Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 24, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | MDAS | |
Entity Registrant Name | MEDASSETS INC | |
Entity Central Index Key | 1,254,419 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 60,002,181 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 10,273 | $ 12,100 |
Accounts receivable, net of allowances of $2,654 and $2,641 as of June 30, 2015 and December 31, 2014, respectively | 129,212 | 127,741 |
Deferred tax asset, current portion | 6,021 | 5,782 |
Prepaid expenses and other current assets | 24,497 | 30,557 |
Total current assets | 170,003 | 176,180 |
Property and equipment, net | 164,686 | 170,318 |
Other long term assets | ||
Goodwill | 1,058,414 | 1,058,414 |
Intangible assets, net | 246,420 | 276,407 |
Other | 34,437 | 37,477 |
Other long term assets | 1,339,271 | 1,372,298 |
Total assets | 1,673,960 | 1,718,796 |
Current liabilities | ||
Accounts payable | 17,254 | 26,910 |
Accrued revenue share obligation and rebates | 100,927 | 91,864 |
Accrued payroll and benefits | 34,402 | 32,784 |
Other accrued expenses | 9,972 | 9,040 |
Deferred revenue, current portion | 75,677 | 76,034 |
Current portion of notes payable | 24,875 | 29,583 |
Current portion of finance obligation | 308 | 294 |
Total current liabilities | 263,415 | 266,509 |
Notes payable, less current portion | 482,417 | 526,417 |
Bonds payable | 325,000 | 325,000 |
Finance obligation, less current portion | 8,318 | 8,475 |
Deferred revenue, less current portion | 15,988 | 15,418 |
Deferred tax liability | 109,326 | 116,607 |
Other long term liabilities | 14,168 | 13,883 |
Total liabilities | $ 1,218,632 | $ 1,272,309 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock, $0.01 par value, 150,000,000 shares authorized; 59,998,000 and 60,199,000 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively | $ 600 | $ 602 |
Additional paid-in capital | 693,411 | 694,235 |
Accumulated deficit | (238,683) | (248,350) |
Total stockholders' equity | 455,328 | 446,487 |
Total liabilities and stockholders' equity | $ 1,673,960 | $ 1,718,796 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Allowances on accounts receivable | $ 2,654 | $ 2,641 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 59,998,000 | 60,199,000 |
Common stock, shares outstanding | 59,998,000 | 60,199,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenue: | ||||
Administrative fees, net | $ 69,723 | $ 70,091 | $ 147,484 | $ 146,337 |
Other service fees | 120,701 | 105,324 | 228,521 | 199,945 |
Total net revenue | 190,424 | 175,415 | 376,005 | 346,282 |
Operating expenses: | ||||
Cost of revenue (inclusive of depreciation expense of $989 and $648 for the three months ended June 30, 2015 and 2014, respectively; and $1,967 and $1,072 for the six months ended June 30, 2015 and 2014, respectively) | 47,124 | 40,361 | 90,057 | 77,792 |
Product development expenses | 7,451 | 6,642 | 15,851 | 14,039 |
Selling and marketing expenses | 23,849 | 20,721 | 43,360 | 35,914 |
General and administrative expenses | 59,399 | 59,529 | 123,884 | 118,332 |
Restructuring, acquisition and integration-related expenses | 556 | 0 | 4,995 | 1,697 |
Depreciation | 13,551 | 11,862 | 26,898 | 23,402 |
Amortization of intangibles | 14,931 | 14,027 | 29,987 | 28,053 |
Total operating expenses | 166,861 | 153,142 | 335,032 | 299,229 |
Operating income | 23,563 | 22,273 | 40,973 | 47,053 |
Other income (expense): | ||||
Interest (expense) | (11,810) | (11,114) | (23,679) | (22,287) |
Other (expense) income | (110) | 31 | (48) | 89 |
Income before income taxes | 11,643 | 11,190 | 17,246 | 24,855 |
Income tax expense | 5,329 | 4,594 | 7,579 | 10,581 |
Net income | $ 6,314 | $ 6,596 | $ 9,667 | $ 14,274 |
Basic and diluted income per share: | ||||
Basic net income per share | $ 0.11 | $ 0.11 | $ 0.16 | $ 0.24 |
Diluted net income per share | $ 0.10 | $ 0.11 | $ 0.16 | $ 0.23 |
Weighted average shares - basic | 59,865 | 59,752 | 59,801 | 60,189 |
Weighted average shares - diluted | 61,056 | 60,946 | 60,832 | 61,419 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
Depreciation expense | $ 989 | $ 648 | $ 1,967 | $ 1,072 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] |
Balances at Dec. 31, 2014 | $ 446,487 | $ 602 | $ 694,235 | $ (248,350) |
Balances, Shares at Dec. 31, 2014 | 60,199,000 | 60,199,000 | ||
Issuance of common stock from stock option and SSAR exercises and restricted stock issuances, net | $ 945 | $ 4 | 941 | |
Issuance of common stock from stock option and SSAR exercises and restricted stock issuances, net, Shares | 413,000 | |||
Shares surrendered to pay taxes on vesting of restricted stock | (3,836) | $ (2) | (3,834) | |
Shares surrendered to pay taxes on vesting of restricted stock, shares | (199,000) | |||
Stock compensation expense | 11,131 | 11,131 | ||
Repurchase of common stock | $ (8,588) | $ (4) | (8,584) | |
Repurchase of common stock, shares | (415,236) | (415,000) | ||
Tax deficit from equity award exercises, net | $ (478) | (478) | ||
Net income | 9,667 | 9,667 | ||
Balances at Jun. 30, 2015 | $ 455,328 | $ 600 | $ 693,411 | $ (238,683) |
Balances, Shares at Jun. 30, 2015 | 59,998,000 | 59,998,000 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Operating activities | ||
Net income | $ 9,667 | $ 14,274 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | ||
Bad debt expense | 100 | |
Depreciation | 28,865 | 24,474 |
Amortization of intangibles | 29,987 | 28,053 |
Loss on sale of assets | 237 | 16 |
Noncash stock compensation expense | 11,131 | 9,894 |
Excess tax benefit from exercise of equity awards | (438) | (1,557) |
Amortization of debt issuance costs | 1,949 | 1,880 |
Noncash interest expense, net | 195 | 208 |
Deferred income tax benefit | (7,613) | (4,837) |
Changes in assets and liabilities: | ||
Accounts receivable | (1,471) | (10,365) |
Prepaid expenses and other assets | 6,060 | (2,736) |
Other long-term assets | (63) | 477 |
Accounts payable | (9,374) | (6,889) |
Accrued revenue share obligations and rebates | 9,063 | 299 |
Accrued payroll and benefits | 1,618 | (12,077) |
Other accrued expenses and long-term liabilities | 1,217 | (411) |
Deferred revenue | 213 | 9,986 |
Cash provided by operating activities | 81,243 | 50,789 |
Investing activities | ||
Purchases of property, equipment and software, net | (3,135) | (7,201) |
Capitalized software development costs | (19,848) | (20,878) |
Cash used in investing activities | (22,983) | (28,079) |
Financing activities | ||
Borrowings from revolving credit facility | 74,080 | |
Repayment of notes payable | (18,708) | (17,750) |
Repayment of revolving credit facility | (30,000) | (34,080) |
Repayment of finance obligation | (338) | (338) |
Excess tax benefit from exercise of equity awards | 438 | 1,557 |
Issuance of common stock, net | 945 | 2,559 |
Purchase of treasury shares, including shares surrendered for tax withholdings | (12,424) | (45,524) |
Cash used in financing activities | (60,087) | (19,496) |
Net (decrease) increase in cash and cash equivalents | (1,827) | 3,214 |
Cash and cash equivalents, beginning of period | 12,100 | 2,790 |
Cash and cash equivalents, end of period | $ 10,273 | $ 6,004 |
Business Description and Basis
Business Description and Basis of Presentation | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description and Basis of Presentation | 1. BUSINESS DESCRIPTION AND BASIS OF PRESENTATION We provide technology-enabled products and services that, together, deliver solutions designed to reduce total cost of care, enhance operational efficiency, align clinical delivery with advance care coordination and improve revenue performance for hospitals, health systems and other ancillary healthcare providers. Our customer-specific solutions are designed to efficiently analyze detailed information across the spectrum of cost, operations, clinical delivery and reimbursement. Our solutions integrate with our customers’ existing operations and enterprise software systems and provide financial improvement with minimal upfront costs or capital expenditures. Our operations and customers are primarily located throughout the United States and to a limited extent, Canada. The accompanying unaudited condensed consolidated financial statements, and condensed consolidated balance sheet as of December 31, 2014, derived from audited financial statements, have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial reporting and as required by Regulation S-X, Rule 10-01 of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. In the opinion of management, all adjustments considered necessary for a fair presentation of the interim financial information, consisting of normal recurring adjustments, have been included. When preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the date of the condensed consolidated financial statements. Actual results may differ materially from those estimates. Operating results for the three and six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2015. The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2014 included in our annual report on Form 10-K as filed with the SEC on March 2, 2015 in addition to our quarterly reports filed on Form 10-Q for the periods after December 31, 2014. These financial statements include the accounts of MedAssets, Inc. and our wholly owned subsidiaries. All significant intercompany accounts have been eliminated in consolidation. Use of Estimates The preparation of the condensed consolidated financial statements and related disclosures in conformity with GAAP and pursuant to the rules and regulations of the SEC, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from those estimates. We believe that the estimates, assumptions and judgments involved in revenue recognition, allowances for doubtful accounts and returns, product development costs, share-based payments, business combinations, impairment of goodwill, intangible assets and long-lived assets and accounting for income taxes have the greatest potential impact on our condensed consolidated financial statements. Cash and Cash Equivalents All of our highly liquid investments with original maturities of three months or less at the date of purchase are carried at cost (which approximates fair value) and are considered to be cash equivalents. Currently, our excess cash is voluntarily used to repay our swing line credit facility, if any, on a daily basis and applied against our revolving credit facility on a routine basis when our swing line credit facility is undrawn. In addition, we may periodically make voluntary repayments on our term loans. Cash and cash equivalents were $10,273 and $12,100 as of June 30, 2015 and December 31, 2014, respectively. We had $122,000 and $152,000 outstanding on our revolving credit facility as of June 30, 2015 and December 31, 2014, respectively. In the event our cash balance is zero at the end of a period, any outstanding checks are recorded as accrued expenses. See Note 5 for immediately available cash under our revolving credit facility. Additionally, we have a concentration of credit risk arising from cash deposits held in excess of federally insured amounts totaling $9,773 as of June 30, 2015. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 2. RECENT ACCOUNTING PRONOUNCEMENTS Debt Issuance Costs In April 2015, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update relating to simplifying the presentation of debt issuance costs. The amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The update will be effective on January 1, 2016. Going Concern In August 2014, the FASB issued an accounting standard update relating to disclosure of uncertainties about an entity’s ability to continue as a going concern. The update provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures in the event that there is such substantial doubt. The update will be effective on January 1, 2016. Share-Based Compensation In June 2014, the FASB issued an accounting standard update relating to reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. This update requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The update will be effective on January 1, 2016. Revenue Recognition In May 2014, the FASB issued an accounting standard update relating to revenue from contracts with customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The update will replace most existing revenue recognition guidance under GAAP when it becomes effective. The update is effective for us on January 1, 2017. Early application is not permitted. The update permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that the update will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting. |
Restructuring, Acquisition and
Restructuring, Acquisition and Integration-Related Expenses | 6 Months Ended |
Jun. 30, 2015 | |
Text Block [Abstract] | |
Restructuring, Acquisition and Integration-Related Expenses | 3. RESTRUCTURING, ACQUISITION AND INTEGRATION-RELATED EXPENSES Restructuring Activities Restructuring charges consist of exit costs and other costs associated with the reorganization of our operations, including employee termination costs, lease contract termination costs, impairment of assets, and any other qualifying exit costs. Costs associated with exit or disposal activities are generally recorded when the liability is incurred. In the first half of 2015, our management approved and initiated a plan to restructure our operations that resulted in certain workforce reductions within the Company and changes in senior management. During the three months ended June 30, 2015 and 2014, we expensed total restructuring, acquisition and integration-related costs of $556 (inclusive of $48 of acquisition-related expenses) and zero, respectively. During the six months ended June 30, 2015 and 2014, we expensed total restructuring, acquisition and integration-related costs of $4,995 (inclusive of $352 of acquisition-related expenses) and $1,697, respectively. These costs are included within the restructuring, acquisition and integration-related expenses line on the accompanying condensed consolidated statements of operations. During the first half of 2015, cash payments related to restructuring and acquisition-related activities were approximately $5,005. As of June 30, 2015, we had $2,063 in accrued liabilities for these costs of which $999 is expected to be paid over the next twelve months. |
Deferred Revenue
Deferred Revenue | 6 Months Ended |
Jun. 30, 2015 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred Revenue | 4. DEFERRED REVENUE Deferred revenue consists of unrecognized revenue related to advanced customer billing or customer payments received prior to revenue being realized and earned. Substantially all of our deferred revenue consists of: (i) deferred administrative fees, net; (ii) deferred service fees; (iii) deferred software and implementation fees; and (iv) other deferred fees, including receipts for our annual customer and vendor meeting prior to the event. The following table summarizes the deferred revenue categories and balances as of: June 30, December 31, Software and SaaS implementation fees $ 53,570 $ 55,152 Service fees 21,987 19,241 Administrative fees 13,660 15,715 Other fees 2,448 1,344 Deferred revenue, total 91,665 91,452 Less: Deferred revenue, current portion (75,677 ) (76,034 ) Deferred revenue, non-current portion $ 15,988 $ 15,418 As of June 30, 2015 and December 31, 2014, deferred revenue included in our condensed consolidated balance sheets that was contingent upon meeting performance targets was $5,137 and $8,441, respectively. Advance billings on arrangements that include contingent performance targets are recorded in accounts receivable and deferred revenue when billed. Only certain contingent performance targets are billed in advance of meeting the target as determined by the customer arrangement. |
Notes and Bonds Payable
Notes and Bonds Payable | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Notes and Bonds Payable | 5. NOTES AND BONDS PAYABLE The balances of our notes and bonds payable are summarized as follows as of: June 30, December 31, Term A facility $ 211,263 $ 225,000 Term B facility 174,029 179,000 Revolving credit facility 122,000 152,000 Total notes payable 507,292 556,000 Bonds payable 325,000 325,000 Total notes and bonds payable 832,292 881,000 Less: current portions (24,875 ) (29,583 ) Total long-term notes and bonds payable $ 807,417 $ 851,417 Notes Payable As of June 30, 2015, our long-term notes payable consists of a Term A Facility, a Term B Facility and a revolving credit facility under a credit agreement with JP Morgan Chase Bank, N.A and other financial institutions named therein, dated December 13, 2012 (as amended from time to time, the “Credit Agreement”), each with an outstanding balance of $211,263, $174,029 and $122,000, respectively. We have classified the $122,000 outstanding balance on our revolving credit facility as a long term liability given the maturity date of December 13, 2017. No amounts were drawn on our swing line loan and we made voluntary payments of $30,000 on our revolving credit facility, which resulted in $177,000 of availability under our revolving credit facility (after giving effect to $1,000 of outstanding but undrawn letters of credit on such date and the increase in the revolving credit facility as discussed below) as of June 30, 2015. During the six months ended June 30, 2015, we made scheduled principal payments of $10,875 on our Term A Facility and Term B Facility in addition to payments of $7,833 relating to our 2014 excess cash flow payment ($4,362 on the Term A Facility and $3,471 on the Term B Facility). The applicable weighted average interest rates (inclusive of the applicable bank margin) on our Term A Facility, Term B Facility and revolving credit facility at June 30, 2015 were 2.52%, 4.00% and 2.51%, respectively. On September 8, 2014, the Company entered into a First Increase Joinder to the Credit Agreement (the “First Increase Joinder”). The First Increase Joinder increased the revolving commitment amount under the Credit Agreement by $100,000 to $300,000. In connection with the First Increase Joinder, we incurred and capitalized approximately $615 of debt issuance costs which will be amortized into interest expense ratably over the remaining term of the revolving credit facility. The Credit Agreement contains certain customary negative covenants, including but not limited to, limitations on the incurrence of debt, limitations on liens, limitations on fundamental changes, limitations on asset sales and sale leasebacks, limitations on investments, limitations on dividends or distributions on, or redemptions of, equity interests, limitations on prepayments or redemptions of unsecured or subordinated debt, limitations on negative pledge clauses, limitations on transactions with affiliates and limitations on changes to the Company’s fiscal year. The Credit Agreement also includes maintenance covenants of maximum ratios of consolidated total indebtedness (subject to certain adjustments) to consolidated EBITDA (subject to certain adjustments) and minimum cash interest coverage ratios. The Credit Agreement contains certain customary representations and warranties, affirmative covenants and events of default, including but not limited to, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of insolvency or bankruptcy, material judgments, certain events under ERISA, actual or asserted failures of any guaranty or security document supporting the credit agreement to be in full force and effect and changes of control. The Company was in compliance with these covenants as of June 30, 2015. We are also required to prepay our debt obligations based on an excess cash flow calculation for the applicable fiscal year which is determined in accordance with the terms of the Credit Agreement. Our current portion of notes payable does not include an amount with respect to any 2015 excess cash flow payment. We will reclassify a portion of our long-term notes payable to a current classification at such time that any 2015 excess cash flow payment becomes estimable. We will be required to make any necessary cash flow payment within the first quarter of 2016. All of the Company’s obligations under the Credit Agreement are unconditionally guaranteed by each of the Company’s existing and subsequently acquired or organized wholly owned restricted subsidiaries, except that the following subsidiaries do not and will not provide guarantees: (a) unrestricted subsidiaries, (b) subsidiaries with tangible assets and revenues each having a value of less than 2.5% of the consolidated tangible assets and consolidated revenues of the Company (provided that all such immaterial subsidiaries, on a consolidated basis, shall not account for more than 5.0% of the consolidated EBITDA of the Company), (c) any subsidiary prohibited by applicable law, rule or regulation from providing a guarantee or which would require governmental (including regulatory) consent or approval or which would result in adverse tax consequences and (d) not-for-profit subsidiaries. All of the Company’s obligations under the Credit Agreement are secured by substantially all of the Company’s assets and the assets of each guarantor (subject to certain exceptions), including but not limited to, (1) a perfected pledge of all of the equity securities of each direct wholly owned restricted subsidiary of the Company and of each subsidiary guarantor (which pledge, in the case of any foreign subsidiary, is limited to 65% of the equity securities of such foreign subsidiary) and (2) perfected security interests in, and mortgages on, substantially all tangible and intangible personal property and material fee-owned real property of the Company and each subsidiary guarantor (including but not limited to, accounts receivable, inventory, equipment, general intangibles (including contract rights), investment property, intellectual property, material intercompany notes and proceeds of the foregoing). Loans under the Credit Agreement must be prepaid under certain circumstances, including with proceeds from certain future debt issuances, asset sales and a portion of excess cash flow for the applicable fiscal year. Loans under the Credit Agreement may be voluntarily prepaid at any time, subject to customary LIBOR breakage costs. Bonds Payable The Company has an aggregate principal amount of $325,000 of 8% senior notes due 2018 (the “Notes”) outstanding that have been registered under the Securities Act of 1933, as amended. The Notes are guaranteed on a senior unsecured basis by each of our existing domestic subsidiaries and each of our future domestic restricted subsidiaries in each case that guarantees our obligations under the Credit Agreement. Each of the subsidiary guarantors is 100% owned by us. The guarantees by the subsidiary guarantors are full and unconditional and joint and several. We have no independent assets or operations, and any subsidiaries of ours other than the subsidiary guarantors are minor. The Notes and the guarantees are senior unsecured obligations of the Company and the subsidiary guarantors, respectively. The Notes were issued pursuant to an indenture dated as of November 16, 2010 (the “Indenture”) among the Company, its subsidiary guarantors and Wells Fargo Bank, N.A., as trustee. Pursuant to the Indenture, the Notes will mature on November 15, 2018 and bear 8% annual interest. Interest on the Notes is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on May 15, 2011. The Indenture contains certain customary negative covenants, including but not limited to, limitations on the incurrence of debt, limitations on liens, limitations on consolidations or mergers, limitations on asset sales, limitations on certain restricted payments and limitations on transactions with affiliates. The Indenture does not contain any significant restrictions on the ability of the Company or any subsidiary guarantor to obtain funds from the Company or any other subsidiary guarantor by dividend or loan. The Indenture also contains customary events of default. The Company was in compliance with these covenants as of June 30, 2015. The Company has the option to redeem all or a part of the Notes, at the following redemption prices: Year Percentage 2015 102 % 2016 and thereafter 100 % The Notes also contain a redemption feature that would require the repurchase of 101% of the aggregate principal amount plus accrued and unpaid interest at the option of the holders upon a change in control. As of June 30, 2015, the Notes were trading at 103.3% of par value (Level 1). Debt Issuance Costs As of June 30, 2015, we had approximately $12,126 of debt issuance costs related to the Credit Agreement and Notes which will be amortized into interest expense generally using the effective interest method until the applicable maturity date. For the three months ended June 30, 2015 and 2014, we recognized $971 and $937, respectively, in interest expense related to the amortization of debt issuance costs. For the six months ended June 30, 2015 and 2014, we recognized $1,949 and $1,880, respectively, in interest expense related to the amortization of debt issuance costs. Debt Maturity Table The following table summarizes our stated debt maturities and scheduled principal repayments as of June 30, 2015: Year Term A Facility Term B Facility(2) Revolving Senior Total 2015(1) $ 9,375 $ 1,500 $ — $ — $ 10,875 2016 25,000 3,000 — — 28,000 2017 176,888 3,000 122,000 — 301,888 2018 — 3,000 — 325,000 328,000 2019 — 163,529 — — 163,529 $ 211,263 $ 174,029 $ 122,000 $ 325,000 $ 832,292 (1) Represents the remaining quarterly principal payments due during the fiscal year ending December 31, 2015 and the balance of the swing line component of our revolving credit facility, if any. (2) The Term B Facility matures on December 13, 2019; however, the facility will mature in full on May 15, 2018 if our outstanding senior notes have not been repaid or refinanced in full by such date. Total interest paid (net of amounts capitalized) on our notes and bonds payable during the six months ended June 30, 2015 and 2014 was approximately $21,554 and $20,058, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. COMMITMENTS AND CONTINGENCIES Performance Targets In the ordinary course of contracting with our customers, we may agree to make some or all of our fees contingent upon the customer’s achievement of financial improvement targets from the use of our services and software. These contingent fees are not recognized as revenue until the customer confirms achievement of the performance targets. We generally receive customer acceptance as and when the performance targets are achieved. If we invoice contingent fees prior to customer confirmation that a performance target has been achieved, we record invoiced contingent fees as deferred revenue on our condensed consolidated balance sheet. Often, recognition of this revenue occurs in periods subsequent to the recognition of the associated costs. Legal Proceedings From time to time, we become involved in legal proceedings arising in the ordinary course of business. As of June 30, 2015, we are not presently involved in any legal proceedings, the outcome of which, if determined adversely to us, would have a material adverse effect on our business, operating results or financial condition. |
Stockholders' Equity and Share-
Stockholders' Equity and Share-Based Compensation | 6 Months Ended |
Jun. 30, 2015 | |
Text Block [Abstract] | |
Stockholders' Equity and Share-Based Compensation | 7. STOCKHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION Common Stock During the six months ended June 30, 2015, we issued approximately 437,000 shares of common stock in connection with employee stock option exercises, stock-settled stock appreciation rights (“SSARs”) exercises and the vesting of restricted stock units (“RSUs”) for net exercise proceeds of $945. During the six months ended June 30, 2015, approximately 24,000 shares of restricted common stock were forfeited. During the six months ended June 30, 2015, we received approximately 199,000 restricted shares that were surrendered from equity awards holders to settle their associated minimum statutory tax liability of $3,836 from shares that vested during the year. Repurchase of Common Stock In February 2015, our Board of Directors authorized an extension to our existing share repurchase program until February 29, 2016 and increased the total dollar amount available for the repurchase of shares of our common stock to $100,000 subject to certain restrictions under our Credit Agreement and Indenture. The following table shows the amount and cost of shares of common stock we repurchased for the three and six months ended June 30, 2015 and 2014 under the share repurchase program. The repurchased shares have not been retired and constitute authorized shares that are issued but not outstanding. Three Months Ended Six Months Ended June 30, 2015 2014 2015 2014 Number of shares repurchased 415,236 1,144,145 415,236 1,784,145 Cost of shares repurchased $ 8,588 $ 26,699 $ 8,588 $ 42,759 Share-Based Compensation As of June 30, 2015, we had restricted common stock, RSUs, SSARs and common stock option equity awards outstanding under three share-based compensation plans. As of June 30, 2015, we had approximately 3,942,000 shares reserved (inclusive of equity award forfeitures) and available for grant under the 2008 MedAssets, Inc. Long-Term Performance Incentive Plan (“LTPIP”). The total share-based compensation expense related to equity awards was $5,399 and $5,592 for the three months ended June 30, 2015 and 2014, respectively. The total income tax benefit recognized in the condensed consolidated statements of operations for share-based compensation arrangements related to equity awards was $2,018 and $2,083 for the three months ended June 30, 2015 and 2014, respectively. The total share-based compensation expense related to equity awards was $11,131 and $9,894 for the six months ended June 30, 2015 and 2014, respectively. The total income tax benefit recognized in the condensed consolidated statements of operations for share-based compensation arrangements related to equity awards was $4,160 and $3,686 for the six months ended June 30, 2015 and 2014, respectively. There were no capitalized share-based compensation expenses during the three and six months ended June 30, 2015. Total share-based compensation expense (inclusive of restricted common stock, RSUs, SSARs and common stock options) for the three and six months ended June 30, 2015 and 2014 as reflected in our condensed consolidated statements of operations is as follows: Three Months Ended Six Months Ended 2015 2014 2015 2014 Cost of revenue $ 1,419 $ 1,863 $ 3,150 $ 3,029 Product development 338 391 773 635 Selling and marketing 873 845 1,907 1,372 General and administrative 2,769 2,493 5,301 4,858 Total share-based compensation expense $ 5,399 $ 5,592 $ 11,131 $ 9,894 Employee Stock Purchase Plan In 2010, we established the MedAssets, Inc. Employee Stock Purchase Plan (the “Plan”). Under the Plan, eligible employees may purchase shares of our common stock at a discounted price through payroll deductions. The price per share of the common stock sold to participating employees will be 95% of the fair market value of our common stock on the applicable purchase date. The Plan requires that all stock purchased be held by participants for a period of 18 months from the purchase date. A total of 500,000 shares of our common stock are authorized for purchase under the Plan. For the six months ended June 30, 2015 and 2014, we purchased approximately 15,000 shares and 11,000 shares of our common stock under the Plan which amounted to approximately $275 and $253, respectively. Equity Award Grants Information regarding equity awards for the six months ended June 30, 2015 is as follows: Restricted Stock Unit Equity Awards During the first half of 2015, our Compensation Committee of our Board of Directors (the “Compensation Committee”) approved equity grants for certain eligible employees consisting of service-based and performance-based RSUs. The purpose of the equity grants are to assist the Company in attracting, retaining, motivating, and rewarding certain individuals of the Company. The equity grants are intended to promote the creation of long-term value for stockholders of the Company by closely aligning the interests of such individuals with those of the stockholders. A summary of the total approved equity grants during the six months ended June 30, 2015 is as follows: Total RSUs Range of Grant RSUs — Service 796,636 $ 18.44 – $20.32 (1) RSUs — Performance 1,011,144 $ 18.44 – $20.32 (2) Total RSUs granted 1,807,780 (1) Service-based RSUs vest annually over three years of continuous service with the exception of certain equity awards granted to our Board that vest ratably each month through December 31, 2015; and (2) Performance-based RSUs generally vest annually over three years of continuous service provided the performance metric is achieved and consist of a net revenue and a non-GAAP adjusted earnings per share (“EPS”) performance metric. The Company must achieve a minimum net revenue and non-GAAP adjusted EPS threshold before any performance-based RSUs begin vesting. If the minimum threshold is not met, the equity award holders will forfeit those awards. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. INCOME TAXES Income tax expense recorded during the three and six months ended June 30, 2015 reflected an effective income tax rate of 45.8% and 43.9%, respectively. Income tax expense recorded during the three and six months ended June 30, 2014 reflected an effective income tax rate of 41.1% and 42.6%, respectively. |
Income Per Share
Income Per Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Income Per Share | 9. INCOME PER SHARE We calculate earnings per share (or “EPS”) in accordance with GAAP relating to earnings per share. Basic EPS is calculated by dividing reported net income by the weighted-average number of common shares outstanding for the reported period. Diluted EPS reflects the potential dilution that could occur if our stock options, SSARs, unvested restricted stock, RSUs and shares that were purchasable pursuant to our employee stock purchase plan were exercised and converted into our common shares during the reporting periods. A reconciliation of basic and diluted weighted average shares outstanding for basic and diluted EPS for the three and six months ended June 30, 2015 and 2014 is as follows: Three Months Ended June 30, 2015 2014 Numerator for Basic and Diluted Income Per Share: Net income $ 6,314 $ 6,596 Denominator for basic income per share weighted average shares 59,865,000 59,752,000 Effect of dilutive securities: Stock options 128,000 222,000 SSARs 203,000 343,000 Restricted stock and RSUs 860,000 629,000 Denominator for diluted income per share — adjusted weighted average shares and assumed conversions 61,056,000 60,946,000 Basic income per share: Basic net income from continuing operations $ 0.11 $ 0.11 Diluted net income per share: Diluted net income from continuing operations $ 0.10 $ 0.11 Six Months Ended June 30, 2015 2014 Numerator for Basic and Diluted Income Per Share: Net income $ 9,667 $ 14,274 Denominator for basic income per share weighted average shares 59,801,000 60,189,000 Effect of dilutive securities: Stock options 132,000 282,000 SSARs 181,000 330,000 Restricted stock and RSUs 718,000 618,000 Denominator for diluted income per share — adjusted weighted average shares and assumed conversions 60,832,000 61,419,000 Basic income per share: Basic net income from continuing operations $ 0.16 $ 0.24 Diluted net income per share: Diluted net income from continuing operations $ 0.16 $ 0.23 During the three and six months ended June 30, 2015 and 2014, the effect of certain dilutive securities have been excluded because the impact is anti-dilutive as a result of certain securities being “out of the money” with strike prices greater than the average market price during the periods presented. The following table provides a summary of those potentially dilutive securities that have been excluded from the above calculation of diluted EPS: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 SSARs 16,000 5,000 27,000 8,000 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | 10. SEGMENT INFORMATION We manage our business through two reportable business segments, Spend and Clinical Resource Management (or “SCM”) and Revenue Cycle Management (or “RCM”). • Spend and Clinical Resource Management • Revenue Cycle Management GAAP relating to segment reporting defines reportable segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing financial performance. The guidance indicates that financial information about segments should be reported on the same basis as that which is used by the chief operating decision maker in the analysis of performance and allocation of resources. Management of the Company, including our chief operating decision maker, uses what we refer to as Segment Adjusted EBITDA as its primary measure of profit or loss to assess segment performance and to determine the allocation of resources. We define Segment Adjusted EBITDA as segment net income (loss) before net interest expense, income tax expense (benefit), depreciation and amortization (“EBITDA”) as adjusted for other non-recurring, non-cash or non-operating items. Our chief operating decision maker uses Segment Adjusted EBITDA to facilitate a comparison of our operating performance on a consistent basis from period to period. Segment Adjusted EBITDA includes expenses associated with sales and marketing, general and administrative and product development activities specific to the operation of the segment. General and administrative corporate expenses that are not specific to the segments are not included in the calculation of Segment Adjusted EBITDA. These expenses include the costs to manage our corporate offices, interest expense on our credit facilities and expenses related to being a publicly-held company. All reportable segment revenues are presented net of inter-segment eliminations and represent revenues from external customers. The following tables present Segment Adjusted EBITDA and financial position information as utilized by our chief operating decision maker. A reconciliation of Segment Adjusted EBITDA to consolidated net income is included. General corporate expenses are included in the “Corporate” line item. “RCM” represents the Revenue Cycle Management segment and “SCM” represents the Spend and Clinical Resource Management segment. Other assets and liabilities are included to provide a reconciliation to total assets and total liabilities. The following tables represent our results of operations, by segment, for the three and six months ended June 30, 2015 and 2014: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Revenue: SCM Net administrative fees $ 69,723 $ 70,091 $ 147,484 $ 146,337 Other service fees(1) 50,215 35,816 91,862 68,187 Total SCM net revenue 119,938 105,907 239,346 214,524 RCM Revenue cycle technology 47,521 47,507 93,502 91,700 Revenue cycle services 22,965 22,001 43,157 40,058 Total RCM net revenue 70,486 69,508 136,659 131,758 Total net revenue 190,424 175,415 376,005 346,282 Operating expenses: SCM 94,428 81,813 191,182 158,256 RCM 57,803 58,243 113,529 115,218 Corporate 14,630 13,086 30,321 25,755 Total operating expenses 166,861 153,142 335,032 299,229 Operating income (loss): SCM 25,510 24,094 48,164 56,268 RCM 12,683 11,265 23,130 16,540 Corporate (14,630 ) (13,086 ) (30,321 ) (25,755 ) Total operating income 23,563 22,273 40,973 47,053 Interest (expense) (11,810 ) (11,114 ) (23,679 ) (22,287 ) Other (expense) income (110 ) 31 (48 ) 89 Income before income taxes 11,643 11,190 17,246 24,855 Income tax expense 5,329 4,594 7,579 10,581 Net income $ 6,314 $ 6,596 $ 9,667 $ 14,274 Segment Adjusted EBITDA SCM $ 46,478 $ 42,300 $ 91,466 $ 92,250 RCM 20,631 19,613 39,381 33,014 Total Segment Adjusted EBITDA $ 67,109 $ 61,913 $ 130,847 $ 125,264 Corporate (7,972 ) (7,589 ) (14,337 ) (14,223 ) Total Adjusted EBITDA(2) $ 59,137 $ 54,324 $ 116,510 $ 111,041 (1) Other service fees primarily consists of consulting, services and technology fees. (2) These are non-GAAP measures. See “Use of Non-GAAP Financial Measures” section for additional information. Six Months Ended June 30, 2015 2014 Capital expenditures(1): SCM $ 8,480 $ 11,002 RCM 12,513 15,417 Corporate 1,990 1,660 Total $ 22,983 $ 28,079 (1) Capital expenditures consist of purchases of property and equipment and capitalized software development costs (internal and external use). June 30, 2015 December 31, 2014 Financial Position: Accounts receivable, net SCM $ 67,434 $ 74,337 RCM 61,778 53,129 Corporate — 275 Total accounts receivable, net 129,212 127,741 Other assets SCM 1,040,051 1,067,039 RCM 437,636 439,333 Corporate 67,061 84,683 Total other assets 1,544,748 1,591,055 Total assets $ 1,673,960 $ 1,718,796 SCM accrued revenue share obligation $ 100,927 $ 91,864 Deferred revenue SCM 50,010 51,958 RCM 41,655 39,494 Total deferred revenue 91,665 91,452 Notes payable 507,292 556,000 Bonds payable 325,000 325,000 Other liabilities SCM 29,019 36,938 RCM 18,373 23,952 Corporate 146,356 147,103 Total other liabilities 193,748 207,993 Total liabilities $ 1,218,632 $ 1,272,309 GAAP for segment reporting requires that the total of the reportable segments’ measures of profit or loss be reconciled to the Company’s consolidated operating results. The following table reconciles Segment Adjusted EBITDA to consolidated net income for the three and six months ended June 30, 2015 and 2014: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 SCM Adjusted EBITDA $ 46,478 $ 42,300 $ 91,466 $ 92,250 RCM Adjusted EBITDA 20,631 19,613 39,381 33,014 Total Segment Adjusted EBITDA 67,109 61,913 130,847 125,264 Depreciation (9,713 ) (8,696 ) (19,237 ) (16,958 ) Depreciation (included in cost of revenue) (989 ) (648 ) (1,967 ) (1,072 ) Amortization of intangibles (14,931 ) (14,027 ) (29,987 ) (28,053 ) Income tax expense (18,650 ) (14,562 ) (32,845 ) (30,952 ) Share-based compensation expense(1) (2,518 ) (3,243 ) (5,609 ) (5,341 ) Purchase accounting adjustments(2) (367 ) — (828 ) — Restructuring, acquisition and integration-related expenses(3) (461 ) — (2,126 ) (1,131 ) Total reportable segment net income 19,480 20,737 38,248 41,757 Corporate net loss (13,166 ) (14,141 ) (28,581 ) (27,483 ) Consolidated net income $ 6,314 $ 6,596 $ 9,667 $ 14,274 (1) Represents non-cash share-based compensation to both employees and directors. We believe excluding this non-cash expense allows us to compare our operating performance without regard to the impact of share-based compensation, which varies from period to period based on amount and timing of grants. (2) Represents the effect on revenue of adjusting Sg2’s acquired deferred revenue balance to fair value at the acquisition date. (3) Represents the amount attributable to restructuring, acquisition and integration-related costs which may include costs such as severance, retention, salaries relating to redundant positions, certain performance-related salary-based compensation, operating infrastructure costs and facility consolidation costs. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 11. FAIR VALUE MEASUREMENTS We measure fair value for financial instruments when a valuation is necessary, such as for impairment of long-lived and indefinite-lived assets when indicators of impairment exist in accordance with GAAP for fair value measurements and disclosures. This defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measures required under other accounting pronouncements, but does not change existing guidance as to whether or not an instrument is carried at fair value. In estimating our fair value disclosures for financial instruments, we use the following methods and assumptions: • Cash and cash equivalents • Accounts receivable, net • Accounts payable and current liabilities • Notes payable • Bonds payable |
Related Party Transaction
Related Party Transaction | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | 12. RELATED PARTY TRANSACTION We had an agreement with John Bardis, formerly our chief executive officer, for the use of an airplane owned by JJB Aviation, LLC, a limited liability company owned by Mr. Bardis. We paid Mr. Bardis at market-based rates for the use of the airplane for business purposes. The audit committee of the board of directors reviews such usage of the airplane annually. During the six months ended June 30, 2015 and 2014, we incurred charges of zero and $756, respectively, related to transactions with Mr. Bardis. On February 17, 2015, the Company entered into a Transition and Consulting Agreement (the “Transition Agreement”) with Mr. Bardis in connection with Mr. Bardis’s resignation from his positions with the Company. Pursuant to the Transition Agreement, the Company’s agreement to use the airplane owned by JJB Aviation, LLC was terminated effective as of January 1, 2015. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. SUBSEQUENT EVENTS We have evaluated subsequent events for recognition or disclosure in the condensed consolidated financial statements filed on Form 10-Q with the SEC and no events have occurred that require disclosure, except for the following: On August 4, 2015, the Company received written notification from Tenet Healthcare Corporation (“Tenet”) that the Company’s supply chain solutions agreement (“SCS Agreement”) with Tenet will not be renewed following its scheduled expiration on January 31, 2016. The SCS Agreement includes the provision of group purchasing and outsourced procurement services, and related supply chain technology products. The net revenue from products and services under the SCS Agreement for the six-month period ended June 30, 2015 represents approximately $21,400, or approximately 5.7% of the Company’s net revenue during the same period. The Company estimates that the SCS Agreement contributed approximately $10,500 to operating income, before the allocation of segment and corporate indirect expenses, in the Spend and Clinical Resource Management segment during the six month period ended June 30, 2015. |
Business Description and Basi21
Business Description and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements and related disclosures in conformity with GAAP and pursuant to the rules and regulations of the SEC, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from those estimates. We believe that the estimates, assumptions and judgments involved in revenue recognition, allowances for doubtful accounts and returns, product development costs, share-based payments, business combinations, impairment of goodwill, intangible assets and long-lived assets and accounting for income taxes have the greatest potential impact on our condensed consolidated financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents All of our highly liquid investments with original maturities of three months or less at the date of purchase are carried at cost (which approximates fair value) and are considered to be cash equivalents. Currently, our excess cash is voluntarily used to repay our swing line credit facility, if any, on a daily basis and applied against our revolving credit facility on a routine basis when our swing line credit facility is undrawn. In addition, we may periodically make voluntary repayments on our term loans. Cash and cash equivalents were $10,273 and $12,100 as of June 30, 2015 and December 31, 2014, respectively. We had $122,000 and $152,000 outstanding on our revolving credit facility as of June 30, 2015 and December 31, 2014, respectively. In the event our cash balance is zero at the end of a period, any outstanding checks are recorded as accrued expenses. See Note 5 for immediately available cash under our revolving credit facility. Additionally, we have a concentration of credit risk arising from cash deposits held in excess of federally insured amounts totaling $9,773 as of June 30, 2015. |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Deferred Revenue Disclosure [Abstract] | |
Summary of Deferred Revenue | The following table summarizes the deferred revenue categories and balances as of: June 30, December 31, Software and SaaS implementation fees $ 53,570 $ 55,152 Service fees 21,987 19,241 Administrative fees 13,660 15,715 Other fees 2,448 1,344 Deferred revenue, total 91,665 91,452 Less: Deferred revenue, current portion (75,677 ) (76,034 ) Deferred revenue, non-current portion $ 15,988 $ 15,418 |
Notes and Bonds Payable (Tables
Notes and Bonds Payable (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Summary of Notes and Bonds Payable | The balances of our notes and bonds payable are summarized as follows as of: June 30, December 31, Term A facility $ 211,263 $ 225,000 Term B facility 174,029 179,000 Revolving credit facility 122,000 152,000 Total notes payable 507,292 556,000 Bonds payable 325,000 325,000 Total notes and bonds payable 832,292 881,000 Less: current portions (24,875 ) (29,583 ) Total long-term notes and bonds payable $ 807,417 $ 851,417 |
Percentage of Redemption Prices | The Company has the option to redeem all or a part of the Notes, at the following redemption prices: Year Percentage 2015 102 % 2016 and thereafter 100 % |
Debt Maturities and Scheduled Principal Repayments | The following table summarizes our stated debt maturities and scheduled principal repayments as of June 30, 2015: Year Term A Facility Term B Facility(2) Revolving Senior Total 2015(1) $ 9,375 $ 1,500 $ — $ — $ 10,875 2016 25,000 3,000 — — 28,000 2017 176,888 3,000 122,000 — 301,888 2018 — 3,000 — 325,000 328,000 2019 — 163,529 — — 163,529 $ 211,263 $ 174,029 $ 122,000 $ 325,000 $ 832,292 (1) Represents the remaining quarterly principal payments due during the fiscal year ending December 31, 2015 and the balance of the swing line component of our revolving credit facility, if any. (2) The Term B Facility matures on December 13, 2019; however, the facility will mature in full on May 15, 2018 if our outstanding senior notes have not been repaid or refinanced in full by such date. |
Stockholders' Equity and Shar24
Stockholders' Equity and Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Text Block [Abstract] | |
Summary of Amount and Cost of Shares of Common Stock Repurchased | The following table shows the amount and cost of shares of common stock we repurchased for the three and six months ended June 30, 2015 and 2014 under the share repurchase program. The repurchased shares have not been retired and constitute authorized shares that are issued but not outstanding. Three Months Ended Six Months Ended June 30, 2015 2014 2015 2014 Number of shares repurchased 415,236 1,144,145 415,236 1,784,145 Cost of shares repurchased $ 8,588 $ 26,699 $ 8,588 $ 42,759 |
Summary of Total Share-Based Compensation Expense | Total share-based compensation expense (inclusive of restricted common stock, RSUs, SSARs and common stock options) for the three and six months ended June 30, 2015 and 2014 as reflected in our condensed consolidated statements of operations is as follows: Three Months Ended Six Months Ended 2015 2014 2015 2014 Cost of revenue $ 1,419 $ 1,863 $ 3,150 $ 3,029 Product development 338 391 773 635 Selling and marketing 873 845 1,907 1,372 General and administrative 2,769 2,493 5,301 4,858 Total share-based compensation expense $ 5,399 $ 5,592 $ 11,131 $ 9,894 |
Summary of Total Approved Equity Grants | A summary of the total approved equity grants during the six months ended June 30, 2015 is as follows: Total RSUs Range of Grant RSUs — Service 796,636 $ 18.44 – $20.32 (1) RSUs — Performance 1,011,144 $ 18.44 – $20.32 (2) Total RSUs granted 1,807,780 (1) Service-based RSUs vest annually over three years of continuous service with the exception of certain equity awards granted to our Board that vest ratably each month through December 31, 2015; and (2) Performance-based RSUs generally vest annually over three years of continuous service provided the performance metric is achieved and consist of a net revenue and a non-GAAP adjusted earnings per share (“EPS”) performance metric. The Company must achieve a minimum net revenue and non-GAAP adjusted EPS threshold before any performance-based RSUs begin vesting. If the minimum threshold is not met, the equity award holders will forfeit those awards. |
Income Per Share (Tables)
Income Per Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic and Diluted Weighted Average Shares Outstanding | A reconciliation of basic and diluted weighted average shares outstanding for basic and diluted EPS for the three and six months ended June 30, 2015 and 2014 is as follows: Three Months Ended June 30, 2015 2014 Numerator for Basic and Diluted Income Per Share: Net income $ 6,314 $ 6,596 Denominator for basic income per share weighted average shares 59,865,000 59,752,000 Effect of dilutive securities: Stock options 128,000 222,000 SSARs 203,000 343,000 Restricted stock and RSUs 860,000 629,000 Denominator for diluted income per share — adjusted weighted average shares and assumed conversions 61,056,000 60,946,000 Basic income per share: Basic net income from continuing operations $ 0.11 $ 0.11 Diluted net income per share: Diluted net income from continuing operations $ 0.10 $ 0.11 Six Months Ended June 30, 2015 2014 Numerator for Basic and Diluted Income Per Share: Net income $ 9,667 $ 14,274 Denominator for basic income per share weighted average shares 59,801,000 60,189,000 Effect of dilutive securities: Stock options 132,000 282,000 SSARs 181,000 330,000 Restricted stock and RSUs 718,000 618,000 Denominator for diluted income per share — adjusted weighted average shares and assumed conversions 60,832,000 61,419,000 Basic income per share: Basic net income from continuing operations $ 0.16 $ 0.24 Diluted net income per share: Diluted net income from continuing operations $ 0.16 $ 0.23 |
Summary of Potentially Dilutive Securities | The following table provides a summary of those potentially dilutive securities that have been excluded from the above calculation of diluted EPS: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 SSARs 16,000 5,000 27,000 8,000 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Financial Information of Business Segments | The following tables represent our results of operations, by segment, for the three and six months ended June 30, 2015 and 2014: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Revenue: SCM Net administrative fees $ 69,723 $ 70,091 $ 147,484 $ 146,337 Other service fees(1) 50,215 35,816 91,862 68,187 Total SCM net revenue 119,938 105,907 239,346 214,524 RCM Revenue cycle technology 47,521 47,507 93,502 91,700 Revenue cycle services 22,965 22,001 43,157 40,058 Total RCM net revenue 70,486 69,508 136,659 131,758 Total net revenue 190,424 175,415 376,005 346,282 Operating expenses: SCM 94,428 81,813 191,182 158,256 RCM 57,803 58,243 113,529 115,218 Corporate 14,630 13,086 30,321 25,755 Total operating expenses 166,861 153,142 335,032 299,229 Operating income (loss): SCM 25,510 24,094 48,164 56,268 RCM 12,683 11,265 23,130 16,540 Corporate (14,630 ) (13,086 ) (30,321 ) (25,755 ) Total operating income 23,563 22,273 40,973 47,053 Interest (expense) (11,810 ) (11,114 ) (23,679 ) (22,287 ) Other (expense) income (110 ) 31 (48 ) 89 Income before income taxes 11,643 11,190 17,246 24,855 Income tax expense 5,329 4,594 7,579 10,581 Net income $ 6,314 $ 6,596 $ 9,667 $ 14,274 Segment Adjusted EBITDA SCM $ 46,478 $ 42,300 $ 91,466 $ 92,250 RCM 20,631 19,613 39,381 33,014 Total Segment Adjusted EBITDA $ 67,109 $ 61,913 $ 130,847 $ 125,264 Corporate (7,972 ) (7,589 ) (14,337 ) (14,223 ) Total Adjusted EBITDA(2) $ 59,137 $ 54,324 $ 116,510 $ 111,041 (1) Other service fees primarily consists of consulting, services and technology fees. (2) These are non-GAAP measures. See “Use of Non-GAAP Financial Measures” section for additional information. Six Months Ended June 30, 2015 2014 Capital expenditures(1): SCM $ 8,480 $ 11,002 RCM 12,513 15,417 Corporate 1,990 1,660 Total $ 22,983 $ 28,079 (1) Capital expenditures consist of purchases of property and equipment and capitalized software development costs (internal and external use). June 30, 2015 December 31, 2014 Financial Position: Accounts receivable, net SCM $ 67,434 $ 74,337 RCM 61,778 53,129 Corporate — 275 Total accounts receivable, net 129,212 127,741 Other assets SCM 1,040,051 1,067,039 RCM 437,636 439,333 Corporate 67,061 84,683 Total other assets 1,544,748 1,591,055 Total assets $ 1,673,960 $ 1,718,796 SCM accrued revenue share obligation $ 100,927 $ 91,864 Deferred revenue SCM 50,010 51,958 RCM 41,655 39,494 Total deferred revenue 91,665 91,452 Notes payable 507,292 556,000 Bonds payable 325,000 325,000 Other liabilities SCM 29,019 36,938 RCM 18,373 23,952 Corporate 146,356 147,103 Total other liabilities 193,748 207,993 Total liabilities $ 1,218,632 $ 1,272,309 |
Segment Adjusted EBITDA to Consolidated Net Income | The following table reconciles Segment Adjusted EBITDA to consolidated net income for the three and six months ended June 30, 2015 and 2014: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 SCM Adjusted EBITDA $ 46,478 $ 42,300 $ 91,466 $ 92,250 RCM Adjusted EBITDA 20,631 19,613 39,381 33,014 Total Segment Adjusted EBITDA 67,109 61,913 130,847 125,264 Depreciation (9,713 ) (8,696 ) (19,237 ) (16,958 ) Depreciation (included in cost of revenue) (989 ) (648 ) (1,967 ) (1,072 ) Amortization of intangibles (14,931 ) (14,027 ) (29,987 ) (28,053 ) Income tax expense (18,650 ) (14,562 ) (32,845 ) (30,952 ) Share-based compensation expense(1) (2,518 ) (3,243 ) (5,609 ) (5,341 ) Purchase accounting adjustments(2) (367 ) — (828 ) — Restructuring, acquisition and integration-related expenses(3) (461 ) — (2,126 ) (1,131 ) Total reportable segment net income 19,480 20,737 38,248 41,757 Corporate net loss (13,166 ) (14,141 ) (28,581 ) (27,483 ) Consolidated net income $ 6,314 $ 6,596 $ 9,667 $ 14,274 (1) Represents non-cash share-based compensation to both employees and directors. We believe excluding this non-cash expense allows us to compare our operating performance without regard to the impact of share-based compensation, which varies from period to period based on amount and timing of grants. (2) Represents the effect on revenue of adjusting Sg2’s acquired deferred revenue balance to fair value at the acquisition date. (3) Represents the amount attributable to restructuring, acquisition and integration-related costs which may include costs such as severance, retention, salaries relating to redundant positions, certain performance-related salary-based compensation, operating infrastructure costs and facility consolidation costs. |
Business Description and Basi27
Business Description and Basis of Presentation - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Change in Accounting Estimate [Line Items] | ||||
Cash and cash equivalents | $ 10,273 | $ 12,100 | $ 6,004 | $ 2,790 |
Outstanding balance on revolving credit facility | 482,417 | 526,417 | ||
Cash deposit held in excess of federally insured amounts | 9,773 | |||
Revolving Credit Facility [Member] | ||||
Change in Accounting Estimate [Line Items] | ||||
Outstanding balance on revolving credit facility | $ 122,000 | $ 152,000 |
Restructuring, Acquisition an28
Restructuring, Acquisition and Integration-Related Expenses - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Restructuring And Acquisition Integration Charges [Abstract] | ||||
Acquisition related expense | $ 48 | $ 48 | $ 352 | $ 352 |
Cash payments | 5,005 | |||
Restructuring reserve accrued liabilities | 2,063 | |||
Restructuring reserve current | 999 | 999 | ||
Restructuring, acquisition and integration-related expenses | $ 556 | $ 0 | $ 4,995 | $ 1,697 |
Deferred Revenue - Summary of D
Deferred Revenue - Summary of Deferred Revenue (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, total | $ 91,665 | $ 91,452 |
Less: Deferred revenue, current portion | (75,677) | (76,034) |
Deferred revenue, non-current portion | 15,988 | 15,418 |
Software and SaaS Implementation Fees [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, total | 53,570 | 55,152 |
Service Fees [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, total | 21,987 | 19,241 |
Administrative Fees [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, total | 13,660 | 15,715 |
Other Fees [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, total | $ 2,448 | $ 1,344 |
Deferred Revenue - Additional I
Deferred Revenue - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Text Block [Abstract] | ||
Contingent deferred revenue | $ 5,137 | $ 8,441 |
Notes and Bonds Payable - Summa
Notes and Bonds Payable - Summary of Notes and Bonds Payable (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Total notes payable | $ 507,292 | $ 556,000 |
Bonds payable | 325,000 | 325,000 |
Total notes and bonds payable | 832,292 | 881,000 |
Total notes and bonds payable | 832,292 | 881,000 |
Less: current portions | (24,875) | (29,583) |
Total long-term notes and bonds payable | 807,417 | 851,417 |
Term A Facility [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable | 211,263 | 225,000 |
Total notes and bonds payable | 211,263 | |
Total notes and bonds payable | 211,263 | |
Term B Facility [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable | 174,029 | 179,000 |
Total notes and bonds payable | 174,029 | |
Total notes and bonds payable | 174,029 | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable | 122,000 | $ 152,000 |
Total notes and bonds payable | 122,000 | |
Total notes and bonds payable | $ 122,000 |
Notes and Bonds Payable - Addit
Notes and Bonds Payable - Additional Information (Detail) - USD ($) | Sep. 08, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||||||
Total notes payable | $ 507,292,000 | $ 507,292,000 | $ 556,000,000 | |||
Outstanding balance on revolving credit facility | 482,417,000 | 482,417,000 | 526,417,000 | |||
Amount drawn on swing line loan | 0 | 0 | ||||
Outstanding letter of credit under credit facility | 177,000,000 | 177,000,000 | ||||
Letters of credit outstanding amount | $ 1,000,000 | 1,000,000 | ||||
Increase in revolving committed amount under Credit Agreement | $ 100,000,000 | |||||
Revolving committed amount under Credit Agreement | 300,000,000 | |||||
Debt issuance costs | $ 615,000 | $ 12,126,000 | ||||
Percentage owned by subsidiary guarantor | 100.00% | 100.00% | ||||
Amortization of debt issuance costs | $ 971,000 | $ 937,000 | $ 1,949,000 | $ 1,880,000 | ||
Total interest paid, net of amounts capitalized | 21,554,000 | $ 20,058,000 | ||||
Term A Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Total notes payable | $ 211,263,000 | 211,263,000 | 225,000,000 | |||
Notes payable current | $ 4,362,000 | |||||
Weighted average interest rate of senior term loan facility | 2.52% | 2.52% | ||||
Term B Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Total notes payable | $ 174,029,000 | $ 174,029,000 | 179,000,000 | |||
Notes payable current | $ 3,471,000 | |||||
Weighted average interest rate of senior term loan facility | 4.00% | 4.00% | ||||
Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Total notes payable | $ 122,000,000 | $ 122,000,000 | 152,000,000 | |||
Outstanding balance on revolving credit facility | $ 122,000,000 | 122,000,000 | $ 152,000,000 | |||
Voluntary payments | $ 30,000,000 | |||||
Weighted average interest rate of senior term loan facility | 2.51% | 2.51% | ||||
Credit Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Notes payable current | $ 7,833,000 | |||||
Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of consolidated tangible assets and revenues of subsidiaries not providing guarantees | 2.50% | |||||
Percentage of consolidated earnings before interest taxes depreciation and amortization on consolidated basis of immaterial subsidiaries not providing guarantees | 5.00% | |||||
Percentage of pledged equity securities of foreign subsidiary | 65.00% | |||||
Senior Notes Due 2018 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of senior notes | $ 325,000,000 | $ 325,000,000 | ||||
Percentage of interest rate on bonds payable | 8.00% | 8.00% | ||||
Maturity date of debt instrument | Nov. 15, 2018 | |||||
Repurchase percentage of aggregate principal amount plus accrued and unpaid interest | 101.00% | |||||
Percentage of par value on senior notes | 103.30% | |||||
Term Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Scheduled principal payments | $ 10,875,000 |
Notes and Bonds Payable - Perce
Notes and Bonds Payable - Percentage of Redemption Prices (Detail) - Senior Notes Due 2018 [Member] | 6 Months Ended |
Jun. 30, 2015 | |
Debt Instrument, Redemption, Period One [Member] | |
Debt Instrument [Line Items] | |
Percentage of redemption prices | 102.00% |
Debt Instrument, Redemption, Period Two [Member] | |
Debt Instrument [Line Items] | |
Percentage of redemption prices | 100.00% |
Notes and Bonds Payable - Debt
Notes and Bonds Payable - Debt Maturities and Scheduled Principal Repayments (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Principal Payment in 2015 | $ 10,875 | |
Principal Payment in 2016 | 28,000 | |
Principal Payment in 2017 | 301,888 | |
Principal Payment in 2018 | 328,000 | |
Principal Payment in 2019 | 163,529 | |
Total notes and bonds payable | 832,292 | $ 881,000 |
Term A Facility [Member] | ||
Debt Instrument [Line Items] | ||
Principal Payment in 2015 | 9,375 | |
Principal Payment in 2016 | 25,000 | |
Principal Payment in 2017 | 176,888 | |
Total notes and bonds payable | 211,263 | |
Term B Facility [Member] | ||
Debt Instrument [Line Items] | ||
Principal Payment in 2015 | 1,500 | |
Principal Payment in 2016 | 3,000 | |
Principal Payment in 2017 | 3,000 | |
Principal Payment in 2018 | 3,000 | |
Principal Payment in 2019 | 163,529 | |
Total notes and bonds payable | 174,029 | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Principal Payment in 2017 | 122,000 | |
Total notes and bonds payable | 122,000 | |
Senior Unsecured Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Payment in 2018 | 325,000 | |
Total notes and bonds payable | $ 325,000 |
Stockholders' Equity and Shar35
Stockholders' Equity and Share-Based Compensation - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Feb. 28, 2015USD ($) | Jun. 30, 2015USD ($)shares | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)Plansshares | Jun. 30, 2014USD ($)shares | Dec. 31, 2010 | |
Equity [Line Items] | ||||||
Aggregate exercise price of stock issued in connection with exercise of stock options | $ 945,000 | |||||
Associated minimum statutory tax liability, shares surrendered | $ 3,836,000 | |||||
Expiration date of share repurchase program | Feb. 29, 2016 | |||||
Stock Repurchase Program, authorized amount | $ 100,000,000 | |||||
Number of share-based compensation plans | Plans | 3 | |||||
Shares reserved under 2008 equity incentive plan available for grant | shares | 3,942,000 | 3,942,000 | ||||
Total share-based compensation expense | $ 5,399,000 | $ 5,592,000 | $ 11,131,000 | $ 9,894,000 | ||
Income tax benefit recognized from equity awards | 2,018,000 | $ 2,083,000 | 4,160,000 | 3,686,000 | ||
Capitalized share-based compensation expenses | $ 0 | 0 | ||||
Shares of common stock purchased, amount | $ 275,000 | $ 253,000 | ||||
Restricted Stock [Member] | ||||||
Equity [Line Items] | ||||||
Forfeited, Shares | shares | 24,000 | |||||
Restricted shares that were surrendered from equity awards holders | shares | 199,000 | |||||
Associated minimum statutory tax liability, shares surrendered | $ 3,836,000 | |||||
SSARs Awards [Member] | ||||||
Equity [Line Items] | ||||||
Approximate stock issued in connection with exercise of stock options | shares | 437,000 | |||||
Aggregate exercise price of stock issued in connection with exercise of stock options | $ 945,000 | |||||
Employee Stock Purchase Plan [Member] | ||||||
Equity [Line Items] | ||||||
Shares reserved under 2008 equity incentive plan available for grant | shares | 500,000 | 500,000 | ||||
Percentage of price per share of the common stock sold to participating employees | 95.00% | |||||
Period required for holding stock purchases as per the plan | 18 months | |||||
Shares of common stock purchased | shares | 15,000 | 11,000 |
Stockholders' Equity and Shar36
Stockholders' Equity and Share-Based Compensation - Summary of Amount and Cost of Common Stock Repurchased (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Equity [Abstract] | ||||
Number of shares repurchased | 415,236 | 1,144,145 | 415,236 | 1,784,145 |
Cost of shares repurchased | $ 8,588 | $ 26,699 | $ 8,588 | $ 42,759 |
Stockholders' Equity and Shar37
Stockholders' Equity and Share-Based Compensation - Summary of Total Share-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total share-based compensation expense | $ 5,399 | $ 5,592 | $ 11,131 | $ 9,894 |
Cost of Revenue [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total share-based compensation expense | 1,419 | 1,863 | 3,150 | 3,029 |
Product Development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total share-based compensation expense | 338 | 391 | 773 | 635 |
Selling and Marketing [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total share-based compensation expense | 873 | 845 | 1,907 | 1,372 |
General and Administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total share-based compensation expense | $ 2,769 | $ 2,493 | $ 5,301 | $ 4,858 |
Stockholders' Equity and Shar38
Stockholders' Equity and Share-Based Compensation - Summary of Total Approved Equity Grants (Detail) - 6 months ended Jun. 30, 2015 - $ / shares | Total |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total RSUs | 1,807,780 |
RSUs - Service [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total RSUs | 796,636 |
Vesting period | 3 years |
RSUs - Performance [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total RSUs | 1,011,144 |
Vesting period | 3 years |
Minimum [Member] | RSUs - Service [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Grant Date Fair Values | $ 18.44 |
Minimum [Member] | RSUs - Performance [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Grant Date Fair Values | 18.44 |
Maximum [Member] | RSUs - Service [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Grant Date Fair Values | 20.32 |
Maximum [Member] | RSUs - Performance [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Grant Date Fair Values | $ 20.32 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 45.80% | 41.10% | 43.90% | 42.60% |
Income Per Share - Reconciliati
Income Per Share - Reconciliation of Basic and Diluted Weighted Average Shares Outstanding (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Numerator for Basic and Diluted Income Per Share: | ||||
Net income | $ 6,314 | $ 6,596 | $ 9,667 | $ 14,274 |
Denominator for basic income per share weighted average shares | 59,865,000 | 59,752,000 | 59,801,000 | 60,189,000 |
Effect of dilutive securities: | ||||
Stock options | 128,000 | 222,000 | 132,000 | 282,000 |
SSARs | 203,000 | 343,000 | 181,000 | 330,000 |
Restricted stock and RSUs | 860,000 | 629,000 | 718,000 | 618,000 |
Denominator for diluted income per share - adjusted weighted average shares and assumed conversions | 61,056,000 | 60,946,000 | 60,832,000 | 61,419,000 |
Basic income per share: | ||||
Basic net income from continuing operations | $ 0.11 | $ 0.11 | $ 0.16 | $ 0.24 |
Diluted net income per share: | ||||
Diluted net income from continuing operations | $ 0.10 | $ 0.11 | $ 0.16 | $ 0.23 |
Income Per Share - Summary of P
Income Per Share - Summary of Potentially Dilutive Securities (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
SSARs [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from calculation of diluted EPS | 16,000 | 5,000 | 27,000 | 8,000 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2015Segment | |
Segment Reporting [Abstract] | |
Number of reportable business segments | 2 |
Segment Information - Financial
Segment Information - Financial Information of Business Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Revenue: | |||||
Net administrative fees | $ 69,723 | $ 70,091 | $ 147,484 | $ 146,337 | |
Other service fees | 120,701 | 105,324 | 228,521 | 199,945 | |
Total net revenue | 190,424 | 175,415 | 376,005 | 346,282 | |
Operating expenses: | |||||
Total operating expenses | 166,861 | 153,142 | 335,032 | 299,229 | |
Operating income (loss): | |||||
Total operating income | 23,563 | 22,273 | 40,973 | 47,053 | |
Interest (expense) | (11,810) | (11,114) | (23,679) | (22,287) | |
Other (expense) income | (110) | 31 | (48) | 89 | |
Income before income taxes | 11,643 | 11,190 | 17,246 | 24,855 | |
Income tax expense | 5,329 | 4,594 | 7,579 | 10,581 | |
Net income | 6,314 | 6,596 | 9,667 | 14,274 | |
Segment Adjusted EBITDA | |||||
Total Adjusted EBITDA | 59,137 | 54,324 | 116,510 | 111,041 | |
Capital expenditures: | |||||
Total Capital expenditures | 22,983 | 28,079 | |||
Accounts receivable, net | |||||
Total accounts receivable, net | 129,212 | 129,212 | $ 127,741 | ||
Other assets | |||||
Total other assets | 1,544,748 | 1,544,748 | 1,591,055 | ||
Total assets | 1,673,960 | 1,673,960 | 1,718,796 | ||
Accrued revenue share obligation and rebates | 100,927 | 100,927 | 91,864 | ||
Deferred revenue | |||||
Total deferred revenue | 91,665 | 91,665 | 91,452 | ||
Notes payable | 507,292 | 507,292 | 556,000 | ||
Bonds payable | 325,000 | 325,000 | 325,000 | ||
Other liabilities | |||||
Total other liabilities | 193,748 | 193,748 | 207,993 | ||
Total liabilities | 1,218,632 | 1,218,632 | 1,272,309 | ||
Operating Segments [Member] | |||||
Operating income (loss): | |||||
Net income | 19,480 | 20,737 | 38,248 | 41,757 | |
Segment Adjusted EBITDA | |||||
Total Adjusted EBITDA | 67,109 | 61,913 | 130,847 | 125,264 | |
Deferred revenue | |||||
Total deferred revenue | 91,665 | 91,665 | 91,452 | ||
Notes payable | 507,292 | 507,292 | 556,000 | ||
Bonds payable | 325,000 | 325,000 | 325,000 | ||
Corporate, Non-Segment [Member] | |||||
Operating expenses: | |||||
Total operating expenses | 14,630 | 13,086 | 30,321 | 25,755 | |
Operating income (loss): | |||||
Total operating income | (14,630) | (13,086) | (30,321) | (25,755) | |
Net income | (13,166) | (14,141) | (28,581) | (27,483) | |
Segment Adjusted EBITDA | |||||
Total Adjusted EBITDA | (7,972) | (7,589) | (14,337) | (14,223) | |
Capital expenditures: | |||||
Total Capital expenditures | 1,990 | 1,660 | |||
Accounts receivable, net | |||||
Total accounts receivable, net | 275 | ||||
Other assets | |||||
Total other assets | 67,061 | 67,061 | 84,683 | ||
Other liabilities | |||||
Total other liabilities | 146,356 | 146,356 | 147,103 | ||
SCM [Member] | Operating Segments [Member] | |||||
Revenue: | |||||
Net administrative fees | 69,723 | 70,091 | 147,484 | 146,337 | |
Other service fees | 50,215 | 35,816 | 91,862 | 68,187 | |
Total net revenue | 119,938 | 105,907 | 239,346 | 214,524 | |
Operating expenses: | |||||
Total operating expenses | 94,428 | 81,813 | 191,182 | 158,256 | |
Operating income (loss): | |||||
Total operating income | 25,510 | 24,094 | 48,164 | 56,268 | |
Segment Adjusted EBITDA | |||||
Total Adjusted EBITDA | 46,478 | 42,300 | 91,466 | 92,250 | |
Capital expenditures: | |||||
Total Capital expenditures | 8,480 | 11,002 | |||
Accounts receivable, net | |||||
Total accounts receivable, net | 67,434 | 67,434 | 74,337 | ||
Other assets | |||||
Total other assets | 1,040,051 | 1,040,051 | 1,067,039 | ||
Accrued revenue share obligation and rebates | 100,927 | 100,927 | 91,864 | ||
Deferred revenue | |||||
Total deferred revenue | 50,010 | 50,010 | 51,958 | ||
Other liabilities | |||||
Total other liabilities | 29,019 | 29,019 | 36,938 | ||
RCM [Member] | Operating Segments [Member] | |||||
Revenue: | |||||
Revenue cycle technology | 47,521 | 47,507 | 93,502 | 91,700 | |
Revenue cycle services | 22,965 | 22,001 | 43,157 | 40,058 | |
Total net revenue | 70,486 | 69,508 | 136,659 | 131,758 | |
Operating expenses: | |||||
Total operating expenses | 57,803 | 58,243 | 113,529 | 115,218 | |
Operating income (loss): | |||||
Total operating income | 12,683 | 11,265 | 23,130 | 16,540 | |
Segment Adjusted EBITDA | |||||
Total Adjusted EBITDA | 20,631 | $ 19,613 | 39,381 | 33,014 | |
Capital expenditures: | |||||
Total Capital expenditures | 12,513 | $ 15,417 | |||
Accounts receivable, net | |||||
Total accounts receivable, net | 61,778 | 61,778 | 53,129 | ||
Other assets | |||||
Total other assets | 437,636 | 437,636 | 439,333 | ||
Deferred revenue | |||||
Total deferred revenue | 41,655 | 41,655 | 39,494 | ||
Other liabilities | |||||
Total other liabilities | $ 18,373 | $ 18,373 | $ 23,952 |
Segment Information - Segment A
Segment Information - Segment Adjusted Ebitda Consolidated Net Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total Segment Adjusted EBITDA | $ 59,137 | $ 54,324 | $ 116,510 | $ 111,041 |
Depreciation | (28,865) | (24,474) | ||
Net (loss) income | 6,314 | 6,596 | 9,667 | 14,274 |
Depreciation (included in cost of revenue) | (989) | (648) | (1,967) | (1,072) |
Amortization of intangibles | (14,931) | (14,027) | (29,987) | (28,053) |
Income tax expense | (5,329) | (4,594) | (7,579) | (10,581) |
Total share-based compensation expense | (5,399) | (5,592) | (11,131) | (9,894) |
Restructuring, acquisition and integration-related expenses | (556) | 0 | (4,995) | (1,697) |
Operating Segments [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total Segment Adjusted EBITDA | 67,109 | 61,913 | 130,847 | 125,264 |
Net (loss) income | 19,480 | 20,737 | 38,248 | 41,757 |
Segment Reporting Reconciling Items [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Depreciation | (9,713) | (8,696) | (19,237) | (16,958) |
Depreciation (included in cost of revenue) | (989) | (648) | (1,967) | (1,072) |
Amortization of intangibles | (14,931) | (14,027) | (29,987) | (28,053) |
Income tax expense | (18,650) | (14,562) | (32,845) | (30,952) |
Total share-based compensation expense | (2,518) | (3,243) | (5,609) | (5,341) |
Purchase accounting adjustments | (367) | (828) | ||
Restructuring, acquisition and integration-related expenses | (461) | (2,126) | (1,131) | |
Corporate, Non-Segment [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total Segment Adjusted EBITDA | (7,972) | (7,589) | (14,337) | (14,223) |
Net (loss) income | (13,166) | (14,141) | (28,581) | (27,483) |
SCM [Member] | Operating Segments [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total Segment Adjusted EBITDA | 46,478 | 42,300 | 91,466 | 92,250 |
RCM [Member] | Operating Segments [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total Segment Adjusted EBITDA | $ 20,631 | $ 19,613 | $ 39,381 | $ 33,014 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2015 | |
Senior Notes Due 2018 [Member] | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Percentage of par value on senior notes | 103.30% |
Related Party Transaction - Add
Related Party Transaction - Additional Information (Detail) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Former Chief Executive Officer [Member] | ||
Related Party Transaction [Line Items] | ||
Charges incurred with respect to transactions with Mr. Bardis | $ 0 | $ 756,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - 6 months ended Jun. 30, 2015 - Tenet Healthcare Corporation [Member] - Supply Chain Solutions Agreement [Member] - USD ($) $ in Thousands | Total |
Subsequent Event [Line Items] | |
Agreement expiration date | Jan. 31, 2016 |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |
Subsequent Event [Line Items] | |
Concentration risk, amount | $ 21,400 |
Concentration risk, percentage | 5.70% |
Operating Income [Member] | Customer Concentration Risk [Member] | |
Subsequent Event [Line Items] | |
Concentration risk, amount | $ 10,500 |