Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 05, 2015 | |
Entity Registrant Name | PROVIDENCE SERVICE CORP | |
Entity Central Index Key | 1,220,754 | |
Trading Symbol | prsc | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 15,373,551 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Convertible Preferred Stock [Member] | ||
Liabilities and stockholders' equity | ||
Total convertible preferred stock, net | $ 77,719 | |
Cash and cash equivalents (Note 14) | 106,724 | $ 135,258 |
Accounts receivable, net of allowance of $5,665 in 2015 and $2,735 in 2014 | 186,038 | 107,565 |
Other receivables | 10,242 | 5,314 |
Prepaid expenses and other | 30,045 | 43,134 |
Restricted cash | 3,897 | 3,234 |
Deferred tax assets | 1,859 | 4,148 |
Current assets of discontinued operations held for sale | 75,854 | 75,993 |
Total current assets | 414,659 | 374,646 |
Property and equipment, net | 51,349 | 42,648 |
Goodwill (2) | 340,854 | 342,297 |
Intangible assets, net | 295,602 | 323,904 |
Other assets | 29,713 | 18,812 |
Restricted cash, less current portion | 15,553 | 14,764 |
Non-current assets of discontinued operations held for sale | 48,823 | 51,863 |
Total assets | 1,196,553 | 1,168,934 |
Current portion of long-term obligations | $ 31,000 | 24,588 |
Note payable to related party | 65,500 | |
Accounts payable | $ 31,961 | 46,557 |
Accrued expenses | 105,681 | 99,273 |
Accrued transportation costs | 79,118 | 55,492 |
Deferred revenue | 28,140 | 10,743 |
Reinsurance liability reserve | 15,337 | 11,077 |
Current liabilities of discontinued operations held for sale | 24,222 | 26,228 |
Total current liabilities | 315,459 | 339,458 |
Long-term obligations, less current portion | 451,035 | 484,525 |
Other long-term liabilities | 27,509 | 25,974 |
Deferred tax liabilities | 88,765 | 96,928 |
Non-current liabilities of discontinued operations held for sale | 854 | 635 |
Total liabilities | $ 883,622 | $ 947,520 |
Commitments and contingencies (Note 11) | ||
Common stock: Authorized 40,000,000 shares; $0.001 par value; 17,136,574 and 16,870,285 issued and outstanding (including treasury shares) | $ 17 | $ 17 |
Additional paid-in capital | 273,862 | 261,155 |
Accumulated deficit | (6,067) | (13,366) |
Accumulated other comprehensive loss, net of tax | (14,335) | (8,756) |
Treasury shares, at cost, 1,029,638 and 1,014,108 shares | (18,424) | (17,686) |
Total Providence stockholders' equity | 235,053 | 221,364 |
Non-controlling interest | 159 | 50 |
Total stockholders' equity | 235,212 | 221,414 |
Total liabilities and stockholders' equity | $ 1,196,553 | $ 1,168,934 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Convertible Preferred Stock [Member] | ||
Convertible Preferred Stock, Shares Authorized (in shares) | 10,000,000 | 10,000,000 |
Convertible Preferred Stock, Par Value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible Preferred Stock, Shares Issued (in shares) | 805,000 | 0 |
Convertible Preferred Stock, Shares Outstanding (in shares) | 805,000 | 0 |
Cash Dividends [Member] | ||
Convertible Preferred Stock, Dividend Rate | 5.50% | |
Paid-in-kind Dividends [Member] | ||
Convertible Preferred Stock, Dividend Rate | 8.50% | |
Accounts receivable, allowance | $ 5,665 | $ 2,735 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares issued (in shares) | 17,136,574 | 16,870,285 |
Common stock, shares outstanding (in shares) | 17,136,574 | 16,870,285 |
Treasury shares, shares (in shares) | 1,029,638 | 1,014,108 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Continuing Operations [Member] | ||||
Other expenses: | ||||
Net income (loss) available to common stockholders (Note 9) | $ (4,896) | $ 1,252 | $ 2,783 | $ 12,564 |
Basic earnings (loss) per common share: | ||||
Continuing operations (in dollars per share) | $ (0.30) | $ 0.08 | $ 0.17 | $ 0.87 |
Diluted earnings (loss) per share: | ||||
(in dollars per share) | (0.30) | 0.08 | 0.17 | 0.85 |
Diluted earnings (loss) per common share (in dollars per share) | $ (0.30) | $ 0.08 | $ 0.17 | $ 0.85 |
Discontinued Operations [Member] | ||||
Other expenses: | ||||
Net income (loss) available to common stockholders (Note 9) | $ (1,791) | $ (986) | $ 310 | $ 660 |
Basic earnings (loss) per common share: | ||||
Continuing operations (in dollars per share) | $ (0.11) | $ (0.06) | $ 0.02 | $ 0.05 |
Diluted earnings (loss) per share: | ||||
(in dollars per share) | (0.11) | (0.06) | 0.02 | 0.05 |
Diluted earnings (loss) per common share (in dollars per share) | $ (0.11) | $ (0.06) | $ 0.02 | $ 0.05 |
Revenues | $ 432,450 | $ 309,474 | $ 1,270,517 | $ 767,902 |
Service expense | 390,878 | 280,444 | 1,128,984 | 690,752 |
General and administrative expense | 21,324 | 20,326 | 59,084 | 40,439 |
Depreciation and amortization | 13,370 | 6,256 | 39,614 | 11,805 |
Total operating expenses | 425,572 | 307,026 | 1,227,682 | 742,996 |
Operating income | 6,878 | 2,448 | 42,835 | 24,906 |
Interest expense, net | 3,809 | $ 795 | 12,734 | $ 3,439 |
Loss on equity investment | 4,465 | 8,008 | ||
Gain on foreign currency translation | (736) | $ (164) | (1,131) | $ (63) |
Income (loss) from continuing operations before income taxes | (660) | 1,817 | 23,224 | 21,530 |
Provision for income taxes | 3,120 | 565 | 16,267 | 8,966 |
Income (loss) from continuing operations, net of tax | (3,780) | 1,252 | 6,957 | 12,564 |
Discontinued operations, net of tax | (1,791) | (986) | 342 | 660 |
Net income (loss) | (5,571) | 266 | 7,299 | 13,224 |
Net income (loss) available to common stockholders (Note 9) | $ (6,687) | $ 266 | $ 3,093 | $ 13,224 |
Continuing operations (in dollars per share) | $ (0.41) | $ 0.02 | $ 0.19 | $ 0.92 |
(in dollars per share) | (0.41) | 0.02 | 0.19 | 0.90 |
Diluted earnings (loss) per common share (in dollars per share) | $ (0.41) | $ 0.02 | $ 0.19 | $ 0.90 |
Denominator: | ||||
Denominator for basic earnings per share -- weighted-average shares (in shares) | 16,130,421 | 14,955,773 | 16,068,455 | 14,450,248 |
Denominator for diluted earnings per share -- adjusted weighted-average shares assumed conversion (in shares) | 16,130,421 | 15,176,105 | 16,220,747 | 14,723,360 |
Unaudited Condensed Consolidat5
Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net income | $ (5,571) | $ 266 | $ 7,299 | $ 13,224 |
Other comprehensive loss: | ||||
Foreign currency translation adjustments, net of tax | (6,290) | (7,559) | (5,579) | (5,182) |
Comprehensive income (loss) | $ (11,861) | $ (7,293) | $ 1,720 | $ 8,042 |
Unaudited Condensed Consolidat6
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | ||
Operating activities | |||
Net income | $ 7,299 | $ 13,224 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 15,287 | 8,938 | |
Amortization | 29,157 | 7,968 | |
Provision for doubtful accounts | 2,018 | 1,770 | |
Stock based compensation | 8,822 | 5,375 | |
Deferred income taxes | (7,811) | (3,814) | |
Amortization of deferred financing costs | 1,611 | 607 | |
Excess tax benefit upon exercise of stock options | (2,364) | $ (2,835) | |
Asset impairment charge | 1,593 | ||
Loss on equity investment | 8,008 | ||
Other non-cash charges | (433) | $ (465) | |
Changes in operating assets and liabilities: | |||
Accounts receivable | (87,823) | (17,296) | |
Other receivables | 1,177 | 1,470 | |
Restricted cash | 43 | 168 | |
Prepaid expenses and other | 12,719 | 85 | |
Reinsurance liability reserve | 5,174 | 3,995 | |
Accounts payable and accrued expenses | (10,556) | 13,475 | |
Accrued transportation costs | 23,626 | 6,328 | |
Deferred revenue | 17,896 | 628 | |
Other long-term liabilities | 248 | (5,249) | |
Net cash provided by operating activities | 25,691 | 34,372 | |
Investing activities | |||
Purchase of property and equipment | (23,834) | (11,623) | |
Acquisition of businesses, net of cash acquired | (3,433) | $ (59,666) | |
Equity investments | (13,785) | ||
Net increase in short-term investments | (14) | $ (14) | |
Restricted cash for reinsured claims losses | (1,452) | (3,812) | |
Net cash used in investing activities | (42,518) | $ (75,115) | |
Financing activities | |||
Proceeds from issuance of preferred stock, net of issuance costs | 80,667 | ||
Preferred stock dividends | (2,814) | ||
Repurchase of common stock, for treasury | (738) | $ (501) | |
Proceeds from common stock issued pursuant to stock option exercise | 4,490 | 10,880 | |
Excess tax benefit upon exercise of stock options | $ 2,364 | 2,835 | |
Proceeds from long-term debt | 115,000 | ||
Repayment of long-term debt | $ (92,938) | $ (47,500) | |
Payment of contingent consideration | (7,496) | ||
Debt financing costs | (287) | $ (728) | |
Other | 113 | 36 | |
Net cash (used in) provided by financing activities | (16,639) | 80,022 | |
Effect of exchange rate changes on cash | (463) | (1,376) | |
Net change in cash | (33,929) | 37,903 | |
Cash at beginning of period | 160,406 | 98,995 | |
Cash at end of period | 126,477 | 136,898 | |
Supplemental cash flow information: | |||
Cash included in current assets of discontinued operations held for sale | 19,753 | [1] | 26,899 |
Cash paid for interest | 12,922 | 3,930 | |
Cash paid for income taxes | 16,600 | $ 15,714 | |
Significant noncash investing activities: | |||
Unfunded future equity investment capital contributions | $ 8,501 | ||
[1] | In accordance with the Purchase Agreement, the amount of the Human Services segment cash and cash equivalents on hand as of the closing date are to remain in the Human Services segment entities as a closing accommodation. The buyer will pay the Company for the Human Services segment cash and cash equivalents at closing in addition to the net cash sale proceeds (see Note 16 - Subsequent Events). |
Note 1 - Basis of Presentation,
Note 1 - Basis of Presentation, Description of Business and Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | 1. Basis of Presentation, Description of Business and Recent Accounting Pronouncements Basis of Presentation The accompanying unaudited condensed consolidated financial statements (the “consolidated financial statements”) include the accounts of The Providence Service Corporation (“Providence,” “the Company,” “our,” “we” and “us”), its wholly-owned subsidiaries and entities in which the Company has a voting controlling interest. Investments in non-consolidated entities over which the Company exercises significant influence but does not control are accounted for under the equity method. The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for fair presentation have been included. In order to conform to the current year presentation, prior year amounts have been reclassified to show service revenue as one line item, service expense as one line item, and loss on foreign currency translation as a component of other expenses. Additionally, the Company’s legacy workforce development businesses have been reclassified from the Human Services segment to the Workforce Development Services segment. During the quarter ended September 30, 2015, the Human Services segment met the criteria for held-for-sale classification due to the execution of an agreement to sell the segment as of September 3, 2015. Since the disposition will result in a strategic shift, that will have a major effect on the Company’s operations and financial results, it is required to be accounted for as a discontinued operation. The assets and liabilities of the Human Services segment are classified as held for sale in the Condensed Consolidated Balance Sheets for all periods presented. Additionally, the operating results of this segment are reported as discontinued operations, net of tax in the Condensed Consolidated Statements of Income for all periods presented. The Company has made estimates relating to the reporting of assets and liabilities, revenues and expenses and certain disclosures to prepare these consolidated financial statements in conformity with GAAP. Actual results could differ from those estimates. Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2015. Management has evaluated events and transactions that occurred after the balance sheet date and through the date these consolidated financial statements were issued, and considered the effect of such events in the preparation of these consolidated financial statements. The consolidated balance sheet at December 31, 2014 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. The consolidated financial statements contained herein should be read in conjunction with the audited financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Description of Business The Company provides and manages health and human services through non-emergency transportation, community and behavioral health, workforce development and health assessment offerings. The Company historically operated in four segments, Non-Emergency Transportation Services (“NET Services”), Human Services, Workforce Development Services (“WD Services”) and Health Assessment Services (“HA Services”). As further discussed below, the Company completed the sale of the Human Services segment effective November 1, 2015. The NET Services segment manages transportation networks and arranges for client transportation to health care related facilities and services for state or regional Medicaid agencies, managed care organizations (“MCOs”) and commercial insurers. The WD Services segment provides outsourced employability and legal offender rehabilitation case management services, primarily to the eligible participants in government sponsored programs. The HA Services segment primarily provides comprehensive health assessments (“CHAs”) for members enrolled in Medicare Advantage (“MA”) health plans, in patient’s homes. In the Human Services segment, which has been presented as a discontinued operation, counselors, social workers and behavioral health professionals work with clients, primarily in the client’s home or community, who are eligible for government assistance due to income level, disabilities or court order. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers: Topic 606 ● Step 1: Identify the contract(s) with a customer. ● Step 2: Identify the performance obligations in the contract. ● Step 3: Determine the transaction price. ● Step 4: Allocate the transaction price to the performance obligations in the contract. ● Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. Publicly held entities must apply the new revenue standard for annual reporting periods (including interim periods within those annual periods) beginning after December 15, 2017. Early adoption of the standard is permitted, but not before annual periods beginning after December 15, 2016. The Company is currently evaluating the impact ASU 2014-09 will have on its consolidated financial statements. In November 2014, the FASB issued ASU No 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity . In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In September 2015 the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments |
Note 2 - Concentrations
Note 2 - Concentrations | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Concentration Risk Disclosure [Text Block] | 2. Concentrations Domestic service revenue, net, from continuing operations, totaled 77.2% and 85.2% of service revenue, net for the nine months ended September 30, 2015 and 2014, respectively. Foreign service revenue, net, from continuing operations, totaled 22.8% and 14.8% of service revenue, net for the nine months ended September 30, 2015 and 2014, respectively. Contracts with domestic governmental agencies and other domestic entities that contract with governmental agencies accounted for approximately 54.6% and 73.7% of the Company’s domestic revenue from continuing operations for the nine months ended September 30, 2015 and 2014, respectively. Contracts with foreign governmental agencies and other foreign entities that contract with governmental agencies accounted for approximately 95.3% and 84.1% of the Company’s foreign revenue from continuing operations for the nine months ended September 30, 2015 and 2014, respectively. Additionally, approximately 42.3% and 57.3% of our WD Services revenue for the nine months ended September 30, 2015 and 2014, respectively, was generated from one foreign payer. At September 30, 2015, approximately $31,667, or 14.8%, of the Company’s net assets from continuing operations were located in countries outside of the US. At December 31, 2014, approximately $40,213, or 33.4%, of the Company’s net assets from continuing operations were located in countries outside of the US. |
Note 3 - Equity Investment
Note 3 - Equity Investment | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Equity Method Investments and Joint Ventures Disclosure [Text Block] | 3 . Equity Investment The Company entered into a joint venture agreement in November 2014 to form Mission Providence Pty Ltd (“Mission Providence”). Mission Providence delivers employment services in Australia. The Company has a 60% ownership in Mission Providence, and has rights to 75% of Mission Providence’s distributions of cash or profit surplus twice per calendar year. The Company provided and will continue to provide capital contributions to Mission Providence in exchange for its equity interests. The Company determined it has a variable interest in Mission Providence. However, it does not have unilateral power to direct the activities that most significantly impact Mission Providence’s economic performance, which include budget approval, business planning, the appointment of key officers and liquidation and distribution of share capital. As a result, the Company is not the primary beneficiary of Mission Providence. The Company accounts for this investment under the equity method of accounting and the Company’s share of Mission Providence’s losses are recorded as “Loss on equity investment” in the accompanying condensed consolidated statements of income. Cash contributions made to Mission Providence in exchange for its equity interests are included in the Condensed Consolidated Statements of Cash Flows as “Equity Investments”. The following table summarizes the carrying amounts of the assets and liabilities included in the Company’s condensed consolidated balance sheet and the maximum loss exposure related to the Company’s interest in Mission Providence at September 30, 2015: Assets Liabilities Other Assets Accrued Expenses Maximum Exposure to Loss $ 13,564 $ 8,501 $ 13,564 Under the terms of the joint venture agreement, the Company will be required to make future financial contributions. These future expected contributions are included in “Other Assets” and “Accrued Expenses” in the table above. |
Note 4 - Fair Value Measurement
Note 4 - Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | 4. Fair Value Measurements The Company determines the fair value of its financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Below are the three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company may be required to pay additional consideration under certain acquisition agreements based on the achievement of certain earnings targets by the acquired businesses. Acquisition-related contingent consideration is initially measured and recorded at fair value as an element of consideration paid in connection with an acquisition with subsequent adjustments recognized in other operating expenses in the condensed consolidated statements of income. The Company determines the fair value of acquisition-related contingent consideration, and any subsequent changes in fair value using a discounted probability-weighted approach. This approach takes into consideration Level 3 unobservable inputs including probability assessments of expected future cash flows over the period in which the obligation is expected to be settled and applies a discount factor that captures the uncertainties associated with the obligation. Changes in these unobservable inputs could significantly impact the fair value of the obligation recorded in the accompanying condensed consolidated balance sheets and operating expenses in the condensed consolidated statements of income. The fair value of the Company’s contingent consideration was $2,380 at September 30, 2015, which is included in “Other long-term liabilities” in the condensed consolidated balance sheets. The fair value of the Company’s contingent consideration was $10,549 at December 31, 2014, of which $7,767 was included in “Accrued expenses” and $2,782 was included in “Other long-term liabilities” in the condensed consolidated balance sheets. The decrease in the contingent consideration since December 31, 2014 is attributable to payments totaling $7,496 made in the first quarter of 2015 and changes in the foreign currency translation rate. |
Note 5 - Long-term Obligations
Note 5 - Long-term Obligations and Note Payable to Related Party | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Long-term Debt [Text Block] | 5. Long-Term Obligations and Note Payable to Related Party The Company’s long-term obligations from continuing operations as of September 30, 2015 and December 31, 2014 were as follows: September 30, December 31, 2015 2014 $240,000 revolving loan, LIBOR plus 2.25% - 3.25% (effective rate of 3.24% at September 30, 2015) with interest payable at least once every three months through August 2018 $ 191,700 $ 201,700 $250,000 term loan, LIBOR plus 2.25% - 3.25% (effective rate of 3.28% at September 30, 2015), with principal payable quarterly beginning March 31, 2015 and interest payable at least once every three months through August 2018 235,938 250,000 $60,000 term loan, LIBOR plus 2.25% - 3.25% (effective rate of 3.28% at September 30, 2015), with principal payable quarterly beginning December 31, 2014 and interest payable at least once every three months, through August 2018 55,500 58,875 14.0% unsecured related party, subordinated bridge note with principal due September 30, 2018 and interest payable quarterly - 65,500 483,138 576,075 Less unamortized discount on debt 1,103 1,462 482,035 574,613 Less current portion 31,000 90,088 Total long-term obligations, less current portion $ 451,035 $ 484,525 In connection with the recent amendment to the Company’s credit facility on September 3, 2015, the Company determined that the terms of its long-term obligations are at current market rates. Therefore, the Company believes that the carrying amount of the long-term obligations approximated the fair values at September 30, 2015 and December 31, 2014. Amendment to Credit Facility On September 3, 2015, the Company entered into the Third Amendment and Consent to the Amended and Restated Credit and Guaranty Agreement (the “Third Amendment”) amending its Amended and Restated Credit and Guaranty Agreement, previously amended by that certain First Amendment dated May 28, 2014 and Second Amendment dated October 23, 2014 (“Credit Agreement”). Pursuant to the Third Amendment, the lenders under the Credit Agreement consented to the Company’s sale of the Human Services segment, provided that a minimum amount equal to 50% of the net cash proceeds of the sale, as defined in the Credit Agreement, is applied pro rata to the prepayment of revolving loans and swingline loans under the Credit Agreement. Further, the lenders consented to providing the Company the ability to use 50% of the net cash proceeds of the sale to make restricted payments to repurchase common stock pursuant to the Company’s stock repurchase program. Related party u nsecured s ubordinated b ridge n ote On October 23, 2014, the Company issued to Coliseum Capital Management, LLC and certain of its affiliates (“Coliseum”), a related party, a 14.0% Unsecured Subordinated Note in aggregate principal amount of $65,500 (the “Note”) due September 30, 2018. The Note was repaid in full on February 11, 2015, with the proceeds from a registered rights offering of convertible preferred stock (“Rights Offering”) and a related standby purchase agreement. |
Note 6 - Stock-based Compensati
Note 6 - Stock-based Compensation Arrangements | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 6 . Stock-Based Compensation Arrangements The Company issues both option awards and restricted stock to employees and non-employee directors. Option awards and restricted stock vest commensurate with the respective award agreements. The fair value expense of option awards was estimated on the date of grant using the Black-Scholes option pricing formula and amortized over the option’s vesting periods, and the fair value expense of restricted stock grants was determined based on the closing market price of the Company’s common stock on the date of grant and is recognized as stock based compensation expense over the vesting period. The following table summarizes the stock option activity: For the nine months ended September 30, 2015 Number of Shares Under Option Weighted-average Exercise Price Balance at beginning of period 813,622 $ 30.77 Granted 294,294 $ 44.28 Exercised (202,419 ) $ 22.18 Forfeited or expired (248,130 ) $ 43.60 Outstanding at September 30, 2015 657,367 $ 34.62 The following table summarizes the activity of the shares and weighted-average grant date fair value of the Company’s restricted common stock: For the nine months ended September 30, 2015 Shares Weighted-average Grant Date Fair Value Non-vested balance at beginning of period 688,262 $ 37.71 Granted 29,959 $ 50.73 Vested (213,099 ) $ 33.83 Forfeited or cancelled (250 ) $ 15.50 Non-vested at September 30, 2015 504,872 $ 40.13 On August 6, 2015 (the “Award Date”), the Compensation Committee of the Board of Directors of Providence adopted the 2015 Holding Company LTI Program (the “HoldCo LTI Program”) under the Providence 2006 Long-Term Incentive Plan. The HoldCo LTI Program is designed to provide long term performance based awards to certain executive officers of Providence. Under the program, executives will receive shares of Providence common stock based on the shareholder value created in excess of an 8.0% compounded annual return between the Award Date (calculated on the basis of the Providence stock price equal to the volume weighted average of the common share price over a 90 day period ending on the Award Date) and December 31, 2017 (calculated on the basis of a similar 90 day volume weighted average) (the “Extraordinary Shareholder Value”). A pool for use in the allocation of awards will be created equal to 8.0% of the Extraordinary Shareholder Value. Participants in the HoldCo LTI Program will receive a percentage allocation of any such pool and, following determination of the size of the pool, will be entitled to a number of shares equal to their pro rata portion of the pool divided by the volume weighted average of the Company’s per share price over the 90 day period ending on December 31, 2017. Of the shares allocated, 60% will be issued to the participant on or shortly following determination of the pool, 25% will vest and be issued on the one year anniversary of such determination date, subject to continued employment, and the remaining 15% will be issued on the second anniversary of the determination date, subject to continued employment. As of September 30, 2015, 75% of the award pool had been granted to executives and approximately $478 of expense is included in “General and administrative expense” in the condensed consolidated statements of income for the three and nine months ended September 30, 2015. These awards are equity classified and the fair value of the awards was calculated using a Monte-Carlo simulation valuation model. |
Note 7 - Convertible Preferred
Note 7 - Convertible Preferred Stock, Net | 9 Months Ended |
Sep. 30, 2015 | |
Convertible Preferred Stock [Member] | |
Notes to Financial Statements | |
Preferred Stock [Text Block] | 7 . Convertible Preferred Stock, Net The Company completed a rights offering, on February 5, 2015, providing all of the Company’s existing common stock holders the non-transferrable right to purchase their pro rata share of $65,500 of convertible preferred stock at a price equal to $100 per share. The convertible preferred stock is convertible into shares of Providence’s common stock at a conversion price equal to $39.88 per share, which was the closing price of the Company’s common stock on the NASDAQ Global Select Market on October 22, 2014. Stockholders exercised subscription rights to purchase 130,884 shares of the Company's convertible preferred stock. Pursuant to the terms and conditions of the Standby Purchase Agreement (the “Standby Purchase Agreement”) between Coliseum Capital Partners, L.P., Coliseum Capital Partners II, L.P., Coliseum Capital Co-Invest, L.P. and Blackwell Partners, LLC (collectively, the "Standby Purchasers") and the Company, the remaining 524,116 shares of the Company's preferred stock were purchased by the Standby Purchasers at the $100 per share subscription price. The Company received $65,500 in aggregate gross proceeds from the consummation of the Rights Offering and Standby Purchase Agreement. Additionally, on March 12, 2015, the Standby Purchasers exercised their right to purchase an additional 150,000 shares of the Company’s convertible preferred stock, at a purchase price of $105 per share, of the same series and having the same conversion price as the convertible preferred stock sold in the Rights Offering. The Company may pay a noncumulative cash dividend on each share of convertible preferred stock, when, as and if declared by its Board of Directors, at the rate of five and one-half percent (5.5%) per annum on the liquidation preference then in effect. On or before the third business day immediately preceding each fiscal quarter, the Company must determine its intention whether or not to pay a cash dividend with respect to that ensuing quarter and will give notice of its intention to each holder of convertible preferred stock as soon as practicable thereafter. In the event the Company does not declare and pay a cash dividend, the Company will pay paid in kind (“PIK”) dividends by increasing the liquidation preference of the convertible preferred stock to an amount equal to the liquidation preference in effect at the start of the applicable dividend period, plus an amount equal to the liquidation preference then in effect multiplied by eight and one-half percent (8.5%) per annum, computed on the basis of a 365-day year and the actual number of days elapsed from the start of the applicable dividend period to the applicable date of determination. As of September 16, 2015, all holders of the Company’s preferred stock are able to convert their preferred stock to shares of common stock at a rate of approximately 2.51 shares of common stock for each share of preferred stock. Cash dividends are payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, commencing on April 1, 2015, and, if declared, will begin to accrue on the first day of the applicable dividend period. PIK dividends, if applicable, will accrue and be cumulative on the same schedule as set forth above for cash dividends and will also be compounded at the applicable annual rate on each applicable subsequent dividend date. Cash dividends totaling $594, $1,104 and $1,116 were paid to preferred stockholders on April 1, 2015, July 1, 2015, and October 1, 2015, respectively. The convertible preferred stock is accounted for as mezzanine equity as it could be redeemed upon certain change in control events that are not solely in the control of the Company. Dividends are recorded in stockholders equity and consist of the 5.5%/8.5% dividend. Convertible preferred stock, net at September 30, 2015 consisted of the following: Original issue price of convertible preferred stock $ 81,250 Less: Issuance costs (3,531 ) Total convertible preferred stock, net $ 77,719 |
Note 8 - Stockholders' Equity
Note 8 - Stockholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | 8 . Stockholders’ Equity The following table reflects changes in common stock, additional paid-in capital, accumulated deficit, accumulated other comprehensive loss and treasury stock for the nine months ended September 30, 2015: Accumulated Additional Other Common Stock Paid-In Accumulated Comprehensive Treasury Stock Shares Amount Capital Deficit Loss Shares Amount Balance at December 31, 2014 16,870,285 $ 17 $ 261,155 $ (13,366 ) $ (8,756 ) 1,014,108 $ (17,686 ) Stock-based compensation - - 8,822 - - - - Exercise of employee stock options, including net tax windfall of $2,209 202,419 - 6,699 - - - - Restricted stock issued 63,870 - - - - 15,530 (738 ) Foreign currency translation adjustments - - - - (5,579 ) - - Beneficial conversion feature related to preferred stock - - 1,071 - - - - Convertible preferred stock dividends - - (2,814 ) - - - - Accretion of convertible preferred stock discount - - (1,071 ) - - - - Net income - - - 7,299 - - - Balance at September 30, 2015 17,136,574 $ 17 $ 273,862 $ (6,067 ) $ (14,335 ) 1,029,638 $ (18,424 ) |
Note 9 - Earnings Per Share
Note 9 - Earnings Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | 9. Earnings Per Share The following table details the computation of basic and diluted earnings per share: Three months ended Nine months ended September 30, September 30, 2015 2014 2015 2014 Numerator: Net income (loss) $ (5,571 ) $ 266 $ 7,299 $ 13,224 Less dividends on convertible preferred stock (1,116 ) - (2,814 ) - Less accretion of convertible preferred stock discount - - (1,071 ) - Less income allocated to participating securities - - (321 ) - Net income (loss) available to common stockholders $ (6,687 ) $ 266 $ 3,093 $ 13,224 Continuing operations $ (4,896 ) $ 1,252 $ 2,783 $ 12,564 Discontinued operations (1,791 ) (986 ) 310 660 $ (6,687 ) $ 266 $ 3,093 $ 13,224 Denominator: Denominator for basic earnings per share -- weighted-average shares 16,130,421 14,955,773 16,068,455 14,450,248 Effect of dilutive securities: Common stock options - 203,612 152,292 256,392 Performance-based restricted stock units - 16,720 - 16,720 Denominator for diluted earnings per share -- adjusted weighted-average shares assumed conversion 16,130,421 15,176,105 16,220,747 14,723,360 Basic earnings (loss) per share: Continuing operations $ (0.30 ) $ 0.08 $ 0.17 $ 0.87 Discontinued operations $ (0.11 ) $ (0.06 ) $ 0.02 $ 0.05 $ (0.41 ) $ 0.02 $ 0.19 $ 0.92 Diluted earnings (loss) per share: Continuing operations $ (0.30 ) $ 0.08 $ 0.17 $ 0.85 Discontinued operations $ (0.11 ) $ (0.06 ) $ 0.02 $ 0.05 $ (0.41 ) $ 0.02 $ 0.19 $ 0.90 For the three and nine months ended September 30, 2015, 805,000 and 665,220 shares of convertible preferred stock, respectively, were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For the three months ended September 30, 2015 employee stock options to purchase 144,051 shares of common stock were not included in the computation of diluted earnings as the Company recorded a net loss available to common stockholders for this period and as such, all potentially dilutive securities were anti-dilutive. The accretion of convertible preferred stock discount in the table above related to a beneficial conversion feature of the Company’s convertible preferred stock that was fully amortized as of June 30, 2015. Income allocated to participating securities is calculated by allocating a portion of net income less dividends on convertible stock and amortization of convertible preferred stock discount to the convertible preferred stock holders on a pro-rata basis; however, the convertible preferred stockholders are not required to absorb losses. |
Note 10 - Income Taxes
Note 10 - Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | 10. Income Taxes The Company’s effective tax rate from continuing operations for the three months ended September 30, 2015 exceeded 100% and the effective tax rate from continuing operations for the nine months ended September 30, 2015 was 70.0%. The effective tax rate for these periods exceeded the United States federal statutory rate of 35% primarily due to foreign net operating losses (including equity investment losses) for which the future income tax benefit currently cannot be recognized, state income taxes, and certain non-deductible expenses. The Company recognized an income tax provision for the three months ended September 30, 2015 despite having a loss from continuing operations before income taxes because of these factors. The Company’s effective tax rate from continuing operations for the three and nine months ended September 30, 2014 was 31.1% and 41.6%, respectively. |
Note 11 - Commitments and Conti
Note 11 - Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | 11. Commitments and Contingencies On June 15, 2015, a putative stockholder class action derivative complaint was filed in the Court of Chancery of the State of Delaware, (the “Court”), captioned Haverhill Retirement System v. Kerley et al. On August 31, 2015, after arms’ length negotiations, the parties reached an agreement in principle and executed a memorandum of understanding providing for the settlement of claims concerning the dividend rate increase term and stockholder vote and related disclosure. The Memorandum of Understanding stated that the Defendants have entered into the partial settlement of the litigation solely to eliminate the distraction, burden, expense, and potential delay of further litigation involving claims that have been settled. Pursuant to the partial settlement, the Company agreed to supplement the disclosures in its definitive proxy statement on Schedule 14A (“Definitive Proxy Statement”), Coliseum and certain of its affiliates and the Company entered into an amendment to the Exchange Agreement dated as of February 11, 2015 described in the Definitive Proxy Statement, and the Board of Directors of the Company agreed to adopt a policy related to the Board’s determination each quarter as to whether the Company should pay cash dividends or allow dividends to be paid in the form of PIK dividends on the preferred stock, as further described in the supplemental proxy disclosures. On September 2, 2015, Providence issued supplemental disclosures through a Supplement to the Proxy Statement. On September 16, 2015, Providence stockholders approved the removal of the Caps. The settlement provides for, among other things, the release of any claims based on alleged coercion and disclosure related to the stockholder vote on the removal of the Caps. The settlement is subject to court approval. No settlement has been reached as to the derivative claims related to the underlying subordinated note and standby purchase agreement and the options. On September 18, 2015, a former client of Ingeus filed a complaint in the Birmingham County Court, United Kingdom, against Ingeus and two other defendants. The complaint alleges collusion in the wrongful withholding of a jobseeker’s welfare allowance, discrimination in violation of the Human Rights Act, and harassment. On October 15, 2015, the plaintiff was awarded a default judgment against Ingeus due to Ingeus’s failure to respond to the complaint within 14 days of the court’s incorrect deemed date of notice. On October 19, 2015, Ingeus filed an Application notice to have the default judgment set aside because the Birmingham County Court made procedural errors when serving the complaint and did not provide Ingeus with the ability to respond timely to the complaint before the default judgment was made. On November 2, 2015, the Birmingham County Court set aside the default judgment providing Ingeus with 14 days to file a defense against the plaintiff’s claim against Ingeus of approximately $775. The Company has not accrued a liability for the plaintiff’s claim as of September 30, 2015 because it believes there are no reasonable grounds for bringing the complaint against Ingeus. The Company is involved in other various claims and legal actions arising in the ordinary course of business, many of which are covered in whole or in part by insurance. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity. The Company has two deferred compensation plans for management and highly compensated employees. These deferred compensation plans are unfunded; therefore, benefits are paid from the general assets of the Company. The total of participant deferrals, which is reflected in “Other long-term liabilities” in the accompanying condensed consolidated balance sheets, was approximately $1,398 and $1,432 at September 30, 2015 and December 31, 2014, respectively. |
Note 12 - Transactions with Rel
Note 12 - Transactions with Related Parties | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Related Party Transactions Disclosure [Text Block] | 12. Transactions with Related Parties On October 23, 2014, the Company issued to Coliseum, a related party, a 14.0% Unsecured Subordinated Note in aggregate principal amount of $65,500. Interest from the issuance date to, but excluding, the 120th day after the issuance date, was paid in cash in the amount of $3,015 on the issuance of the Note. Coliseum held approximately 15% of our outstanding common stock as of October 23, 2014 and is the Company’s largest shareholder. Additionally, Christopher Shackelton, who serves as the Company’s Chairman of the Board of Directors and from June 1, 2015 through August 6, 2015 served as interim Chief Executive Officer of the Company, is also a Managing Partner at Coliseum Capital Management, LLC. The Note was repaid in full on February 11, 2015, with the proceeds from a registered rights offering and related standby purchase commitment described above, which allowed all of the Company’s existing common stockholders the non-transferrable right to purchase their pro rata share of $65,500 of convertible preferred stock at a price of $100 per share, as further described above. In connection with the anticipated Rights Offering, on October 23, 2014, the Company entered the Standby Purchase Agreement with the Standby Purchasers, pursuant to which the Standby Purchasers agreed to purchase, substantially simultaneously with the completion of the Rights Offering, in the aggregate, all of the available preferred stock not otherwise sold in the Rights Offering following the exercise of the subscription privileges of holders of the Company’s common stock. As consideration for entering into the Standby Purchase Agreement, on October 23, 2014, the Company paid the Standby Purchasers a fee of $2,947, which is included in “Convertible Preferred Stock, Net” in the condensed consolidated balance sheet at September 30, 2015. In addition, the Standby Purchasers had the right, exercisable within 30 days following the completion of the Rights Offering, to purchase additional preferred stock valued at $15,000 at a price per share of $105 which was exercised on March 12, 2015. Preferred stock dividends earned by Coliseum during the nine months ended September 30, 2015 totaled $2,678. |
Note 13 - Acquisitions
Note 13 - Acquisitions | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Business Combination Disclosure [Text Block] | 13. Acquisitions On October 23, 2014, the Company acquired all of the outstanding equity of CCHN Group Holdings, Inc. (“Matrix”), the parent company of Community Care Health Network, Inc. (dba Matrix Medical Network ), pursuant to an Agreement and Plan of Merger, dated as of September 17, 2014. The purchase price of Matrix is calculated as follows: Cash purchase of common stock (including working capital adjustment) $ 354,637 Equity consideration (valued using October 23, 2014 stock price) 38,569 Total purchase price $ 393,206 The table below presents Matrix’s net assets based upon the final estimate of the respective fair values: Accounts receivable (1) $ 21,546 Other current assets 11,253 Property and equipment 4,293 Intangibles 247,500 Goodwill (2) 210,071 Other non-current assets 3,953 Deferred taxes, net (80,681 ) Accounts payable and accrued liabilities (24,175 ) Other non-current liabilities (554 ) Total $ 393,206 (1) The fair value of trade accounts receivable acquired in this transaction was determined to be approximately $21,546. The gross amount due with respect to these receivables is approximately $22,745, of which approximately $1,199 is expected to be uncollectible. (2) The goodwill was allocated to the Company's HA Services segment. Goodwill totaling $995 is expected to be deductible for tax purposes. Goodwill includes the value of the purchased assembled workforce. The fair value of intangible assets is as follows: Type Life (in years) Value Trademarks and trade names Indefinite Lived N/A $ 25,900 Customer relationships Amortizable 10 181,300 Developed technology Amortizable 5 40,300 9.1* $ 247,500 *Weighted-average amortization period for intangible assets with definite lives Pro forma information Revenue and net income attributable to Ingeus Limited and its wholly-owned subsidiaries (“Ingeus”), which the Company acquired on May 30, 2014, and Matrix included in the Company’s condensed consolidated statements of income for the three and nine months ended September 30, 2015 and 2014, and the pro forma revenue and net income of the combined entity had these acquisitions occurred as of January 1, 2014, are as follows: Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 Ingeus results included in the Company's condensed consolidated statements of income: Revenue $ 95,369 $ 76,176 $ 281,614 $ 105,012 Net income (loss) $ (11,352 ) $ (181 ) $ (14,142 ) $ 521 Matrix results included in the Company's condensed consolidated statements of income: Revenue $ 52,882 $ - $ 165,718 $ - Net income $ 2,715 $ - $ 7,231 $ - Consolidated Pro forma: Revenue $ 432,450 $ 366,631 $ 1,270,517 $ 1,071,086 Net income (loss) $ (5,571 ) $ 4,217 $ 7,299 $ 31,982 Diluted earnings per share $ (0.41 ) $ 0.26 $ 0.19 $ 2.00 The pro forma information above for the three and nine months ended September 30, 2014 includes the elimination of acquisition related costs, adjustments for compensation and stock-based compensation expense related to employment agreements effective upon consummation of the acquisitions, additional interest expense on the debt issued to finance the acquisitions, amortization and depreciation expense based on the estimated fair value and useful lives of intangible assets and property and equipment and related tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been consummated on January 1, 2014. |
Note 14 - Discontinued Operatio
Note 14 - Discontinued Operations | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | 14. Discontinued Operations On September 3, 2015, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”), pursuant to which the Company agreed to sell all of the membership interests in Providence Human Services, LLC and Providence Community Services, LLC, comprising the Company’s Human Services segment, in exchange for cash proceeds of approximately $200,000, prior to adjustments for estimated working capital, certain seller transaction costs, debt assumed by the Buyer, and a cash payment for the Providence Human Services cash and cash equivalents on hand at closing. See additional discussion of the sale of the Human Services segment in Note 16. The Company’s cash and cash equivalents of $106,724 and $135,258 at September 30, 2015 and December 31, 2014 exclude $19,753 and $25,148, respectively, of cash and cash equivalents pertaining to the Human Services segment which are classified as “Current assets of discontinued operations held for sale” in the Condensed Consolidated Balance Sheets. In accordance with the Purchase Agreement, the amount of the Human Services segment cash and cash equivalents on hand as of the closing date are to remain in the Human Services segment entities as a closing accommodation. The buyer will pay the Company for the Human Services segment cash and cash equivalents at closing in addition to the net cash sale proceeds (see Note 16 - Subsequent Events). In accordance with ASC 205-20, Presentation of Financial Statements-Discontinued Operations The following table summarizes the results of operations classified as discontinued operations, net of tax, for the three and nine months ended September 30, 2015 and 2014: Three months ended Nine months ended September 30, September 30, 2015 2014 2015 2014 Service revenue, net $ 84,722 $ 84,744 $ 260,701 $ 259,673 Operating expenses: Service expense 77,890 78,900 233,710 237,658 General and administrative expense 6,807 4,841 17,047 14,504 Asset impairment charge 1,593 - 1,593 - Depreciation and amortization 1,217 1,778 4,831 5,101 Total operating expenses 87,507 85,519 257,181 257,263 Operating income (loss) (2,785 ) (775 ) 3,520 2,410 Other expenses: Interest expense, net 795 578 2,422 780 Income (loss) from discontinued operations before provision (benefit) for income taxes (3,580 ) (1,353 ) 1,098 1,630 Provision (benefit) for income taxes (1,789 ) (367 ) 756 970 Discontinued operations, net of tax $ (1,791 ) $ (986 ) $ 342 $ 660 In connection with classifying the Human Services segment as a discontinued operation, the Company was required to compare the estimated fair values of each reporting unit of the underlying disposal group, less the costs to sell, to the respective carrying amount. As a result of this analysis, the Company recorded a non-cash goodwill impairment charge of $1,593 during the three and nine months ended September 30, 2015, which is included in Asset impairment charge in the table above. The impairment charge was related to the Company’s Maple Star reporting unit. We estimated the fair value of each reporting unit within the Human Services segment based on both a market-based valuation approach and an income-based valuation approach. The valuation methodology applied was consistent with our methodology for the 2014, 2013 and 2012 annual goodwill impairment assessments. Under the market approach, the fair value of the reporting unit is determined using one or more methods based on current values in the market for similar businesses. Under the income approach, the fair value of the reporting unit is based on the cash flow streams expected to be generated by the reporting unit over an appropriate time period, and then discounting the cash flows to present value using an appropriate discount rate. The income approach is dependent on a number of significant management assumptions, including estimates of future revenue and expenses, growth rates and discount rates. Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including our interpretation of current economic indicators and market valuations, and assumptions about our strategic plans with regard to our operations. The Company allocated interest expense to discontinued operations based on the portion of the revolving line of credit that was required to be paid with the proceeds from the sale of the Human Services segment. The total allocated interest expense was $805 and $2,461, respectively, for the three and nine months ended September 30, 2015, and $589 and $810, respectively, for the three and nine months ended September 30, 2014, and is included in Interest expense, net in the table above. The following table summarizes the carrying amounts of the major classes of assets and liabilities held for sale in the condensed consolidated balance sheet as of September 30, 2015 and December 31, 2014: September 30, December 31, 2015 2014 Cash and cash equivalents (a) $ 19,753 $ 25,148 Accounts receivable, net of allowance of $1,612 in 2015 and $2,770 in 2014 50,149 43,779 Other receivables 1,087 1,552 Prepaid expenses and other 3,904 3,023 Restricted cash 530 573 Deferred tax assets 431 1,918 Current assets of discontinued operations held for sale $ 75,854 $ 75,993 Property and equipment, net $ 14,694 $ 14,500 Goodwill 11,636 13,344 Intangible assets, net 14,314 16,769 Deferred tax assets 4,570 3,689 Other assets 3,609 3,561 Non-current assets of discontinued operations held for sale $ 48,823 $ 51,863 Current portion of long-term obligations $ 600 $ 600 Accounts payable 1,895 1,504 Accrued expenses 19,602 22,584 Deferred revenue 2,061 1,502 Reinsurance liability reserve 64 38 Current liabilities of discontinued operations held for sale $ 24,222 $ 26,228 Other long-term liabilities $ 854 $ 635 Non-current liabilities of discontinued operations held for sale $ 854 $ 635 (a) In accordance with the Purchase Agreement, the amount of the Human Services segment cash and cash equivalents on hand as of the closing date are to remain in the Human Services segment entities as a closing accommodation. The buyer will pay the Company for the Human Services segment cash and cash equivalents at closing in addition to the net cash sale proceeds (see Note 16 - Subsequent Events). The following table presents depreciation, amortization, capital expenditures, and significant operating noncash items of the discontinued operations for the nine months ended September 30, 2015 and 2014: For the nine months ended September 30, 2015 2014 Cash flows from discontinued operating activities: Depreciation $ 2,376 $ 2,304 Amortization $ 2,455 $ 2,797 Stock based compensation $ 168 $ 30 Deferred income taxes $ (2,368 ) $ 653 Cash flows from discontinued investing activities: Purchase of property and equipment $ 2,550 $ 3,963 |
Note 15 - Business Segments
Note 15 - Business Segments | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | 15. Business Segments The Company’s operations are organized and reviewed by management along its service lines. The Company has historically operated in four segments, NET Services, Human Services, WD Services and HA Services. Effective November 1, 2015, the Company sold the Human Services segment as further discussed in Note 16. NET Services includes managing the delivery of non-emergency transportation services. WD Services primarily includes workforce development, legal offender rehabilitation case management and outsourced employability programs. HA Services primarily includes the provision of CHAs for MA health plans in enrolled members’ homes. Prior to January 1, 2015, the Company reported its segment activities under a full absorption method, where all corporate direct and indirect costs were allocated to the reporting segments. Beginning on January 1, 2015, the Company began analyzing the results of the segments exclusive of the allocation of indirect corporate costs. Corporate costs that represent a direct expense of a segment continue to be allocated to the respective segment. The segment results for the three and nine months ended September 30, 2014 have been recast to reflect management’s current internal method of segment reporting. The Corporate and Other column includes certain general and administrative costs that are not directly attributable to a specific segment, such as executive, accounting, technology, legal and other costs, as well as consolidation and elimination amounts and the activities of the Company’s wholly-owned captive insurance subsidiary. Additionally, beginning January 1, 2015, oversight of the Company’s legacy workforce development businesses (those that existed prior to the acquisition of Ingeus) was transferred to the management of the WD Services segment. The financial results of these legacy workforce development businesses have been reclassified from the Human Services segment to the WD Services segment in the table below for the three and nine months ended September 30, 2015 and 2014. These legacy workforce development businesses were not sold in connection with the Company’s sale of the Human Services segment. The following table sets forth certain financial information attributable to the Company’s business segments (excluding the Human Services segment which has been classified to discontinued operations) for the three and nine months ended September 30, 2015 and 2014. Three Months Ended September 30, 2015 NET Services WD Services HA Services Corporate and Other Total Service revenue, net $ 277,130 $ 102,547 $ 52,882 $ (109 ) $ 432,450 Service expense 257,518 95,934 40,134 (2,708 ) 390,878 General and administrative expense 2,908 8,260 804 9,352 21,324 Depreciation and amortization 2,389 3,441 7,488 52 13,370 Operating income (loss) $ 14,315 $ (5,088 ) $ 4,456 $ (6,805 ) $ 6,878 Total assets $ 287,929 $ 238,097 $ 490,189 $ 55,661 $ 1,071,876 Three Months Ended September 30, 2014 NET Services WD Services HA Services Corporate and Other Total Service revenue, net $ 226,055 $ 83,596 $ - $ (177 ) $ 309,474 Service expense 206,456 73,159 - 829 280,444 General and administrative expense 2,136 5,834 - 12,356 20,326 Depreciation and amortization 1,926 4,050 - 280 6,256 Operating income (loss) $ 15,537 $ 553 $ - $ (13,642 ) $ 2,448 Total assets $ 246,589 $ 221,022 $ - $ 73,065 $ 540,676 Nine Months Ended September 30, 2015 NET Services WD Services HA Services Corporate and Other Total Service revenue, net $ 802,580 $ 302,340 $ 165,718 $ (121 ) $ 1,270,517 Service expense 733,696 273,426 124,541 (2,679 ) 1,128,984 General and administrative expense 7,959 23,469 2,086 25,570 59,084 Depreciation and amortization 6,995 10,089 21,855 675 39,614 Operating income (loss) $ 53,930 $ (4,644 ) $ 17,236 $ (23,687 ) $ 42,835 Nine Months Ended September 30, 2014 NET Services WD Services HA Services Corporate and Other Total Service revenue, net $ 640,428 $ 127,661 $ - $ (187 ) $ 767,902 Service expense 578,159 110,061 - 2,532 690,752 General and administrative expense 6,119 8,563 - 25,757 40,439 Depreciation and amortization 5,552 5,443 - 810 11,805 Operating income (loss) $ 50,598 $ 3,594 $ - $ (29,286 ) $ 24,906 |
Note 16 - Subsequent Events
Note 16 - Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | 16. Subsequent Events On October 14, 2015, the Company entered into amendments to the Agreement and Plan of Merger and related Escrow Agreement that governed its acquisition of Matrix (the “Amendments”). The Amendments call for the release from escrow by October 21, 2015 of the 946,723 shares of Providence common stock issued to the former stockholders and option holders of Matrix. One half of the escrowed shares were originally to be released on October 23, 2015 with the remaining shares to be released on October 23, 2016. The escrowed shares were placed in escrow to secure indemnification obligations related to certain representations made to Providence regarding healthcare billing and compliance with the Privacy, Security, Breach Notification and Enforcement Rules, known as HIPAA. The Amendments terminated these indemnification obligations effective October 14, 2015. On October 14, 2015, the Company entered into an agreement to repurchase 707,318 of its common stock held by former stockholders of Matrix for an aggregate purchase price of $29,000 (or $41.00 per share). The Company funded this purchase through a combination of borrowing on its revolving credit facility and cash on hand. The purchase of these shares was completed on October 30, 2015. Effective November 1, 2015, the sale of the Human Services segment was completed. The Company received approximately $198,377 in net proceeds (including $10,000 held in an indemnity escrow) representing the $200,000 purchase price net of an estimated working capital adjustment, estimated seller transaction costs, debt assumed by the Buyer, and excluding a $24,525 cash payment received for the Providence Human Services cash and cash equivalents on hand at closing. Approximately $6,158 of total estimated seller transaction costs of $8,589 were contingent upon the completion of the sale and, therefore, were expensed subsequent to September 30, 2015. The Company was required to use 50% of the net cash proceeds from the sale to fund a repayment on the revolving loan under its existing credit facility. However, in November 2015, the Company used the full amount of the net proceeds plus the cash payment received for the Providence Human Services cash and cash equivalents on hand at closing to fund a $206,000 repayment on the revolving loan under its existing credit facility. On October 15, 2015, the Company and two executives of Ingeus entered into Settlement Deeds whereby these executives’ employment was terminated by mutual agreement. The termination of the employees’ employment agreements caused the Company to recognize approximately $16,070 in stock compensation expense as of October 15, 2015 related to deferred consideration payable to these two executives in connection with the Share Sale Agreement for the purchase of Ingeus on May 30, 2014. The Company expects to receive approximately $4,866 from escrow representing the non-vested portion of cash that the Company placed into escrow for the payment of estimated income taxes related to the vesting of the common stock deferred consideration while these two executives were employees of the Company. On November 4, 2015, the Company’s Board of Directors authorized the Company to engage in a common stock repurchase program to repurchase up to $70,000 in aggregate value of the Company’s common stock during the twelve-month period following November 4, 2015. Purchases under the common stock repurchase program may be made from time-to-time through a combination of open market repurchases (including Rule 10b5-1 plans), privately negotiated transactions, and accelerated share repurchase transactions, at the discretion of the Company’s officers, and as permitted by securities laws, covenants under existing bank agreements, and other legal requirements. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The accompanying unaudited condensed consolidated financial statements (the “consolidated financial statements”) include the accounts of The Providence Service Corporation (“Providence,” “the Company,” “our,” “we” and “us”), its wholly-owned subsidiaries and entities in which the Company has a voting controlling interest. Investments in non-consolidated entities over which the Company exercises significant influence but does not control are accounted for under the equity method. The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for fair presentation have been included. In order to conform to the current year presentation, prior year amounts have been reclassified to show service revenue as one line item, service expense as one line item, and loss on foreign currency translation as a component of other expenses. Additionally, the Company’s legacy workforce development businesses have been reclassified from the Human Services segment to the Workforce Development Services segment. During the quarter ended September 30, 2015, the Human Services segment met the criteria for held-for-sale classification due to the execution of an agreement to sell the segment as of September 3, 2015. Since the disposition will result in a strategic shift, that will have a major effect on the Company’s operations and financial results, it is required to be accounted for as a discontinued operation. The assets and liabilities of the Human Services segment are classified as held for sale in the Condensed Consolidated Balance Sheets for all periods presented. Additionally, the operating results of this segment are reported as discontinued operations, net of tax in the Condensed Consolidated Statements of Income for all periods presented. The Company has made estimates relating to the reporting of assets and liabilities, revenues and expenses and certain disclosures to prepare these consolidated financial statements in conformity with GAAP. Actual results could differ from those estimates. Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2015. Management has evaluated events and transactions that occurred after the balance sheet date and through the date these consolidated financial statements were issued, and considered the effect of such events in the preparation of these consolidated financial statements. The consolidated balance sheet at December 31, 2014 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. The consolidated financial statements contained herein should be read in conjunction with the audited financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. |
Description of Business [Policy Text Block] | Description of Business The Company provides and manages health and human services through non-emergency transportation, community and behavioral health, workforce development and health assessment offerings. The Company historically operated in four segments, Non-Emergency Transportation Services (“NET Services”), Human Services, Workforce Development Services (“WD Services”) and Health Assessment Services (“HA Services”). As further discussed below, the Company completed the sale of the Human Services segment effective November 1, 2015. The NET Services segment manages transportation networks and arranges for client transportation to health care related facilities and services for state or regional Medicaid agencies, managed care organizations (“MCOs”) and commercial insurers. The WD Services segment provides outsourced employability and legal offender rehabilitation case management services, primarily to the eligible participants in government sponsored programs. The HA Services segment primarily provides comprehensive health assessments (“CHAs”) for members enrolled in Medicare Advantage (“MA”) health plans, in patient’s homes. In the Human Services segment, which has been presented as a discontinued operation, counselors, social workers and behavioral health professionals work with clients, primarily in the client’s home or community, who are eligible for government assistance due to income level, disabilities or court order. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers: Topic 606 ? Step 1: Identify the contract(s) with a customer. ? Step 2: Identify the performance obligations in the contract. ? Step 3: Determine the transaction price. ? Step 4: Allocate the transaction price to the performance obligations in the contract. ? Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. Publicly held entities must apply the new revenue standard for annual reporting periods (including interim periods within those annual periods) beginning after December 15, 2017. Early adoption of the standard is permitted, but not before annual periods beginning after December 15, 2016. The Company is currently evaluating the impact ASU 2014-09 will have on its consolidated financial statements. In November 2014, the FASB issued ASU No 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity . In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In September 2015 the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments |
Note 3 - Equity Investment (Tab
Note 3 - Equity Investment (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Equity Method Investments [Table Text Block] | Assets Liabilities Other Assets Accrued Expenses Maximum Exposure to Loss $ 13,564 $ 8,501 $ 13,564 |
Note 5 - Long-term Obligation25
Note 5 - Long-term Obligations and Note Payable to Related Party (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Long-term Debt Instruments [Table Text Block] | September 30, December 31, 2015 2014 $240,000 revolving loan, LIBOR plus 2.25% - 3.25% (effective rate of 3.24% at September 30, 2015) with interest payable at least once every three months through August 2018 $ 191,700 $ 201,700 $250,000 term loan, LIBOR plus 2.25% - 3.25% (effective rate of 3.28% at September 30, 2015), with principal payable quarterly beginning March 31, 2015 and interest payable at least once every three months through August 2018 235,938 250,000 $60,000 term loan, LIBOR plus 2.25% - 3.25% (effective rate of 3.28% at September 30, 2015), with principal payable quarterly beginning December 31, 2014 and interest payable at least once every three months, through August 2018 55,500 58,875 14.0% unsecured related party, subordinated bridge note with principal due September 30, 2018 and interest payable quarterly - 65,500 483,138 576,075 Less unamortized discount on debt 1,103 1,462 482,035 574,613 Less current portion 31,000 90,088 Total long-term obligations, less current portion $ 451,035 $ 484,525 |
Note 6 - Stock-based Compensa26
Note 6 - Stock-based Compensation Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | For the nine months ended September 30, 2015 Number of Shares Under Option Weighted-average Exercise Price Balance at beginning of period 813,622 $ 30.77 Granted 294,294 $ 44.28 Exercised (202,419 ) $ 22.18 Forfeited or expired (248,130 ) $ 43.60 Outstanding at September 30, 2015 657,367 $ 34.62 |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] | For the nine months ended September 30, 2015 Shares Weighted-average Grant Date Fair Value Non-vested balance at beginning of period 688,262 $ 37.71 Granted 29,959 $ 50.73 Vested (213,099 ) $ 33.83 Forfeited or cancelled (250 ) $ 15.50 Non-vested at September 30, 2015 504,872 $ 40.13 |
Note 7 - Convertible Preferre27
Note 7 - Convertible Preferred Stock, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Temporary Equity [Table Text Block] | Original issue price of convertible preferred stock $ 81,250 Less: Issuance costs (3,531 ) Total convertible preferred stock, net $ 77,719 |
Note 8 - Stockholders' Equity (
Note 8 - Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Stockholders Equity [Table Text Block] | Accumulated Additional Other Common Stock Paid-In Accumulated Comprehensive Treasury Stock Shares Amount Capital Deficit Loss Shares Amount Balance at December 31, 2014 16,870,285 $ 17 $ 261,155 $ (13,366 ) $ (8,756 ) 1,014,108 $ (17,686 ) Stock-based compensation - - 8,822 - - - - Exercise of employee stock options, including net tax windfall of $2,209 202,419 - 6,699 - - - - Restricted stock issued 63,870 - - - - 15,530 (738 ) Foreign currency translation adjustments - - - - (5,579 ) - - Beneficial conversion feature related to preferred stock - - 1,071 - - - - Convertible preferred stock dividends - - (2,814 ) - - - - Accretion of convertible preferred stock discount - - (1,071 ) - - - - Net income - - - 7,299 - - - Balance at September 30, 2015 17,136,574 $ 17 $ 273,862 $ (6,067 ) $ (14,335 ) 1,029,638 $ (18,424 ) |
Note 9 - Earnings Per Share (Ta
Note 9 - Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three months ended Nine months ended September 30, September 30, 2015 2014 2015 2014 Numerator: Net income (loss) $ (5,571 ) $ 266 $ 7,299 $ 13,224 Less dividends on convertible preferred stock (1,116 ) - (2,814 ) - Less accretion of convertible preferred stock discount - - (1,071 ) - Less income allocated to participating securities - - (321 ) - Net income (loss) available to common stockholders $ (6,687 ) $ 266 $ 3,093 $ 13,224 Continuing operations $ (4,896 ) $ 1,252 $ 2,783 $ 12,564 Discontinued operations (1,791 ) (986 ) 310 660 $ (6,687 ) $ 266 $ 3,093 $ 13,224 Denominator: Denominator for basic earnings per share -- weighted-average shares 16,130,421 14,955,773 16,068,455 14,450,248 Effect of dilutive securities: Common stock options - 203,612 152,292 256,392 Performance-based restricted stock units - 16,720 - 16,720 Denominator for diluted earnings per share -- adjusted weighted-average shares assumed conversion 16,130,421 15,176,105 16,220,747 14,723,360 Basic earnings (loss) per share: Continuing operations $ (0.30 ) $ 0.08 $ 0.17 $ 0.87 Discontinued operations $ (0.11 ) $ (0.06 ) $ 0.02 $ 0.05 $ (0.41 ) $ 0.02 $ 0.19 $ 0.92 Diluted earnings (loss) per share: Continuing operations $ (0.30 ) $ 0.08 $ 0.17 $ 0.85 Discontinued operations $ (0.11 ) $ (0.06 ) $ 0.02 $ 0.05 $ (0.41 ) $ 0.02 $ 0.19 $ 0.90 |
Note 13 - Acquisitions (Tables)
Note 13 - Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | Cash purchase of common stock (including working capital adjustment) $ 354,637 Equity consideration (valued using October 23, 2014 stock price) 38,569 Total purchase price $ 393,206 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | Accounts receivable (1) $ 21,546 Other current assets 11,253 Property and equipment 4,293 Intangibles 247,500 Goodwill (2) 210,071 Other non-current assets 3,953 Deferred taxes, net (80,681 ) Accounts payable and accrued liabilities (24,175 ) Other non-current liabilities (554 ) Total $ 393,206 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | Type Life (in years) Value Trademarks and trade names Indefinite Lived N/A $ 25,900 Customer relationships Amortizable 10 181,300 Developed technology Amortizable 5 40,300 9.1* $ 247,500 |
Business Acquisition, Pro Forma Information [Table Text Block] | Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 Ingeus results included in the Company's condensed consolidated statements of income: Revenue $ 95,369 $ 76,176 $ 281,614 $ 105,012 Net income (loss) $ (11,352 ) $ (181 ) $ (14,142 ) $ 521 Matrix results included in the Company's condensed consolidated statements of income: Revenue $ 52,882 $ - $ 165,718 $ - Net income $ 2,715 $ - $ 7,231 $ - Consolidated Pro forma: Revenue $ 432,450 $ 366,631 $ 1,270,517 $ 1,071,086 Net income (loss) $ (5,571 ) $ 4,217 $ 7,299 $ 31,982 Diluted earnings per share $ (0.41 ) $ 0.26 $ 0.19 $ 2.00 |
Note 14 - Discontinued Operat31
Note 14 - Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Cash Flow Statement [Member] | |
Notes Tables | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | For the nine months ended September 30, 2015 2014 Cash flows from discontinued operating activities: Depreciation $ 2,376 $ 2,304 Amortization $ 2,455 $ 2,797 Stock based compensation $ 168 $ 30 Deferred income taxes $ (2,368 ) $ 653 Cash flows from discontinued investing activities: Purchase of property and equipment $ 2,550 $ 3,963 |
Balance Sheet [Member] | |
Notes Tables | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | September 30, December 31, 2015 2014 Cash and cash equivalents (a) $ 19,753 $ 25,148 Accounts receivable, net of allowance of $1,612 in 2015 and $2,770 in 2014 50,149 43,779 Other receivables 1,087 1,552 Prepaid expenses and other 3,904 3,023 Restricted cash 530 573 Deferred tax assets 431 1,918 Current assets of discontinued operations held for sale $ 75,854 $ 75,993 Property and equipment, net $ 14,694 $ 14,500 Goodwill 11,636 13,344 Intangible assets, net 14,314 16,769 Deferred tax assets 4,570 3,689 Other assets 3,609 3,561 Non-current assets of discontinued operations held for sale $ 48,823 $ 51,863 Current portion of long-term obligations $ 600 $ 600 Accounts payable 1,895 1,504 Accrued expenses 19,602 22,584 Deferred revenue 2,061 1,502 Reinsurance liability reserve 64 38 Current liabilities of discontinued operations held for sale $ 24,222 $ 26,228 Other long-term liabilities $ 854 $ 635 Non-current liabilities of discontinued operations held for sale $ 854 $ 635 |
Operations Statement [Member] | |
Notes Tables | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | Three months ended Nine months ended September 30, September 30, 2015 2014 2015 2014 Service revenue, net $ 84,722 $ 84,744 $ 260,701 $ 259,673 Operating expenses: Service expense 77,890 78,900 233,710 237,658 General and administrative expense 6,807 4,841 17,047 14,504 Asset impairment charge 1,593 - 1,593 - Depreciation and amortization 1,217 1,778 4,831 5,101 Total operating expenses 87,507 85,519 257,181 257,263 Operating income (loss) (2,785 ) (775 ) 3,520 2,410 Other expenses: Interest expense, net 795 578 2,422 780 Income (loss) from discontinued operations before provision (benefit) for income taxes (3,580 ) (1,353 ) 1,098 1,630 Provision (benefit) for income taxes (1,789 ) (367 ) 756 970 Discontinued operations, net of tax $ (1,791 ) $ (986 ) $ 342 $ 660 |
Note 15 - Business Segments (Ta
Note 15 - Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Three Months Ended September 30, 2015 NET Services WD Services HA Services Corporate and Other Total Service revenue, net $ 277,130 $ 102,547 $ 52,882 $ (109 ) $ 432,450 Service expense 257,518 95,934 40,134 (2,708 ) 390,878 General and administrative expense 2,908 8,260 804 9,352 21,324 Depreciation and amortization 2,389 3,441 7,488 52 13,370 Operating income (loss) $ 14,315 $ (5,088 ) $ 4,456 $ (6,805 ) $ 6,878 Total assets $ 287,929 $ 238,097 $ 490,189 $ 55,661 $ 1,071,876 Three Months Ended September 30, 2014 NET Services WD Services HA Services Corporate and Other Total Service revenue, net $ 226,055 $ 83,596 $ - $ (177 ) $ 309,474 Service expense 206,456 73,159 - 829 280,444 General and administrative expense 2,136 5,834 - 12,356 20,326 Depreciation and amortization 1,926 4,050 - 280 6,256 Operating income (loss) $ 15,537 $ 553 $ - $ (13,642 ) $ 2,448 Total assets $ 246,589 $ 221,022 $ - $ 73,065 $ 540,676 Nine Months Ended September 30, 2015 NET Services WD Services HA Services Corporate and Other Total Service revenue, net $ 802,580 $ 302,340 $ 165,718 $ (121 ) $ 1,270,517 Service expense 733,696 273,426 124,541 (2,679 ) 1,128,984 General and administrative expense 7,959 23,469 2,086 25,570 59,084 Depreciation and amortization 6,995 10,089 21,855 675 39,614 Operating income (loss) $ 53,930 $ (4,644 ) $ 17,236 $ (23,687 ) $ 42,835 Nine Months Ended September 30, 2014 NET Services WD Services HA Services Corporate and Other Total Service revenue, net $ 640,428 $ 127,661 $ - $ (187 ) $ 767,902 Service expense 578,159 110,061 - 2,532 690,752 General and administrative expense 6,119 8,563 - 25,757 40,439 Depreciation and amortization 5,552 5,443 - 810 11,805 Operating income (loss) $ 50,598 $ 3,594 $ - $ (29,286 ) $ 24,906 |
Note 1 - Basis of Presentatio33
Note 1 - Basis of Presentation, Description of Business and Recent Accounting Pronouncements (Details Textual) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Other Assets [Member] | |
Unamortized Debt Issuance Expense | $ 2,533 |
Number of Operating Segments | 4 |
Note 2 - Concentrations (Detail
Note 2 - Concentrations (Details Textual) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Customer Concentration Risk [Member] | UNITED STATES | Sales Revenue, Net [Member] | |||
Concentration Risk, Percentage | 77.20% | 85.20% | |
Customer Concentration Risk [Member] | Foreign Countries [Member] | Sales Revenue, Net [Member] | |||
Concentration Risk, Percentage | 22.80% | 14.80% | |
Customer Concentration Risk [Member] | Workforce Development Services Revenue [Member] | One Foreign Payer [Member] | |||
Concentration Risk, Percentage | 42.30% | 57.30% | |
Government Contracts Concentration Risk [Member] | UNITED STATES | Sales Revenue, Net [Member] | |||
Concentration Risk, Percentage | 54.60% | 73.70% | |
Government Contracts Concentration Risk [Member] | Foreign Countries [Member] | Sales Revenue, Net [Member] | |||
Concentration Risk, Percentage | 95.30% | 84.10% | |
Geographic Concentration Risk [Member] | Foreign Countries [Member] | Net Assets, Geographic Area [Member] | |||
Concentration Risk, Percentage | 14.80% | 33.40% | |
Foreign Countries [Member] | |||
Concentration Risk, Net Assets Amount, Geographic Area | $ 31,667 | $ 40,213 |
Note 3 - Equity Investment (Det
Note 3 - Equity Investment (Details Textual) - Mission Providence [Member] | Sep. 30, 2015 |
Equity Method Investment, Ownership Percentage | 60.00% |
Joint Venture, Rights to Cash or Profit Distributions, Percentage | 75.00% |
Note 3 - Equity Investment - Ca
Note 3 - Equity Investment - Carrying Amounts of Assets and Liabilities and Maximum Loss Exposure (Details) $ in Thousands | Sep. 30, 2015USD ($) |
Other Assets [Member] | Mission Providence [Member] | |
Other Assets | $ 13,564 |
Accrued Expenses [Member] | Mission Providence [Member] | |
Accrued Expenses | 8,501 |
Maximum Exposure to Loss | $ 13,564 |
Note 4 - Fair Value Measureme37
Note 4 - Fair Value Measurements (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Other Noncurrent Liabilities [Member] | ||||
Business Combination, Contingent Consideration, Liability | $ 2,380 | $ 2,782 | ||
Accrued Expenses [Member] | ||||
Business Combination, Contingent Consideration, Liability | 7,767 | |||
Business Combination, Contingent Consideration, Liability | $ 10,549 | |||
Payments for Merger Related Costs | $ 7,496 | $ 7,496 |
Note 5 - Long-term Obligation38
Note 5 - Long-term Obligations and Note Payable to Related Party (Details Textual) - Unsecured Subordinated Note Issued to Coliseum [Member] - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | Oct. 23, 2014 |
Coliseum Capital Management, LLC [Member] | |||
Debt Instrument, Interest Rate, Stated Percentage | 14.00% | ||
Debt Instrument, Face Amount | $ 65.5 | ||
Debt Instrument, Interest Rate, Stated Percentage | 14.00% | 14.00% |
Note 5 - Long-term Obligation39
Note 5 - Long-term Obligations and Note Payable to Related Party - Company's Long-term Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Revolving Credit Facility [Member] | ||
Long-term debt | $ 191,700 | $ 201,700 |
Credit Facility, Second Amendment, Term Loan Tranche [Member] | ||
Long-term debt | 235,938 | 250,000 |
Term Loan [Member] | ||
Long-term debt | $ 55,500 | 58,875 |
Unsecured Subordinated Note Issued to Coliseum [Member] | ||
Long-term debt | 65,500 | |
Long-term debt | $ 483,138 | 576,075 |
Less unamortized discount on debt | 1,103 | 1,462 |
482,035 | 574,613 | |
Less current portion | 31,000 | 90,088 |
Total long-term obligations, less current portion | $ 451,035 | $ 484,525 |
Note 5 - Long-term Obligation40
Note 5 - Long-term Obligations and Note Payable to Related Party - Company's Long-term Obligations (Details) (Parentheticals) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Revolving Credit Facility [Member] | Minimum [Member] | ||
Basis spread on variable rate | 2.25% | 2.25% |
Revolving Credit Facility [Member] | Maximum [Member] | ||
Basis spread on variable rate | 3.25% | 3.25% |
Revolving Credit Facility [Member] | ||
Face amount | $ 240 | $ 240 |
Basis spread on variable rate | 3.24% | |
Minimum [Member] | Credit Facility, Second Amendment, Term Loan Tranche [Member] | ||
Basis spread on variable rate | 2.25% | 2.25% |
Minimum [Member] | Term Loan [Member] | ||
Basis spread on variable rate | 2.25% | 2.25% |
Maximum [Member] | Credit Facility, Second Amendment, Term Loan Tranche [Member] | ||
Basis spread on variable rate | 3.25% | 3.25% |
Maximum [Member] | Term Loan [Member] | ||
Basis spread on variable rate | 3.25% | 3.25% |
Credit Facility, Second Amendment, Term Loan Tranche [Member] | ||
Face amount | $ 250 | $ 250 |
Debt instrument, effective rate | 3.28% | |
Term Loan [Member] | ||
Face amount | $ 60 | $ 60 |
Debt instrument, effective rate | 3.28% | |
Unsecured Subordinated Note Issued to Coliseum [Member] | ||
Interest rate | 14.00% | 14.00% |
Note 6 - Stock-based Compensa41
Note 6 - Stock-based Compensation Arrangements (Details Textual) - HoldCo LTI Program [Member] - USD ($) $ in Thousands | Aug. 06, 2015 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2015 |
Performance Shares [Member] | Certain Executive Officers [Member] | After Determination of the Pool [Member] | ||||
Sharebased Compensation Award,Percentage of Shares to be Issued | 60.00% | |||
Performance Shares [Member] | Certain Executive Officers [Member] | Issued on First Anniversary [Member] | ||||
Sharebased Compensation Award,Percentage of Shares to be Issued | 25.00% | |||
Performance Shares [Member] | Certain Executive Officers [Member] | Issued on Second Anniversary [Member] | ||||
Sharebased Compensation Award,Percentage of Shares to be Issued | 15.00% | |||
Performance Shares [Member] | Certain Executive Officers [Member] | ||||
Share-based Compensation Arrangement, Award Threshold, Percentage of Compounded Annual Return | 8.00% | |||
Period for Weighted Average Price for Common Share | 90 days | |||
Sharebased Compensation Award Percentage of Shares Issued | 75.00% | |||
General and Administrative Expense [Member] | ||||
Allocated Share-based Compensation Expense | $ 478 | $ 478 |
Note 6 - Stock-based Compensa42
Note 6 - Stock-based Compensation Arrangements - Stock Option Activity (Details) | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Balance at beginning of period (in shares) | 813,622 |
Balance at beginning of period (in dollars per share) | $ / shares | $ 30.77 |
Granted (in shares) | 294,294 |
Granted (in dollars per share) | $ / shares | $ 44.28 |
Exercised (in shares) | (202,419) |
Exercised (in dollars per share) | $ / shares | $ 22.18 |
Forfeited or expired (in shares) | (248,130) |
Forfeited or expired (in dollars per share) | $ / shares | $ 43.60 |
Outstanding at September 30, 2015 (in shares) | 657,367 |
Outstanding at September 30, 2015 (in dollars per share) | $ / shares | $ 34.62 |
Note 6 - Stock-based Compensa43
Note 6 - Stock-based Compensation Arrangements - Nonvested Stock Activity (Details) - Restricted Stock [Member] | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Non-vested balance at beginning of period (in shares) | 688,262 |
Non-vested balance at beginning of period (in dollars per share) | $ / shares | $ 37.71 |
Granted (in shares) | 29,959 |
Granted (in dollars per share) | $ / shares | $ 50.73 |
Vested (in shares) | (213,099) |
Vested (in dollars per share) | $ / shares | $ 33.83 |
Forfeited or cancelled (in shares) | (250) |
Forfeited or cancelled (in dollars per share) | $ / shares | $ 15.50 |
Non-vested at September 30, 2015 (in shares) | 504,872 |
Non-vested at September 30, 2015 (in dollars per share) | $ / shares | $ 40.13 |
Note 7 - Convertible Preferre44
Note 7 - Convertible Preferred Stock, Net (Details Textual) - USD ($) | Oct. 01, 2015 | Sep. 16, 2015 | Jul. 02, 2015 | Apr. 01, 2015 | Feb. 11, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Mar. 12, 2015 | Feb. 05, 2015 | Dec. 31, 2014 |
Non-Standby Purchasers [Member] | Convertible Preferred Stock [Member] | ||||||||||||
Temporary Equity, Shares Issued | 130,884 | |||||||||||
The Standby Purchasers [Member] | Convertible Preferred Stock [Member] | ||||||||||||
Rights Offering, Right to Purchase Preferred Stock, Price Per Share | $ 105 | $ 100 | ||||||||||
Temporary Equity, Shares Issued | 150,000 | 524,116 | ||||||||||
Convertible Preferred Stock [Member] | Cash Dividends [Member] | ||||||||||||
Preferred Stock, Dividend Rate, Percentage | 5.50% | |||||||||||
Convertible Preferred Stock [Member] | Paid-in-kind Dividends [Member] | ||||||||||||
Preferred Stock, Dividend Rate, Percentage | 8.50% | |||||||||||
Convertible Preferred Stock [Member] | Subsequent Event [Member] | ||||||||||||
Dividends, Preferred Stock | $ 1,116,000 | |||||||||||
Convertible Preferred Stock [Member] | ||||||||||||
Temporary Equity, Shares Issued | 805,000 | 805,000 | 0 | |||||||||
Dividends, Preferred Stock | $ 1,104,000 | $ 594,000 | ||||||||||
Cash Dividends [Member] | ||||||||||||
Preferred Stock, Dividend Rate, Percentage | 5.50% | |||||||||||
Paid-in-kind Dividends [Member] | ||||||||||||
Preferred Stock, Dividend Rate, Percentage | 8.50% | |||||||||||
Common Stock [Member] | ||||||||||||
Convertible Preferred Stock Converted to Other Securities | $ 2.51 | |||||||||||
Dividends, Preferred Stock | ||||||||||||
Convertible Preferred Stock, Pro Rata Share | $ 65,500,000 | $ 65,500,000 | ||||||||||
Rights Offering, Right to Purchase Preferred Stock, Price Per Share | $ 100 | $ 100 | ||||||||||
Conversion Price | $ 39.88 | |||||||||||
Registered Rights Offering, Convertible Preferred Stock, Value | $ 65,500,000 | |||||||||||
Dividends, Preferred Stock | $ 1,116,000 | $ 2,814,000 |
Note 7 - Convertible Preferre45
Note 7 - Convertible Preferred Stock, Net - Convertible Preferred Stock (Details) - Convertible Preferred Stock [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Original issue price of convertible preferred stock | $ 81,250 |
Less: Issuance costs | (3,531) |
Total convertible preferred stock, net | $ 77,719 |
Note 8 - Stockholders' Equity -
Note 8 - Stockholders' Equity - Changes in Stockholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Common Stock [Member] | ||
Balance (in shares) | 16,870,285 | |
Balance | $ 17 | |
Restricted stock issued (in shares) | 63,870 | |
Restricted stock issued | ||
Foreign currency translation adjustments, net of tax | ||
Beneficial conversion feature related to preferred stock | ||
Convertible preferred stock dividends | ||
Accretion of convertible preferred stock discount | ||
Net income | ||
Balance at September 30, 2015 (in shares) | 17,136,574 | 17,136,574 |
Balance at September 30, 2015 | $ 17 | $ 17 |
Additional Paid-in Capital [Member] | ||
Balance | 261,155 | |
Stock-based compensation | $ 8,822 | |
Restricted stock issued | ||
Foreign currency translation adjustments, net of tax | ||
Beneficial conversion feature related to preferred stock | $ 1,071 | |
Convertible preferred stock dividends | (2,814) | |
Accretion of convertible preferred stock discount | $ (1,071) | |
Net income | ||
Balance at September 30, 2015 | 273,862 | $ 273,862 |
Retained Earnings [Member] | ||
Balance | $ (13,366) | |
Stock-based compensation | ||
Restricted stock issued | ||
Foreign currency translation adjustments, net of tax | ||
Beneficial conversion feature related to preferred stock | ||
Convertible preferred stock dividends | ||
Accretion of convertible preferred stock discount | ||
Net income | $ 7,299 | |
Balance at September 30, 2015 | (6,067) | (6,067) |
AOCI Attributable to Parent [Member] | ||
Balance | $ (8,756) | |
Stock-based compensation | ||
Restricted stock issued | ||
Foreign currency translation adjustments, net of tax | $ (5,579) | |
Beneficial conversion feature related to preferred stock | ||
Convertible preferred stock dividends | ||
Accretion of convertible preferred stock discount | ||
Net income | ||
Balance at September 30, 2015 | $ (14,335) | $ (14,335) |
Treasury Stock [Member] | ||
Balance (in shares) | 1,014,108 | |
Balance | $ (17,686) | |
Stock-based compensation | ||
Restricted stock issued (in shares) | 15,530 | |
Restricted stock issued | $ (738) | |
Foreign currency translation adjustments, net of tax | ||
Beneficial conversion feature related to preferred stock | ||
Convertible preferred stock dividends | ||
Accretion of convertible preferred stock discount | ||
Net income | ||
Balance at September 30, 2015 (in shares) | 1,029,638 | 1,029,638 |
Balance at September 30, 2015 | $ (18,424) | $ (18,424) |
Balance | $ 221,364 | |
Exercise of employee stock options, including net tax windfall of $2,209 (in shares) | 202,419 | |
Exercise of employee stock options, including net tax windfall of $2,209 | $ 6,699 | |
Foreign currency translation adjustments, net of tax | (6,290) | (5,579) |
Convertible preferred stock dividends | $ 1,116 | 2,814 |
Accretion of convertible preferred stock discount | (1,071) | |
Net income | $ (5,571) | 7,299 |
Balance at September 30, 2015 | $ 235,053 | $ 235,053 |
Note 8 - Stockholders' Equity47
Note 8 - Stockholders' Equity - Changes in Stockholders' Equity (Details) (Parentheticals) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Net tax windfall | $ 2,209 |
Note 9 - Earnings Per Share (De
Note 9 - Earnings Per Share (Details Textual) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Convertible Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 805,000 | 665,220 | ||
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 144,051 | 65,217 | 21,978 |
Note 9 - Earnings Per Share - B
Note 9 - Earnings Per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Continuing Operations [Member] | ||||
Numerator: | ||||
Net income (loss) available to common stockholders | $ (4,896) | $ 1,252 | $ 2,783 | $ 12,564 |
Operations | $ (4,896) | $ 1,252 | $ 2,783 | $ 12,564 |
Effect of dilutive securities: | ||||
Continuing operations (in dollars per share) | $ (0.30) | $ 0.08 | $ 0.17 | $ 0.87 |
(in dollars per share) | (0.30) | 0.08 | 0.17 | 0.87 |
Diluted earnings (loss) per share: | ||||
Continuing operations (in dollars per share) | (0.30) | 0.08 | 0.17 | 0.85 |
(in dollars per share) | $ (0.30) | $ 0.08 | $ 0.17 | $ 0.85 |
Discontinued Operations [Member] | ||||
Numerator: | ||||
Net income (loss) available to common stockholders | $ (1,791) | $ (986) | $ 310 | $ 660 |
Operations | $ (1,791) | $ (986) | $ 310 | $ 660 |
Effect of dilutive securities: | ||||
Discontinued operations (in dollars per share) | $ (0.11) | $ (0.06) | $ 0.02 | $ 0.05 |
(in dollars per share) | (0.11) | (0.06) | 0.02 | 0.05 |
Diluted earnings (loss) per share: | ||||
Discontinued operations (in dollars per share) | (0.11) | (0.06) | 0.02 | 0.05 |
(in dollars per share) | $ (0.11) | $ (0.06) | $ 0.02 | $ 0.05 |
Employee Stock Option [Member] | ||||
Effect of dilutive securities: | ||||
Common stock options (in shares) | 203,612 | 152,292 | 256,392 | |
Restricted Stock Units (RSUs) [Member] | ||||
Effect of dilutive securities: | ||||
Performance-based restricted stock units (in shares) | 16,720 | 16,720 | ||
Net income (loss) | $ (5,571) | $ 266 | $ 7,299 | $ 13,224 |
Less dividends on convertible preferred stock | $ (1,116) | (2,814) | ||
Less accretion of convertible preferred stock discount | (1,071) | |||
Less income allocated to participating securities | (321) | |||
Net income (loss) available to common stockholders | $ (6,687) | $ 266 | 3,093 | $ 13,224 |
Operations | $ (6,687) | $ 266 | $ 3,093 | $ 13,224 |
Denominator for basic earnings per share -- weighted-average shares (in shares) | 16,130,421 | 14,955,773 | 16,068,455 | 14,450,248 |
Denominator for diluted earnings per share -- adjusted weighted-average shares assumed conversion (in shares) | 16,130,421 | 15,176,105 | 16,220,747 | 14,723,360 |
(in dollars per share) | $ (0.41) | $ 0.02 | $ 0.19 | $ 0.92 |
Diluted earnings (loss) per share: | ||||
(in dollars per share) | $ (0.41) | $ 0.02 | $ 0.19 | $ 0.90 |
Note 10 - Income Taxes (Details
Note 10 - Income Taxes (Details Textual) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Effective Income Tax Rate Reconciliation, Percent | 100.00% | 31.10% | 70.00% | 41.60% |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% |
Note 11 - Commitments and Con51
Note 11 - Commitments and Contingencies (Details Textual) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) | |
Other Noncurrent Liabilities [Member] | ||
Deferred Compensation Arrangement with Individual, Recorded Liability | $ 1,398 | $ 1,432 |
Litigation Claim | $ 775 | |
Number of Deferred Compensation Plans | 2 |
Note 12 - Transactions with R52
Note 12 - Transactions with Related Parties (Details Textual) - USD ($) | Oct. 23, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Mar. 12, 2015 | Feb. 11, 2015 | Feb. 05, 2015 | Dec. 31, 2014 |
Unsecured Subordinated Note Issued to Coliseum [Member] | Coliseum Capital Management, LLC [Member] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 14.00% | ||||||
Debt Instrument, Face Amount | $ 65,500,000 | ||||||
Interest Paid | 3,015,000 | ||||||
Unsecured Subordinated Note Issued to Coliseum [Member] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 14.00% | 14.00% | |||||
Coliseum Capital Management, LLC [Member] | Prepaid Expenses and Other Current Assets [Member] | Consideration for Entering into Standby Purchase Agreement [Member] | |||||||
Standby Purchase Agreement, Fee Paid to Investor | $ 2,947,000 | ||||||
Coliseum Capital Management, LLC [Member] | Preferred Stock Dividends Earned by Related Party [Member] | |||||||
Related Party Transaction, Amounts of Transaction | $ 2,678,000 | ||||||
Coliseum Capital Management, LLC [Member] | |||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 15.00% | ||||||
Standby Purchase Agreement, Number of Days Investor Has to Exercise Right | 30 days | ||||||
Standby Purchase Agreement, Right of Investor to Purchase Additional Preferred Stock, Value | $ 15,000,000 | ||||||
Standby Purchase Agreement, Right of Investor to Purchase Additional Preferred Stock, Price Per Share | $ 105 | ||||||
Interest Paid | $ 12,922,000 | $ 3,930,000 | |||||
Convertible Preferred Stock, Pro Rata Share | $ 65,500,000 | $ 65,500,000 | |||||
Rights Offering, Right to Purchase Preferred Stock, Price Per Share | $ 100 | $ 100 |
Note 13 - Acquisitions (Details
Note 13 - Acquisitions (Details Textual) - Matrix Acquisition [Member] $ in Thousands | Oct. 23, 2014USD ($) |
Business Combination, Acquired Receivables, Fair Value | $ 21,546 |
Business Combination, Acquired Receivables, Gross Contractual Amount | 22,745 |
Business Combination, Acquired Receivables, Estimated Uncollectible | 1,199 |
Business Acquisition, Goodwill, Expected Tax Deductible Amount | $ 995 |
Note 13 - Acquisitions - Purcha
Note 13 - Acquisitions - Purchase Price Calculation (Details) - Matrix Acquisition [Member] $ in Thousands | Oct. 23, 2014USD ($) |
Cash purchase of common stock (including working capital adjustment) | $ 354,637 |
Equity consideration (valued using October 23, 2014 stock price) | 38,569 |
Total purchase price | $ 393,206 |
Note 13 - Acquisitions - Net As
Note 13 - Acquisitions - Net Assets Based Upon Preliminary Estimate of Fair Values (Details) $ in Thousands | Oct. 23, 2014USD ($) | |
Matrix Acquisition [Member] | ||
Accounts receivable (1) | $ 21,546 | [1] |
Other current assets | 11,253 | |
Property and equipment | 4,293 | |
Intangibles | 247,500 | |
Goodwill (2) | 210,071 | [2] |
Other non-current assets | 3,953 | |
Deferred taxes, net | (80,681) | |
Accounts payable and accrued liabilities | (24,175) | |
Other non-current liabilities | (554) | |
Total | $ 393,206 | |
[1] | The fair value of trade accounts receivable acquired in this transaction was determined to be approximately $21,546. The gross amount due with respect to these receivables is approximately $22,745, of which approximately $1,199 is expected to be uncollectible. | |
[2] | The goodwill was allocated to the Company's HA Services segment. Goodwill totaling $995 is expected to be deductible for tax purposes. Goodwill includes the value of the purchased assembled workforce. |
Note 13 - Acquisitions - Prelim
Note 13 - Acquisitions - Preliminary Fair Value of Intangible Assets (Details) - Matrix Acquisition [Member] $ in Millions | Oct. 23, 2014USD ($) | |
Trademarks and Trade Names [Member] | ||
Life | ||
Value | $ 25.9 | |
Customer Relationships [Member] | ||
Life | 10 years | |
Value | $ 181.3 | |
Developed Technology Rights [Member] | ||
Life | 5 years | |
Value | $ 40.3 | |
Life | 9 years 36 days | [1] |
Value | $ 247.5 | |
[1] | Weighted-average amortization period for intangible assets with definite lives |
Note 13 - Acquisitions - Unaudi
Note 13 - Acquisitions - Unaudited Proforma Revenue and Net Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Ingeus Acquisition [Member] | ||||
Revenue | $ 95,369 | $ 76,176 | $ 281,614 | $ 105,012 |
Net income (loss) | (11,352) | $ (181) | (14,142) | $ 521 |
Matrix Acquisition [Member] | ||||
Revenue | 52,882 | 165,718 | ||
Net income (loss) | 2,715 | 7,231 | ||
Consolidated Pro forma: | ||||
Revenue | 432,450 | $ 366,631 | 1,270,517 | $ 1,071,086 |
Net income (loss) | $ (5,571) | $ 4,217 | $ 7,299 | $ 31,982 |
Diluted earnings per share (in dollars per share) | $ (0.41) | $ 0.26 | $ 0.19 | $ 2 |
Note 14 - Discontinued Operat58
Note 14 - Discontinued Operations (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 03, 2015 | Dec. 31, 2014 | ||||
Human Services [Member] | |||||||||
Disposal Group, Including Discontinued Operation, Consideration | $ 200,000 | ||||||||
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents | $ 19,753 | $ 19,753 | $ 25,148 | ||||||
Revolving Credit Facility [Member] | |||||||||
Disposal Group, Including Discontinued Operation, Interest Expense | 805 | $ 589 | 2,461 | $ 810 | |||||
Goodwill, Impairment Loss | 1,593 | 1,593 | |||||||
Cash and Cash Equivalent at Carrying Value Excluding Discontinued Operations | 106,724 | 106,724 | 135,258 | ||||||
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents | $ 19,753 | [1] | $ 26,899 | $ 19,753 | [1] | $ 26,899 | $ 25,148 | [1] | |
[1] | In accordance with the Purchase Agreement, the amount of the Human Services segment cash and cash equivalents on hand as of the closing date are to remain in the Human Services segment entities as a closing accommodation. The buyer will pay the Company for the Human Services segment cash and cash equivalents at closing in addition to the net cash sale proceeds (see Note 16 - Subsequent Events). |
Note 14 - Operations Classified
Note 14 - Operations Classified as Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Human Services [Member] | ||||
Service revenue, net | $ 84,722 | $ 84,744 | $ 260,701 | $ 259,673 |
Service expense | 77,890 | 78,900 | 233,710 | 237,658 |
General and administrative expense | 6,807 | $ 4,841 | 17,047 | $ 14,504 |
Asset impairment charge | 1,593 | 1,593 | ||
Depreciation and amortization | 1,217 | $ 1,778 | 4,831 | $ 5,101 |
Total operating expenses | 87,507 | 85,519 | 257,181 | 257,263 |
Operating income (loss) | (2,785) | (775) | 3,520 | 2,410 |
Disposal Group, Including Discontinued Operation, Interest Expense | 795 | 578 | 2,422 | 780 |
Income (loss) from discontinued operations before provision (benefit) for income taxes | (3,580) | (1,353) | 1,098 | 1,630 |
Provision (benefit) for income taxes | (1,789) | (367) | 756 | 970 |
Discontinued operations, net of tax | (1,791) | (986) | 342 | 660 |
Discontinued operations, net of tax | $ (1,791) | $ (986) | $ 342 | $ 660 |
Note 14 - Discontinued Operat60
Note 14 - Discontinued Operations Held for Sale in the Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Human Services [Member] | |||
Accounts receivable, net of allowance of $1,612 in 2015 and $2,770 in 2014 | $ 50,149 | $ 43,779 | |
Other receivables | 1,087 | 1,552 | |
Prepaid expenses and other | 3,904 | 3,023 | |
Restricted cash | 530 | 573 | |
Deferred tax assets | 431 | 1,918 | |
Current assets of discontinued operations held for sale | 75,854 | 75,993 | |
Property and equipment, net | 14,694 | 14,500 | |
Goodwill | 11,636 | 13,344 | |
Intangible assets, net | 14,314 | 16,769 | |
Deferred tax assets | 4,570 | 3,689 | |
Other assets | 3,609 | 3,561 | |
Non-current assets of discontinued operations held for sale | 48,823 | 51,863 | |
Current portion of long-term obligations | 600 | 600 | |
Accounts payable | 1,895 | 1,504 | |
Accrued expenses | 19,602 | 22,584 | |
Deferred revenue | 2,061 | 1,502 | |
Reinsurance liability reserve | 64 | 38 | |
Current liabilities of discontinued operations held for sale | 24,222 | 26,228 | |
Other long-term liabilities | 854 | 635 | |
Non-current liabilities of discontinued operations held for sale | 854 | 635 | |
Cash included in current assets of discontinued operations held for sale | [1] | 19,753 | 25,148 |
Current assets of discontinued operations held for sale | 75,854 | 75,993 | |
Non-current assets of discontinued operations held for sale | 48,823 | 51,863 | |
Current liabilities of discontinued operations held for sale | $ 24,222 | $ 26,228 | |
[1] | In accordance with the Purchase Agreement, the amount of the Human Services segment cash and cash equivalents on hand as of the closing date are to remain in the Human Services segment entities as a closing accommodation. The buyer will pay the Company for the Human Services segment cash and cash equivalents at closing in addition to the net cash sale proceeds (see Note 16 - Subsequent Events). |
Note 14 - Discontinued Operat61
Note 14 - Discontinued Operations Held for Sale in the Condensed Consolidated Balance Sheet (Details) (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Human Services [Member] | ||
Accounts receivable, allowance | $ 1,612 | $ 2,770 |
Note 14 - Cash Flow from Discon
Note 14 - Cash Flow from Discontinued Operating Activities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Human Services [Member] | Discontinued Operations [Member] | ||
Cash flows from discontinued operating activities: | ||
Depreciation | $ 2,376 | $ 2,304 |
Amortization | 2,455 | 2,797 |
Stock based compensation | 168 | 30 |
Deferred income taxes | (2,368) | 653 |
Purchase of property and equipment | 2,550 | 3,963 |
Depreciation | 15,287 | 8,938 |
Amortization | 29,157 | 7,968 |
Stock based compensation | 8,822 | 5,375 |
Deferred income taxes | $ (7,811) | $ (3,814) |
Note 15 - Business Segments (De
Note 15 - Business Segments (Details Textual) | 9 Months Ended |
Sep. 30, 2015 | |
Number of Operating Segments | 4 |
Note 15 - Business Segments - F
Note 15 - Business Segments - Financial Information Attributable to the Company's Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
NET Services [Member] | Balance Excluding Discontinued Operations [Member] | ||||
Total assets | $ 287,929 | $ 246,589 | $ 287,929 | $ 246,589 |
NET Services [Member] | ||||
Revenues | 277,130 | 226,055 | 802,580 | 640,428 |
Service expense | 257,518 | 206,456 | 733,696 | 578,159 |
General and administrative expense | 2,908 | 2,136 | 7,959 | 6,119 |
Depreciation and amortization | 2,389 | 1,926 | 6,995 | 5,552 |
Operating income (loss) | 14,315 | 15,537 | 53,930 | 50,598 |
WD Services [Member] | Balance Excluding Discontinued Operations [Member] | ||||
Total assets | 238,097 | 221,022 | 238,097 | 221,022 |
WD Services [Member] | ||||
Revenues | 102,547 | 83,596 | 302,340 | 127,661 |
Service expense | 95,934 | 73,159 | 273,426 | 110,061 |
General and administrative expense | 8,260 | 5,834 | 23,469 | 8,563 |
Depreciation and amortization | 3,441 | 4,050 | 10,089 | 5,443 |
Operating income (loss) | (5,088) | $ 553 | (4,644) | $ 3,594 |
HA Services [Member] | Balance Excluding Discontinued Operations [Member] | ||||
Total assets | 490,189 | 490,189 | ||
HA Services [Member] | ||||
Revenues | 52,882 | 165,718 | ||
Service expense | 40,134 | 124,541 | ||
General and administrative expense | 804 | 2,086 | ||
Depreciation and amortization | 7,488 | 21,855 | ||
Operating income (loss) | 4,456 | 17,236 | ||
Corporate Segment [Member] | Balance Excluding Discontinued Operations [Member] | ||||
Total assets | 55,661 | $ 73,065 | 55,661 | $ 73,065 |
Corporate Segment [Member] | ||||
Revenues | (109) | (177) | (121) | (187) |
Service expense | (2,708) | 829 | (2,679) | 2,532 |
General and administrative expense | 9,352 | 12,356 | 25,570 | 25,757 |
Depreciation and amortization | 52 | 280 | 675 | 810 |
Operating income (loss) | (6,805) | (13,642) | (23,687) | (29,286) |
Balance Excluding Discontinued Operations [Member] | ||||
Total assets | 1,071,876 | 540,676 | 1,071,876 | 540,676 |
Revenues | 432,450 | 309,474 | 1,270,517 | 767,902 |
Service expense | 390,878 | 280,444 | 1,128,984 | 690,752 |
General and administrative expense | 21,324 | 20,326 | 59,084 | 40,439 |
Depreciation and amortization | 13,370 | 6,256 | 39,614 | 11,805 |
Operating income (loss) | 6,878 | $ 2,448 | 42,835 | $ 24,906 |
Total assets | $ 1,196,553 | $ 1,196,553 |
Note 16 - Subsequent Events (De
Note 16 - Subsequent Events (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Nov. 01, 2015 | Oct. 23, 2015 | Oct. 21, 2015 | Oct. 15, 2015 | Oct. 14, 2015 | Nov. 04, 2015 | Sep. 30, 2015 | Sep. 03, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | ||
Subsequent Event [Member] | Former Stockholders and Option Holders of Matrix [Member] | Matrix Acquisition [Member] | ||||||||||||
Escrowed Shares | 946,723 | |||||||||||
Percentage of Escrowed Shares released | 50.00% | |||||||||||
Subsequent Event [Member] | Former Stockholders and Option Holders of Matrix [Member] | ||||||||||||
Treasury Stock, Shares, Acquired | 707,318 | |||||||||||
Treasury Stock, Value, Acquired, Cost Method | $ 29,000 | |||||||||||
Treasury Stock Acquired, Average Cost Per Share | $ 41 | |||||||||||
Subsequent Event [Member] | Two Executives of Ingeus [Member] | One-time Termination Benefits [Member] | ||||||||||||
Allocated Share-based Compensation Expense | $ 16,070 | |||||||||||
Subsequent Event [Member] | Discontinued Operations, Disposed of by Sale [Member] | Human Services [Member] | ||||||||||||
Proceeds from Sales of Business, Affiliate and Productive Assets | $ 198,377 | |||||||||||
Indemnity Escrow Reserve | 10,000 | |||||||||||
Disposal Group, Including Discontinued Operation, Consideration | 200,000 | |||||||||||
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents | 24,525 | |||||||||||
Disposal Group Including Discontinued Operation Contingent Seller Transaction Costs | 8,589 | |||||||||||
Subsequent Event [Member] | Discontinued Operations, Disposed of by Sale [Member] | ||||||||||||
Disposal Group Including Discontinued Operation Contingent Seller Transaction Costs | 6,158 | |||||||||||
Subsequent Event [Member] | Human Services [Member] | Revolving Credit Facility [Member] | ||||||||||||
Repayments of Lines of Credit | $ 206,000 | |||||||||||
Subsequent Event [Member] | Human Services [Member] | ||||||||||||
Percentage of Cash Proceeds to Fund for Repayment of Loan | 50.00% | |||||||||||
Subsequent Event [Member] | Escrow, Non-vested Portion [Member] | ||||||||||||
Prepaid Expense and Other Assets | $ 4,866 | |||||||||||
Subsequent Event [Member] | ||||||||||||
Stock Repurchase Program, Authorized Amount | $ 70,000 | |||||||||||
Human Services [Member] | ||||||||||||
Disposal Group, Including Discontinued Operation, Consideration | $ 200,000 | |||||||||||
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents | $ 19,753 | $ 25,148 | ||||||||||
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents | 19,753 | [1] | 25,148 | [1] | $ 26,899 | |||||||
Prepaid Expense and Other Assets | $ 30,045 | $ 43,134 | ||||||||||
[1] | In accordance with the Purchase Agreement, the amount of the Human Services segment cash and cash equivalents on hand as of the closing date are to remain in the Human Services segment entities as a closing accommodation. The buyer will pay the Company for the Human Services segment cash and cash equivalents at closing in addition to the net cash sale proceeds (see Note 16 - Subsequent Events). |