average common shares outstanding | 36,413 | 35,488 |
Effect of dilutive outstanding stock-based awards | 0 | 1,130 |
Diluted weighted average common shares outstanding | 36,413 | 36,618 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) (Stock Compensation Plan) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Stock Compensation Plan | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Share-based compensation awards | 2,800,000 | 700,000 |