Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 19, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | PharMerica CORP | ||
Entity Central Index Key | 1,388,195 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 979,005,881 | ||
Entity Common Stock, Shares Outstanding | 30,517,083 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 |
CONSOLIDATED INCOME STATEMENTS
CONSOLIDATED INCOME STATEMENTS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CONSOLIDATED INCOME STATEMENTS [Abstract] | |||
Revenues | $ 2,028.5 | $ 1,894.5 | $ 1,757.9 |
Cost of goods sold | 1,693.4 | 1,555.2 | 1,430.7 |
Gross profit | 335.1 | 339.3 | 327.2 |
Selling, general and administrative expenses | 222.5 | 236.3 | 225.3 |
Amortization expense | 28.6 | 20.1 | 15.4 |
Merger, acquisition, integration costs and other charges | 21.3 | 13.6 | 8.1 |
Settlement, litigation and other related charges | 13.3 | 37.3 | 19.6 |
Restructuring and impairment charges | 0.5 | 3.3 | 4.4 |
Hurricane Sandy disaster costs (recoveries) | (4.9) | (1.7) | (1.4) |
Operating income | 53.8 | 30.4 | 55.8 |
Interest expense, net | 6.6 | 9.9 | 10.6 |
Loss on extinguishment of debt | 0 | 4.3 | 0 |
Income before income taxes | 47.2 | 16.2 | 45.2 |
Provision for income taxes | 12.1 | 9.4 | 26.3 |
Net income | $ 35.1 | $ 6.8 | $ 18.9 |
Earnings per common share: | |||
Basic (in dollars per share) | $ 1.16 | $ 0.23 | $ 0.64 |
Diluted (in dollars per share) | $ 1.14 | $ 0.22 | $ 0.63 |
Shares used in computing earnings per common share: | |||
Basic (in shares) | 30,363,588 | 29,983,428 | 29,601,199 |
Diluted (in shares) | 30,767,366 | 30,649,131 | 30,075,699 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 23.1 | $ 33.3 |
Accounts receivable, net | 200.5 | 195.4 |
Inventory | 155.2 | 135.5 |
Deferred tax assets, net | 41.8 | 42.8 |
Income taxes receivable | 10.5 | 0 |
Prepaids and other assets | 52.4 | 90.3 |
Total current assets | 483.5 | 497.3 |
Equipment and leasehold improvements | 218.5 | 196.4 |
Accumulated depreciation | (144) | (125) |
Total Equipment and leasehold improvements | 74.5 | 71.4 |
Goodwill | 371 | 323.6 |
Intangible assets, net | 190.2 | 177.6 |
Other long-term assets (See Note 6) | 34.5 | 4.1 |
Total assets | 1,153.7 | 1,074 |
Current liabilities: | ||
Accounts payable | 71.7 | 96 |
Salaries, wages and other compensation | 30.6 | 35.1 |
Current portion of long-term debt | 11.6 | 6.3 |
Income taxes payable | 0 | 2.3 |
Other accrued liabilities | 27.5 | 38.5 |
Total current liabilities | 141.4 | 178.2 |
Long-term debt | 415.7 | 344.4 |
Other long-term liabilities | 56.5 | 57.6 |
Deferred tax liabilities | $ 20.7 | $ 15.7 |
Commitments and contingencies (See Note 6) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value per share; 1,000,000 shares authorized and no shares issued, December 31, 2014 and 2015 | $ 0 | $ 0 |
Common stock, $0.01 par value per share; 175,000,000 shares authorized; 32,725,786 and 33,237,732 shares issued as of December 31, 2014 and 2015, respectively | 0.3 | 0.3 |
Capital in excess of par value | 404.6 | 394.1 |
Retained earnings | 152.1 | 117 |
Treasury stock at cost, 2,617,305 and 2,776,875 shares at December 31, 2014 and December 31, 2015, respectively | (37.6) | (33.3) |
Total stockholders' equity | 519.4 | 478.1 |
Total liabilities and stockholders' equity | $ 1,153.7 | $ 1,074 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
CONSOLIDATED BALANCE SHEETS [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 175,000,000 | 175,000,000 |
Common stock, shares issued (in shares) | 33,237,732 | 32,725,786 |
Treasury stock at cost, shares (in shares) | 2,776,875 | 2,617,305 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows provided by (used in) operating activities: | |||
Net income | $ 35.1 | $ 6.8 | $ 18.9 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 23.1 | 20.3 | 19.3 |
Amortization | 28.6 | 20.1 | 15.4 |
Impairment charge | 0 | 0 | 0.1 |
Merger, acquisition, integration costs and other charges | 0 | 2.5 | 0 |
Hurricane Sandy disaster costs (recoveries) | 0 | (1.8) | 0.2 |
Stock-based compensation and deferred compensation | 7.8 | 8 | 8.7 |
Amortization of deferred financing fees | 0.6 | 1.9 | 2.3 |
Deferred income taxes | 4 | (2.3) | 12 |
Loss on disposition of equipment | 0 | 0 | 0.6 |
Gain on acquisition/disposition | (0.4) | (0.2) | (1.3) |
Loss on debt extinguishment | 0 | 4.3 | 0 |
Other | 0 | 0.4 | (0.1) |
Change in operating assets and liabilities: | |||
Accounts receivable, net | (2.4) | 29.1 | 16.5 |
Inventory | (15.9) | (18.8) | 32.7 |
Prepaids and other assets | 4.2 | (49.2) | (1.4) |
Accounts payable | (24) | (2.9) | 17.1 |
Salaries, wages and other compensation | (4.7) | (4.9) | (4.2) |
Other accrued and long-term liabilities | (24.4) | 31.3 | 19.3 |
Change in income taxes payable (receivable) | (10.7) | 7.2 | 0 |
Excess tax benefit from stock-based compensation | (2.4) | (3.4) | (0.4) |
Net cash provided by operating activities | 18.5 | 48.4 | 155.7 |
Cash flows provided by (used in) investing activities: | |||
Purchase of equipment and leasehold improvements | (23.9) | (25.6) | (27.3) |
Hurricane Sandy Insurance Recovery | 3.3 | 0 | 0 |
Acquisitions, net of cash acquired | (83.6) | (133.7) | (26.5) |
Cash proceeds from the sale of assets | 0.1 | 0.1 | 0.1 |
Cash proceeds from dispositions, including insurance | 0 | 2.2 | 0 |
Net cash used in investing activities | (104.1) | (157) | (53.7) |
Cash flows provided by (used in) financing activities: | |||
Repayments of long-term debt | (5.6) | (231.3) | (12.5) |
Proceeds from long-term debt | 0 | 225 | 0 |
Net activity of long-term revolving credit facility | 82 | 125 | (71.7) |
Payment of debt issuance costs | 0 | (2.7) | 0 |
Repayments of capital lease obligations | 0.1 | 0 | 0 |
Issuance of common stock | 0.8 | 3.4 | 9.9 |
Treasury stock at cost | (4.3) | (5.1) | (16.2) |
Excess tax benefit from stock-based compensation | 2.4 | 3.4 | 0.4 |
Net cash provided by (used in) financing activities | 75.4 | 117.7 | (90.1) |
Change in cash and cash equivalents | (10.2) | 9.1 | 11.9 |
Cash and cash equivalents at beginning of year | 33.3 | 24.2 | 12.3 |
Cash and cash equivalents at end of year | 23.1 | 33.3 | 24.2 |
Supplemental information: | |||
Cash paid for interest | 8.5 | 7.8 | 8.4 |
Cash paid for taxes | $ 19.4 | $ 5.3 | $ 18.1 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Common Stock [Member] | Capital in Excess of Par Value [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
Beginning Balance at Dec. 31, 2012 | $ 0.3 | $ 363 | $ 91.3 | $ (12) | $ 442.6 |
Beginning Balance (in shares) at Dec. 31, 2012 | 29,487,455 | ||||
Net income | 18.9 | 18.9 | |||
Exercise of stock options and tax components of stock-based awards, net | $ 0 | 10 | 0 | 0 | 10 |
Exercise of stock options and tax components of stock-based awards, net (in shares) | 622,712 | ||||
Vested restricted stock units | $ 0 | 0 | 0 | 0 | 0 |
Vested restricted stock units (in shares) | 325,257 | ||||
Vested performance stock units | 0 | ||||
Vested performance share units (in shares) | 62,547 | ||||
Treasury stock at cost | $ 0 | 0 | 0 | $ (16.2) | (16.2) |
Treasury stock at cost (in shares) | (960,678) | ||||
Stock-based compensation - non-vested restricted stock | 0 | 6.2 | 0 | $ 0 | 6.2 |
Stock-based compensation - stock options | 0 | 1 | 0 | 0 | 1 |
Ending Balance at Dec. 31, 2013 | $ 0.3 | 380.2 | 110.2 | (28.2) | 462.5 |
Ending Balance (in shares) at Dec. 31, 2013 | 29,537,293 | ||||
Net income | 6.8 | 6.8 | |||
Exercise of stock options and tax components of stock-based awards, net | $ 0 | 6.5 | 0 | 0 | 6.5 |
Exercise of stock options and tax components of stock-based awards, net (in shares) | 283,809 | ||||
Vested restricted stock units | $ 0 | 0 | 0 | 0 | 0 |
Vested restricted stock units (in shares) | 288,076 | ||||
Vested performance stock units | $ 0 | 0 | 0 | 0 | 0 |
Vested performance share units (in shares) | 199,637 | ||||
Treasury stock at cost | $ 0 | 0 | 0 | $ (5.1) | (5.1) |
Treasury stock at cost (in shares) | (200,334) | ||||
Stock-based compensation - non-vested restricted stock | 0 | 6.8 | 0 | $ 0 | 6.8 |
Stock-based compensation - stock options | 0 | 0.6 | 0 | 0 | 0.6 |
Ending Balance at Dec. 31, 2014 | $ 0.3 | 394.1 | 117 | (33.3) | 478.1 |
Ending Balance (in shares) at Dec. 31, 2014 | 30,108,481 | ||||
Net income | 35.1 | 35.1 | |||
Exercise of stock options and tax components of stock-based awards, net | $ 0 | 2.9 | 0 | 0 | 2.9 |
Exercise of stock options and tax components of stock-based awards, net (in shares) | 149,314 | ||||
Vested restricted stock units | $ 0 | 0 | 0 | 0 | 0 |
Vested restricted stock units (in shares) | 219,625 | ||||
Vested performance stock units | $ 0 | 0 | 0 | 0 | 0 |
Vested performance share units (in shares) | 143,007 | ||||
Treasury stock at cost | $ 0 | 0 | 0 | $ (4.3) | (4.3) |
Treasury stock at cost (in shares) | (159,570) | ||||
Stock-based compensation - non-vested restricted stock | 0 | 7.5 | 0 | $ 0 | 7.5 |
Stock-based compensation - stock options | 0 | 0.1 | 0 | 0 | 0.1 |
Ending Balance at Dec. 31, 2015 | $ 0.3 | $ 404.6 | $ 152.1 | $ (37.6) | $ 519.4 |
Ending Balance (in shares) at Dec. 31, 2015 | 30,460,857 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1—ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business PharMerica Corporation together with its subsidiaries, (the "Corporation"), is a pharmacy services company that services healthcare facilities, provides pharmacy management services to hospitals, provides specialty infusion services to patients outside a hospital setting, and offers the only national oncology pharmacy in the United States. The Corporation is the second largest institutional pharmacy services company in the United States based on revenues and customer licensed beds under contract, operating 94 institutional pharmacies, 17 specialty infusion pharmacies, and 5 specialty oncology pharmacies in 45 states. The Corporation's customers are typically institutional healthcare providers, such as skilled nursing facilities, nursing centers, assisted living facilities, hospitals, individuals receiving in-home care and other long-term alternative care providers. The Corporation is generally the primary source of supply of pharmaceuticals to its customers. Operating Segments The Corporation consists of three operating segments: institutional pharmacy, specialty infusion services and specialty oncology pharmacy. Management believes the nature of the products and services are similar, the payers for the products and services are common among the segments and all segments operate in the healthcare regulatory environment. In addition, the segments are economically similar. Accordingly, management has aggregated the three operating segments into one reporting segment. Principles of Consolidation All intercompany transactions have been eliminated. Use of Estimates The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP") which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates are involved in collectability of accounts receivable, revenue recognition, inventory valuation, supplier rebates and the valuation of long-lived assets and goodwill. Actual amounts may differ from these estimates. Potential risks and uncertainties, many of which are beyond the control of the Corporation, include, but are not necessarily limited to, such factors as overall economic, financial and business conditions; the overall condition of the Corporation's customers and suppliers; the intense competition in the Corporation's industry; the loss of one or more key pharmaceutical manufacturers; changes in manufacturers' rebate programs; the risk of loss of revenues due to the loss of certain customers or a customer or owner of a skilled nursing facility entering the institutional pharmacy business; the effects of the loss of a large customer and the Corporation's ability to adequately restructure its operations to offset the loss; the home infusion joint ventures formed with hospitals could adversely affect the Corporation's financial results; the decline in operating revenues and profitability with an increase in the Corporation's generic dispensing rate; the loss of prescription volumes and revenue from pharmaceutical products that develop unexpected safety or efficacy concerns; reduction in reimbursement rates for the Corporation's products and/or medical treatments or services may reduce profitability; modifications to the Medicare Part D program which may reduce revenue or impose additional costs; changes in Medicaid reimbursement which may reduce revenue; the payments of significant penalties and damages for failure to comply with complex and rapidly evolving laws and regulations, as well as licensure requirements; the adverse results from material litigation or governmental inquires including the possible insufficiency of any accruals established by the Corporation could have a material impact on the Corporation's business; failure to comply with Medicare and Medicaid regulations could result in loss of eligibility to participate in these programs; efforts by payers to control costs; healthcare reform adversely impacting the liquidity of the Corporation's customers thus affecting their ability to make timely payments to the Corporation; increasing enforcement in the U.S. healthcare industry negatively impacting the Corporation's business; further consolidation of managed care organizations and other third-party payers adversely affecting the Corporation's profits; Federal and state medical privacy regulations increasing costs of operations and exposing the Corporation to civil and criminal sanctions; interruption or damage to the Corporation's sophisticated information systems; purchasing a significant portion of the Corporation's pharmaceutical products from one supplier; attracting and retaining key executives, pharmacists, and other healthcare personnel; revenues and volumes adversely affected by certain factors in markets in which the Corporation operates, including weather; the provisions in the Corporation's certification of incorporation and bylaws could delay or prevent a change of control that stockholders favor; changes in volatility of the Corporation's stock price; successfully pursuing development and acquisition activities; indebtedness that restricts the Corporation's ability to pay cash dividends and has a negative impact on the Corporation's financing options; exposure to changes in interest rates; the potential impact of the litigation proceedings with AmerisourceBergen Drug Corporation ("ABDC") regarding the Previous Prime Vendor Agreement ("Previous PVA") and collection of the $23.5 million included in other long-term assets on the accompanying consolidated balance sheets; the Corporation's ability to collect outstanding receivables, changes in tax laws and regulations, changes to critical accounting estimates and changes in and interpretations of accounting rules and standards. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and cash equivalents with original maturities of three months or less. The Corporation places its cash in financial institutions that are federally insured. As of December 31, 2014 and 2015, the Corporation did not hold a material amount of funds in cash equivalent money market accounts. PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 1—ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the Corporation follows a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs for which there is little or no market data, which require the Corporation to develop its own assumptions. Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques: A. Market approach: B. Cost approach: C. Income approach: Financial liabilities and non-financial assets recorded at fair value at December 31, 2014 and 2015, are set forth in the tables below (dollars in millions): As of December 31, 2014 Asset/(Liability) Level 1 Level 2 Level 3 Valuation Technique Financial Liability Deferred Compensation Plan $ (8.0 ) $ - $ (8.0 ) $ - A Contingent Consideration $ (1.1 ) $ - $ - $ (1.1 ) C Mandatorily Redeemable Interest $ (8.3 ) $ - $ - $ (8.3 ) C As of December 31, 2015 Asset/(Liability) Level 1 Level 2 Level 3 Valuation Technique Financial Liability Deferred Compensation Plan $ (8.2 ) $ - $ (8.2 ) $ - A Contingent Consideration $ (11.5 ) $ - $ - $ (11.5 ) C Mandatorily Redeemable Interest $ (5.8 ) $ - $ - $ (5.8 ) C The deferred compensation plan liability represents an unfunded obligation associated with the deferred compensation plan offered to eligible employees and members of the Board of Directors of the Corporation. The fair value of the liability associated with the deferred compensation plan is derived using pricing and other relevant information for investments in phantom shares of certain available investment options, primarily mutual funds. This liability is classified as other long-term liabilities in the accompanying consolidated balance sheets. The contingent consideration represents future earn-outs associated with the Corporation's acquisition of an infusion business and a hospital services business both purchased in 2015. The fair values of the liabilities associated with the contingent consideration were derived using the income approach with unobservable inputs, which included future gross profit forecasts and present value assumptions, and there was little or no market data. The Corporation assessed the fair values of the liabilities as of the acquisition date and will assess quarterly thereafter until settlement. These liabilities are classified as other long-term liabilities in the accompanying consolidated balance sheets. The mandatorily redeemable interest represents a future obligation associated with the Corporation's acquisition of a specialty pharmacy business, OncoMed Specialty, LLC ("Onco") purchased on December 6, 2013. The mandatorily redeemable interest is classified as a long-term liability and measured at fair value. The fair value was derived using the income approach with unobservable inputs, which included a future gross profit forecast and present value assumptions, and there was little or no market data. The Corporation assessed and adjusted the mandatorily redeemable interest liability to estimated fair value as of December 31, 2015. PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 1—ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) For the years ended December 31, 2014 and December 31, 2015, there were no transfers between the valuation hierarchy Levels 1, 2 and 3. The following table summarizes the change in fair value of the Corporation's contingent consideration and mandatorily redeemable interest identified as Level 3 for the years ended December 31, 2014 and December 31, 2015 (in millions): Contingent Consideration Mandatorily Redeemable Interest Beginning balance, December 31, 2013 $ 0.7 $ 8.2 Additions from business acquisitions 1.1 - Change in fair value (0.7 ) 0.1 Balance, December 31, 2014 1.1 8.3 Additions from business acquisitions 11.9 - Subtractions from business acquisitions (1.1 ) - Change in fair value (0.4 ) (2.5 ) Balance, December 31, 2015 $ 11.5 $ 5.8 The carrying amounts reported in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, inventory and accounts payable approximate fair value because of the short-term maturity of these instruments. The Corporation's debt approximates fair value due to the terms of the interest being set at variable market interest rates (Level 2). Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable primarily consist of amounts due from Prescription Drug Plans ("PDPs") under Medicare Part D, institutional healthcare providers, the respective state Medicaid programs, third party insurance companies, and private payers. The Corporation's ability to collect outstanding receivables is critical to its results of operations and cash flows. To provide for accounts receivable that could become uncollectible in the future, the Corporation establishes an allowance for doubtful accounts to reduce the carrying value of such receivables to the extent it is probable that a portion or all of a particular account will not be collected. The Corporation has an established process to determine the adequacy of the allowance for doubtful accounts, which relies on analytical tools, specific identification, and benchmarks to arrive at a reasonable allowance. No single statistic or measurement determines the adequacy of the allowance for doubtful accounts. The Corporation monitors and reviews trends by payer classification along with the composition of the Corporation's accounts receivable aging. This review is focused primarily on trends in private and other payers, PDPs, dual eligible co-payments, historic payment patterns of long-term care institutions, and monitoring respective credit risks. In addition, the Corporation analyzes other factors such as revenue days in accounts receivables, denial trends by payer types, payment patterns by payer types, subsequent cash collections, and current events that may impact payment patterns of the Corporation's long-term care institution customers. Accounts receivable are written off after collection efforts have been completed in accordance with the Corporation's policies. The Corporation's accounts receivable and summarized aging categories are as follows (dollars in millions): (As Adjusted) December 31, December 31, 2014 2015 Institutional healthcare providers $ 153.2 $ 145.9 Medicare Part D 30.5 30.2 Private payer and other 30.6 26.8 Insured 24.5 31.1 Medicaid 11.7 12.6 Medicare 3.0 3.2 Allowance for doubtful accounts (58.1 ) (49.3 ) $ 195.4 $ 200.5 0 to 60 days 58.8 % 62.0 % 61 to 120 days 17.2 % 15.0 % Over 120 days 24.0 % 23.0 % 100.0 % 100.0 % PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 1—ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The following is a summary of activity in the Corporation's allowance for doubtful accounts (dollars in millions): Beginning Balance Charges Included in Selling, General & Administrative Expenses Write-offs Ending Balance Allowance for doubtful accounts: Year Ended December 31, 2013 $ 56.4 $ 22.7 $ (22.4 ) $ 56.7 Year Ended December 31, 2014 $ 56.7 $ 23.2 $ (21.8 ) $ 58.1 Year Ended December 31, 2015 $ 58.1 $ 7.9 $ (16.7 ) $ 49.3 In the fourth quarter of 2015, the Corporation reversed an allowance of $4.6 million related to a customer's outstanding receivable for which a settlement payment was received which significantly exceeded the existing net receivable. This reversal is reflected in the "Charges Included in Selling, General & Administrative Expenses" column above. Deferred Financing Fees The Corporation capitalizes financing fees related to acquiring or issuing new debt instruments. These expenditures include bank fees and premiums, legal costs, and filing fees. The Corporation amortizes these deferred financing fees using the effective interest method. Inventory Inventory is primarily located at the Corporation's pharmacy locations. Inventory consists solely of finished products (primarily prescription drugs) and is valued at the lower of first-in, first-out ("FIFO") cost or market. Physical inventories are performed at a minimum on a quarterly basis at the end of the quarter at all pharmacy sites. Cost of goods sold is adjusted based upon the results of the physical inventory counts. Equipment and Leasehold Improvements Equipment and leasehold improvements are recorded at cost on the acquisition date and are depreciated using the straight-line method over their estimated useful lives or lease term, if shorter, as follows (in years): Estimated Useful Lives Leasehold improvements 1-7 Equipment and software 3-10 Expenditures for maintenance, repairs and renewals of minor items are expensed as incurred. Major rebuilds and improvements are capitalized. For the years ended December 31, 2013, 2014 and 2015, maintenance and repairs were $10.0 million, $11.1 million and $12.5 million, respectively. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of long-lived assets is assessed by a comparison of the carrying amount of the asset or asset group to the estimated future undiscounted net cash flows expected to be generated by the asset or group of assets. If estimated future undiscounted net cash flows are less than the carrying amount of the asset or group of assets, the asset is considered impaired and an expense is recorded in an amount required to reduce the carrying amount of the asset or asset group to its then fair value. The Corporation incurred $0.1 million for the year ended December 31, 2013 and no fixed asset impairment charges for the years ended December 31, 2014 and 2015. The Corporation's equipment and leasehold improvements are further described in Note 3. PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 1—ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Capitalization of Internal Software Costs The Corporation capitalizes the costs incurred during the application development stage, which includes costs to design the software configuration and interfaces, coding, installation, and testing. Costs incurred during the preliminary project stage along with post-implementation stages of internal use computer software are expensed as incurred. Capitalized development costs are amortized generally over three years and are subject to impairment evaluations. Costs incurred to maintain existing software development are expensed as incurred. The capitalization and ongoing assessment of recoverability of development costs requires judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility and estimated economic life. For the years ended December 31, 2014 and 2015, the Corporation capitalized internally developed software costs of $14.7 million and $14.3 million, respectively. As of December 31, 2014 and 2015, net capitalized software costs, including acquired assets and amounts for projects which have not been completed, totaled $29.4 million and $32.6 million, respectively. Goodwill and Other Intangibles The Corporation's policy is to perform a qualitative assessment of its institutional pharmacy and a quantitative assessment of its specialty infusion and specialty oncology reporting units to determine whether it is more likely than not (defined as having a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount. The Corporation performed the qualitative assessment of its institutional pharmacy at December 31, 2015 and did not find it necessary to perform the first step of the two-step impairment review process based on that analysis. The Corporation also performed the quantitative assessments as of December 31, 2015 for its specialty infusion and specialty oncology reporting units. The specialty infusion and specialty oncology reporting unit's fair values as calculated were approximately 23.8 % and 175.7 %, respectively, greater than current book value. The Corporation's finite-lived intangible assets are comprised primarily of trade names, customer relationship assets, limited distributor relationships, doctor and insurer relationships and non-compete agreements. Finite-lived intangible assets are amortized on a straight-line basis over the course of their lives ranging from 5 to 20 years. For impairment reviews, intangible assets are reviewed on a specific pharmacy basis or as a group of pharmacies depending on the intangible assets under review. The Corporation's goodwill and intangible assets are further described in Note 4. Self-Insured Employee Health Benefits The Corporation is self-insured for the majority of its employee health benefits. The Corporation's self-insurance for employee health benefits includes a stop-loss policy to limit the maximum potential liability of the Corporation for both individual and aggregate claims per year. The Corporation records a monthly expense for self-insurance based on historical claims data and inputs from third-party administrators. For years ended December 31, 2013, 2014 and 2015, the expense for employee health benefits was $22.3 million, $15.5 million and $15.7 million, respectively, the majority of which was related to its self-insured plans. As of December 31, 2014 and 2015, the Corporation had $2.2 million and $1.8 million, respectively, recorded as a liability for self-insured employee health benefits. Supplier Rebates The Corporation receives rebates on purchases from select vendors and suppliers for achieving market share or purchase volumes. Rebates for brand name products are generally based upon achieving a defined market share tier within a therapeutic class and can be based on either purchasing volumes or actual prescriptions dispensed. Rebates for generic products are primarily based on achieving purchasing volume requirements, or in the case of the Prime Vendor Agreement with Cardinal Health ("Cardinal Health PVA"), contractually based requirements. The Corporation generally accounts for these rebates and other incentives received from its vendors and suppliers, relating to the purchase or distribution of inventory, on an accrual basis as an estimated reduction of cost of goods sold and inventory. The estimated accrual is adjusted, if necessary, after the third party validates the appropriate data and notifies the Corporation of its agreement under the terms of the contract. The Corporation considers these rebates to represent product discounts, and as a result, the rebates are allocated as a reduction of product cost and relieved through cost of goods sold upon the sale of the related inventory or as a reduction of inventory for drugs which have not yet been sold. Delivery Expenses The Corporation incurred delivery expenses of $62.0 million, $60.8 million and $56.6 million for the years ended December 31, 2013, 2014, and 2015, respectively, to deliver products sold to its customers. Delivery expenses are reported as a component of cost of goods sold in the accompanying consolidated income statements. Stock Option Accounting The measurement and recognition of compensation cost for all share-based payment awards made to employees and non-employee directors is based on the fair value of the award. The Corporation recognizes share-based compensation costs for only those shares expected to vest on a straight-line basis over the requisite service period of the award (see Note 10). PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 1—ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Restructuring and Impairment Charges Restructuring and impairment charges in the consolidated financial statements represent amounts expensed for purposes of realigning corporate and pharmacy locations. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Corporation accrues for tax obligations, as appropriate, based on facts and circumstances in the various tax jurisdictions. Deferred tax assets and liabilities are more fully described in Note 11. Mandatorily Redeemable Interest On December 6, 2013, the Corporation acquired 37.5% of the membership interests of OncoMed Specialty, LLC (the "Onco Acquisition") while also obtaining control of the business. The subsidiary is consolidated in the Corporation's consolidated financial statements and the mandatorily redeemable interest is classified as debt within other long-term liabilities in the consolidated balance sheets. Measurement Period Adjustments For the year ended December 31, 2015, the Corporation has adjusted certain amounts on the consolidated balance sheet as of December 31, 2014 as a result of measurement period adjustments related to the acquisitions occurring in 2014 (See Note 2). Recently Issued Accounting Pronouncements In April 2015, the FASB issued Accounting Standards Update ("ASU") 2015-03 "Simplifying the Presentation of Debt Issuance Costs". The update requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The Corporation has elected not to early adopt the provisions of ASU 2015-03. In February 2015, the FASB issued ASU 2015-02 "Amendments to the Consolidation Analysis" . In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers", which provides guidance for revenue recognition. The standard's core principle is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosures. In July 2015, the FASB approved a one-year delay in the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, although early adoption would be permitted for annual reporting periods beginning after December 15, 2016. The Corporation is currently in the process of evaluating the impact of adoption of this ASU on its consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, "Balance Sheet Classification of Deferred Taxes" related to accounting for income taxes which changes the balance sheet classification of deferred taxes, requiring deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The new guidance is effective for the Corporation beginning with annual and interim periods in 2017, with early adoption permitted. The Corporation elected not to early adopt the guidance. The Corporation is currently in the process of evaluating the impact of adoption of this ASU on its consolidated financial statements. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2015 | |
ACQUISITIONS [Abstract] | |
Acquisitions | PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 2—ACQUISITIONS 2015 Acquisitions During the year ended December 31, 2015, the Corporation completed acquisitions of two long-term care businesses, two infusion businesses and one hospital services business (collectively the "2015 Acquisitions"), none of which were individually significant to the Corporation. The 2015 Acquisitions had an estimated purchase price of $82.6 million, comprised of a net cash payment of $70.7 million and an estimated fair value of contingent consideration of $11.9 million. The resulting amount of goodwill and identifiable intangibles related to these transactions in the aggregate were $47.4 million and $41.2 million, respectively. The Corporation believes the resulting amount of goodwill reflects its expectation of synergistic benefits of the acquisitions. Tax deductible goodwill associated with the acquisitions was $40.4 million as of December 31, 2015. The net assets and operating results of the 2015 Acquisitions have been included in the Corporation's consolidated financial statements from the respective dates of acquisition. Amounts contingently payable related to the 2015 Acquisitions, representing payments originating from earn-out provisions of the infusion acquisition and hospital services acquisition, were $11.5 million as of December 31, 2015. The 2015 Acquisitions on a combined basis increased consolidated revenues by $25.6 million and increased consolidated pre-tax income by $6.7 million for the year ended December 31, 2015. 2014 Acquisitions During the year ended December 31, 2014, the Corporation completed acquisitions of four long-term care businesses and one infusion business (collectively the "2014 Acquisitions"), none of which were individually significant to the Corporation. The 2014 Acquisitions required cash payments of approximately $115.2 million in the aggregate. The resulting amount of goodwill and identifiable intangibles related to these transactions in the aggregate were $40.8 million and $61.4 million, respectively. The Corporation believes the resulting amount of goodwill reflects its expectation of synergistic benefits of the acquisitions. Tax deductible goodwill associated with the 2014 Acquisitions was $30.7 million as of December 31, 2015. The net assets and operating results of the 2014 Acquisitions have been included in the Corporation's consolidated financial statements from their respective dates of acquisition. There were no amounts contingently payable related to the 2014 Acquisitions as of December 31, 2015. The amounts recognized related to the 2014 Acquisitions, on a combined basis, for assets acquired and liabilities assumed are as follows (dollars in millions): Amounts Recognized as of Acquisition Date Measurement Period Adjustments As Adjusted Accounts receivable $ 26.7 $ (0.3 ) $ 26.4 Inventory 6.8 (0.2 ) 6.6 Deferred tax assets - current 1.8 0.6 2.4 Other current assets 3.1 (0.1 ) 3.0 Equipment and leasehold improvements 4.8 - 4.8 Deferred tax assets 8.2 - 8.2 Identifiable intangibles 61.4 - 61.4 Goodwill 34.9 5.9 40.8 Total Assets 147.7 5.9 153.6 Current liabilities 26.4 1.5 27.9 Other long-term liabilities 6.9 3.6 10.5 Total Liabilities 33.3 5.1 38.4 Total purchase price, less cash acquired $ 114.4 $ 0.8 $ 115.2 The 2014 Acquisitions on a combined basis increased consolidated revenues by $63.0 million and increased consolidated pre-tax income by $0.6 million for the year ended December 31, 2014. During the year ended December 31, 2015, two of the long-term care acquisitions were consolidated into existing pharmacies of the Corporation. Pro Forma Pro forma financial statements are not presented on the 2014 Acquisitions and 2015 Acquisitions as the results are not material to the Corporation's consolidated financial statements. Other For the years ended December 31, 2013, 2014 and 2015, the Corporation incurred $5.9 million, $13.3 million, and $20.5 million, respectively, of acquisition related costs, which have been classified as a component of merger, acquisition, integration costs and other related charges. PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) |
EQUIPMENT AND LEASEHOLD IMPROVE
EQUIPMENT AND LEASEHOLD IMPROVEMENTS | 12 Months Ended |
Dec. 31, 2015 | |
EQUIPMENT AND LEASEHOLD IMPROVEMENTS [Abstract] | |
EQUIPMENT AND LEASEHOLD IMPROVEMENTS | NOTE 3—EQUIPMENT AND LEASEHOLD IMPROVEMENTS Equipment and leasehold improvements consist of the following (dollars in millions): December 31, 2014 2015 Leasehold improvements $ 19.6 $ 20.4 Equipment and software 166.1 185.7 Construction in progress 10.7 12.4 196.4 218.5 Accumulated depreciation (125.0 ) (144.0 ) Total equipment and leasehold improvements $ 71.4 $ 74.5 Depreciation expense totaled $19.3 million, $20.3 million, and $23.1 million for the years ended December 31, 2013, 2014, and 2015, respectively. |
GOODWILL AND INTANGIBLES
GOODWILL AND INTANGIBLES | 12 Months Ended |
Dec. 31, 2015 | |
GOODWILL AND INTANGIBLES [Abstract] | |
GOODWILL AND INTANGIBLES | N OTE 4—GOODWILL AND INTANGIBLES The following table presents the changes in the carrying amount of goodwill for the years ended December 31, 2014 and 2015 (dollars in millions): Balance at December 31, 2013 as adjusted $ 282.8 Goodwill acquired from 2014 acquisitions, as adjusted 40.8 Balance at December 31, 2014, as adjusted 323.6 Goodwill acquired from 2015 acquisitions 47.4 Balance at December 31, 2015 $ 371.0 The following table presents the components of the Corporation's intangible assets (dollars in millions): Finite Lived Intangible Assets Balance at 2013 Additions Balance at 2014 Additions Balance at 2015 Customer relationships $ 121.2 $ 56.3 $ 177.5 $ 39.3 $ 216.8 Trade name 60.2 2.0 62.2 0.9 63.1 Non-compete agreements 16.8 3.1 19.9 1.0 20.9 Sub Total 198.2 61.4 259.6 41.2 300.8 Accumulated amortization (61.9 ) (20.1 ) (82.0 ) (28.6 ) (110.6 ) Net intangible assets $ 136.3 $ 41.3 $ 177.6 $ 12.6 $ 190.2 Amortization expense relating to finite-lived intangible assets was $15.4 million, $20.1 million, and $28.6 million for the years ended December 31, 2013, 2014 and 2015, respectively. Total estimated amortization expense for the Corporation's finite-lived intangible assets for the next five years and thereafter are as follows (dollars in millions): Year Ending December 31, 2016 $ 32.3 2017 30.6 2018 29.3 2019 25.7 2020 23.8 Thereafter 48.5 $ 190.2 |
CREDIT AGREEMENT
CREDIT AGREEMENT | 12 Months Ended |
Dec. 31, 2015 | |
CREDIT AGREEMENT [Abstract] | |
Credit Agreement | PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 5—CREDIT AGREEMENT On September 17, 2014, the Corporation entered into a credit agreement by and among the Corporation, the lenders named therein (the "Lenders"), Bank of America, N.A., as administrative agent, JP Morgan Chase Bank N.A., as syndication agent, and U.S. Bank, National Association, Citibank, N.A., MUFG Union Bank, N.A., BBVA Compass Bank and SunTrust Bank as co-documentation agents (the "Credit Agreement"). The Credit Agreement replaced the $450.0 million five-year credit agreement dated as of May 2, 2011, am As a result of the payoff of the Prior Credit Agreement, the Corporation recorded a loss on debt extinguishment of $4.3 million in the Consolidated Income Statements during the year ended December 31, 2014. The loss recorded consisted primarily of unamortized deferred financing fees associated with the Prior Credit Agreement. As of December 31, 2015, $219.4 million was outstanding under the term loan facility and $207.0 million was outstanding under the revolving credit facility. Indebtedness under the Credit Agreement matures on September 17, 2019, at which time the commitments of the Lenders to make revolving loans also expire. The table below summarizes the total outstanding debt of the Corporation (dollars in millions): December 31, 2014 December 31, 2015 Term Debt - payable to lenders at LIBOR plus applicable margin (2.42% as of December 31, 2015), matures September 17, 2019 $ 225.0 $ 219.4 Revolving Credit Facility payable to lenders, interest at LIBOR plus applicable margin (2.39% as of December 31, 2015), matures September 17, 2019 125.0 207.0 Capital lease obligations 0.7 0.9 Total debt 350.7 427.3 Less: Current portion of long-term debt 6.3 11.6 Total long-term debt $ 344.4 $ 415.7 The Corporation's indebtedness has the following maturities (dollars in millions): Year Ending December 31, Term Debt Revolving Credit Facility Capital Lease Obligations Total Maturities 2016 $ 11.3 $ - $ 0.3 $ 11.6 2017 11.3 - 0.3 11.6 2018 11.3 - 0.1 11.4 2019 185.5 207.0 0.1 392.6 2020 - - 0.1 0.1 $ 219.4 $ 207.0 $ 0.9 $ 427.3 The Credit Agreement provides for the issuance of letters of credit which, when issued, reduce availability under the revolving credit facility. The aggregate amount of letters of credit outstanding as of December 31, 2015 was $2.8 million. After giving effect to the letters of credit, total availability under the revolving credit facility was $100.2 million as of December 31, 2015. Borrowings under the Credit Agreement bear interest at a floating rate equal to, at the Corporation's option, a base rate plus a margin between 0.50% and 1.25% per annum, or a Eurodollar Rate plus a margin between 1.50% and 2.25% per annum, in each case depending on the leverage ratio of the Corporation as defined by the Credit Agreement. The base rate is the greater of the prime lending rate in effect on such day, the federal funds effective rate plus 0.5%, and the Eurodollar Rate plus 1.0%. The Credit Agreement also provides for letter of credit fees between 1.50% and 2.50% on the letter of credit exposure, depending on the leverage ratio of the Corporation, and 0.125% on the actual daily amount available to be drawn under such letter of credit. The Corporation will also pay fronting fees on the aggregate letter of credit exposure at a rate separately agreed upon between the Corporation and the issuing bank. The Credit Agreement also provides for a commitment fee payable on the unused portion of the revolving credit facility, which shall accrue at a rate per annum ranging from 0.25% to 0.35%, depending on the leverage ratio of the Corporation. The Credit Agreement contains customary affirmative and negative covenants, as well as customary events of default. The Credit Agreement also requires the Corporation to satisfy an interest coverage ratio and a leverage ratio. The interest charge coverage ratio as of the last day of any fiscal quarter can be no less than: 3.00: 1.00 1.00 The obligations under the Credit Agreement are guaranteed by certain domestic subsidiaries of the Corporation and secured by liens on substantially all of the Corporation's assets. Deferred Financing Fees The Corporation capitalized a total of $2.7 million in deferred financing fees associated with the Credit Agreement and recorded them as other long-term assets in the accompanying consolidated balance sheets. As of December 31, 2015, the Corporation had $2.0 million of unamortized deferred financing fees. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Commitments and Contingencies | PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 6—COMMITMENTS AND CONTINGENCIES Legal Action and Regulatory The Corporation maintains liabilities for certain of its outstanding investigations and litigation. In accordance with the provisions of U.S. GAAP for contingencies, the Corporation records a liability when it is probable that such a liability has been incurred and the amount of the loss can be reasonably estimated. To the extent that the resolution of contingencies result in actual losses that differ from the Corporation's recorded liabilities, earnings will be charged or credited accordingly. The Corporation cannot know the ultimate outcome of the pending matters described below, and there can be no assurance that the resolution of these matters will not have a material adverse impact on the Corporation's consolidated results of operations, financial position or cash flows. As a part of its ongoing operations, the Corporation is subject to various inspections, audits, inquiries, investigations and similar actions by third parties, as well as by government/regulatory authorities responsible for enforcing the laws and regulations to which the Corporation is subject. Further, under the federal False Claims Act, private parties have the right to bring qui tam, or "whistleblower," suits against companies that submit false claims for payments to, or improperly retain overpayments from, the government. The inherently unpredictable nature of legal proceedings may be impacted by various factors, including: (i) the damages sought in the proceedings are unsubstantiated or indeterminate; (ii) discovery is not complete; (iii) the proceeding is in its early stages; (iv) the matters present legal uncertainties; (v) significant facts are in dispute; (vi) a large number of parties are participating in the proceedings (including where it is uncertain how liability, if any, will be shared among defendants); or (vii) the proceedings present a wide range of potential outcomes. The Corporation is the subject of certain investigations and is a defendant in a number of cases, including those discussed below. On June 10, 2013, the United States District Court In connection with the settlement of this matter, the Corporation also entered into a Corporate Integrity Agreement ("CIA") with the Department of Health and Human Services Office of the Inspector General ("OIG") with a term of five years from May 11, 2015. Pursuant to the CIA, the Corporation is required, among other things, to (i) create procedures designed to ensure that it complies with the CSA and related regulations; (ii) retain an independent review organization to review the Corporation's compliance with the terms of the CIA and report to OIG regarding that compliance; and (iii) provide training for certain Corporation employees and the Board of Directors as to the Corporation's requirements under the CSA. The requirements of the CIA will result in increased costs to maintain the Corporation's compliance program and greater scrutiny by federal regulatory authorities. Violations of the CIA could subject the Corporation to significant monetary penalties. On October 29, 2013, a complaint was filed in the United States District Court for the Southern District of Florida by Pines Nursing Homes (77), Inc. as a putative class action against the Corporation. The complaint alleged that the Corporation sent unsolicited advertisements promoting the Corporation's goods or services by facsimile to individuals or entities, and that such communications did not include an opt-out clause, all in violation of the federal Telephone Consumer Protection Act ("TCPA"). The Complaint did not specify the amount of damages sought, but the TCPA provides a statutory remedy of $500 per facsimile communication sent in violation of the statute, which may be trebled in the event of a willful violation. On August 18, 2014, the Corporation entered into a Settlement Agreement with the putative class and class counsel resolving all claims raised in the complaint. The parties moved on September 8, 2014 for, among other things, certification of the putative class for the purposes of effectuating the settlement and preliminary approval of the parties' settlement. On June 26, 2015, the Court granted preliminary approval of the settlement and the Court approved the settlement on November 12, 2015. The matter is concluded. On November 20, 2013, the complaint filed by a relator, Robert Gadbois, on behalf of the U.S. Government and various state governments, was unsealed by the United States District Court for the District of Rhode Island against the Corporation alleging that the Corporation dispensed controlled and non-controlled substances in violation of the CSA and the dispenses were not eligible for payment and that the claims the Corporation submitted to the Government were false within the meaning of the FCA. The U.S. Government and the various state governments declined to intervene in this case. On March 4, 2011, a relator, Mark Silver, on behalf of the U.S. Government and various state governments, filed a complaint in the United States District Court for the District of New Jersey against the Corporation alleging that the Corporation violated the FCA and Federal Anti-Kickback Statute through its agreements to provide prescription drugs to nursing homes under certain Medicare and Medicaid programs. On February 19, 2013, the U.S. Government declined to intervene in the case. The complaint has been amended several times, most recently on November 12, 2013, and thereafter served upon the Corporation. On December 6, 2013, the Corporation moved to dismiss the amended complaint for failure to state a claim upon which relief may be granted and on September 29, 2014, the court declined to dismiss the case, but limited the relevant time period for which claims could be brought against the Corporation. On December 22, 2015, Silver and the Corporation filed a joint motion with the court for an order dismissing with prejudice all successor liability claims against the Corporation for or regarding the conduct of Chem Rx Corporation. The court has not yet ruled on the motion or entered the order of dismissal. PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 6—COMMITMENTS AND CONTINGENCIES (Continued) On January 31, 2014, a relator, Frank Kurnik, on behalf of the U.S. Government and various state governments served its complaint filed in the United States District for the District of South Carolina alleging that the Corporation solicited and received remuneration in violation of the Federal Anti-Kickback Statute from drug manufacturer Amgen in exchange for preferring and promoting Amgen's drug Aranesp over a competing drug called Procrit. The Complaint was served on the Corporation on January 31, 2014 and subsequently amended on April 24, 2014. The U.S. Government has declined to intervene in the case. The Corporation's motion to dismiss the case was denied by the Court on July 24, 2014. The Court of Appeals affirmed the trial court's decision. On January 13, 2015, the Corporation again moved to dismiss the complaint and on March 23, 2015, the second motion was denied. On April 2, 2015, the Corporation moved the court to reconsider its denial of the second motion to dismiss and that motion was denied. On December 2, 2015, the Corporation and the Department of Justice settled this matter for $2.5 million plus the relator's attorney fees of approximately $2.0 million which was previously accrued for in the consolidated balance sheets of the Corporation. The U.S. Department of Justice, through the U.S. Attorney's Office for the Western District of Virginia, investigated whether the Corporation's activities in connection with the agreements it had with the manufacturer of the pharmaceutical Depakote violated the False Claims Act or the Anti-Kickback Statute. The Corporation cooperated with this investigation and believes that it has complied with applicable laws and regulations with respect to this matter. On May 29, 2014, the United States District Court for the Western District of Virginia entered an order unsealing two previously partially sealed qui tam complaints, entitled United States, et al., ex rel. Spetter v. Abbott Laboratories. Inc., Omnicare, Inc., and PharMerica Corp., No. 1:07-cv-00006 and United States, et al., ex rel. McCoyd v. Abbott Laboratories, Omnicare, Inc., PharMerica Corp., and Miles White, No. 1:07-cv-0008. The Corporation entered into a settlement agreement on October 6, 2015 with the Government including the Department of Justice, with approvals from the National Association of Medicaid Fraud Control and the Department of Health and Human Services Office of Inspector General. In the settlement, the Corporation agreed to pay $9.2 million to resolve the matter. On September 10, 2014, the Corporation filed a Complaint in Jefferson Circuit Court in Louisville, Kentucky against ABDC for failure of ABDC to comply with certain pricing and rebate provisions of the Previous PVA. The Corporation subsequently filed a First Amended Verified Complaint on September 26, 2014 asserting additional breaches of the Previous PVA . As a result of ABDC's failure to comply with certain pricing and rebate provisions, the Corporation had recorded a receivable of $40.8 million related to these disputes at December 31, 2014. Separately, as of December 31, 2014, the Corporation had recorded $12.2 million for additional rebates owing from ABDC which at that time the Corporation believed were not in dispute and had previously been paid by ABDC in all the prior quarters. These receivables totaled $53.0 million and were included in prepaids and other assets in the accompanying consolidated balance sheet as of December 31, 2014. During the period of January 1, 2015 through March 31, 2015, an additional $19.3 million, net of payments received, of certain rebates and guarantees owed by ABDC under the Previous PVA were recognized, which brought the total gross receivable to $72.3 million at December 31, 2015. On March, 2, 2015, the Corporation notified ABDC of its intent to terminate the Previous PVA effective April 1, 2015. The Corporation also announced that it had entered into the Cardinal Health PVA effective April 1, 2015. On March 3, 2015, the Corporation received a letter from ABDC terminating the Previous PVA effective immediately based upon the Corporation's alleged failure to pay certain disputed miscellaneous charges and the Corporation's signing of the Cardinal Health PVA. The Corporation believes ABDC did not have the right to immediately terminate the contract pursuant to the terms of the Previous PVA. On March 6 and March 13, 2015, the Corporation withheld from ABDC normal recurring payments for drug purchases of approximately $48.8 million. On May 18, 2015, ABDC filed an Amended Counterclaim seeking additional financial damages against the Corporation and asserted claims against two counter-defendants. On November 23, 2015, the Corporation filed its Third Amended Complaint against ABDC for additional financial damages, amounts overcharged by ABDC, and for certain rebates not paid by ABDC under the Previous PVA. The following table represents all receivables, whether previously disputed or not, due and owing from ABDC at December 31, 2015 and the related amounts allegedly payable to ABDC of $48.8 million, which have been offset resulting in a net receivable at December 31, 2015 of $23.5 million. This net receivable is included in other long-term assets in the accompanying consolidated balance sheet as of December 31, 2015. PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 6—COMMITMENTS AND CONTINGENCIES (Continued) Presented in the consolidated balance sheet, the following amounts are recorded as of December 31, 2015 (dollars in millions): Description Gross Amount of Recognized Asset Gross Liability Offset in the Consolidated Balance Sheet Net Amount of Asset Presented in the Consolidated Balance Sheet Rebates & Other Receivables (long-term) $ 72.3 $ (48.8 ) $ 23.5 Total $ 72.3 $ (48.8 ) $ 23.5 The Corporation has claims for additional damages resulting from ABDC's breaches of the Previous PVA. The Corporation intends to vigorously pursue its claims. At this time, the Corporation is unable to determine the ultimate impact of these litigation proceedings on its consolidated financial condition, results of operations, or liquidity. The litigation with ABDC could continue for an extended period of time, likely longer than 12 months. The Corporation cannot provide any assurances about the outcome of the litigation. In addition, the Corporation is involved in certain legal actions and regulatory investigations arising in the ordinary course of business. At December 31, 2015, the Corporation had accrued approximately $28.0 million related to the pending legal actions and investigations. California Medicaid On August 14, 2013, the California Department of Health Care Service ("DHCS") announced its intent to implement a ten (10) percent reimbursement reduction for numerous healthcare providers, including long term care pharmacies, retroactive to June 1, 2011. The Corporation estimated its total liability to be approximately $3.3 million which was recorded as a reduction to revenue in the third quarter of 2013. The DHCS implemented the reduction prospectively beginning in the first quarter of 2014; however, the price reduction retroactive to June 1, 2011 was not implemented until the fourth quarter of 2015. The Corporation had overestimated the retroactive component of the recoupment and therefore, $2.5 million of the original accrual was reversed in the fourth quarter of 2015. Leases The Corporation leases real estate properties, buildings, vehicles, and equipment under cancelable and non-cancelable leases. The leases expire at various times and have various renewal options. Certain leases that meet the lease capitalization criteria have been recorded as an asset and liability at the net present value of the minimum lease payments at the inception of the lease. Interest rates used in computing the net present value of the lease payments are based on the Corporation's incremental borrowing rate at the inception of the lease. The Corporation recorded the following lease expense for the periods presented (dollars in millions): 2013 2014 2015 Pharmacy locations and administrative offices lease expense $ 15.2 $ 15.8 $ 15.8 Office equipment lease expense 2.1 2.3 2.4 Total lease expense $ 17.3 $ 18.1 $ 18.2 Future minimum lease payments for those leases having an initial or remaining non-cancelable lease term in excess of one year are as follows for the years indicated (dollars in millions): Year Ending December 31, Operating Leases Capital Lease Obligations Total 2016 $ 18.8 $ 0.3 $ 19.1 2017 18.3 0.3 18.6 2018 16.3 0.1 16.4 2019 10.2 0.1 10.3 2020 10.2 0.1 10.3 Thereafter 6.9 - 6.9 Total $ 80.7 $ 0.9 $ 81.6 |
MERGER, ACQUISITION, INTEGRATIO
MERGER, ACQUISITION, INTEGRATION COSTS AND OTHER CHARGES | 12 Months Ended |
Dec. 31, 2015 | |
MERGER, ACQUISITION, INTEGRATION COSTS AND OTHER CHARGES [Abstract] | |
Merger, Acquisition, Integration Costs and Other Charges | PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Merger, acquisition, integration costs and other charges were $8.1 million, $13.6 million and $21.3 million for the years ended December 31, 2013, 2014 and 2015, respectively. These costs primarily relate to costs incurred prior to an acquisition such as professional advisory fees and the costs associated with integrating completed acquisitions into our business, such as IT transition and facility related costs. |
RESTRUCTURING COSTS AND OTHER C
RESTRUCTURING COSTS AND OTHER CHARGES | 12 Months Ended |
Dec. 31, 2015 | |
RESTRUCTURING COSTS AND OTHER CHARGES [Abstract] | |
RESTRUCTURING COSTS AND OTHER CHARGES | NOTE 8-RESTRUCTURING COSTS AND OTHER CHARGES In July 2013, the Corporation commenced the implementation of its restructuring plan as a result of the loss of two of the Corporation's significant customers, Kindred and Golden Living. The plan was a major initiative primarily designed to optimize operational efficiency while ensuring that the Corporation remains well-positioned to serve its clients and achieve sustainable, long-term growth. The Corporation's restructuring plan included steps to right size its cost structure by adjusting its workforce and facility plans to reflect anticipated business needs. In addition, in the year ended December 31, 2015, the Corporation began a restructuring and centralization initiative related to its specialty pharmacy business. The initiative is not expected to be material to the financial statements. The Corporation recorded restructuring costs and other related charges of approximately $4.4 million, $3.3 million and $0.5 million during the years ended December 31,2013, 2014, and 2015, respectively. The restructuring charges primarily included severance pay, the buy-out of employment agreements, lease terminations, and other exit-related asset disposals, professional fees and facility exit costs. The following table presents the components of the Corporation's restructuring liability (dollars in millions): Balance at December 31, 2014 Accrual Utilized Amounts Balance at December 31, 2015 Employee Severance and related costs $ 0.3 $ 0.3 $ (0.3 ) $ 0.3 Facility costs 1.1 0.2 (0.6 ) 0.7 $ 1.4 $ 0.5 $ (0.9 ) $ 1.0 The liability at December 31, 2015 represents amounts not yet paid relating to actions taken in connection with the program (primarily lease payments and severance costs). |
HURRICANE SANDY DISASTER COSTS
HURRICANE SANDY DISASTER COSTS | 12 Months Ended |
Dec. 31, 2015 | |
HURRICANE SANDY DISASTER COSTS [Abstract] | |
Hurricane Sandy Disaster Costs | NOTE 9—HURRICANE SANDY DISASTER COSTS (RECOVERIES) In October 2012, Hurricane Sandy caused significant damage on Long Island, New York and surrounding areas. The financial impacts of the storm to the Corporation's Long Beach facility as well as damage and disruption at the Corporation's customers' facilities have been recorded as a separate component in the consolidated income statements. For the years ended December 31, 2013, 2014 and 2015, Hurricane Sandy disaster costs (recoveries) were $(1.4) million, $(1.7) million, and $(4.9) million, respectively. The Corporation has recovered certain losses associated with Hurricane Sandy from the insurance carrier, and settled both losses and the business interruption portion of its insurance claim during the year ended December 31, 2015. The Corporation's settlement of covered losses was equal to $6.9 million for business interruption and $5.3 million for other losses. After consideration of a $7.2 million advance by the insurance carrier, the Corporation received a final payment of $5.0 million. During the year ended December 31, 2015, the Corporation realized $4.9 million as income which is shown in the Hurricane Sandy disaster costs line item of the consolidated income statement for the year ended December 31, 2015. The cash payment is shown on the consolidated cash flow statement in both operating and investing cash flows, recognizing the amounts that were reimbursed related to the fixed asset losses in investing activities. |
COMMON STOCK, PREFERRED STOCK,
COMMON STOCK, PREFERRED STOCK, TREASURY STOCK, STOCK-BASED COMPENSATION AND OTHER BENEFITS | 12 Months Ended |
Dec. 31, 2015 | |
COMMON STOCK, PREFERRED STOCK, TREASURY STOCK, STOCK-BASED COMPENSATION AND OTHER BENEFITS [Abstract] | |
Common Stock, Preferred Stock, Treasury Stock, Stock-Based Compensation and Other Benefits | PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Common Stock Holders of the Corporation's common stock are entitled to one vote for each share held of record on all matters on which stockholders may vote. There are no preemptive, conversion, redemption or sinking fund provisions applicable to the Corporation's common stock. In the event of liquidation, dissolution or winding up, holders of common stock are entitled to share ratably in the assets available for distribution, subject to any prior rights of any holders of preferred stock then outstanding. In addition, the Corporation's Credit Agreement imposes restrictions on its ability to pay cash dividends. Preferred Stock The certificate of incorporation authorizes the issuance of an aggregate of 1,000,000 million shares of preferred stock. On August 25, 2011, the Board of Directors designated 175,000 shares of preferred stock as Series A Junior Participating Preferred Stock ("Series A Junior Preferred Stock"). As of December 31, 2015, there were no shares of preferred stock outstanding. The Series A Junior Preferred Stock is entitled to receive quarterly cumulative dividends in an amount per whole share equal to the greater of $10.00 or 1,000 times the dividends declared on the Common Stock since the preceding quarterly dividend payment date, or with respect to the first quarterly dividend payment date, since the date of issuance, and a liquidation preference of a minimum of $10.00 per whole share, plus an amount equal to any accrued dividends and distributions thereon, whether or not declared, to the date of payment, and will be entitled to an aggregate payment per whole share equal to1,000 times the amount per share distributed to the holders of Common Stock. Holders of Series A Junior Preferred Stock are entitled to vote on each matter on which holders of Common Stock are entitled to vote, and have 1,000 votes per whole share. The preferred stockholders also are entitled to certain corporate governance and special voting rights, as defined in the certificate of designation. The Corporation's Board of Directors may, from time to time, direct the issuance of shares of preferred stock in series and may, at the time of issuance, determine the designation, powers, rights, preferences and limitations of each series. Satisfaction of any dividend preferences of outstanding preferred stock would reduce the amount of funds available for the payment of dividends on the Corporation's shares of common stock. Holders of preferred stock may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up of the Corporation before any payment is made to the holders of the Corporation's common stock. Under certain circumstances, the issuance of preferred stock may render more difficult or tend to discourage a merger, tender offer or proxy contest, the assumption of control by a holder of a large block of the Corporation's securities or the removal of incumbent management. The Board of Directors may issue shares of preferred stock with voting and conversion rights that could adversely affect the holders of common stock. Specifically, the Corporation's certificate of incorporation authorizes the Corporation's Board of Directors to adopt a rights plan without stockholder approval. This could delay or prevent a change in control of the Corporation or the removal of existing management. Treasury Stock Purchases In August 2010, the Board of Directors authorized a share repurchase of up to $25.0 million of the Corporation's common stock, of which $10.5 million was used. On July 2, 2012 the Board of Directors authorized an increase to the remaining portion of the existing stock repurchase program that allows the Corporation to repurchase up to a maximum of $25.0 million of the Corporation's common stock. Approximately $19.7 million remained available under the program as of December 31, 2015. Share repurchases under this authorization may be made in the open market through unsolicited or solicited privately negotiated transactions, or in such other appropriate manner, and may be funded from available cash or the revolving credit facility. The amount and timing of the repurchases, if any, would be determined by the Corporation's management and would depend on a variety of factors including price, corporate and regulatory requirements, capital availability and other market conditions. Common stock acquired through the share repurchase program would be held as treasury shares and may be used for general corporate purposes, including reissuances in connection with acquisitions, employee stock option exercises or other employee stock plans. The stock repurchase program does not have an expiration date and may be limited, terminated or extended at any time without prior notice. During the year ended December 31, 2015, the Corporation repurchased no shares of common stock. The Corporation may redeem shares from employees upon the vesting of the Corporation's stock awards for minimum statutory tax withholding purposes and to cover option exercise costs. The Corporation redeemed 159,570 shares of certain vested awards and exercise of certain stock options for an aggregate price of approximately $4.3 million during year ended December 31, 2015. These shares have also been designated by the Corporation as treasury stock. As of December 31, 2015, the Corporation had a total of 2,776,875 shares held as treasury stock. PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 10—COMMON STOCK, PREFERRED STOCK, TREASURY STOCK, STOCK-BASED COMPENSATION AND OTHER BENEFITS (Continued) 2015 Omnibus Incentive Plan Effective April 29, 2015, the Corporation adopted the PharMerica Corporation 2015 Omnibus Incentive Plan (the "Omnibus Plan") under which the Corporation is authorized to grant equity-based and other awards to its employees, officers, directors, and consultants. The Omnibus Plan replaced the Amended and Restated PharMerica Corporation 2007 Omnibus Incentive Plan (the "Prior Plan"). The Corporation has reserved 2,000,000 shares of its common stock for awards to be granted under the Omnibus Plan, subject to certain increases and reductions for grants under the Prior Plan. The following shares shall be added back to the number of shares available for grant under the Omnibus Plan: (i) shares covered by an award that expire or are forfeited, canceled, surrendered, or otherwise terminated without the issuance of such shares; (ii) shares covered by an award that are settled only in cash; and (iii) shares withheld by the Corporation or any subsidiary to satisfy a tax withholding obligation with respect to full value awards granted pursuant to the Omnibus Plan. However, shares surrendered for the payment of the exercise price under stock options (or options outstanding under the Prior Plan), shares repurchased by us with option proceeds (or option proceeds under the Prior Plan), and shares withheld for taxes upon exercise or vesting of an award other than a full value award (or an award other than a full value award under the Prior Plan), will not again be available for issuance under the Omnibus Plan. In addition, if a stock appreciation right ("SAR") (or SAR under the Prior Plan) is exercised and settled in shares, all of the shares underlying the SAR will be counted against the Omnibus Plan limit regardless of the number of shares used to settle the SAR. The Omnibus Plan provides for certain limits on issuances of certain types of awards and awards to certain recipients. The Omnibus Plan prohibits share recycling for stock options and stock appreciation rights, meaning that shares used to pay the exercise price or tax withholding for those awards are not added back to the share reserve. The Corporation's Compensation Committee administers the Omnibus Plan and has the authority to determine the recipient of the awards, the types of awards, the number of shares covered, and the terms and conditions of the awards. The Omnibus Plan allows for grants of incentive stock options, non-qualified stock options, stock appreciation rights, restricted share and restricted stock units, deferred shares, performance awards, including cash bonus awards, and other stock-based awards. The Corporation's Compensation Committee may condition the vesting, exercise or settlement of any award upon the achievement of one or more performance objectives. Stock options granted to officers and employees under the Omnibus Plan generally vest in four equal annual installments and have a term of seven years. The restricted stock units granted to officers generally vest in three equal annual installments. The restricted stock units granted to members of the Board of Directors vest in one annual installment. The performance share units granted under the Omnibus Plan vest based upon the achievement of a target amount of the Corporation's adjusted earnings before interest, income taxes, depreciation and amortization, which reinforces the importance of achieving the Corporation's profitability objectives. The performance is generally measured over a three-year period. As of December 31, 2015, total shares available for grants of stock-based awards pursuant to the Omnibus Plan were 1,817,038 shares. Stock-Based Compensation Expense The following is a summary of stock-based compensation incurred by the Corporation (dollars in millions, except per share amounts): 2013 2014 2015 Stock option compensation expense $ 1.0 $ 0.6 $ 0.1 Nonvested stock compensation expense 6.2 6.8 7.5 Total Stock Compensation Expense $ 7.2 $ 7.4 $ 7.6 Effect on diluted earnings per share $ (0.15 ) $ (0.15 ) $ (0.15 ) As of December 31, 2015, there was $10.2 million of total unrecognized compensation cost related to the Corporation's stock compensation arrangements. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 10—COMMON STOCK, PREFERRED STOCK, TREASURY STOCK, STOCK-BASED COMPENSATION AND OTHER BENEFITS (Continued) Stock Option Activity The Corporation did not issue stock options during the years ended December 31, 2014 or December 31, 2015. The following table summarizes option activity for the periods presented: Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Term Aggregate Intrinsic Value (in millions) Outstanding options at December 31, 2014 913,209 $ 14.62 2.1 years $ 5.6 Exercised (149,314 ) 15.28 Canceled (124,851 ) 11.74 Expired (303 ) 13.42 Outstanding options at December 31, 2015 638,741 $ 14.34 1.3 years $ 13.2 Exercisable options at December 31, 2015 638,741 $ 14.34 1.3 years $ 13.2 The total intrinsic value of stock options exercised for the years ended December 31, 2013, 2014, and 2015 was $3.5 million, $1.6 million, and $1.3 million, respectively. Cash received from stock option exercises during the year ended December 31, 2015 was $0.8 million. The total fair value of options vested for the years ended December 31, 2013, 2014, and 2015 was $1.6 million, $0.9 million, and $0.4 million, respectively. The Corporation fully recognized stock-based compensation expense for all stock options awarded. Nonvested Shares The following table summarizes nonvested share activity for the periods presented: Number of Shares Weighted- Average Grant Date Fair Value Outstanding shares at December 31, 2014 942,021 $ 18.00 Granted - Restricted Stock Units 172,097 28.88 Granted - Performance Share Units 156,309 26.62 Forfeited (6,929 ) 22.58 Vested (362,632 ) 16.23 Outstanding shares at December 31, 2015 900,866 $ 22.26 The total fair value of shares vested for the years ended December 31, 2013, 2014, and 2015 was $5.1 million, $6.0 million, and $5.9 million, respectively. The weighted average remaining term and intrinsic value of nonvested shares at December 31, 2015 was 2.6 years and $31.5 million, respectively. The Corporation expects to recognize stock based compensation expense of $10.2 million for nonvested shares over a weighted average period of approximately 2.4 years. Based upon the achievement of the performance criteria at the end of the performance cycle for the performance share units issued to date, the Corporation may issue no shares or a maximum of 685,176 shares. 401(k) Plan The Corporation sponsors a salary reduction plan qualified under Section 401(k) of the Internal Revenue Code with a safe harbor matching contribution for all eligible employees, as defined in the plan document. Contributions to the plan are based upon employee contributions and the Corporation's matching contributions. For the years ended December 31, 2013, 2014, and 2015, the Corporation's matching contributions to the plan were $5.9 million, $5.8 million, and $6.3 million, respectively. PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 10—COMMON STOCK, PREFERRED STOCK, TREASURY STOCK, STOCK-BASED COMPENSATION AND OTHER BENEFITS (Continued) The Corporation maintains a deferred compensation plan for certain management and highly compensated employees. Under the plan, a participant may elect to defer up to 50% of such participant's annual base salary and up to 100% of such participant's annual short-term incentive program cash bonus into the plan during each plan year. The Corporation also maintains a deferred compensation plan for the directors of the Corporation. The directors of the Corporation may elect to defer up to 100% of their cash fees and their stock fees in any one year. If a director elects to defer his/her restricted share grant, the shares will be deferred as they vest until the participant elects for the deferred compensation to be a taxable event. As of December 31, 2014 and 2015, the Corporation had $8.0 million and $8.2 million, respectively, recognized as a long-term liability related to the deferred compensation plans in the accompanying consolidated balance sheets. Deferred compensation expense was $1.5 million, $0.7 million and $0.2 million for the years ended December 31, 2013, 2014, and 2015, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES [Abstract] | |
Income Taxes | NOTE 11—INCOME TAXES The provision for income taxes is based upon the Corporation's annual income or loss before income taxes for each respective accounting period. The following table summarizes the Corporation's provision for income taxes for the periods presented (dollars in millions): 2013 2014 2015 Current provision: Federal $ 13.0 $ 10.4 $ 6.7 State 1.3 1.3 1.4 Total 14.3 11.7 8.1 Deferred provision (benefit): Federal 4.8 (2.1 ) 5.1 State 7.2 (0.2 ) (1.1 ) Total 12.0 (2.3 ) 4.0 Total provision for income taxes $ 26.3 $ 9.4 $ 12.1 A reconciliation of the U.S. statutory rate to the Corporation's effective tax rate is as follows for the years ended December 31: 2013 2014 2015 U.S. statutory rate applied to pretax income 35.0 % 35.0 % 35.0 % Differential arising from: State taxes 4.3 5.1 3.2 Non-deductible legal expenses 14.8 31.3 3.3 Deductible legal expenses - - (19.4 ) Domestic Production Activities Deduction (2.9 ) (7.1 ) (1.0 ) Stock compensation 2.6 - - 162(m) compensation 0.3 1.2 1.9 Valuation allowances 7.0 0.2 (0.6 ) Federal and state tax true-ups (2.3 ) (8.2 ) 0.9 Research and development credits - (1.5 ) (0.6 ) Other (0.6 ) 2.0 3.0 Effective tax rate 58.2 % 58.0 % 25.7 % The effective tax rates in 2014 are higher than the federal statutory rate largely as a result of the combined impact of state and local taxes and various non-deductible expenses. Conversely, the effective tax rate in 2015 is lower than the federal statutory rate largely as a result of the impact of deductible legal expenses. The effective tax rate decreased from 2014 to 2015. The change in the Corporation's opinion on the deductibility of legal expenses after consulting with third party experts between years is the primary driver of this decrease. The deductible legal expenses relate to settlements entered into with the Department of Justice. These settlements were treated as nondeductible when accrued in 2014. In 2015, the settlement process has been completed and the Corporation has concluded the expenses are deductible. The decrease in the Domestic Production Activities Deduction was a direct result of the legal settlements being deductible in 2015 and other favorable timing differences. While the dollar amount of the research credit in 2015 remained comparable to 2014, the rate impact of the research credit was diluted by the increased pre-tax book income in 2015 as compared to 2014. The increase in pre-tax book income in 2015 as compared to 2014 of $31.0 million is directly related to the significant amount of legal expenses incurred in 2014 of $28.5 million. The Corporation derives a current federal and state income tax benefit from the impact of deductions associated with the amortization of tax deductible goodwill acquired through business combinations. The tax basis of the Corporation's tax deductible goodwill was approximately $146.3 million (as adjusted) and $171.1 million at December 31, 2014 and 2015, respectively. PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) As a result of a corporate restructuring that was implemented on January 1, 2014, separate company state taxable income was significantly reduced. This reduction in separate company state taxable income impacted the Corporation's analysis of the realizability of separate company net operating loss carryforwards. The Corporation recognized net deferred tax assets totaling $27.1 million and $21.1 million at December 31, 2014 (as adjusted) and 2015, net of valuation allowances of $4.1 million and $3.8 million, respectively. Current deferred income taxes consisted of (dollars in millions): December 31, 2014 December 31, 2015 Assets Liabilities Assets Liabilities Accrued expenses $ 7.7 $ - $ 7.5 $ - Allowance for doubtful accounts 22.9 - 18.4 - Net operating losses - - - - Other 14.2 - 19.0 0.8 Valuation allowance (2.0 ) - (2.3 ) - Total current deferred taxes $ 42.8 $ - $ 42.6 $ 0.8 Current deferred taxes, net $ 42.8 $ 41.8 Noncurrent deferred income taxes consisted of (dollars in millions): December 31, 2014 December 31, 2015 Assets Liabilities Assets Liabilities Accelerated depreciation $ - $ 11.4 $ - $ 13.1 Stock-based compensation 4.6 - 4.8 - Goodwill and intangibles - 33.0 - 33.9 Net operating losses 17.1 - 15.2 - Other 9.1 - 9.7 1.9 Valuation allowances (2.1 ) - (1.5 ) - Total noncurrent deferred taxes $ 28.7 $ 44.4 $ 28.2 $ 48.9 Noncurrent deferred taxes, net $ 15.7 $ 20.7 As of December 31, 2014 and December 31, 2015, the Corporation had no reserves recorded as a liability for unrecognized tax benefits for U.S. federal and state tax jurisdictions. There were no unrecognized tax benefits at December 31, 2015 that, if recognized, would affect the tax rate. It is the Corporation's policy to accrue interest and penalties related to liabilities for income tax contingencies in the provision for income taxes. As of December 31, 2015, the Corporation had no accrued interest or penalties related to uncertain tax positions. The federal statute of limitations remains open for tax years 2012 through 2014. The IRS completed its audit of the Corporation's consolidated U.S. income tax returns for 2010 and 2011 in February 2014 and the Corporation has not been notified of any additional IRS tax audits. State tax jurisdictions generally have statutes of limitations ranging from three to five years. The Corporation is no longer subject to state and local income tax examinations by tax authorities for years before 2010. The state income tax impact of federal income tax changes remains subject to examination by various states for a period of up to one year after formal notification of IRS settlement to the states. During 2015, the New York Department of Taxation and Finance closed its audit on the Corporation's 2010-2013 tax returns that resulted in an immaterial amount of additional tax, penalties and interest which has been accounted for in the current year tax provision. One of the company's subsidiaries is currently under exam by the state of Tennessee. PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 12—EARNINGS PER SHARE |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2015 | |
EARNINGS PER SHARE [Abstract] | |
Earnings Per Share | The following table sets forth the computation using the treasury share method of basic and diluted earnings per share (dollars in millions, except per share amounts): 2013 2014 2015 Numerator: Numerator for basic and earnings per diluted share - net income $ 18.9 $ 6.8 $ 35.1 Denominator: Denominator for basic earnings per share - weighted average shares 29,601,199 29,983,428 30,363,588 Effect of dilutive securities (stock options, restricted stock units and performance share units) 474,500 665,703 403,778 Denominator for earnings per diluted share - adjusted weighted average shares 30,075,699 30,649,131 30,767,366 Basic earnings per share $ 0.64 $ 0.23 $ 1.16 Earnings per diluted share $ 0.63 $ 0.22 $ 1.14 Unexercised employee stock options, unvested restricted shares and performance shares excluded from the effect of dilutive securities above (a) 1,417,272 340,291 291,679 (a) These unexercised employee stock options, unvested restricted shares and performance shares that have not yet met performance conditions are not included in the computation of diluted earnings per share because to do so would be anti-dilutive for the periods presented. Stock options and restricted shares and units granted by the Corporation are treated as potential common shares outstanding in computing earnings per diluted share. Performance share units are treated as potential common shares outstanding in computing earnings per diluted share only when the performance conditions are met. Common shares repurchased by the Corporation reduce the number of basic shares used in the denominator for basic and diluted earnings per share. |
UNAUDITED QUARTERLY FINANCIAL I
UNAUDITED QUARTERLY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
UNAUDITED QUARTERLY FINANCIAL INFORMATION [Abstract] | |
Unaudited Quarterly Financial Information | NOTE 13—UNAUDITED QUARTERLY FINANCIAL INFORMATION The quarterly interim information shown below has been prepared by the Corporation's management and is unaudited. It should be read in conjunction with the audited consolidated financial statements appearing herein (dollars in millions, except per share amounts). 2014 Quarters 2015 First Second Third Fourth First Second Third Fourth Revenue $ 452.2 $ 448.6 $ 470.2 $ 523.5 $ 511.6 $ 497.5 $ 498.8 $ 520.6 Cost of goods sold 372.2 366.7 387.2 429.1 423.0 416.3 420.2 433.9 Gross profit $ 80.0 $ 81.9 $ 83.0 $ 94.4 $ 88.6 $ 81.2 $ 78.6 $ 86.7 Operating income (loss) $ 10.3 $ (9.7 ) $ 17.1 $ 12.7 $ 16.8 $ 8.5 $ 8.5 $ 20.0 Net income (loss) $ 4.8 $ (9.7 ) $ 8.5 (1) $ 3.2 $ 9.6 $ 2.3 $ 3.0 $ 20.2 Earnings (loss) per common share: Basic $ 0.16 $ (0.32 ) $ 0.28 $ 0.11 $ 0.32 $ 0.08 $ 0.10 $ 0.66 Diluted $ 0.16 $ (0.32 ) $ 0.28 $ 0.10 $ 0.31 $ 0.07 $ 0.10 $ 0.66 Shares used in computing earnings (loss) per common share: Basic 29.8 30.0 30.1 30.1 30.2 30.4 30.4 30.4 Diluted 30.4 30.0 30.6 30.7 30.7 30.8 30.9 31.0 (1) During the third quarter 2014, the Corporation recognized a $4.3 million loss on extinguishment of debt. |
ORGANIZATION AND SUMMARY OF S20
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Nature of Business | Nature of Business PharMerica Corporation together with its subsidiaries, (the "Corporation"), is a pharmacy services company that services healthcare facilities, provides pharmacy management services to hospitals, provides specialty infusion services to patients outside a hospital setting, and offers the only national oncology pharmacy in the United States. The Corporation is the second largest institutional pharmacy services company in the United States based on revenues and customer licensed beds under contract, operating 94 institutional pharmacies, 17 specialty infusion pharmacies, and 5 specialty oncology pharmacies in 45 states. The Corporation's customers are typically institutional healthcare providers, such as skilled nursing facilities, nursing centers, assisted living facilities, hospitals, individuals receiving in-home care and other long-term alternative care providers. The Corporation is generally the primary source of supply of pharmaceuticals to its customers. |
Operating Segments | Operating Segments The Corporation consists of three operating segments: institutional pharmacy, specialty infusion services and specialty oncology pharmacy. Management believes the nature of the products and services are similar, the payers for the products and services are common among the segments and all segments operate in the healthcare regulatory environment. In addition, the segments are economically similar. Accordingly, management has aggregated the three operating segments into one reporting segment. |
Principles of Consolidation | Principles of Consolidation All intercompany transactions have been eliminated. |
Use of Estimates | Use of Estimates The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP") which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates are involved in collectability of accounts receivable, revenue recognition, inventory valuation, supplier rebates and the valuation of long-lived assets and goodwill. Actual amounts may differ from these estimates. Potential risks and uncertainties, many of which are beyond the control of the Corporation, include, but are not necessarily limited to, such factors as overall economic, financial and business conditions; the overall condition of the Corporation's customers and suppliers; the intense competition in the Corporation's industry; the loss of one or more key pharmaceutical manufacturers; changes in manufacturers' rebate programs; the risk of loss of revenues due to the loss of certain customers or a customer or owner of a skilled nursing facility entering the institutional pharmacy business; the effects of the loss of a large customer and the Corporation's ability to adequately restructure its operations to offset the loss; the home infusion joint ventures formed with hospitals could adversely affect the Corporation's financial results; the decline in operating revenues and profitability with an increase in the Corporation's generic dispensing rate; the loss of prescription volumes and revenue from pharmaceutical products that develop unexpected safety or efficacy concerns; reduction in reimbursement rates for the Corporation's products and/or medical treatments or services may reduce profitability; modifications to the Medicare Part D program which may reduce revenue or impose additional costs; changes in Medicaid reimbursement which may reduce revenue; the payments of significant penalties and damages for failure to comply with complex and rapidly evolving laws and regulations, as well as licensure requirements; the adverse results from material litigation or governmental inquires including the possible insufficiency of any accruals established by the Corporation could have a material impact on the Corporation's business; failure to comply with Medicare and Medicaid regulations could result in loss of eligibility to participate in these programs; efforts by payers to control costs; healthcare reform adversely impacting the liquidity of the Corporation's customers thus affecting their ability to make timely payments to the Corporation; increasing enforcement in the U.S. healthcare industry negatively impacting the Corporation's business; further consolidation of managed care organizations and other third-party payers adversely affecting the Corporation's profits; Federal and state medical privacy regulations increasing costs of operations and exposing the Corporation to civil and criminal sanctions; interruption or damage to the Corporation's sophisticated information systems; purchasing a significant portion of the Corporation's pharmaceutical products from one supplier; attracting and retaining key executives, pharmacists, and other healthcare personnel; revenues and volumes adversely affected by certain factors in markets in which the Corporation operates, including weather; the provisions in the Corporation's certification of incorporation and bylaws could delay or prevent a change of control that stockholders favor; changes in volatility of the Corporation's stock price; successfully pursuing development and acquisition activities; indebtedness that restricts the Corporation's ability to pay cash dividends and has a negative impact on the Corporation's financing options; exposure to changes in interest rates; the potential impact of the litigation proceedings with AmerisourceBergen Drug Corporation ("ABDC") regarding the Previous Prime Vendor Agreement ("Previous PVA") and collection of the $23.5 million included in other long-term assets on the accompanying consolidated balance sheets; the Corporation's ability to collect outstanding receivables, changes in tax laws and regulations, changes to critical accounting estimates and changes in and interpretations of accounting rules and standards. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and cash equivalents with original maturities of three months or less. The Corporation places its cash in financial institutions that are federally insured. As of December 31, 2014 and 2015, the Corporation did not hold a material amount of funds in cash equivalent money market accounts. |
Fair Value of Financial Instruments | PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 1—ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the Corporation follows a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs for which there is little or no market data, which require the Corporation to develop its own assumptions. Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques: A. Market approach: B. Cost approach: C. Income approach: Financial liabilities and non-financial assets recorded at fair value at December 31, 2014 and 2015, are set forth in the tables below (dollars in millions): As of December 31, 2014 Asset/(Liability) Level 1 Level 2 Level 3 Valuation Technique Financial Liability Deferred Compensation Plan $ (8.0 ) $ - $ (8.0 ) $ - A Contingent Consideration $ (1.1 ) $ - $ - $ (1.1 ) C Mandatorily Redeemable Interest $ (8.3 ) $ - $ - $ (8.3 ) C As of December 31, 2015 Asset/(Liability) Level 1 Level 2 Level 3 Valuation Technique Financial Liability Deferred Compensation Plan $ (8.2 ) $ - $ (8.2 ) $ - A Contingent Consideration $ (11.5 ) $ - $ - $ (11.5 ) C Mandatorily Redeemable Interest $ (5.8 ) $ - $ - $ (5.8 ) C The deferred compensation plan liability represents an unfunded obligation associated with the deferred compensation plan offered to eligible employees and members of the Board of Directors of the Corporation. The fair value of the liability associated with the deferred compensation plan is derived using pricing and other relevant information for investments in phantom shares of certain available investment options, primarily mutual funds. This liability is classified as other long-term liabilities in the accompanying consolidated balance sheets. The contingent consideration represents future earn-outs associated with the Corporation's acquisition of an infusion business and a hospital services business both purchased in 2015. The fair values of the liabilities associated with the contingent consideration were derived using the income approach with unobservable inputs, which included future gross profit forecasts and present value assumptions, and there was little or no market data. The Corporation assessed the fair values of the liabilities as of the acquisition date and will assess quarterly thereafter until settlement. These liabilities are classified as other long-term liabilities in the accompanying consolidated balance sheets. The mandatorily redeemable interest represents a future obligation associated with the Corporation's acquisition of a specialty pharmacy business, OncoMed Specialty, LLC ("Onco") purchased on December 6, 2013. The mandatorily redeemable interest is classified as a long-term liability and measured at fair value. The fair value was derived using the income approach with unobservable inputs, which included a future gross profit forecast and present value assumptions, and there was little or no market data. The Corporation assessed and adjusted the mandatorily redeemable interest liability to estimated fair value as of December 31, 2015. PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 1—ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) For the years ended December 31, 2014 and December 31, 2015, there were no transfers between the valuation hierarchy Levels 1, 2 and 3. The following table summarizes the change in fair value of the Corporation's contingent consideration and mandatorily redeemable interest identified as Level 3 for the years ended December 31, 2014 and December 31, 2015 (in millions): Contingent Consideration Mandatorily Redeemable Interest Beginning balance, December 31, 2013 $ 0.7 $ 8.2 Additions from business acquisitions 1.1 - Change in fair value (0.7 ) 0.1 Balance, December 31, 2014 1.1 8.3 Additions from business acquisitions 11.9 - Subtractions from business acquisitions (1.1 ) - Change in fair value (0.4 ) (2.5 ) Balance, December 31, 2015 $ 11.5 $ 5.8 The carrying amounts reported in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, inventory and accounts payable approximate fair value because of the short-term maturity of these instruments. The Corporation's debt approximates fair value due to the terms of the interest being set at variable market interest rates (Level 2). |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable primarily consist of amounts due from Prescription Drug Plans ("PDPs") under Medicare Part D, institutional healthcare providers, the respective state Medicaid programs, third party insurance companies, and private payers. The Corporation's ability to collect outstanding receivables is critical to its results of operations and cash flows. To provide for accounts receivable that could become uncollectible in the future, the Corporation establishes an allowance for doubtful accounts to reduce the carrying value of such receivables to the extent it is probable that a portion or all of a particular account will not be collected. The Corporation has an established process to determine the adequacy of the allowance for doubtful accounts, which relies on analytical tools, specific identification, and benchmarks to arrive at a reasonable allowance. No single statistic or measurement determines the adequacy of the allowance for doubtful accounts. The Corporation monitors and reviews trends by payer classification along with the composition of the Corporation's accounts receivable aging. This review is focused primarily on trends in private and other payers, PDPs, dual eligible co-payments, historic payment patterns of long-term care institutions, and monitoring respective credit risks. In addition, the Corporation analyzes other factors such as revenue days in accounts receivables, denial trends by payer types, payment patterns by payer types, subsequent cash collections, and current events that may impact payment patterns of the Corporation's long-term care institution customers. Accounts receivable are written off after collection efforts have been completed in accordance with the Corporation's policies. The Corporation's accounts receivable and summarized aging categories are as follows (dollars in millions): (As Adjusted) December 31, December 31, 2014 2015 Institutional healthcare providers $ 153.2 $ 145.9 Medicare Part D 30.5 30.2 Private payer and other 30.6 26.8 Insured 24.5 31.1 Medicaid 11.7 12.6 Medicare 3.0 3.2 Allowance for doubtful accounts (58.1 ) (49.3 ) $ 195.4 $ 200.5 0 to 60 days 58.8 % 62.0 % 61 to 120 days 17.2 % 15.0 % Over 120 days 24.0 % 23.0 % 100.0 % 100.0 % PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 1—ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The following is a summary of activity in the Corporation's allowance for doubtful accounts (dollars in millions): Beginning Balance Charges Included in Selling, General & Administrative Expenses Write-offs Ending Balance Allowance for doubtful accounts: Year Ended December 31, 2013 $ 56.4 $ 22.7 $ (22.4 ) $ 56.7 Year Ended December 31, 2014 $ 56.7 $ 23.2 $ (21.8 ) $ 58.1 Year Ended December 31, 2015 $ 58.1 $ 7.9 $ (16.7 ) $ 49.3 In the fourth quarter of 2015, the Corporation reversed an allowance of $4.6 million related to a customer's outstanding receivable for which a settlement payment was received which significantly exceeded the existing net receivable. This reversal is reflected in the "Charges Included in Selling, General & Administrative Expenses" column above. |
Deferred Financing Fees | Deferred Financing Fees The Corporation capitalizes financing fees related to acquiring or issuing new debt instruments. These expenditures include bank fees and premiums, legal costs, and filing fees. The Corporation amortizes these deferred financing fees using the effective interest method. |
Inventory | Inventory Inventory is primarily located at the Corporation's pharmacy locations. Inventory consists solely of finished products (primarily prescription drugs) and is valued at the lower of first-in, first-out ("FIFO") cost or market. Physical inventories are performed at a minimum on a quarterly basis at the end of the quarter at all pharmacy sites. Cost of goods sold is adjusted based upon the results of the physical inventory counts. Equipment and Leasehold Improvements |
Equipment and Leasehold Improvements | Equipment and leasehold improvements are recorded at cost on the acquisition date and are depreciated using the straight-line method over their estimated useful lives or lease term, if shorter, as follows (in years): Estimated Useful Lives Leasehold improvements 1-7 Equipment and software 3-10 Expenditures for maintenance, repairs and renewals of minor items are expensed as incurred. Major rebuilds and improvements are capitalized. For the years ended December 31, 2013, 2014 and 2015, maintenance and repairs were $10.0 million, $11.1 million and $12.5 million, respectively. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of long-lived assets is assessed by a comparison of the carrying amount of the asset or asset group to the estimated future undiscounted net cash flows expected to be generated by the asset or group of assets. If estimated future undiscounted net cash flows are less than the carrying amount of the asset or group of assets, the asset is considered impaired and an expense is recorded in an amount required to reduce the carrying amount of the asset or asset group to its then fair value. The Corporation incurred $0.1 million for the year ended December 31, 2013 and no fixed asset impairment charges for the years ended December 31, 2014 and 2015. The Corporation's equipment and leasehold improvements are further described in Note 3. |
Capitalization of Internal Software Costs | PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 1—ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Capitalization of Internal Software Costs The Corporation capitalizes the costs incurred during the application development stage, which includes costs to design the software configuration and interfaces, coding, installation, and testing. Costs incurred during the preliminary project stage along with post-implementation stages of internal use computer software are expensed as incurred. Capitalized development costs are amortized generally over three years and are subject to impairment evaluations. Costs incurred to maintain existing software development are expensed as incurred. The capitalization and ongoing assessment of recoverability of development costs requires judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility and estimated economic life. For the years ended December 31, 2014 and 2015, the Corporation capitalized internally developed software costs of $14.7 million and $14.3 million, respectively. As of December 31, 2014 and 2015, net capitalized software costs, including acquired assets and amounts for projects which have not been completed, totaled $29.4 million and $32.6 million, respectively. |
Goodwill and Other Intangibles | Goodwill and Other Intangibles The Corporation's policy is to perform a qualitative assessment of its institutional pharmacy and a quantitative assessment of its specialty infusion and specialty oncology reporting units to determine whether it is more likely than not (defined as having a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount. The Corporation performed the qualitative assessment of its institutional pharmacy at December 31, 2015 and did not find it necessary to perform the first step of the two-step impairment review process based on that analysis. The Corporation also performed the quantitative assessments as of December 31, 2015 for its specialty infusion and specialty oncology reporting units. The specialty infusion and specialty oncology reporting unit's fair values as calculated were approximately 23.8 % and 175.7 %, respectively, greater than current book value. The Corporation's finite-lived intangible assets are comprised primarily of trade names, customer relationship assets, limited distributor relationships, doctor and insurer relationships and non-compete agreements. Finite-lived intangible assets are amortized on a straight-line basis over the course of their lives ranging from 5 to 20 years. For impairment reviews, intangible assets are reviewed on a specific pharmacy basis or as a group of pharmacies depending on the intangible assets under review. The Corporation's goodwill and intangible assets are further described in Note 4. |
Self-Insured Employee Health Benefits | Self-Insured Employee Health Benefits The Corporation is self-insured for the majority of its employee health benefits. The Corporation's self-insurance for employee health benefits includes a stop-loss policy to limit the maximum potential liability of the Corporation for both individual and aggregate claims per year. The Corporation records a monthly expense for self-insurance based on historical claims data and inputs from third-party administrators. For years ended December 31, 2013, 2014 and 2015, the expense for employee health benefits was $22.3 million, $15.5 million and $15.7 million, respectively, the majority of which was related to its self-insured plans. As of December 31, 2014 and 2015, the Corporation had $2.2 million and $1.8 million, respectively, recorded as a liability for self-insured employee health benefits. |
Supplier Rebates | Supplier Rebates The Corporation receives rebates on purchases from select vendors and suppliers for achieving market share or purchase volumes. Rebates for brand name products are generally based upon achieving a defined market share tier within a therapeutic class and can be based on either purchasing volumes or actual prescriptions dispensed. Rebates for generic products are primarily based on achieving purchasing volume requirements, or in the case of the Prime Vendor Agreement with Cardinal Health ("Cardinal Health PVA"), contractually based requirements. The Corporation generally accounts for these rebates and other incentives received from its vendors and suppliers, relating to the purchase or distribution of inventory, on an accrual basis as an estimated reduction of cost of goods sold and inventory. The estimated accrual is adjusted, if necessary, after the third party validates the appropriate data and notifies the Corporation of its agreement under the terms of the contract. The Corporation considers these rebates to represent product discounts, and as a result, the rebates are allocated as a reduction of product cost and relieved through cost of goods sold upon the sale of the related inventory or as a reduction of inventory for drugs which have not yet been sold. |
Delivery Expenses | Delivery Expenses The Corporation incurred delivery expenses of $62.0 million, $60.8 million and $56.6 million for the years ended December 31, 2013, 2014, and 2015, respectively, to deliver products sold to its customers. Delivery expenses are reported as a component of cost of goods sold in the accompanying consolidated income statements. |
Stock Option Accounting | Stock Option Accounting The measurement and recognition of compensation cost for all share-based payment awards made to employees and non-employee directors is based on the fair value of the award. The Corporation recognizes share-based compensation costs for only those shares expected to vest on a straight-line basis over the requisite service period of the award (see Note 10). |
Restructuring and Impairment Charges | PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 1—ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Restructuring and Impairment Charges Restructuring and impairment charges in the consolidated financial statements represent amounts expensed for purposes of realigning corporate and pharmacy locations. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Corporation accrues for tax obligations, as appropriate, based on facts and circumstances in the various tax jurisdictions. Deferred tax assets and liabilities are more fully described in Note 11. |
Mandatorily Redeemable Interest | Mandatorily Redeemable Interest On December 6, 2013, the Corporation acquired 37.5% of the membership interests of OncoMed Specialty, LLC (the "Onco Acquisition") while also obtaining control of the business. The subsidiary is consolidated in the Corporation's consolidated financial statements and the mandatorily redeemable interest is classified as debt within other long-term liabilities in the consolidated balance sheets. |
Measurement Period Adjustments | Measurement Period Adjustments For the year ended December 31, 2015, the Corporation has adjusted certain amounts on the consolidated balance sheet as of December 31, 2014 as a result of measurement period adjustments related to the acquisitions occurring in 2014 (See Note 2). |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In April 2015, the FASB issued Accounting Standards Update ("ASU") 2015-03 "Simplifying the Presentation of Debt Issuance Costs". The update requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The Corporation has elected not to early adopt the provisions of ASU 2015-03. In February 2015, the FASB issued ASU 2015-02 "Amendments to the Consolidation Analysis" . In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers", which provides guidance for revenue recognition. The standard's core principle is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosures. In July 2015, the FASB approved a one-year delay in the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, although early adoption would be permitted for annual reporting periods beginning after December 15, 2016. The Corporation is currently in the process of evaluating the impact of adoption of this ASU on its consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, "Balance Sheet Classification of Deferred Taxes" related to accounting for income taxes which changes the balance sheet classification of deferred taxes, requiring deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The new guidance is effective for the Corporation beginning with annual and interim periods in 2017, with early adoption permitted. The Corporation elected not to early adopt the guidance. The Corporation is currently in the process of evaluating the impact of adoption of this ASU on its consolidated financial statements. |
ORGANIZATION AND SUMMARY OF S21
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Schedule of Financial Liabilities and Non-Financial Assets Recorded at Fair Value | Financial liabilities and non-financial assets recorded at fair value at December 31, 2014 and 2015, are set forth in the tables below (dollars in millions): As of December 31, 2014 Asset/(Liability) Level 1 Level 2 Level 3 Valuation Technique Financial Liability Deferred Compensation Plan $ (8.0 ) $ - $ (8.0 ) $ - A Contingent Consideration $ (1.1 ) $ - $ - $ (1.1 ) C Mandatorily Redeemable Interest $ (8.3 ) $ - $ - $ (8.3 ) C As of December 31, 2015 Asset/(Liability) Level 1 Level 2 Level 3 Valuation Technique Financial Liability Deferred Compensation Plan $ (8.2 ) $ - $ (8.2 ) $ - A Contingent Consideration $ (11.5 ) $ - $ - $ (11.5 ) C Mandatorily Redeemable Interest $ (5.8 ) $ - $ - $ (5.8 ) C |
Schedule of Contingent Consideration and Mandatorily Redeemable Interest Identified as Level 3 | PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 1—ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) For the years ended December 31, 2014 and December 31, 2015, there were no transfers between the valuation hierarchy Levels 1, 2 and 3. The following table summarizes the change in fair value of the Corporation's contingent consideration and mandatorily redeemable interest identified as Level 3 for the years ended December 31, 2014 and December 31, 2015 (in millions): Contingent Consideration Mandatorily Redeemable Interest Beginning balance, December 31, 2013 $ 0.7 $ 8.2 Additions from business acquisitions 1.1 - Change in fair value (0.7 ) 0.1 Balance, December 31, 2014 1.1 8.3 Additions from business acquisitions 11.9 - Subtractions from business acquisitions (1.1 ) - Change in fair value (0.4 ) (2.5 ) Balance, December 31, 2015 $ 11.5 $ 5.8 The carrying amounts reported in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, inventory and accounts payable approximate fair value because of the short-term maturity of these instruments. The Corporation's debt approximates fair value due to the terms of the interest being set at variable market interest rates (Level 2). |
Schedule of Accounts Receivable and Summarized Aging Categories | The Corporation's accounts receivable and summarized aging categories are as follows (dollars in millions): (As Adjusted) December 31, December 31, 2014 2015 Institutional healthcare providers $ 153.2 $ 145.9 Medicare Part D 30.5 30.2 Private payer and other 30.6 26.8 Insured 24.5 31.1 Medicaid 11.7 12.6 Medicare 3.0 3.2 Allowance for doubtful accounts (58.1 ) (49.3 ) $ 195.4 $ 200.5 0 to 60 days 58.8 % 62.0 % 61 to 120 days 17.2 % 15.0 % Over 120 days 24.0 % 23.0 % 100.0 % 100.0 % |
Schedule of Allowance for Doubtful Accounts | PHARMERICA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) NOTE 1—ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The following is a summary of activity in the Corporation's allowance for doubtful accounts (dollars in millions): Beginning Balance Charges Included in Selling, General & Administrative Expenses Write-offs Ending Balance Allowance for doubtful accounts: Year Ended December 31, 2013 $ 56.4 $ 22.7 $ (22.4 ) $ 56.7 Year Ended December 31, 2014 $ 56.7 $ 23.2 $ (21.8 ) $ 58.1 Year Ended December 31, 2015 $ 58.1 $ 7.9 $ (16.7 ) $ 49.3 In the fourth quarter of 2015, the Corporation reversed an allowance of $4.6 million related to a customer's outstanding receivable for which a settlement payment was received which significantly exceeded the existing net receivable. This reversal is reflected in the "Charges Included in Selling, General & Administrative Expenses" column above. |
Schedule of Equipment and Leasehold Improvements | Equipment and leasehold improvements are recorded at cost on the acquisition date and are depreciated using the straight-line method over their estimated useful lives or lease term, if shorter, as follows (in years): Estimated Useful Lives Leasehold improvements 1-7 Equipment and software 3-10 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
ACQUISITIONS [Abstract] | |
Schedule of Purchase Price Allocation | The amounts recognized related to the 2014 Acquisitions, on a combined basis, for assets acquired and liabilities assumed are as follows (dollars in millions): Amounts Recognized as of Acquisition Date Measurement Period Adjustments As Adjusted Accounts receivable $ 26.7 $ (0.3 ) $ 26.4 Inventory 6.8 (0.2 ) 6.6 Deferred tax assets - current 1.8 0.6 2.4 Other current assets 3.1 (0.1 ) 3.0 Equipment and leasehold improvements 4.8 - 4.8 Deferred tax assets 8.2 - 8.2 Identifiable intangibles 61.4 - 61.4 Goodwill 34.9 5.9 40.8 Total Assets 147.7 5.9 153.6 Current liabilities 26.4 1.5 27.9 Other long-term liabilities 6.9 3.6 10.5 Total Liabilities 33.3 5.1 38.4 Total purchase price, less cash acquired $ 114.4 $ 0.8 $ 115.2 |
EQUIPMENT AND LEASEHOLD IMPRO23
EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
EQUIPMENT AND LEASEHOLD IMPROVEMENTS [Abstract] | |
Schedule of Equipment and Leasehold Improvements | Equipment and leasehold improvements consist of the following (dollars in millions): December 31, 2014 2015 Leasehold improvements $ 19.6 $ 20.4 Equipment and software 166.1 185.7 Construction in progress 10.7 12.4 196.4 218.5 Accumulated depreciation (125.0 ) (144.0 ) Total equipment and leasehold improvements $ 71.4 $ 74.5 |
GOODWILL AND INTANGIBLES (Table
GOODWILL AND INTANGIBLES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
GOODWILL AND INTANGIBLES [Abstract] | |
Changes in Carrying Amount of Goodwill | The following table presents the changes in the carrying amount of goodwill for the years ended December 31, 2014 and 2015 (dollars in millions): Balance at December 31, 2013 as adjusted $ 282.8 Goodwill acquired from 2014 acquisitions, as adjusted 40.8 Balance at December 31, 2014, as adjusted 323.6 Goodwill acquired from 2015 acquisitions 47.4 Balance at December 31, 2015 $ 371.0 |
Schedule of Finite Lived Intangible Assets | The following table presents the components of the Corporation's intangible assets (dollars in millions): Finite Lived Intangible Assets Balance at 2013 Additions Balance at 2014 Additions Balance at 2015 Customer relationships $ 121.2 $ 56.3 $ 177.5 $ 39.3 $ 216.8 Trade name 60.2 2.0 62.2 0.9 63.1 Non-compete agreements 16.8 3.1 19.9 1.0 20.9 Sub Total 198.2 61.4 259.6 41.2 300.8 Accumulated amortization (61.9 ) (20.1 ) (82.0 ) (28.6 ) (110.6 ) Net intangible assets $ 136.3 $ 41.3 $ 177.6 $ 12.6 $ 190.2 |
Schedule of Estimated Amortization Expense | Total estimated amortization expense for the Corporation's finite-lived intangible assets for the next five years and thereafter are as follows (dollars in millions): Year Ending December 31, 2016 $ 32.3 2017 30.6 2018 29.3 2019 25.7 2020 23.8 Thereafter 48.5 $ 190.2 |
CREDIT AGREEMENT (Tables)
CREDIT AGREEMENT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
CREDIT AGREEMENT [Abstract] | |
Schedule of Term Debt and Revolving Credit Facility | The table below summarizes the total outstanding debt of the Corporation (dollars in millions): December 31, 2014 December 31, 2015 Term Debt - payable to lenders at LIBOR plus applicable margin (2.42% as of December 31, 2015), matures September 17, 2019 $ 225.0 $ 219.4 Revolving Credit Facility payable to lenders, interest at LIBOR plus applicable margin (2.39% as of December 31, 2015), matures September 17, 2019 125.0 207.0 Capital lease obligations 0.7 0.9 Total debt 350.7 427.3 Less: Current portion of long-term debt 6.3 11.6 Total long-term debt $ 344.4 $ 415.7 |
Schedule of Indebtedness Maturities | The Corporation's indebtedness has the following maturities (dollars in millions): Year Ending December 31, Term Debt Revolving Credit Facility Capital Lease Obligations Total Maturities 2016 $ 11.3 $ - $ 0.3 $ 11.6 2017 11.3 - 0.3 11.6 2018 11.3 - 0.1 11.4 2019 185.5 207.0 0.1 392.6 2020 - - 0.1 0.1 $ 219.4 $ 207.0 $ 0.9 $ 427.3 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Summary of offset amounts related to Rebates and Other Receivables | Presented in the consolidated balance sheet, the following amounts are recorded as of December 31, 2015 (dollars in millions): Description Gross Amount of Recognized Asset Gross Liability Offset in the Consolidated Balance Sheet Net Amount of Asset Presented in the Consolidated Balance Sheet Rebates & Other Receivables (long-term) $ 72.3 $ (48.8 ) $ 23.5 Total $ 72.3 $ (48.8 ) $ 23.5 |
Schedule of Lease Expense | The Corporation leases real estate properties, buildings, vehicles, and equipment under cancelable and non-cancelable leases. The leases expire at various times and have various renewal options. Certain leases that meet the lease capitalization criteria have been recorded as an asset and liability at the net present value of the minimum lease payments at the inception of the lease. Interest rates used in computing the net present value of the lease payments are based on the Corporation's incremental borrowing rate at the inception of the lease. The Corporation recorded the following lease expense for the periods presented (dollars in millions): 2013 2014 2015 Pharmacy locations and administrative offices lease expense $ 15.2 $ 15.8 $ 15.8 Office equipment lease expense 2.1 2.3 2.4 Total lease expense $ 17.3 $ 18.1 $ 18.2 |
Schedule of Future Minimum Lease Payments for Operating Leases | Future minimum lease payments for those leases having an initial or remaining non-cancelable lease term in excess of one year are as follows for the years indicated (dollars in millions): Year Ending December 31, Operating Leases Capital Lease Obligations Total 2016 $ 18.8 $ 0.3 $ 19.1 2017 18.3 0.3 18.6 2018 16.3 0.1 16.4 2019 10.2 0.1 10.3 2020 10.2 0.1 10.3 Thereafter 6.9 - 6.9 Total $ 80.7 $ 0.9 $ 81.6 |
RESTRUCTURING COSTS AND OTHER27
RESTRUCTURING COSTS AND OTHER CHARGES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
RESTRUCTURING COSTS AND OTHER CHARGES [Abstract] | |
Components of Restructuring Liability | The following table presents the components of the Corporation's restructuring liability (dollars in millions): Balance at December 31, 2014 Accrual Utilized Amounts Balance at December 31, 2015 Employee Severance and related costs $ 0.3 $ 0.3 $ (0.3 ) $ 0.3 Facility costs 1.1 0.2 (0.6 ) 0.7 $ 1.4 $ 0.5 $ (0.9 ) $ 1.0 |
COMMON STOCK, PREFERRED STOCK28
COMMON STOCK, PREFERRED STOCK, TREASURY STOCK, STOCK-BASED COMPENSATION AND OTHER BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
COMMON STOCK, PREFERRED STOCK, TREASURY STOCK, STOCK-BASED COMPENSATION AND OTHER BENEFITS [Abstract] | |
Schedule of Stock-Based Compensation Expense | The following is a summary of stock-based compensation incurred by the Corporation (dollars in millions, except per share amounts): 2013 2014 2015 Stock option compensation expense $ 1.0 $ 0.6 $ 0.1 Nonvested stock compensation expense 6.2 6.8 7.5 Total Stock Compensation Expense $ 7.2 $ 7.4 $ 7.6 Effect on diluted earnings per share $ (0.15 ) $ (0.15 ) $ (0.15 ) |
Schedule of Stock Option Activity | The following table summarizes option activity for the periods presented: Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Term Aggregate Intrinsic Value (in millions) Outstanding options at December 31, 2014 913,209 $ 14.62 2.1 years $ 5.6 Exercised (149,314 ) 15.28 Canceled (124,851 ) 11.74 Expired (303 ) 13.42 Outstanding options at December 31, 2015 638,741 $ 14.34 1.3 years $ 13.2 Exercisable options at December 31, 2015 638,741 $ 14.34 1.3 years $ 13.2 |
Schedule of Nonvested Share Activity | The following table summarizes nonvested share activity for the periods presented: Number of Shares Weighted- Average Grant Date Fair Value Outstanding shares at December 31, 2014 942,021 $ 18.00 Granted - Restricted Stock Units 172,097 28.88 Granted - Performance Share Units 156,309 26.62 Forfeited (6,929 ) 22.58 Vested (362,632 ) 16.23 Outstanding shares at December 31, 2015 900,866 $ 22.26 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES [Abstract] | |
Schedule of Provision for Income Taxes | The provision for income taxes is based upon the Corporation's annual income or loss before income taxes for each respective accounting period. The following table summarizes the Corporation's provision for income taxes for the periods presented (dollars in millions): 2013 2014 2015 Current provision: Federal $ 13.0 $ 10.4 $ 6.7 State 1.3 1.3 1.4 Total 14.3 11.7 8.1 Deferred provision (benefit): Federal 4.8 (2.1 ) 5.1 State 7.2 (0.2 ) (1.1 ) Total 12.0 (2.3 ) 4.0 Total provision for income taxes $ 26.3 $ 9.4 $ 12.1 |
Reconciliation of Effective Tax Rate and U.S. Statutory Rate | A reconciliation of the U.S. statutory rate to the Corporation's effective tax rate is as follows for the years ended December 31: 2013 2014 2015 U.S. statutory rate applied to pretax income 35.0 % 35.0 % 35.0 % Differential arising from: State taxes 4.3 5.1 3.2 Non-deductible legal expenses 14.8 31.3 3.3 Deductible legal expenses - - (19.4 ) Domestic Production Activities Deduction (2.9 ) (7.1 ) (1.0 ) Stock compensation 2.6 - - 162(m) compensation 0.3 1.2 1.9 Valuation allowances 7.0 0.2 (0.6 ) Federal and state tax true-ups (2.3 ) (8.2 ) 0.9 Research and development credits - (1.5 ) (0.6 ) Other (0.6 ) 2.0 3.0 Effective tax rate 58.2 % 58.0 % 25.7 % |
Deferred Income Taxes | Current deferred income taxes consisted of (dollars in millions): December 31, 2014 December 31, 2015 Assets Liabilities Assets Liabilities Accrued expenses $ 7.7 $ - $ 7.5 $ - Allowance for doubtful accounts 22.9 - 18.4 - Net operating losses - - - - Other 14.2 - 19.0 0.8 Valuation allowance (2.0 ) - (2.3 ) - Total current deferred taxes $ 42.8 $ - $ 42.6 $ 0.8 Current deferred taxes, net $ 42.8 $ 41.8 Noncurrent deferred income taxes consisted of (dollars in millions): December 31, 2014 December 31, 2015 Assets Liabilities Assets Liabilities Accelerated depreciation $ - $ 11.4 $ - $ 13.1 Stock-based compensation 4.6 - 4.8 - Goodwill and intangibles - 33.0 - 33.9 Net operating losses 17.1 - 15.2 - Other 9.1 - 9.7 1.9 Valuation allowances (2.1 ) - (1.5 ) - Total noncurrent deferred taxes $ 28.7 $ 44.4 $ 28.2 $ 48.9 Noncurrent deferred taxes, net $ 15.7 $ 20.7 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
EARNINGS PER SHARE [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation using the treasury share method of basic and diluted earnings per share (dollars in millions, except per share amounts): 2013 2014 2015 Numerator: Numerator for basic and earnings per diluted share - net income $ 18.9 $ 6.8 $ 35.1 Denominator: Denominator for basic earnings per share - weighted average shares 29,601,199 29,983,428 30,363,588 Effect of dilutive securities (stock options, restricted stock units and performance share units) 474,500 665,703 403,778 Denominator for earnings per diluted share - adjusted weighted average shares 30,075,699 30,649,131 30,767,366 Basic earnings per share $ 0.64 $ 0.23 $ 1.16 Earnings per diluted share $ 0.63 $ 0.22 $ 1.14 Unexercised employee stock options, unvested restricted shares and performance shares excluded from the effect of dilutive securities above (a) 1,417,272 340,291 291,679 (a) These unexercised employee stock options, unvested restricted shares and performance shares that have not yet met performance conditions are not included in the computation of diluted earnings per share because to do so would be anti-dilutive for the periods presented. |
UNAUDITED QUARTERLY FINANCIAL31
UNAUDITED QUARTERLY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
UNAUDITED QUARTERLY FINANCIAL INFORMATION [Abstract] | |
Quarterly Interim Information | The quarterly interim information shown below has been prepared by the Corporation's management and is unaudited. It should be read in conjunction with the audited consolidated financial statements appearing herein (dollars in millions, except per share amounts). 2014 Quarters 2015 First Second Third Fourth First Second Third Fourth Revenue $ 452.2 $ 448.6 $ 470.2 $ 523.5 $ 511.6 $ 497.5 $ 498.8 $ 520.6 Cost of goods sold 372.2 366.7 387.2 429.1 423.0 416.3 420.2 433.9 Gross profit $ 80.0 $ 81.9 $ 83.0 $ 94.4 $ 88.6 $ 81.2 $ 78.6 $ 86.7 Operating income (loss) $ 10.3 $ (9.7 ) $ 17.1 $ 12.7 $ 16.8 $ 8.5 $ 8.5 $ 20.0 Net income (loss) $ 4.8 $ (9.7 ) $ 8.5 (1) $ 3.2 $ 9.6 $ 2.3 $ 3.0 $ 20.2 Earnings (loss) per common share: Basic $ 0.16 $ (0.32 ) $ 0.28 $ 0.11 $ 0.32 $ 0.08 $ 0.10 $ 0.66 Diluted $ 0.16 $ (0.32 ) $ 0.28 $ 0.10 $ 0.31 $ 0.07 $ 0.10 $ 0.66 Shares used in computing earnings (loss) per common share: Basic 29.8 30.0 30.1 30.1 30.2 30.4 30.4 30.4 Diluted 30.4 30.0 30.6 30.7 30.7 30.8 30.9 31.0 (1) During the third quarter 2014, the Corporation recognized a $4.3 million loss on extinguishment of debt. |
ORGANIZATION AND SUMMARY OF S32
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015USD ($)Pharmacy | Dec. 31, 2015USD ($)PharmacySegment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||
Rebate receivable - ABDC litigation | $ 23.5 | $ 23.5 | ||
Outstanding receivable payment | $ 4.6 | |||
Property, Plant and Equipment [Line Items] | ||||
Number of operating institutional pharmacies | Pharmacy | 94 | 94 | ||
Number of specialty infusion pharmacies | Pharmacy | 17 | 17 | ||
Number of specialty oncology pharmacies | Pharmacy | 5 | 5 | ||
Number of states in which there are institutional pharmacies | Pharmacy | 45 | 45 | ||
Number of operating segments | Segment | 3 | |||
Rebate receivable - ABDC litigation | $ 23.5 | $ 23.5 | ||
Maintenance and repairs | 12.5 | $ 11.1 | $ 10 | |
Impairment charge of fixed assets | $ 0 | 0 | 0.1 | |
Capitalized internally developed software costs, amortization period | 3 years | |||
Capitalized internally developed software costs | $ 14.3 | 14.7 | ||
Capitalized internally developed software costs, net | 32.6 | $ 32.6 | 29.4 | |
Finite-lived intangible assets useful lives | 5 years | |||
Self-insured employee health benefits expense | $ 15.7 | 15.5 | 22.3 | |
Self-insured employee health benefits liability | $ 1.8 | 1.8 | 2.2 | |
Delivery expenses | $ 56.6 | $ 60.8 | $ 62 | |
Specialty Infusion [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Percentage by which discounted cash flows were greater than current book value | 23.80% | 23.80% | ||
Specialty oncology [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Percentage by which discounted cash flows were greater than current book value | 175.70% | 175.70% | ||
Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Finite-lived intangible assets useful lives | 5 years | |||
Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Finite-lived intangible assets useful lives | 20 years | |||
OncoMed Speciality, LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Percentage of ownership acquired | 37.50% | 37.50% |
ORGANIZATION AND SUMMARY OF S33
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Schedule of Financial Liabilities and Non-Financial Assets Recorded at Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Income Approach Valuation Technique [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent Consideration | $ (11.5) | $ (1.1) |
Mandatorily Redeemable Interest | (5.8) | (8.3) |
Market Approach Valuation Technique [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred Compensation Plan | (8.2) | (8) |
Level 1 [Member] | Income Approach Valuation Technique [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent Consideration | 0 | 0 |
Mandatorily Redeemable Interest | 0 | 0 |
Level 1 [Member] | Market Approach Valuation Technique [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred Compensation Plan | 0 | 0 |
Level 2 [Member] | Income Approach Valuation Technique [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent Consideration | 0 | 0 |
Mandatorily Redeemable Interest | 0 | 0 |
Level 2 [Member] | Market Approach Valuation Technique [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred Compensation Plan | (8.2) | (8) |
Level 3 [Member] | Income Approach Valuation Technique [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent Consideration | (11.5) | (1.1) |
Mandatorily Redeemable Interest | (5.8) | (8.3) |
Level 3 [Member] | Market Approach Valuation Technique [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred Compensation Plan | $ 0 | $ 0 |
ORGANIZATION AND SUMMARY OF S34
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Schedule of Contingent Consideration and Mandatorily Redeemable Interest Identified as Level 3 (Details) - Level 3 [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Contingent Consideration [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Beginning balance | $ 1.1 | $ 0.7 |
Additions from business acquisitions | 11.9 | 1.1 |
Subtractions from business acquisitions | (1.1) | |
Change in fair value of contingency | (0.4) | (0.7) |
Ending balance | 11.5 | 1.1 |
Mandatorily Redeemable Interest [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Beginning balance | 8.3 | 8.2 |
Additions from business acquisitions | 0 | 0 |
Subtractions from business acquisitions | 0 | |
Change in fair value of contingency | (2.5) | 0.1 |
Ending balance | $ 5.8 | $ 8.3 |
ORGANIZATION AND SUMMARY OF S35
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Schedule of Accounts Receivable and Summarized Aging Categories (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Allowance for doubtful accounts | $ (49.3) | $ (58.1) | $ (56.7) | $ (56.4) |
Accounts receivable, net | $ 200.5 | $ 195.4 | ||
0 to 60 days | 62.00% | 58.80% | ||
61 to 120 days | 15.00% | 17.20% | ||
Over 120 days | 23.00% | 24.00% | ||
Total accounts receivable recorded percentage due | 100.00% | 100.00% | ||
Institutional Healthcare Providers [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts receivable, gross | $ 145.9 | $ 153.2 | ||
Medicare Part D [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts receivable, gross | 30.2 | 30.5 | ||
Private Payer and Other [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts receivable, gross | 26.8 | 30.6 | ||
Insured [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts receivable, gross | 31.1 | 24.5 | ||
Medicaid [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts receivable, gross | 12.6 | 11.7 | ||
Medicare [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts receivable, gross | $ 3.2 | $ 3 |
ORGANIZATION AND SUMMARY OF S36
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||
Allowance for doubtful accounts, Beginning Balance | $ 58.1 | $ 56.7 | $ 56.4 |
Allowance for doubtful accounts, Charges Included in Selling, General & Administrative Expenses | 7.9 | 23.2 | 22.7 |
Allowance for doubtful accounts, Write-offs | (16.7) | (21.8) | (22.4) |
Allowance for doubtful accounts, Ending Balance | $ 49.3 | $ 58.1 | $ 56.7 |
ORGANIZATION AND SUMMARY OF S37
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Schedule of Equipment and Leasehold Improvements Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Leasehold Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 1 year |
Leasehold Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 7 years |
Equipment And Software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 3 years |
Equipment And Software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 10 years |
ACQUISITIONS (Details)
ACQUISITIONS (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)Acquisition | Dec. 31, 2014USD ($)Acquisition | Dec. 31, 2013USD ($) | ||
Business Acquisition [Line Items] | ||||||||||||
Cash payments for acquisitions | $ 83.6 | $ 133.7 | $ 26.5 | |||||||||
Tax deductible goodwill | $ 171.1 | $ 146.3 | 171.1 | 146.3 | ||||||||
Revenues | 520.6 | $ 498.8 | $ 497.5 | $ 511.6 | 523.5 | $ 470.2 | $ 448.6 | $ 452.2 | 2,028.5 | 1,894.5 | 1,757.9 | |
Net income | 20.2 | $ 3 | [1] | $ 2.3 | $ 9.6 | 3.2 | $ 8.5 | $ (9.7) | $ 4.8 | 35.1 | 6.8 | 18.9 |
Gain recognized related to acquisitions | $ 0.4 | $ 0.2 | 1.3 | |||||||||
Acquisition costs | $ 5.9 | |||||||||||
2015 Acquisitions [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Number of acquisitions of long-term care businesses completed | Acquisition | 2 | |||||||||||
Number of Acquisitions of Infusion Business Completed | Acquisition | 2 | |||||||||||
Number of Acquisitions of Hospital Services Businesses Completed | Acquisition | 1 | |||||||||||
Estimated purchase price | $ 82.6 | |||||||||||
Estimated fair value of contingent consideration | 11.9 | |||||||||||
Cash payments for acquisitions | 70.7 | |||||||||||
Tax deductible goodwill | 40.4 | 40.4 | ||||||||||
Revenues | 25.6 | |||||||||||
Net income | 6.7 | |||||||||||
Contingent payable originating from earnout provisions of acquisition | 11.5 | 11.5 | ||||||||||
Identifiable intangibles acquired | $ 41.2 | 41.2 | ||||||||||
Acquisition costs | $ 20.5 | |||||||||||
2014 Acquisitions [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Number of acquisitions of long-term care businesses completed | Acquisition | 4 | |||||||||||
Number of Acquisitions of Infusion Business Completed | Acquisition | 1 | |||||||||||
Long term care acquisitions consolidated | Acquisition | 2 | |||||||||||
Cash payments for acquisitions | $ 115.2 | |||||||||||
Tax deductible goodwill | 30.7 | 30.7 | ||||||||||
Revenues | 63 | |||||||||||
Net income | 0.6 | |||||||||||
Contingent payable originating from earnout provisions of acquisition | 0 | 0 | ||||||||||
Identifiable intangibles acquired | 61.4 | 61.4 | ||||||||||
Recorded goodwill in transaction | $ 0.5 | 0.5 | ||||||||||
Acquisition costs | $ 13.3 | |||||||||||
[1] | During the third quarter 2014, the Corporation recognized a $4.3 loss on extinguishment of debt. |
ACQUISITIONS, Schedule of Purch
ACQUISITIONS, Schedule of Purchase Price Allocation (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | |||
Goodwill | $ 371 | $ 323.6 | $ 282.8 |
2014 Acquisitions [Member] | |||
Business Acquisition [Line Items] | |||
Accounts receivable | 26.7 | ||
Inventory | 6.8 | ||
Deferred tax assets - current | 1.8 | ||
Other current assets | 3.1 | ||
Equipment and leasehold improvements | 4.8 | ||
Deferred tax assets | 8.2 | ||
Identifiable intangibles | 61.4 | ||
Goodwill | 34.9 | ||
Total assets | 147.7 | ||
Current liabilities | 26.4 | ||
Other long-term liabilities | 6.9 | ||
Total liabilities | 33.3 | ||
Total purchase price, less cash acquired | 114.4 | ||
Measurement Period Adjustments [Member] | |||
Business Acquisition [Line Items] | |||
Accounts receivable | (0.3) | ||
Inventory | (0.2) | ||
Deferred tax assets - current | 0.6 | ||
Other current assets | (0.1) | ||
Equipment and leasehold improvements | 0 | ||
Deferred tax assets | 0 | ||
Identifiable intangibles | 0 | ||
Goodwill | 5.9 | ||
Total assets | 5.9 | ||
Current liabilities | 1.5 | ||
Other long-term liabilities | 3.6 | ||
Total liabilities | 5.1 | ||
Total purchase price, less cash acquired | 0.8 | ||
As adjusted [Member] | |||
Business Acquisition [Line Items] | |||
Accounts receivable | 26.4 | ||
Inventory | 6.6 | ||
Deferred tax assets - current | 2.4 | ||
Other current assets | 3 | ||
Equipment and leasehold improvements | 4.8 | ||
Deferred tax assets | 8.2 | ||
Identifiable intangibles | 61.4 | ||
Goodwill | 40.8 | ||
Total assets | 153.6 | ||
Current liabilities | 27.9 | ||
Other long-term liabilities | 10.5 | ||
Total liabilities | 38.4 | ||
Total purchase price, less cash acquired | $ 115.2 |
EQUIPMENT AND LEASEHOLD IMPRO40
EQUIPMENT AND LEASEHOLD IMPROVEMENTS, Schedule of Equipment and Leasehold Improvements (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
EQUIPMENT AND LEASEHOLD IMPROVEMENTS [Abstract] | ||
Leasehold improvements | $ 20.4 | $ 19.6 |
Equipment and software | 185.7 | 166.1 |
Construction in progress | 12.4 | 10.7 |
Sub-total equipment and leasehold improvements | 218.5 | 196.4 |
Accumulated depreciation | (144) | (125) |
Total equipment and leasehold improvements | $ 74.5 | $ 71.4 |
EQUIPMENT AND LEASEHOLD IMPRO41
EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
EQUIPMENT AND LEASEHOLD IMPROVEMENTS [Abstract] | |||
Depreciation expense | $ 23.1 | $ 20.3 | $ 19.3 |
GOODWILL AND INTANGIBLES, Chang
GOODWILL AND INTANGIBLES, Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
GOODWILL AND INTANGIBLES [Abstract] | ||
Goodwill Beginning Balance | $ 323.6 | $ 282.8 |
Goodwill acquired | 47.4 | 40.8 |
Goodwill Ending Balance | $ 371 | $ 323.6 |
GOODWILL AND INTANGIBLES, Sched
GOODWILL AND INTANGIBLES, Schedule Of Finite Lived Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite Lived Intangible Assets Gross, Beginning Balance | $ 259.6 | $ 198.2 |
Finite Lived Intangible Assets Gross, Additions | 41.2 | 61.4 |
Finite Lived Intangible Assets Gross, Ending Balance | 300.8 | 259.6 |
Accumulated amortization, Beginning Balance | (82) | (61.9) |
Accumulated amortization, Additions | (28.6) | (20.1) |
Accumulated amortization, Ending Balance | (110.6) | (82) |
Net intangible assets, Beginning Balance | 177.6 | 136.3 |
Net intangible assets, Additions | 12.6 | 41.3 |
Net intangible assets, Ending Balance | 190.2 | 177.6 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite Lived Intangible Assets Gross, Beginning Balance | 177.5 | 121.2 |
Finite Lived Intangible Assets Gross, Additions | 39.3 | 56.3 |
Finite Lived Intangible Assets Gross, Ending Balance | 216.8 | 177.5 |
Trade Name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite Lived Intangible Assets Gross, Beginning Balance | 62.2 | 60.2 |
Finite Lived Intangible Assets Gross, Additions | 0.9 | 2 |
Finite Lived Intangible Assets Gross, Ending Balance | 63.1 | 62.2 |
Non-Compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite Lived Intangible Assets Gross, Beginning Balance | 19.9 | 16.8 |
Finite Lived Intangible Assets Gross, Additions | 1 | 3.1 |
Finite Lived Intangible Assets Gross, Ending Balance | $ 20.9 | $ 19.9 |
GOODWILL AND INTANGIBLES (Detai
GOODWILL AND INTANGIBLES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
GOODWILL AND INTANGIBLES [Abstract] | |||
Amortization expense | $ 28.6 | $ 20.1 | $ 15.4 |
Estimated amortization period | 5 years |
GOODWILL AND INTANGIBLES, Sch45
GOODWILL AND INTANGIBLES, Schedule of Estimated Amortization Expense (Details) $ in Millions | Dec. 31, 2015USD ($) |
GOODWILL AND INTANGIBLES [Abstract] | |
2,016 | $ 32.3 |
2,017 | 30.6 |
2,018 | 29.3 |
2,019 | 25.7 |
2,020 | 23.8 |
Thereafter | 48.5 |
Total estimated amortization expense | $ 190.2 |
CREDIT AGREEMENT (Details)
CREDIT AGREEMENT (Details) - USD ($) $ in Millions | Sep. 17, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | May. 02, 2011 |
Line of Credit Facility [Line Items] | |||||
Loss on extinguishment of debt | $ 0 | $ 4.3 | $ 0 | ||
Letter of credit base rate | 0.125% | ||||
Interest charge coverage ratio | 3 | ||||
Leverage ratio | 3.75 | ||||
Percent of revenues capital spending limitation | 5.00% | ||||
Deferred financing fees | $ 2.7 | ||||
Unamortized deferred financing fees | $ 2 | ||||
Minimum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Letter of credit fees floating rate | 1.50% | ||||
Commitment fee annual percentage | 0.25% | ||||
Maximum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Letter of credit fees floating rate | 2.50% | ||||
Commitment fee annual percentage | 0.35% | ||||
Term Loan Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Credit agreement maximum borrowing capacity | $ 225 | ||||
Credit agreement outstanding | $ 219.4 | ||||
Debt instrument maturity date | Sep. 17, 2019 | Sep. 17, 2019 | Sep. 17, 2014 | ||
Debt instrument interest rate | 2.42% | 2.67% | |||
Revolving Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Credit agreement maximum borrowing capacity | $ 310 | ||||
Credit agreement outstanding | $ 207 | ||||
Debt instrument maturity date | Sep. 17, 2019 | Sep. 17, 2019 | Sep. 17, 2014 | ||
Letters of credit outstanding | $ 2.8 | ||||
Total availability under the revolving credit facility | $ 100.2 | ||||
Debt instrument interest rate | 2.39% | 4.75% | |||
Total Debt Capacity [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Credit agreement maximum borrowing capacity | $ 450 | ||||
Base Rate [Member] | Minimum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Floating Interest rate | 0.50% | ||||
Base interest rate | 0.50% | ||||
Base Rate [Member] | Maximum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Floating Interest rate | 1.25% | ||||
Eurodollar [Member] | Minimum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Floating Interest rate | 1.50% | ||||
Eurodollar [Member] | Maximum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Floating Interest rate | 2.25% | ||||
Base interest rate | 1.00% |
CREDIT AGREEMENT, Schedule of T
CREDIT AGREEMENT, Schedule of Term Debt and Revolving Credit Facility (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Line of Credit Facility [Line Items] | ||
Total debt | $ 427.3 | $ 350.7 |
Less: Current portion of long-term debt | 11.6 | 6.3 |
Total long-term debt | 415.7 | 344.4 |
Term Debt [Member] | ||
Line of Credit Facility [Line Items] | ||
Total debt | 219.4 | |
Term Debt [Member] | 2014 Credit Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Total debt | 219.4 | 225 |
Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Total debt | 207 | |
Revolving Credit Facility [Member] | 2014 Credit Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Total debt | 207 | 125 |
Capital Lease Obligations [Member] | ||
Line of Credit Facility [Line Items] | ||
Total debt | $ 0.9 | $ 0.7 |
CREDIT AGREEMENT, Schedule Of I
CREDIT AGREEMENT, Schedule Of Indebtedness Maturities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
2,016 | $ 11.6 | |
2,017 | 11.6 | |
2,018 | 11.4 | |
2,019 | 392.6 | |
2,020 | 0.1 | |
Total debt | 427.3 | $ 350.7 |
Term Debt [Member] | ||
Debt Instrument [Line Items] | ||
2,016 | 11.3 | |
2,017 | 11.3 | |
2,018 | 11.3 | |
2,019 | 185.5 | |
2,020 | 0 | |
Total debt | 219.4 | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
2,016 | 0 | |
2,017 | 0 | |
2,018 | 0 | |
2,019 | 207 | |
2,020 | 0 | |
Total debt | 207 | |
Capital Lease Obligations [Member] | ||
Debt Instrument [Line Items] | ||
2,016 | 0.3 | |
2,017 | 0.3 | |
2,018 | 0.1 | |
2,019 | 0.1 | |
2,020 | 0.1 | |
Total debt | $ 0.9 | $ 0.7 |
COMMITMENTS AND CONTINGENCIES49
COMMITMENTS AND CONTINGENCIES (Details) | 12 Months Ended | ||||
Dec. 31, 2015USD ($)Complaint | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Mar. 31, 2015USD ($) | Sep. 30, 2013USD ($) | |
Commitments and Contingencies [Line Items] | |||||
Number of complaints | Complaint | 2 | ||||
Statutory Remedy Expenses Per Facsimile | $ 500 | ||||
Amount accrued for legal actions and investigations | 28,000,000 | ||||
Accrual Settlement, litigation and other related charges | $ 40,800,000 | ||||
Rebate receivable - ABDC litigation | 23,500,000 | ||||
Billed Contracts Receivable | 12,200,000 | $ 19,300,000 | |||
Settlement Litigation And Other Charges | $ 13,300,000 | 37,300,000 | $ 19,600,000 | ||
Contract term | 5 years | ||||
ABDC litigation period | 12 months | ||||
Gain Contingencies [Line Items] | |||||
Total rebate receivable end of period | $ 72,300,000 | ||||
Gross liability offset to the condensed consolidated balance sheet | (48,800,000) | ||||
Net rebate receivable | $ 23,500,000 | ||||
California Medicaid [Member] | |||||
Commitments and Contingencies [Line Items] | |||||
Reimbursement reduction for healthcare providers | 10.00% | ||||
Liability recorded representing best estimate of expected amount of recovery | $ 2,500,000 | $ 3,300,000 | |||
Amgen US District South Carolina [Member] | |||||
Commitments and Contingencies [Line Items] | |||||
Settlement Litigation And Other Charges | $ 2,500,000 | ||||
Depakote DOJ settlement [Member] | |||||
Commitments and Contingencies [Line Items] | |||||
Number of complaints | Complaint | 2 | ||||
Settlement Litigation And Other Charges | $ 9,200,000 | ||||
Amgen attorney fees [Member] | |||||
Commitments and Contingencies [Line Items] | |||||
Settlement Litigation And Other Charges | 2,000,000 | ||||
ABDC litigation [Member] | |||||
Gain Contingencies [Line Items] | |||||
Total rebate receivable end of period | 72,300,000 | $ 53,000,000 | |||
Gross liability offset to the condensed consolidated balance sheet | (48,800,000) | ||||
Net rebate receivable | $ 23,500,000 |
COMMITMENTS AND CONTINGENCIES,
COMMITMENTS AND CONTINGENCIES, Schedule of Lease Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Leased Assets [Line Items] | |||
Lease expense | $ 18.2 | $ 18.1 | $ 17.3 |
Pharmacy locations and administrative offices [Member] | |||
Operating Leased Assets [Line Items] | |||
Lease expense | 15.8 | 15.8 | 15.2 |
Office Equipment [Member] | |||
Operating Leased Assets [Line Items] | |||
Lease expense | $ 2.4 | $ 2.3 | $ 2.1 |
COMMITMENTS AND CONTINGENCIES51
COMMITMENTS AND CONTINGENCIES, Schedule of Future Minimum Lease Payments for Operating Leases (Details) $ in Millions | Dec. 31, 2015USD ($) |
Operating Leases [Abstract] | |
2,016 | $ 18.8 |
2,017 | 18.3 |
2,018 | 16.3 |
2,019 | 10.2 |
2,020 | 10.2 |
Thereafter | 6.9 |
Total | 80.7 |
Capital Lease Obligations [Abstract] | |
2,016 | 0.3 |
2,017 | 0.3 |
2,018 | 0.1 |
2,019 | 0.1 |
2,020 | 0.1 |
Thereafter | 0 |
Total | 0.9 |
Total [Abstract] | |
2,016 | 19.1 |
2,017 | 18.6 |
2,018 | 16.4 |
2,019 | 10.3 |
2,020 | 10.3 |
Thereafter | 6.9 |
Total | $ 81.6 |
MERGER, ACQUISITION, INTEGRAT52
MERGER, ACQUISITION, INTEGRATION COSTS AND OTHER CHARGES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
MERGER, ACQUISITION, INTEGRATION COSTS AND OTHER CHARGES [Abstract] | |||
Merger, acquisition, integration costs and other charges | $ 21.3 | $ 13.6 | $ 8.1 |
RESTRUCTURING COSTS AND OTHER53
RESTRUCTURING COSTS AND OTHER CHARGES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
RESTRUCTURING COSTS AND OTHER CHARGES [Abstract] | |||
Restructuring and other related charges | $ 0.5 | $ 3.3 | $ 4.4 |
Components of restructuring liability [Abstract] | |||
Beginning Balance | 1.4 | ||
Accrual | 0.5 | ||
Utilized Amounts | (0.9) | ||
Ending Balance | 1 | 1.4 | |
Employee Severance and Related Costs [Member] | |||
Components of restructuring liability [Abstract] | |||
Beginning Balance | 0.3 | ||
Accrual | 0.3 | ||
Utilized Amounts | (0.3) | ||
Ending Balance | 0.3 | 0.3 | |
Facility Costs [Member] | |||
Components of restructuring liability [Abstract] | |||
Beginning Balance | 1.1 | ||
Accrual | 0.2 | ||
Utilized Amounts | (0.6) | ||
Ending Balance | $ 0.7 | $ 1.1 |
HURRICANE SANDY DISASTER COSTS
HURRICANE SANDY DISASTER COSTS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Interruption Loss [Line Items] | |||
Insurance recoverable associated with Hurricane Sandy | $ 5 | ||
Advance consideration by insurance carrier associated with Hurricane Sandy | 7.2 | ||
Net costs (recoveries) related to Hurricane Sandy | (4.9) | $ (1.7) | $ (1.4) |
Business interruption coverage [Member] | |||
Business Interruption Loss [Line Items] | |||
Insurance recoverable associated with Hurricane Sandy | 6.9 | ||
Other [Member] | |||
Business Interruption Loss [Line Items] | |||
Insurance recoverable associated with Hurricane Sandy | $ 5.3 |
COMMON STOCK, PREFERRED STOCK55
COMMON STOCK, PREFERRED STOCK, TREASURY STOCK, STOCK-BASED COMPENSATION AND OTHER BENEFITS (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||||
Aug. 31, 2010USD ($) | Dec. 31, 2015USD ($)Multiplier$ / sharesshares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($)shares | Jul. 02, 2012USD ($) | Aug. 25, 2011Votesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Preferred stock, shares authorized (in shares) | shares | 1,000,000 | 1,000,000 | ||||
Minimum liquidation preference (in dollars per share) | $ / shares | $ 10 | |||||
Common stock shares repurchase authorized, value that remains available | $ 19.7 | |||||
Common stock shares repurchased | 4.3 | $ 5.1 | $ 16.2 | |||
Aggregate price of treasury stock (in dollars per share) | $ 37.6 | $ 33.3 | ||||
Treasury stock at cost, shares (in shares) | shares | 2,776,875 | 2,617,305 | ||||
Deferred compensation plan long term liability | $ 8.2 | $ 8 | ||||
Deferred compensation expense | 0.2 | 0.7 | 1.5 | |||
Stock Options [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total intrinsic value of stock options exercised | 1.3 | 1.6 | 3.5 | |||
Cash received from stock option exercises | 0.8 | |||||
Fair value of options vested | $ 0.4 | 0.9 | 1.6 | |||
Performance Share Units [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Maximum number of performance shares (in shares) | shares | 685,176 | |||||
Omnibus Plan 2015 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares remaining available for future issuance (in shares) | shares | 1,817,038 | |||||
2015 Omnibus plan shares | shares | 2,000,000 | |||||
Omnibus Plan 2015 [Member] | Stock Options [Member] | Officers and employees [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Term of share based compensation | 7 years | |||||
Vesting period | 4 years | |||||
Omnibus Plan 2015 [Member] | Performance Share Units [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance period | 3 years | |||||
Omnibus Plan 2015 [Member] | Restricted Share Awards [Member] | Officers [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Omnibus Plan 2015 [Member] | Restricted Share Awards [Member] | Board of Directors [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 1 year | |||||
Preferred Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Preferred stock, shares authorized (in shares) | shares | 1,000,000 | |||||
Preferred stock, shares outstanding (in shares) | shares | 0 | |||||
Liquidation preference time common stock distributed | Multiplier | 1,000 | |||||
Preferred Stock [Member] | Series A Junior Preferred Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Preferred stock, shares authorized (in shares) | shares | 175,000 | |||||
Preferred stock, votes per whole share | Votes | 1,000 | |||||
Rights issued to common stock holders to purchase one thousandth of preferred stock for each right | $ / shares | $ 10 | |||||
Treasury Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock shares repurchased | $ 10.5 | $ 4.3 | $ 5.1 | $ 16.2 | ||
Treasury stock at cost (in shares) | shares | (159,570) | (200,334) | (960,678) | |||
Aggregate price of treasury stock (in dollars per share) | $ 4.3 | |||||
Treasury stock at cost, shares (in shares) | shares | 2,776,875 | |||||
Treasury Stock [Member] | Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock shares repurchase authorized, value | $ 25 | |||||
Stock-Based Compensation Expense [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized stock based compensation | $ 10.2 | |||||
Nonvested Shares [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized stock based compensation | 10.2 | |||||
Fair value of shares vested | $ 5.9 | $ 6 | $ 5.1 | |||
Stock based compensation expense expect to recognize nonvested shares, minimum | 2 years 4 months 24 days | |||||
Weighted Average remaining term of nonvested shares | 2 years 7 months 6 days | |||||
Intrinsic value of nonvested shares | $ 31.5 | |||||
Deferred Compensation Plans [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unfunded deferred compensation plan, participants' annual base salary percentage, maximum | 50.00% | |||||
Unfunded deferred compensation plan, participants annual short term incentive program percentage, maximum | 100.00% | |||||
Deferred compensation plan directors cash fees and stock fees percentage, maximum | 100.00% | |||||
Common Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock shares repurchased | $ 0 | $ 0 | 0 | |||
Common Stock [Member] | Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock shares repurchase authorized, value | $ 25 | |||||
401K Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Corporation's matching contributions | $ 6.3 | $ 5.8 | $ 5.9 |
COMMON STOCK, PREFERRED STOCK56
COMMON STOCK, PREFERRED STOCK, TREASURY STOCK, STOCK-BASED COMPENSATION AND OTHER BENEFITS, Schedule of Stock Option Activity (Details) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Options [Roll Forward] | ||
Number of Options, Outstanding options, Beginning (in shares) | 913,209 | |
Number of Options, Exercised (in shares) | (149,314) | |
Number of Options, Canceled (in shares) | (124,851) | |
Number of Options, Expired (in shares) | (303) | |
Number of Options, Outstanding options, Ending (in shares) | 638,741 | 913,209 |
Exercisable Options at end of year (in shares) | 638,741 | |
Weighted Average Exercise Price Per Share [Abstract] | ||
Weighted-Average Exercise Price Per Share, Outstanding, Beginning (in dollars per share) | $ 14.62 | |
Weighted-Average Exercise Price Per Share, Exercised (in dollars per share) | 15.28 | |
Weighted-Average Exercise Price Per Share, Canceled (in dollars per share) | 11.74 | |
Weighted-Average Exercise Price Per Share, Expired (in dollars per share) | 13.42 | |
Weighted-Average Exercise Price Per Share, Outstanding, Ending (in dollars per share) | 14.34 | $ 14.62 |
Weighted-Average Exercise Price Per Share, Exercisable (in dollars per share) | $ 14.34 | |
Weighted Average Remaining Term and Aggregate Intrinsic Value [Abstract] | ||
Weighted-Average Remaining Term, Outstanding | 1 year 3 months 18 days | 2 years 1 month 6 days |
Weighted-Average Remaining Term, Exercisable | 1 year 3 months 18 days | |
Aggregate Intrinsic Value, Outstanding, Beginning | $ 5.6 | |
Aggregate Intrinsic Value, Outstanding, Ending | 13.2 | $ 5.6 |
Aggregate Intrinsic Value, Exercisable | $ 13.2 |
COMMON STOCK, PREFERRED STOCK57
COMMON STOCK, PREFERRED STOCK, TREASURY STOCK, STOCK-BASED COMPENSATION AND OTHER BENEFITS, Schedule of Nonvested Share Activity (Details) | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Nonvested Restricted Stock Units [Member] | |
Number of Shares [Roll Forward] | |
Number of Shares, Outstanding, Beginning (in shares) | shares | 942,021 |
Number of Shares, Granted (in shares) | shares | 172,097 |
Number of Shares, Forfeited (in shares) | shares | (6,929) |
Number of Shares, Vested (in shares) | shares | (362,632) |
Number of Shares, Outstanding, Ending (in shares) | shares | 900,866 |
Weighted-Average Grant Date Fair Value [Roll Forward] | |
Weighted-Average Grant Date Fair Value, Outstanding, Beginning (in dollars per share) | $ / shares | $ 18 |
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares | 28.88 |
Weighted-Average Grant Date Fair Value, Forfeited (in dollars per share) | $ / shares | 22.58 |
Weighted-Average Grant Date Fair Value, Vested (in dollars per share) | $ / shares | 16.23 |
Weighted-Average Grant Date Fair Value, Outstanding, Ending (in dollars per share) | $ / shares | $ 22.26 |
Performance Share Units [Member] | |
Number of Shares [Roll Forward] | |
Number of Shares, Granted (in shares) | shares | 156,309 |
Weighted-Average Grant Date Fair Value [Roll Forward] | |
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares | $ 26.62 |
COMMON STOCK, PREFERRED STOCK58
COMMON STOCK, PREFERRED STOCK, TREASURY STOCK, STOCK-BASED COMPENSATION AND OTHER BENEFITS, Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total Stock Compensation Expense | $ 7.6 | $ 7.4 | $ 7.2 |
Negative effect on diluted earnings per share (in dollars per share) | $ (0.15) | $ (0.15) | $ (0.15) |
Nonvested Stock Compensation Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total Stock Compensation Expense | $ 7.5 | $ 6.8 | $ 6.2 |
Stock-Based Compensation Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total Stock Compensation Expense | $ 0.1 | $ 0.6 | $ 1 |
INCOME TAXES, Schedule of Provi
INCOME TAXES, Schedule of Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current provision [Abstract] | |||
Federal | $ 6.7 | $ 10.4 | $ 13 |
State | 1.4 | 1.3 | 1.3 |
Total | 8.1 | 11.7 | 14.3 |
Deferred provision (benefit) [Abstract] | |||
Federal | 5.1 | (2.1) | 4.8 |
State | (1.1) | (0.2) | 7.2 |
Total | 4 | (2.3) | 12 |
Total provision for income taxes | $ 12.1 | $ 9.4 | $ 26.3 |
INCOME TAXES, Reconciliation of
INCOME TAXES, Reconciliation of Effective Tax Rate and U.S. Statutory Rate (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
INCOME TAXES [Abstract] | |||
U.S. statutory rate applied to pretax income | 35.00% | 35.00% | 35.00% |
State taxes | 3.20% | 5.10% | 4.30% |
Non-deductible legal expenses | 3.30% | 31.30% | 14.80% |
Deductible legal expenses | (19.40%) | 0.00% | 0.00% |
Domestic Production Activities Deduction | (1.00%) | (7.10%) | (2.90%) |
Stock compensation | 0.00% | 0.00% | 2.60% |
162(m) compensation | 1.90% | 1.20% | 0.30% |
Valuation allowances | (0.60%) | 0.20% | 7.00% |
Federal and state tax true-ups | 0.90% | (8.20%) | (2.30%) |
Research and development credits | (0.60%) | (1.50%) | 0.00% |
Other | 3.00% | 2.00% | (0.60%) |
Effective tax rate | 25.70% | 58.00% | 58.20% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes [Line Items] | ||
Tax deductible goodwill | $ 171.1 | $ 146.3 |
Tax benefits of net operating loss carryforwards | 21 | |
Deferred tax assets, total | 21.1 | 27.1 |
Valuation allowances | 3.8 | 4.1 |
Litigation Settlement, Expense | 28.5 | |
Pre Tax Book Income | $ 31 | |
Internal Revenue Service (IRS) [Member] | ||
Income Taxes [Line Items] | ||
Statute of limitations for tax examinations | 1 year | |
Minimum [Member] | State [Member] | ||
Income Taxes [Line Items] | ||
Statute of limitations for tax examinations | 3 years | |
Maximum [Member] | State [Member] | ||
Income Taxes [Line Items] | ||
Statute of limitations for tax examinations | 5 years | |
Domestic Tax Authority [Member] | ||
Income Taxes [Line Items] | ||
Tax benefits of net operating loss carryforwards | $ 7.3 | |
State [Member] | ||
Income Taxes [Line Items] | ||
Tax benefits of net operating loss carryforwards | $ 4.1 | $ 3.1 |
INCOME TAXES, Schedule of Defer
INCOME TAXES, Schedule of Deferred Income Taxes (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Deferred Income Tax Assets and Liabilities [Line Items] | ||
Net operating losses | $ 21 | |
Deferred Tax Liabilities Valuation Allowance Current | 0 | $ 0 |
Total current deferred taxes assets | 41.8 | 42.8 |
Current deferred taxes, net | 41.8 | 42.8 |
Total noncurrent deferred taxes liabilities | 20.7 | 15.7 |
Noncurrent deferred taxes liabilities, net | 20.7 | 15.7 |
Deferred Tax Assets Current [Member] | ||
Schedule of Deferred Income Tax Assets and Liabilities [Line Items] | ||
Accrued expenses | 7.5 | 7.7 |
Allowance for doubtful accounts | 18.4 | 22.9 |
Net operating losses | 0 | 0 |
Other | 19 | 14.2 |
Valuation allowance | (2.3) | (2) |
Total current deferred taxes assets | 42.6 | 42.8 |
Deferred Tax Assets Noncurrent [Member] | ||
Schedule of Deferred Income Tax Assets and Liabilities [Line Items] | ||
Other | 9.7 | 9.1 |
Accelerated depreciation | 0 | 0 |
Stock-based compensation | 4.8 | 4.6 |
Goodwill and intangibles | 0 | 0 |
Net operating losses | 15.2 | 17.1 |
Valuation allowances | (1.5) | (2.1) |
Total noncurrent deferred taxes assets | 28.2 | 28.7 |
Deferred Tax Liabilities Current [Member] | ||
Schedule of Deferred Income Tax Assets and Liabilities [Line Items] | ||
Accrued expenses | 0 | 0 |
Allowance for doubtful accounts | 0 | 0 |
Net operating losses | 0 | 0 |
Total current deferred taxes liabilities | 0.8 | 0 |
Other | 0.8 | 0 |
Deferred Tax Liability Noncurrent [Member] | ||
Schedule of Deferred Income Tax Assets and Liabilities [Line Items] | ||
Accelerated depreciation | 13.1 | 11.4 |
Stock-based compensation | 0 | 0 |
Goodwill and intangibles | 33.9 | 33 |
Net operating losses | 0 | 0 |
Other | 1.9 | 0 |
Valuation allowance | 0 | 0 |
Total noncurrent deferred taxes liabilities | 48.9 | 44.4 |
Noncurrent deferred taxes liabilities, net | $ 48.9 | $ 44.4 |
EARNINGS PER SHARE, Schedule of
EARNINGS PER SHARE, Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||
EARNINGS PER SHARE [Abstract] | |||||||||||||
Numerator for basic and earnings per diluted share-net income | $ 20.2 | $ 3 | [1] | $ 2.3 | $ 9.6 | $ 3.2 | $ 8.5 | $ (9.7) | $ 4.8 | $ 35.1 | $ 6.8 | $ 18.9 | |
Denominator for basic earnings per share-weighted average shares (in shares) | 30.4 | 30.4 | 30.4 | 30.2 | 30.1 | 30.1 | 30 | 29.8 | 30,363,588 | 29,983,428 | 29,601,199 | ||
Effect of dilutive securities (in shares) | 403,778 | 665,703 | 474,500 | ||||||||||
Denominator for earnings per diluted share - adjusted weighted average shares (in shares) | 31 | 30.9 | 30.8 | 30.7 | 30.7 | 30.6 | 30 | 30.4 | 30,767,366 | 30,649,131 | 30,075,699 | ||
Basic earnings per share (in dollars per share) | $ 0.66 | $ 0.10 | $ 0.08 | $ 0.32 | $ 0.11 | $ 0.28 | $ (0.32) | $ 0.16 | $ 1.16 | $ 0.23 | $ 0.64 | ||
Earnings per diluted share (in dollars per share) | $ 0.66 | $ 0.10 | $ 0.07 | $ 0.31 | $ 0.10 | $ 0.28 | $ (0.32) | $ 0.16 | $ 1.14 | $ 0.22 | $ 0.63 | ||
Unexercised employee stock options, unvested restricted shares and performance shares excluded from the effect of dilutive securities above (a) (in shares) | [2] | 291,679 | 340,291 | 1,417,272 | |||||||||
[1] | During the third quarter 2014, the Corporation recognized a $4.3 loss on extinguishment of debt. | ||||||||||||
[2] | These unexercised employee stock options and nonvested restricted shares were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented. |
UNAUDITED QUARTERLY FINANCIAL64
UNAUDITED QUARTERLY FINANCIAL INFORMATION, Quarterly Interim Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
UNAUDITED QUARTERLY FINANCIAL INFORMATION [Abstract] | ||||||||||||
Revenues | $ 520.6 | $ 498.8 | $ 497.5 | $ 511.6 | $ 523.5 | $ 470.2 | $ 448.6 | $ 452.2 | $ 2,028.5 | $ 1,894.5 | $ 1,757.9 | |
Cost of goods sold | 433.9 | 420.2 | 416.3 | 423 | 429.1 | 387.2 | 366.7 | 372.2 | 1,693.4 | 1,555.2 | 1,430.7 | |
Gross profit | 86.7 | 78.6 | 81.2 | 88.6 | 94.4 | 83 | 81.9 | 80 | 335.1 | 339.3 | 327.2 | |
Operating income | 20 | 8.5 | 8.5 | 16.8 | 12.7 | 17.1 | (9.7) | 10.3 | 53.8 | 30.4 | 55.8 | |
Net income | $ 20.2 | $ 3 | [1] | $ 2.3 | $ 9.6 | $ 3.2 | $ 8.5 | $ (9.7) | $ 4.8 | $ 35.1 | $ 6.8 | $ 18.9 |
Basic (in dollars per share) | $ 0.66 | $ 0.10 | $ 0.08 | $ 0.32 | $ 0.11 | $ 0.28 | $ (0.32) | $ 0.16 | $ 1.16 | $ 0.23 | $ 0.64 | |
Diluted (in dollars per share) | $ 0.66 | $ 0.10 | $ 0.07 | $ 0.31 | $ 0.10 | $ 0.28 | $ (0.32) | $ 0.16 | $ 1.14 | $ 0.22 | $ 0.63 | |
Shares used in computing earnings per common share [Abstract] | ||||||||||||
Basic (in shares) | 30.4 | 30.4 | 30.4 | 30.2 | 30.1 | 30.1 | 30 | 29.8 | 30,363,588 | 29,983,428 | 29,601,199 | |
Diluted (in shares) | 31 | 30.9 | 30.8 | 30.7 | 30.7 | 30.6 | 30 | 30.4 | 30,767,366 | 30,649,131 | 30,075,699 | |
Extinguishment of Debt, Gain (Loss), Net of Tax | $ 4.3 | |||||||||||
[1] | During the third quarter 2014, the Corporation recognized a $4.3 loss on extinguishment of debt. |