Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 27, 2014 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
Entity Registrant Name | 'Addus HomeCare Corp | ' |
Entity Central Index Key | '0001468328 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 10,989,879 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash | $14,124 | $15,565 |
Accounts receivable, net of allowances of $4,171 and $4,140 at September 30, 2014 and December 31, 2013, respectively | 62,121 | 61,354 |
Prepaid expenses and other current assets | 6,937 | 6,235 |
Deferred tax assets | 8,326 | 8,326 |
Total current assets | 91,508 | 91,480 |
Property and equipment, net of accumulated depreciation and amortization | 7,646 | 2,634 |
Other assets | ' | ' |
Goodwill | 64,237 | 60,026 |
Intangibles, net of accumulated amortization | 11,043 | 8,762 |
Investments in joint ventures | 900 | 900 |
Other assets | 13 | 132 |
Total other assets | 76,193 | 69,820 |
Total assets | 175,347 | 163,934 |
Current Liabilities | ' | ' |
Accounts payable | 3,613 | 4,633 |
Current portion of capital lease obligations | 978 | ' |
Accrued expenses | 41,434 | 41,945 |
Deferred revenue | 3 | 59 |
Total current liabilities | 46,028 | 46,637 |
Capital lease obligations, less current portion | 2,926 | ' |
Deferred tax liabilities | 3,441 | 3,441 |
Total liabilities | 52,395 | 50,078 |
Stockholders' equity | ' | ' |
Common stock-$.001 par value; 40,000 authorized and 10,990 and 10,913 shares issued and outstanding as of September 30, 2014 and December 31, 2013, respectively | 11 | 11 |
Additional paid-in capital | 83,848 | 83,072 |
Retained earnings | 39,093 | 30,773 |
Total stockholders' equity | 122,952 | 113,856 |
Total liabilities and stockholders' equity | $175,347 | $163,934 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Condensed Consolidated Balance Sheets [Abstract] | ' | ' |
Accounts receivable, allowance for doubtful accounts | $4,171 | $4,140 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 10,990,000 | 10,913,000 |
Common stock, shares outstanding | 10,990,000 | 10,913,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements Of Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Condensed Consolidated Statements Of Income [Abstract] | ' | ' | ' | ' |
Net service revenues | $81,658 | $67,306 | $230,306 | $196,059 |
Cost of service revenues | 59,818 | 50,080 | 169,218 | 146,422 |
Gross profit | 21,840 | 17,226 | 61,088 | 49,637 |
General and administrative expenses | 15,773 | 12,424 | 45,576 | 36,026 |
Depreciation and amortization | 1,106 | 539 | 2,684 | 1,626 |
Total operating expenses | 16,879 | 12,963 | 48,260 | 37,652 |
Operating income from continuing operations | 4,961 | 4,263 | 12,828 | 11,985 |
Interest income | -8 | -183 | -16 | -183 |
Interest expense | 188 | 159 | 500 | 509 |
Total interest expense, net | 180 | -24 | 484 | 326 |
Income from continuing operations before income taxes | 4,781 | 4,287 | 12,344 | 11,659 |
Income tax expense | 1,544 | 1,517 | 4,024 | 3,620 |
Net income from continuing operations | 3,237 | 2,770 | 8,320 | 8,039 |
Discontinued operations: | ' | ' | ' | ' |
(Loss) from home health business, net of tax | ' | -203 | ' | -890 |
Gain on sale of home health business, net of tax | ' | ' | ' | 11,111 |
Earnings from discontinued operations | ' | -203 | ' | 10,221 |
Net income | $3,237 | $2,567 | $8,320 | $18,260 |
Basic income per share | ' | ' | ' | ' |
Continuing operations | $0.30 | $0.26 | $0.76 | $0.75 |
Discontinued operations | ' | ($0.02) | ' | $0.95 |
Basic income per share | $0.30 | $0.24 | $0.76 | $1.70 |
Diluted income per share | ' | ' | ' | ' |
Continuing operations | $0.29 | $0.25 | $0.75 | $0.73 |
Discontinued operations | ' | ($0.02) | ' | $0.93 |
Diluted income per share | $0.29 | $0.23 | $0.75 | $1.66 |
Weighted average number of common shares and potential common shares outstanding: | ' | ' | ' | ' |
Basic | 10,927 | 10,787 | 10,985 | 10,783 |
Diluted | 11,154 | 11,071 | 11,122 | 11,006 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements Of Stockholders' Equity (USD $) | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Total |
In Thousands | ||||
Balance at Dec. 31, 2013 | $11 | $83,072 | $30,773 | $113,856 |
Balance, shares at Dec. 31, 2013 | 10,913 | ' | ' | ' |
Stock-based compensation | ' | 562 | ' | 562 |
Shares issued | 0 | 214 | ' | 214 |
Shares issued, shares | 77 | ' | ' | ' |
Net income | ' | ' | 8,320 | 8,320 |
Balance at Sep. 30, 2014 | $11 | $83,848 | $39,093 | $122,952 |
Balance, shares at Sep. 30, 2014 | 10,990 | ' | ' | ' |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements Of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $8,320 | $18,260 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 2,684 | 1,627 |
Deferred income taxes | ' | 5,425 |
Stock-based compensation | 562 | 365 |
Amortization of debt issuance costs | 119 | 125 |
Provision for doubtful accounts | 2,832 | 2,102 |
Gain on sale of home health business | ' | -18,838 |
Changes in operating assets and liabilities, net of acquired businesses: | ' | ' |
Accounts receivable | -3,077 | 14,685 |
Prepaid expenses and other current assets | -642 | 997 |
Accounts payable | -1,188 | 262 |
Accrued expenses | -1,964 | 234 |
Deferred revenue | -56 | -141 |
Net cash provided by operating activities | 7,590 | 25,103 |
Cash flows from investing activities: | ' | ' |
Acquisitions of businesses | -7,186 | ' |
Acquisition of customer list | -50 | ' |
Net proceeds from sale of Home Health Business | ' | 19,659 |
Purchases of property and equipment, excluding capital lease obligations | -5,913 | -577 |
Net cash (used in) provided by investing activities | -13,149 | 19,082 |
Cash flows from financing activities: | ' | ' |
Net repayments on term loan | ' | -208 |
Borrowings on capital lease obligations | 4,033 | ' |
Payments on capital lease obligations | -129 | ' |
Cash received from exercise of stock options | 214 | ' |
Net payments on revolving credit loan | ' | -16,250 |
Net cash provided by (used in) financing activities | 4,118 | -16,458 |
Net change in cash | -1,441 | 27,727 |
Cash, at beginning of period | 15,565 | 1,737 |
Cash, at end of period | 14,124 | 29,464 |
Supplemental disclosures of cash flow information: | ' | ' |
Cash paid for interest | 500 | 437 |
Cash paid for income taxes | 3,883 | 4,936 |
Supplemental disclosures of non-cash investing and financing activities | ' | ' |
Tax benefit related to the amortization of tax goodwill in excess of book basis | 120 | 120 |
Contingent and deferred consideration accrued for acquisitions | $1,020 | ' |
Summary_Of_Significant_Account
Summary Of Significant Accounting Policies | 9 Months Ended | |
Sep. 30, 2014 | ||
Summary Of Significant Accounting Policies [Abstract] | ' | |
Summary Of Significant Accounting Policies | ' | |
1. Summary of Significant Accounting Policies | ||
Basis of Presentation and Description of Business | ||
The condensed consolidated financial statements include the accounts of Addus HomeCare Corporation (Holdings) and its subsidiaries (together with Holdings, the Company or we). The Company is a comprehensive provider of home and community based services to over 32,000 consumers through a network of 132 locations in 22 states. These services are primarily performed in the homes of the consumers and include assistance to the elderly, chronically ill and disabled with bathing, grooming, dressing, personal hygiene and medication reminders and other activities of daily living. Home and community based services are primarily performed under agreements with state and local governmental agencies and, increasingly, managed care organizations. | ||
Discontinued Operations | ||
On February 7, 2013, subsidiaries of Holdings entered into an Asset Purchase Agreement with LHC Group, Inc. and certain of its subsidiaries (the Home Health Purchase Agreement). Pursuant to the Home Health Purchase Agreement, effective March 1, 2013, the purchasers acquired substantially all the assets of the Companys home health business in Arkansas, Nevada and South Carolina and 90% of its home health business in California and Illinois, with the Company retaining 10% ownership in such locations, for cash consideration of $20,000,000. | ||
The Companys home health services were operated through licensed and Medicare certified offices that provided physical, occupational and speech therapy, as well as skilled nursing services to pediatric, adult infirm and elderly patients. Home health services were reimbursed from Medicare, Medicaid and Medicaid-waiver programs, commercial insurance and private payors (see note 2). | ||
Principles of Consolidation | ||
All intercompany balances and transactions have been eliminated in consolidation. Our investment in entities with less than 20% ownership or in which the Company does not have the ability to influence the operations of the investee are being accounted for using the cost method and are included in investments in joint ventures. | ||
Revenue Recognition | ||
The Company generates net service revenues by providing services directly to consumers. The Company receives payments for providing services from federal, state and local governmental agencies, commercial insurers and private consumers. Our continuing operations, which include the results of operations previously included in our home and community segment and agencies in three states previously included in our home health segment, are principally provided based on authorized hours, determined by the relevant agency, at an hourly rate specified in agreements or fixed by legislation and recognized as revenues at the time services are rendered. Home and community based service revenues are reimbursed by state, local and other governmental programs which are partially funded by Medicaid or Medicaid waiver programs, with the remainder reimbursed through private duty and insurance programs. | ||
Laws and regulations governing the Medicaid and Medicare programs are complex and subject to interpretation. As a result, there is at least a reasonable possibility that recorded estimates may change in the near term. The Company believes that it is in compliance in all material respects with all applicable laws and regulations. | ||
Allowance for Doubtful Accounts | ||
The Company establishes its allowance for doubtful accounts to the extent it is probable that a portion or all of a particular account will not be collected. The Company estimates its provision for doubtful accounts primarily by aging receivables utilizing eight aging categories and applying its historical collection rates to each aging category, taking into consideration factors that might impact the use of historical collection rates or payor groups, with certain large payors analyzed separately from other payor groups. In the Companys evaluation of these estimates, it also considers delays in payment trends in individual states due to budget or funding issues, billing conversions related to acquisitions or internal systems, resubmission of bills with required documentation and disputes with specific payors. An allowance for doubtful accounts is maintained at a level management believes is sufficient to cover potential losses. However, actual collections could differ from the Companys estimates. | ||
Property and Equipment | ||
Property and equipment are recorded at cost and depreciated over the estimated useful lives of the related assets by use of the straight-line method except for internally developed software which is amortized by the sum-of-years digits method. Maintenance and repairs are charged to expense as incurred. The estimated useful lives of the property and equipment are as follows: | ||
Computer equipment | 3 - 5 years | |
Furniture and equipment | 5 - 7 years | |
Transportation equipment | 5 years | |
Computer software | 5 - 10 years | |
Leasehold improvements | Lesser of useful life or lease term, unless | |
probability of lease renewal is likely | ||
Goodwill | ||
The Companys carrying value of goodwill is the residual of the purchase price over the fair value of the net assets acquired from various acquisitions including the acquisition of Addus HealthCare, Inc. (Addus HealthCare). In accordance with Accounting Standards Codification (ASC) Topic 350, Goodwill and Other Intangible Assets goodwill and intangible assets with indefinite useful lives are not amortized. The Company tests goodwill for impairment at the reporting unit level on an annual basis, as of October 1, or whenever potential impairment triggers occur, such as a significant change in business climate or regulatory changes that would indicate that an impairment may have occurred. The Company may use a qualitative test, known as Step 0, or a two-step quantitative method to determine whether impairment has occurred. In Step 0, the Company can elect to perform an optional qualitative analysis and based on the results skip the two step analysis. In 2013, the Company elected to implement Step 0 and was not required to conduct the remaining two step analysis. The results of the Companys Step 0 assessment indicated that it was more likely than not that the fair value of its reporting unit exceeded its carrying value and therefore the Company concluded that there were no impairments for the year ended December 31, 2013. No impairment charges were recorded for the three or nine months ended September 30, 2014 or 2013. | ||
Intangible Assets | ||
The Companys identifiable intangible assets consist of customer and referral relationships, trade names, trademarks, state licenses and non-compete agreements. Amortization is computed using straight-line and accelerated methods based upon the estimated useful lives of the respective assets, which range from two to 25 years. | ||
Intangible assets with finite lives are amortized using the estimated economic benefit method over the useful life and assessed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company would recognize an impairment loss when the estimated future non-discounted cash flows associated with the intangible asset is less than the carrying value. An impairment change would then be recorded for the excess of the carrying value over the fair value. The Company estimates the fair value of these intangible assets using the income approach. No impairment charge was recorded for the three and nine months ended September 30, 2014 or 2013. | ||
The income approach, which the Company uses to estimate the fair value of its intangible assets (other than goodwill), is dependent on a number of factors including estimates of future market growth and trends, forecasted revenue and costs, expected periods the assets will be utilized, appropriate discount rates and other variables. The Company bases its fair value estimates on assumptions the Company believes to be reasonable but which are unpredictable and inherently uncertain. Actual future results may differ from those estimates. In addition, the Company makes certain judgments about the selection of comparable companies used in the market approach in determining valuation. | ||
The Company also has indefinite-lived intangible assets that are not subject to amortization expense such as certificates of need and licenses to conduct specific operations within geographic markets. The Companys management has concluded that certificates of need and licenses have indefinite lives, as management has determined that there are no legal, regulatory, contractual, economic or other factors that would limit the useful life of these intangible assets, and the Company intends to renew and operate the certificates of need and licenses indefinitely. The certificates of need and licenses are tested annually for impairment. No impairment was recorded for the three and nine months ended September 30, 2014 or 2013. | ||
Workers Compensation Program | ||
The Companys workers compensation program has a $350,000 deductible component. The Company recognizes its obligations associated with this program in the period the claim is incurred. The cost of both the claims reported and claims incurred but not reported, up to the deductible, have been accrued based on historical claims experience, industry statistics and an actuarial analysis performed by an independent third party. The future claims payments related to the workers compensation program are secured by letters of credit. | ||
Interest Income | ||
Legislation enacted in Illinois entitles designated service program providers to receive a prompt payment interest penalty based on qualifying services approved for payment that remain unpaid after a designated period of time. As the amount and timing of the receipt of these payments are not certain, the interest income is recognized when received and reported in the statement of operations as interest income. For the three and nine months ended September 30, 2014, the Company did not receive any prompt payment interest. For the three and nine months ended September 30, 2013, the Company received $183,000 in prompt payment interest. | ||
Interest Expense | ||
The Companys interest expense consists of interest costs on its credit facility and other debt instruments. | ||
Income Tax Expense | ||
The Company accounts for income taxes under the provisions of ASC Topic 740, Income Taxes. The objective of accounting for income taxes is to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in its financial statements or tax returns. Deferred taxes, resulting from differences between the financial and tax basis of the Companys assets and liabilities, are also adjusted for changes in tax rates and tax laws when changes are enacted. ASC Topic 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. ASC Topic 740, also prescribes a recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return. In addition, ASC Topic 740 provides guidance on derecognition, classification, accounting in interim periods and disclosure requirements for uncertain tax positions. | ||
Stock-based Compensation | ||
The Company has two stock incentive plans, the 2006 Stock Incentive Plan (the 2006 Plan) and the 2009 Stock Incentive Plan (the 2009 Plan) that provide for stock-based employee compensation. The Company accounts for stock-based compensation in accordance with ASC Topic 718, Stock Compensation . Compensation expense is recognized on a graded method under the 2006 Plan and on a straight-line basis under the 2009 Plan over the vesting period of the awards based on the fair value of the options and restricted stock awards. Under the 2006 Plan, the Company historically used the Black-Scholes option pricing model to estimate the fair value of its stock based payment awards, but beginning October 28, 2009 under its 2009 Plan it began using an enhanced Hull-White Trinomial model. The determination of the fair value of stock-based payments utilizing the Black-Scholes model and the Enhanced Hull-White Trinomial model is affected by Holdings stock price and a number of assumptions, including expected volatility, risk-free interest rate, expected term, expected dividends yield, expected forfeiture rate, expected turn-over rate, and the expected exercise multiple. | ||
Net Income Per Common Share | ||
Net income per common share, calculated on the treasury stock method, is based on the weighted average number of shares outstanding during the period. The Companys outstanding securities that may potentially dilute the common stock are stock options and restricted stock awards. | ||
Included in the Companys calculation for the three and nine months ended September 30, 2014 were 646,000 stock options outstanding, of which 208,000 and 216,000, respectively, were dilutive. In addition, there were 60,000 restricted stock awards outstanding, 19,000 and 12,000 of which were dilutive for the three and nine months ended September 30, 2014, respectively. | ||
Included in the Companys calculation for the three and nine months ended September 30, 2013 were 641,000 stock options outstanding, of which 242,000 and 183,000, respectively, were dilutive. In addition, there were 96,000 restricted stock awards outstanding, 42,000 and 40,000 of which were dilutive for the three and nine months ended September 30, 2013, respectively. | ||
Estimates | ||
The financial statements are prepared by management in conformity with U.S. Generally Accepted Accounting Principles (GAAP) and include estimated amounts and certain disclosures based on assumptions about future events. Accordingly, actual results could differ from those estimates. | ||
Fair Value of Financial Instruments | ||
The Companys financial instruments consist of cash, accounts receivable, payables and debt. The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short-term nature of these instruments. The carrying value of the Companys long-term debt with variable interest rates approximates fair value based on instruments with similar terms. | ||
The Company applies fair value techniques on a non-recurring basis associated with valuing potential impairment losses related to goodwill and indefinite-lived intangible assets and also when determining the fair value of contingent considerations. To determine the fair value in these situations, the Company uses Level 3 inputs, such as discounted cash flows, or if available, what a market participant would pay on the measurement date. | ||
The Company utilizes the income approach to estimate the fair value of its intangible assets derived from acquisitions. In addition, discounted cash flows were used to estimate the fair value of the Companys investment in joint ventures. | ||
Recent Accounting Pronouncements | ||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of its pending adoption of ASU 2014-09 on its consolidated financial statements and has not yet determined the method by which it will adopt the standard in 2017. | ||
Discontinued_Operations
Discontinued Operations | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Discontinued Operations [Abstract] | ' | ||||||||||
Discontinued Operations | ' | ||||||||||
2. Discontinued Operations | |||||||||||
During December 2012, in anticipation of the sale of substantially all of the assets used in its home health business (the Home Health Business), the Company reported the operating results of the Home Health Business as discontinued operations in accordance with ASC 360-10-45, Impairment or Disposal of Long-Lived Assets. On February 7, 2013, the Company entered into the Home Health Purchase Agreement, pursuant to which subsidiaries of LHC Group, Inc. agreed to acquire substantially all the assets of the Home Health Business in Arkansas, Nevada and South Carolina and 90% of the Home Health Business in California and Illinois, with the Company retaining 10% ownership in such locations, for cash consideration of $20,000,000. The transaction was consummated effective March 1, 2013. In addition, the results of operations for an agency in Pennsylvania that was sold on December 30, 2013 and an agency in Idaho that was closed on November 30, 2012 are included in discontinued operations. | |||||||||||
The Company has included the financial results of the Home Health Business in discontinued operations for all periods presented. In connection with the discontinued operations presentation, certain financial statement footnotes have also been updated to reflect the impact of discontinued operations. | |||||||||||
The following table presents the net service revenues and earnings attributable to discontinued operations, which include the financial results for the three and nine months ended September 30, 2014 and 2013: | |||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||
(Amounts in Thousands) | (Amounts in Thousands) | ||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||
Net service revenues | $ | $ | $ | $ | 6,475 | ||||||
Loss before income taxes | (344 | ) | (1,509 | ) | |||||||
Income tax benefit | (141 | ) | (619 | ) | |||||||
Net loss from discontinued operations | $ | $ | (203 | ) | $ | $ | (890 | ) | |||
The following table presents the net gain on the sale of the Home Health Business, which was recorded March 1, 2013. | |||||||||||
Gain | |||||||||||
(Amounts in | |||||||||||
Thousands) | |||||||||||
Gain before income taxes | $ | 18,838 | |||||||||
Income tax benefit | (7,727 | ) | |||||||||
Net income from discontinued operations | 11,111 | ||||||||||
Pursuant to the Home Health Purchase Agreement, the Company retained $625,000 of accounts receivable, net as of December 31, 2013. In addition, the Company retained the related accrued expenses and accounts payable associated with the Home Health Business as of December 31, 2013. | |||||||||||
Acquisitions
Acquisitions | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Acquisitions [Abstract] | ' | |||
Acquisitions | ' | |||
3. Acquisitions | ||||
Effective June 1, 2014, the Company acquired Cura Partners, LLC, which conducts business under the name Aid & Assist at Home, LLC (Aid & Assist), in order to further expand the Companys presence in the State of Tennessee. The total consideration for the transaction was $8,206,000, comprised of $7,186,000 in cash and $1,020,000, which has not yet been paid, representing the estimated fair value, subject to the achievement of certain performance targets set forth in an earn-out agreement. The related acquisition costs were $543,000 and were expensed as incurred. The results of operations from this acquired entity are included in the Companys statement of operations from the date of the acquisition. | ||||
The Companys acquisition of Aid & Assist has been accounted for in accordance with ASC Top 805, Business Combinations, and the resultant goodwill and other intangible assets will be accounted for under ASC Topic 350 Goodwill and Other Intangible Assets. The acquisition was recorded at its fair value as of June 1, 2014. The total purchase price is $8,206,000 and is comprised of: | ||||
Total | ||||
(Amounts in | ||||
Thousands) | ||||
Cash | $ | 7,186 | ||
Contingent earn-out obligation (net of $148 discount) | 1,020 | |||
Total purchase price | $ | 8,206 | ||
The contingent earn-out obligation has been recorded at its fair value of $1,020,000, which is the present value of the Companys obligation to pay up to $1,168,000 based on probability-weighted estimates of the achievement of certain performance targets, as defined. | ||||
Under business combination accounting, the total purchase price will be allocated to Aid & Assists net tangible and identifiable intangible assets based on their estimated fair values. Based upon managements preliminary valuation, the total purchase price has been allocated as follows: | ||||
Total | ||||
(Amounts in | ||||
Thousands) | ||||
Goodwill | $ | 4,331 | ||
Identifiable intangible assets | 3,950 | |||
Accounts receivable (net) | 521 | |||
Furniture, fixtures and equipment | 65 | |||
Other current assets | 60 | |||
Accrued liabilities | (553 | ) | ||
Accounts payable | (168 | ) | ||
Total purchase price allocation | $ | 8,206 | ||
Identifiable intangible assets acquired consist of trade names and trademarks, customer relationships and non-compete agreements. The estimated fair value of identifiable intangible assets was determined by the Companys management. It is anticipated that the net intangible and identifiable intangible assets are deductible for tax purposes. These estimates are provisional and are subject to change. | ||||
The Aid & Assist acquisition accounted for $3,295,000 and $4,358,000 of net service revenues from continuing operations for the three and nine months ended September 30, 2014, respectively. | ||||
The Company acquired two home and community based businesses during 2013 and the first quarter of 2014 to further its presence in both existing states and to expand into new states. On November 1, 2013, the Company acquired two agencies located in South Carolina from the Medi Home Private Care Division of Medical Services of America, Inc. On January 24, 2014, the Company acquired an additional four agencies located in Tennessee and two agencies located in Ohio from the Medi Home Private Care Division of Medical Services of America, Inc. On December 1, 2013, the Company acquired the assets of Coordinated Home Health Care, LLC, a personal care business located in New Mexico (CHHC), which included sixteen offices located in southern New Mexico. The combined purchase price for the foregoing acquisitions was $12,325,000 paid at closing and a maximum of $2,250,000 in future cash consideration based on certain performance criteria. The related acquisition costs totaled $660,000 and were expensed as incurred. The results of operations from these acquired entities are included in the Companys Statements of Income from the dates of the respective acquisitions. | ||||
The Companys acquisition of the assets of CHHC has been accounted for in accordance with ASC Top 805, Business Combinations and the resultant goodwill and other intangible assets will be accounted for under ASC Topic 350 Goodwill and Other Intangible Assets. Assets acquired and liabilities assumed were recorded at their fair values as of December 1, 2013. The total purchase price was $12,825,000 and is comprised of: | ||||
Total | ||||
(Amounts in | ||||
Thousands) | ||||
Cash | $ | 11,725 | ||
Contingent earn-out obligation (net of discount of $1,125) | 1,100 | |||
Total purchase price | $ | 12,825 | ||
The contingent earn-out obligation was recorded at its fair value of $1,100,000, which is the present value of the Companys obligation to up to $2,250,000 based on probability-weighted estimates of the achievement of certain performance targets, as defined in the earn-out agreement between the parties. | ||||
Under business combination accounting, the total purchase price was allocated to CHHCs net tangible and identifiable intangible assets based on their estimated fair values. Based upon managements valuation, the total purchase price was allocated as follows: | ||||
Total | ||||
(Amounts in | ||||
Thousands) | ||||
Goodwill | $ | 9,488 | ||
Identifiable intangible assets | 3,300 | |||
Accounts receivable | 888 | |||
Prepaid expenses | 35 | |||
Furniture, fixtures and equipment | 58 | |||
Deposits | 15 | |||
Accounts payable | (81 | ) | ||
Accrued liabilities | (864 | ) | ||
Other liabilities | (14 | ) | ||
Total purchase price allocation | $ | 12,825 | ||
Identifiable intangible assets acquired consist of trade names and trademarks, customer relationships and non-compete agreements. The estimated fair value of identifiable intangible assets was determined by management. It is anticipated that the net intangible and identifiable intangible assets are deductible for tax purposes. | ||||
Acquisitions completed during the fourth quarter 2013 accounted for $5,821,000 and $16,004,000 of net service revenues from continuing operations for the three and nine months ended September 30, 2014, respectively. | ||||
Goodwill_And_Intangible_Assets
Goodwill And Intangible Assets | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Goodwill And Intangible Assets [Abstract] | ' | ||||||||||||||
Goodwill And Intangible Assets | ' | ||||||||||||||
4. Goodwill and Intangible Assets | |||||||||||||||
The Companys carrying value of goodwill is the residual of the purchase price over the fair value of the net assets acquired from various acquisitions including the acquisition of Addus HealthCare. In accordance with ASC Topic 350, Goodwill and Other Intangible Assets, goodwill and intangible assets with indefinite useful lives are not amortized. The Company tests goodwill for impairment on an annual basis, as of October 1, or whenever potential impairment triggers occur, such as a significant change in business climate or regulatory changes that would indicate that impairment may have occurred. | |||||||||||||||
The Company can elect to perform Step 0, an optional qualitative analysis and based on the results skip the remaining two steps. In 2013 and 2012, the Company elected to implement Step 0 and was not required to conduct the remaining two step analysis. In performing its goodwill assessment for 2013 and 2012, the Company evaluated the following factors that affect future business performance: macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, entity-specific events, reporting unit factors and company stock price. As a result of the assessments of these qualitative factors, the Company concluded that it was more likely than not that the fair values of the reporting unit goodwill as of December 31, 2013 exceed the carrying values of the unit. Accordingly, the first and second steps of the goodwill impairment test as described in ASC 350-20-35, which includes estimating the fair values of the Company, were not considered necessary. | |||||||||||||||
The Company did not record any impairment charges for the three and nine months ended September 30, 2014 or 2013. The Company will perform its annual impairment test for fiscal 2014 during the fourth quarter of 2014. | |||||||||||||||
The following is a summary of the goodwill activity for the nine months ended September 30, 2014: | |||||||||||||||
Goodwill | |||||||||||||||
(Amounts in | |||||||||||||||
Thousands) | |||||||||||||||
Goodwill, at December 31, 2013 | $ | 60,026 | |||||||||||||
Additions for acquisitions | 4,331 | ||||||||||||||
Adjustments to previously recorded goodwill | (120 | ) | |||||||||||||
Goodwill, at September 30, 2014 | $ | 64,237 | |||||||||||||
Adjustments to the previously recorded goodwill are primarily credits related to amortization of tax goodwill in excess of book basis. | |||||||||||||||
The Companys identifiable intangible assets consist of customer and referral relationships, trade names, trademarks, state licenses and non-compete agreements. Amortization is computed using straight-line and accelerated methods based upon the estimated useful lives of the respective assets, which range from two to twenty five years. | |||||||||||||||
The Company also has indefinite-lived assets that are not subject to amortization expense such as certificates of need and licenses to conduct specific operations within geographic markets. The Company has concluded that certificates of need and licenses have indefinite lives, as management has determined that there are no legal, regulatory, contractual, economic or other factors that would limit the useful life of these intangible assets and the Company intends to renew and operate the certificates of need and licenses indefinitely. The certificates of need and licenses are tested annually for impairment using the cost approach. Under this method assumptions are made about the cost to replace the certificates of need. No impairment charges were recorded in the three and nine months ended September 30, 2014 or 2013. | |||||||||||||||
The carrying amount and accumulated amortization of each identifiable intangible asset category consisted of the following for continuing operations at September 30, 2014 and December 31, 2013: | |||||||||||||||
Customer and | Non- | ||||||||||||||
referral | Trade names and | competition | |||||||||||||
relationships | trade marks | State Licenses | agreements | Total | |||||||||||
(Amounts in Thousands) | |||||||||||||||
Gross balance at December 31, 2013 | $ | 26,346 | $ | 5,281 | $ | 150 | $ | 1,508 | $ | 33,285 | |||||
Accumulated amortization | (21,138 | ) | (2,995 | ) | (390 | ) | (24,523 | ) | |||||||
Net Balance at December 31, 2013 | 5,208 | 2,286 | 150 | 1,118 | 8,762 | ||||||||||
Gross balance at January 1, 2014 | 26,346 | 5,281 | 150 | 1,508 | 33,285 | ||||||||||
Additions | 50 | 50 | |||||||||||||
Additions for acquisitions | 1,500 | 1,900 | 550 | 3,950 | |||||||||||
Accumulated amortization | (22,123 | ) | (3,415 | ) | (704 | ) | (26,242 | ) | |||||||
Net Balance at September 30, 2014 | $ | 5,773 | $ | 3,766 | $ | 150 | $ | 1,354 | $ | 11,043 | |||||
Amortization expense for continuing operations related to the identifiable intangible assets amounted to $710,000 and $1,719,000 for the three and nine months ended September 30, 2014, respectively. Amortization expense for continuing and discontinued operations related to the identifiable intangible assets amounted to $339,000 and $1,017,000 for the three and nine months ended September 30, 2013, respectively. Goodwill and state licenses are not amortized pursuant to ASC Topic 350. | |||||||||||||||
Details_Of_Certain_Balance_She
Details Of Certain Balance Sheet Accounts | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Details Of Certain Balance Sheet Accounts [Abstract] | ' | ||||
Details Of Certain Balance Sheet Accounts | ' | ||||
5. Details of Certain Balance Sheet Accounts | |||||
Prepaid expenses and other current assets consisted of the following: | |||||
September 30, | December 31, | ||||
2014 | 2013 | ||||
(Amounts in | (Amounts in | ||||
Thousands) | Thousands) | ||||
Prepaid health insurance | $ | 2,876 | $ | 3,192 | |
Prepaid workers compensation and liability | |||||
insurance | 1,623 | 1,173 | |||
Prepaid rent | 507 | 455 | |||
Workers compensation insurance receivable | 940 | 821 | |||
Other | 991 | 594 | |||
$ | 6,937 | $ | 6,235 | ||
Accrued expenses consisted of the following: | |||||
September 30, | December 31, | ||||
2014 | 2013 | ||||
(Amounts in | (Amounts in | ||||
Thousands) | Thousands) | ||||
Accrued payroll | $ | 15,163 | $ | 12,932 | |
Accrued workers compensation insurance | 13,527 | 13,347 | |||
Accrued health insurance | 3,217 | 3,731 | |||
Indemnification reserve (1) | 1,476 | 3,224 | |||
Accrued payroll taxes | 2,029 | 1,755 | |||
Accrued professional fees | 1,263 | 1,319 | |||
Amounts due to LHCG (2) | 17 | 2,196 | |||
Current portion of contingent earn-out | |||||
obligation (3) | 2,120 | 1,100 | |||
Other | 2,622 | 2,341 | |||
$ | 41,434 | $ | 41,945 | ||
-1 | As a condition of the sale of the Home Health Business to subsidiaries of LHC Group. Inc. (LHCG) the Company is responsible for any adjustments to Medicare and Medicaid billings prior to the closing. In connection with an internal evaluation of the Companys billing processes, it discovered documentation errors in a number of claims that it had submitted to Medicare. Consistent with applicable law, the Company voluntarily remitted $1,840,000 to the government in March 2014. The Company, using its best judgment, has estimated a total of $1,476,000 for billing adjustments remaining. | ||||
-2 | Amounts due to LHCG pursuant to a billing services arrangement between the Company and LHCG. | ||||
-3 | The Company acquired certain assets of CHHC on December 1, 2013 and acquired Aid & Assist on June 1, 2014. The purchase agreements for the acquisitions contained provisions for earn-out payments. The contingent earn-out obligations have been recorded at their fair values of $1,100,000 and $1,020,000, respectively, which is the present value of the Companys obligations of up to $2,250,000 and $1,168,000 for CHHC and Aid & Assist, respectively, based on probability- weighted estimates of the achievement of certain performance targets. | ||||
The Company provides health insurance coverage to qualified union employees providing home and community based services in Illinois through a Taft-Hartley multi-employer health and welfare plan under Section 302(c)(5) of the Labor Management Relations Act of 1947. The Companys insurance contributions equal the amount reimbursed by the State of Illinois. Contributions are due within five business days from the date the funds are received from the State. Amounts due of $2,836,000 and $3,163,000 for health insurance reimbursements and contributions were reflected in prepaid insurance and accrued insurance at September 30, 2014 and December 31, 2013, respectively. | |||||
LongTerm_Debt
Long-Term Debt | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Long-Term Debt [Abstract] | ' | |||
Long-Term Debt | ' | |||
6. Long-Term Debt | ||||
Capital Leases | ||||
On July 12, 2014 and September 11, 2014, the Company executed two 48-month capital lease agreements for $2,650,000 and $1,428,000, respectively, with First American Commercial Bancorp, Inc. The capital leases were entered into to finance property and equipment at the Companys new corporate headquarters in Downers Grove, IL. The underlying assets are included in Property and equipment, net of accumulated depreciation and amortization in the accompanying Unaudited Condensed Consolidated Balance Sheets. These capital lease obligations require monthly payments through September 2018 and have implicit interest rates that range from 3.0% to 3.3%. At the end of the term, the Company has the option to purchase the assets for $1 per lease agreement. | ||||
The following is an analysis of the leased property under capital leases by major classes. | ||||
Asset Balances at | ||||
30-Sep-14 | ||||
Classes of Property | (Amounts in Thousands) | |||
Leasehold Improvements | $ | 2,974 | ||
Furniture & Equipment | 526 | |||
Computer Equipment | 431 | |||
Computer Software | 147 | |||
Less: Accumulated Depreciation | (190 | ) | ||
$ | 3,888 | |||
The future minimum payments for capital leases as of September 30, 2014 are as follows: | ||||
Capital Lease | ||||
(Amounts In Thousands) | ||||
2014 | $ | 275 | ||
2015 | 1,105 | |||
2016 | 1,105 | |||
2017 | 1,105 | |||
2018 | 629 | |||
Total minimum lease payments | 4,219 | |||
Less: amount representing estimated | ||||
executory costs (such as taxes, | ||||
maintenance and insurance), including | ||||
profit thereon, included in total | ||||
minimum lease payments | (73 | ) | ||
Net minimum lease payments | 4,146 | |||
Less: amount representing interest (a) | (242 | ) | ||
Present value of net minimum lease | ||||
payments (b) | $ | 3,904 | ||
(a) | Amount necessary to reduce net minimum lease payments to present value calculated at the Companys incremental borrowing rate at lease inception. | |||
(b) | Reflected in the balance sheet as current and noncurrent obligations under capital leases of $978,000 and $2,926,000 respectively. | |||
Senior Secured Credit Facility | ||||
On August 11, 2014, the Company renewed its credit facility. The Companys credit facility provides a $55,000,000 revolving line of credit expiring November 2, 2019 and includes a $27,500,000 sublimit for the issuance of letters of credit. On November 6, 2014, the Company amended its credit facility, with retroactive effect to September 30, 2014. The credit facility was amended to (i) reduce the floating interest rate from one-month LIBOR, plus a margin of 4.6% to one-month LIBOR, plus a margin of 3.5%, (ii) reduce the interest rate for loans based on term periods of one, two or three months from the LIBOR rate, plus a margin of 4.6% to the LIBOR rate, plus a margin of 3.5% and (iii) increase the allowed capital expenditures for the fiscal year ending 2014 from $5,000,000 to $7,000,000. Substantially all of the subsidiaries of Holdings are co-borrowers, and Holdings has guaranteed the borrowers obligations under the credit facility. The credit facility is secured by a first priority security interest in all of Holdings and the borrowers current and future tangible and intangible assets, including the shares of stock of the borrowers. | ||||
The availability of funds under the revolving credit portion of the credit facility, as amended, is based on the lesser of (i) the product of adjusted EBITDA, as defined in the credit agreement, for the most recent 12-month period for which financial statements have been delivered under the credit agreement multiplied by the specified advance multiple, up to 3.25, less the outstanding senior indebtedness and letters of credit, and (ii) $55,000,000 less the outstanding revolving loans and letters of credit. Interest on the revolving line of credit may be payable at (i) a floating rate equal to the one-month LIBOR, plus a margin of 3.5%, (ii) the LIBOR rate for term periods of one, two or three months, plus a margin of 3.5% or (iii) the base rate, plus a margin of 1.6%, where the base rate is equal to the greatest of (a) the rate of interest last quoted by The Wall Street Journal as the prime rate, (b) the sum of the federal funds rate, plus a margin of 0.5% and (c) the sum of the adjusted LIBOR that would be applicable to a loan with a one month interest period advanced on such day, plus a margin of 3%. The Company pays a fee equal to 0.5% per annum of the unused portion of the revolving portion of the credit facility. Issued stand-by letters of credit are charged at a rate of 2.0% per annum payable monthly. The Company did not have any amounts outstanding on the credit facility as of September 30, 2014, and the total availability under the revolving credit loan facility was $40,304,000 and $42,279,000, as of September 30, 2014 and December 31, 2013, respectively. | ||||
The credit facility contains customary affirmative covenants regarding, among other things, the maintenance of records, compliance with laws, maintenance of permits, maintenance of insurance and property and payment of taxes. The credit facility also contains certain customary financial covenants and negative covenants that, among other things, include a requirement to maintain a minimum fixed charge coverage ratio, a requirement to stay below a maximum senior leverage ratio and a requirement to stay below a maximum permitted amount of capital expenditures, as well as restrictions on guarantees, indebtedness, liens, dividends, distributions, investments and loans, subject to customary carve outs, restrictions on the Companys ability to enter into transactions other than in the ordinary course of business, a restriction on the ability to consummate more than three acquisitions in any calendar year, or for the purchase price of any one acquisition to exceed $2,000,000, in each case without the consent of the lenders, restrictions on mergers, transfers of assets, acquisitions, equipment, subsidiaries and affiliate transactions, subject to customary carve outs, and restrictions on fundamental changes and lines of business. | ||||
Income_Taxes
Income Taxes | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Income Taxes [Abstract] | ' | ||||
Income Taxes | ' | ||||
7. Income Taxes | |||||
A reconciliation of the continuing operations statutory federal tax rate of 35.0% for the three and nine months ended September 30, 2014 and 2013 is summarized as follows: | |||||
Three Months Ended | |||||
September 30, | |||||
2014 | 2013 | ||||
Federal income tax at statutory rate | 35 | % | 35 | % | |
State and local taxes, net of federal benefit | 5.9 | 6 | |||
Jobs tax credits, net | (9.7 | ) | (6.6 | ) | |
Nondeductible meals and entertainment | 1.1 | 1 | |||
Effective income tax rate | 32.3 | % | 35.4 | % | |
Nine Months Ended | |||||
September 30, | |||||
2014 | 2013 | ||||
Federal income tax at statutory rate | 35 | % | 35 | % | |
State and local taxes, net of federal benefit | 5.9 | 6 | |||
Jobs tax credits, net (1) | (8.9 | ) | (10.8 | ) | |
Nondeductible meals and entertainment | 0.6 | 0.8 | |||
Effective income tax rate | 32.6 | % | 31 | % | |
-1 | Included in the jobs tax credit for the nine months ended September 30, 2013 was a one-time benefit of a 7.2% reduction from the Companys statutory tax rate for the jobs tax credits earned in 2012 but not recorded until 2013. The federal employment opportunity tax credits were reinstated in 2013 and were not an allowable deduction in 2012. |
Segment_Data
Segment Data | 9 Months Ended | |
Sep. 30, 2014 | ||
Segment Data [Abstract] | ' | |
Segment Data | ' | |
8 | Segment Data | |
The Company historically segregated its results into two distinct reporting segments: the home & community segment and the home health segment. As a result of the sale of the Home Health Business, the Company has reported the operating results for the Home Health Business in discontinued operations. Therefore, all of the Companys operations are reported as one operating segment. | ||
Commitments_And_Contingencies
Commitments And Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments And Contingencies [Abstract] | ' |
Commitments And Contingencies | ' |
9. Commitments and Contingencies | |
Legal Proceedings | |
The Company is a party to legal and/or administrative proceedings arising in the ordinary course of its business. It is the opinion of management that the outcome of such proceedings will not have a material effect on the Companys financial position and results of operations. | |
Employment Agreements | |
The Company has entered into employment agreements with certain members of senior management. The terms of these agreements are up to four years and include non-compete and nondisclosure provisions, as well as provide for defined severance payments in the event of termination. | |
Significant_Payors
Significant Payors | 9 Months Ended |
Sep. 30, 2014 | |
Significant Payors [Abstract] | ' |
Significant Payors | ' |
10. Significant Payors | |
A substantial portion of the Companys net service revenues and accounts receivables are derived from services performed for federal, state and local governmental agencies. The Illinois Department on Aging accounted for 52.1% and 58.9% of the Companys net service revenues for the three months ended September 30, 2014 and 2013, respectively and 53.7% and 59.1% of the Companys net service revenues for the nine months ended September 30, 2014 and 2013, respectively. | |
The related receivables due from the state agency represented 59.1% of the Companys accounts receivable at September 30, 2014 and 65.6% of the Companys accounts receivable at December 31, 2013. | |
Concentration_Of_Cash
Concentration Of Cash | 9 Months Ended |
Sep. 30, 2014 | |
Concentration Of Cash [Abstract] | ' |
Concentration Of Cash | ' |
11. Concentration of Cash | |
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash. The Company maintains cash with financial institutions which, at times, may exceed federally insured limits. The Company believes it is not exposed to any significant credit risk on cash. | |
Summary_Of_Significant_Account1
Summary Of Significant Accounting Policies (Policy) | 9 Months Ended | |
Sep. 30, 2014 | ||
Summary Of Significant Accounting Policies [Abstract] | ' | |
Basis Of Presentation And Description Of Business | ' | |
Basis of Presentation and Description of Business | ||
The condensed consolidated financial statements include the accounts of Addus HomeCare Corporation (Holdings) and its subsidiaries (together with Holdings, the Company or we). The Company is a comprehensive provider of home and community based services to over 32,000 consumers through a network of 132 locations in 22 states. These services are primarily performed in the homes of the consumers and include assistance to the elderly, chronically ill and disabled with bathing, grooming, dressing, personal hygiene and medication reminders and other activities of daily living. Home and community based services are primarily performed under agreements with state and local governmental agencies and, increasingly, managed care organizations. | ||
Discontinued Operations | ' | |
Discontinued Operations | ||
On February 7, 2013, subsidiaries of Holdings entered into an Asset Purchase Agreement with LHC Group, Inc. and certain of its subsidiaries (the Home Health Purchase Agreement). Pursuant to the Home Health Purchase Agreement, effective March 1, 2013, the purchasers acquired substantially all the assets of the Companys home health business in Arkansas, Nevada and South Carolina and 90% of its home health business in California and Illinois, with the Company retaining 10% ownership in such locations, for cash consideration of $20,000,000. | ||
The Companys home health services were operated through licensed and Medicare certified offices that provided physical, occupational and speech therapy, as well as skilled nursing services to pediatric, adult infirm and elderly patients. Home health services were reimbursed from Medicare, Medicaid and Medicaid-waiver programs, commercial insurance and private payors (see note 2). | ||
Principles Of Consolidation | ' | |
Principles of Consolidation | ||
All intercompany balances and transactions have been eliminated in consolidation. Our investment in entities with less than 20% ownership or in which the Company does not have the ability to influence the operations of the investee are being accounted for using the cost method and are included in investments in joint ventures. | ||
Revenue Recognition | ' | |
Revenue Recognition | ||
The Company generates net service revenues by providing services directly to consumers. The Company receives payments for providing services from federal, state and local governmental agencies, commercial insurers and private consumers. Our continuing operations, which include the results of operations previously included in our home and community segment and agencies in three states previously included in our home health segment, are principally provided based on authorized hours, determined by the relevant agency, at an hourly rate specified in agreements or fixed by legislation and recognized as revenues at the time services are rendered. Home and community based service revenues are reimbursed by state, local and other governmental programs which are partially funded by Medicaid or Medicaid waiver programs, with the remainder reimbursed through private duty and insurance programs. | ||
Laws and regulations governing the Medicaid and Medicare programs are complex and subject to interpretation. As a result, there is at least a reasonable possibility that recorded estimates may change in the near term. The Company believes that it is in compliance in all material respects with all applicable laws and regulations. | ||
Allowance For Doubtful Accounts | ' | |
Allowance for Doubtful Accounts | ||
The Company establishes its allowance for doubtful accounts to the extent it is probable that a portion or all of a particular account will not be collected. The Company estimates its provision for doubtful accounts primarily by aging receivables utilizing eight aging categories and applying its historical collection rates to each aging category, taking into consideration factors that might impact the use of historical collection rates or payor groups, with certain large payors analyzed separately from other payor groups. In the Companys evaluation of these estimates, it also considers delays in payment trends in individual states due to budget or funding issues, billing conversions related to acquisitions or internal systems, resubmission of bills with required documentation and disputes with specific payors. An allowance for doubtful accounts is maintained at a level management believes is sufficient to cover potential losses. However, actual collections could differ from the Companys estimates. | ||
Property And Equipment | ' | |
Property and Equipment | ||
Property and equipment are recorded at cost and depreciated over the estimated useful lives of the related assets by use of the straight-line method except for internally developed software which is amortized by the sum-of-years digits method. Maintenance and repairs are charged to expense as incurred. The estimated useful lives of the property and equipment are as follows: | ||
Computer equipment | 3 - 5 years | |
Furniture and equipment | 5 - 7 years | |
Transportation equipment | 5 years | |
Computer software | 5 - 10 years | |
Leasehold improvements | Lesser of useful life or lease term, unless | |
probability of lease renewal is likely | ||
Goodwill | ' | |
Goodwill | ||
The Companys carrying value of goodwill is the residual of the purchase price over the fair value of the net assets acquired from various acquisitions including the acquisition of Addus HealthCare, Inc. (Addus HealthCare). In accordance with Accounting Standards Codification (ASC) Topic 350, Goodwill and Other Intangible Assets goodwill and intangible assets with indefinite useful lives are not amortized. The Company tests goodwill for impairment at the reporting unit level on an annual basis, as of October 1, or whenever potential impairment triggers occur, such as a significant change in business climate or regulatory changes that would indicate that an impairment may have occurred. The Company may use a qualitative test, known as Step 0, or a two-step quantitative method to determine whether impairment has occurred. In Step 0, the Company can elect to perform an optional qualitative analysis and based on the results skip the two step analysis. In 2013, the Company elected to implement Step 0 and was not required to conduct the remaining two step analysis. The results of the Companys Step 0 assessment indicated that it was more likely than not that the fair value of its reporting unit exceeded its carrying value and therefore the Company concluded that there were no impairments for the year ended December 31, 2013. No impairment charges were recorded for the three or nine months ended September 30, 2014 or 2013. | ||
Intangible Assets | ' | |
Intangible Assets | ||
The Companys identifiable intangible assets consist of customer and referral relationships, trade names, trademarks, state licenses and non-compete agreements. Amortization is computed using straight-line and accelerated methods based upon the estimated useful lives of the respective assets, which range from two to 25 years. | ||
Intangible assets with finite lives are amortized using the estimated economic benefit method over the useful life and assessed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company would recognize an impairment loss when the estimated future non-discounted cash flows associated with the intangible asset is less than the carrying value. An impairment change would then be recorded for the excess of the carrying value over the fair value. The Company estimates the fair value of these intangible assets using the income approach. No impairment charge was recorded for the three and nine months ended September 30, 2014 or 2013. | ||
The income approach, which the Company uses to estimate the fair value of its intangible assets (other than goodwill), is dependent on a number of factors including estimates of future market growth and trends, forecasted revenue and costs, expected periods the assets will be utilized, appropriate discount rates and other variables. The Company bases its fair value estimates on assumptions the Company believes to be reasonable but which are unpredictable and inherently uncertain. Actual future results may differ from those estimates. In addition, the Company makes certain judgments about the selection of comparable companies used in the market approach in determining valuation. | ||
The Company also has indefinite-lived intangible assets that are not subject to amortization expense such as certificates of need and licenses to conduct specific operations within geographic markets. The Companys management has concluded that certificates of need and licenses have indefinite lives, as management has determined that there are no legal, regulatory, contractual, economic or other factors that would limit the useful life of these intangible assets, and the Company intends to renew and operate the certificates of need and licenses indefinitely. The certificates of need and licenses are tested annually for impairment. No impairment was recorded for the three and nine months ended September 30, 2014 or 2013. | ||
Workers' Compensation Program | ' | |
Workers Compensation Program | ||
The Companys workers compensation program has a $350,000 deductible component. The Company recognizes its obligations associated with this program in the period the claim is incurred. The cost of both the claims reported and claims incurred but not reported, up to the deductible, have been accrued based on historical claims experience, industry statistics and an actuarial analysis performed by an independent third party. The future claims payments related to the workers compensation program are secured by letters of credit. | ||
Interest Income | ' | |
Interest Income | ||
Legislation enacted in Illinois entitles designated service program providers to receive a prompt payment interest penalty based on qualifying services approved for payment that remain unpaid after a designated period of time. As the amount and timing of the receipt of these payments are not certain, the interest income is recognized when received and reported in the statement of operations as interest income. For the three and nine months ended September 30, 2014, the Company did not receive any prompt payment interest. For the three and nine months ended September 30, 2013, the Company received $183,000 in prompt payment interest. | ||
Interest Expense | ' | |
Interest Expense | ||
The Companys interest expense consists of interest costs on its credit facility and other debt instruments. | ||
Income Tax Expense | ' | |
Income Tax Expense | ||
The Company accounts for income taxes under the provisions of ASC Topic 740, Income Taxes. The objective of accounting for income taxes is to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in its financial statements or tax returns. Deferred taxes, resulting from differences between the financial and tax basis of the Companys assets and liabilities, are also adjusted for changes in tax rates and tax laws when changes are enacted. ASC Topic 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. ASC Topic 740, also prescribes a recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return. In addition, ASC Topic 740 provides guidance on derecognition, classification, accounting in interim periods and disclosure requirements for uncertain tax positions. | ||
Stock-Based Compensation | ' | |
Stock-based Compensation | ||
The Company has two stock incentive plans, the 2006 Stock Incentive Plan (the 2006 Plan) and the 2009 Stock Incentive Plan (the 2009 Plan) that provide for stock-based employee compensation. The Company accounts for stock-based compensation in accordance with ASC Topic 718, Stock Compensation . Compensation expense is recognized on a graded method under the 2006 Plan and on a straight-line basis under the 2009 Plan over the vesting period of the awards based on the fair value of the options and restricted stock awards. Under the 2006 Plan, the Company historically used the Black-Scholes option pricing model to estimate the fair value of its stock based payment awards, but beginning October 28, 2009 under its 2009 Plan it began using an enhanced Hull-White Trinomial model. The determination of the fair value of stock-based payments utilizing the Black-Scholes model and the Enhanced Hull-White Trinomial model is affected by Holdings stock price and a number of assumptions, including expected volatility, risk-free interest rate, expected term, expected dividends yield, expected forfeiture rate, expected turn-over rate, and the expected exercise multiple. | ||
Net Income Per Common Share | ' | |
Net Income Per Common Share | ||
Net income per common share, calculated on the treasury stock method, is based on the weighted average number of shares outstanding during the period. The Companys outstanding securities that may potentially dilute the common stock are stock options and restricted stock awards. | ||
Included in the Companys calculation for the three and nine months ended September 30, 2014 were 646,000 stock options outstanding, of which 208,000 and 216,000, respectively, were dilutive. In addition, there were 60,000 restricted stock awards outstanding, 19,000 and 12,000 of which were dilutive for the three and nine months ended September 30, 2014, respectively. | ||
Included in the Companys calculation for the three and nine months ended September 30, 2013 were 641,000 stock options outstanding, of which 242,000 and 183,000, respectively, were dilutive. In addition, there were 96,000 restricted stock awards outstanding, 42,000 and 40,000 of which were dilutive for the three and nine months ended September 30, 2013, respectively. | ||
Estimates | ' | |
Estimates | ||
The financial statements are prepared by management in conformity with U.S. Generally Accepted Accounting Principles (GAAP) and include estimated amounts and certain disclosures based on assumptions about future events. Accordingly, actual results could differ from those estimates. | ||
Fair Value Of Financial Instruments | ' | |
Fair Value of Financial Instruments | ||
The Companys financial instruments consist of cash, accounts receivable, payables and debt. The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short-term nature of these instruments. The carrying value of the Companys long-term debt with variable interest rates approximates fair value based on instruments with similar terms. | ||
The Company applies fair value techniques on a non-recurring basis associated with valuing potential impairment losses related to goodwill and indefinite-lived intangible assets and also when determining the fair value of contingent considerations. To determine the fair value in these situations, the Company uses Level 3 inputs, such as discounted cash flows, or if available, what a market participant would pay on the measurement date. | ||
The Company utilizes the income approach to estimate the fair value of its intangible assets derived from acquisitions. In addition, discounted cash flows were used to estimate the fair value of the Companys investment in joint ventures. | ||
Recent Accounting Pronouncements | ' | |
Recent Accounting Pronouncements | ||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of its pending adoption of ASU 2014-09 on its consolidated financial statements and has not yet determined the method by which it will adopt the standard in 2017. | ||
Significant_Accounting_Policie
Significant Accounting Policies (Tables) | 9 Months Ended | |
Sep. 30, 2014 | ||
Summary Of Significant Accounting Policies [Abstract] | ' | |
Schedule Of Property, Plant And Equipment Useful Life | ' | |
Computer equipment | 3 - 5 years | |
Furniture and equipment | 5 - 7 years | |
Transportation equipment | 5 years | |
Computer software | 5 - 10 years | |
Leasehold improvements | Lesser of useful life or lease term, unless | |
probability of lease renewal is likely |
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Discontinued Operations [Abstract] | ' | ||||||||||
Schedule Of Income Loss From Discontinued Operations | ' | ||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||
(Amounts in Thousands) | (Amounts in Thousands) | ||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||
Net service revenues | $ | $ | $ | $ | 6,475 | ||||||
Loss before income taxes | (344 | ) | (1,509 | ) | |||||||
Income tax benefit | (141 | ) | (619 | ) | |||||||
Net loss from discontinued operations | $ | $ | (203 | ) | $ | $ | (890 | ) | |||
Schedule Of Gain On Sale Of Discontinued Operation | ' | ||||||||||
Gain | |||||||||||
(Amounts in | |||||||||||
Thousands) | |||||||||||
Gain before income taxes | $ | 18,838 | |||||||||
Income tax benefit | (7,727 | ) | |||||||||
Net income from discontinued operations | 11,111 |
Acquisitions_Tables
Acquisitions (Tables) | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Coordinated Home Health Care, LLC [Member] | ' | |||
Business Acquisition [Line Items] | ' | |||
Schedule Of Purchase Price Components | ' | |||
Total | ||||
(Amounts in | ||||
Thousands) | ||||
Cash | $ | 11,725 | ||
Contingent earn-out obligation (net of discount of $1,125) | 1,100 | |||
Total purchase price | $ | 12,825 | ||
Schedule Of Purchase Price Allocation | ' | |||
Total | ||||
(Amounts in | ||||
Thousands) | ||||
Goodwill | $ | 9,488 | ||
Identifiable intangible assets | 3,300 | |||
Accounts receivable | 888 | |||
Prepaid expenses | 35 | |||
Furniture, fixtures and equipment | 58 | |||
Deposits | 15 | |||
Accounts payable | (81 | ) | ||
Accrued liabilities | (864 | ) | ||
Other liabilities | (14 | ) | ||
Total purchase price allocation | $ | 12,825 | ||
Cura Partners, LLC [Member] | ' | |||
Business Acquisition [Line Items] | ' | |||
Schedule Of Purchase Price Components | ' | |||
Total | ||||
(Amounts in | ||||
Thousands) | ||||
Cash | $ | 7,186 | ||
Contingent earn-out obligation (net of $148 discount) | 1,020 | |||
Total purchase price | $ | 8,206 | ||
Schedule Of Purchase Price Allocation | ' | |||
Total | ||||
(Amounts in | ||||
Thousands) | ||||
Goodwill | $ | 4,331 | ||
Identifiable intangible assets | 3,950 | |||
Accounts receivable (net) | 521 | |||
Furniture, fixtures and equipment | 65 | |||
Other current assets | 60 | |||
Accrued liabilities | (553 | ) | ||
Accounts payable | (168 | ) | ||
Total purchase price allocation | $ | 8,206 |
Goodwill_And_Intangible_Assets1
Goodwill And Intangible Assets (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Goodwill And Intangible Assets [Abstract] | ' | ||||||||||||||
Changes In Goodwill By Segment | ' | ||||||||||||||
Goodwill | |||||||||||||||
(Amounts in | |||||||||||||||
Thousands) | |||||||||||||||
Goodwill, at December 31, 2013 | $ | 60,026 | |||||||||||||
Additions for acquisitions | 4,331 | ||||||||||||||
Adjustments to previously recorded goodwill | (120 | ) | |||||||||||||
Goodwill, at September 30, 2014 | $ | 64,237 | |||||||||||||
Schedule Of Carrying Amount And Accumulated Amortization Of Intangible Asset | ' | ||||||||||||||
Customer and | Non- | ||||||||||||||
referral | Trade names and | competition | |||||||||||||
relationships | trade marks | State Licenses | agreements | Total | |||||||||||
(Amounts in Thousands) | |||||||||||||||
Gross balance at December 31, 2013 | $ | 26,346 | $ | 5,281 | $ | 150 | $ | 1,508 | $ | 33,285 | |||||
Accumulated amortization | (21,138 | ) | (2,995 | ) | (390 | ) | (24,523 | ) | |||||||
Net Balance at December 31, 2013 | 5,208 | 2,286 | 150 | 1,118 | 8,762 | ||||||||||
Gross balance at January 1, 2014 | 26,346 | 5,281 | 150 | 1,508 | 33,285 | ||||||||||
Additions | 50 | 50 | |||||||||||||
Additions for acquisitions | 1,500 | 1,900 | 550 | 3,950 | |||||||||||
Accumulated amortization | (22,123 | ) | (3,415 | ) | (704 | ) | (26,242 | ) | |||||||
Net Balance at September 30, 2014 | $ | 5,773 | $ | 3,766 | $ | 150 | $ | 1,354 | $ | 11,043 |
Details_Of_Certain_Balance_She1
Details Of Certain Balance Sheet Accounts (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Details Of Certain Balance Sheet Accounts [Abstract] | ' | ||||
Schedule Of Prepaid Expenses And Other Current Assets | ' | ||||
September 30, | December 31, | ||||
2014 | 2013 | ||||
(Amounts in | (Amounts in | ||||
Thousands) | Thousands) | ||||
Prepaid health insurance | $ | 2,876 | $ | 3,192 | |
Prepaid workers compensation and liability | |||||
insurance | 1,623 | 1,173 | |||
Prepaid rent | 507 | 455 | |||
Workers compensation insurance receivable | 940 | 821 | |||
Other | 991 | 594 | |||
$ | 6,937 | $ | 6,235 | ||
Schedule Of Accrued Expenses | ' | ||||
September 30, | December 31, | ||||
2014 | 2013 | ||||
(Amounts in | (Amounts in | ||||
Thousands) | Thousands) | ||||
Accrued payroll | $ | 15,163 | $ | 12,932 | |
Accrued workers compensation insurance | 13,527 | 13,347 | |||
Accrued health insurance | 3,217 | 3,731 | |||
Indemnification reserve (1) | 1,476 | 3,224 | |||
Accrued payroll taxes | 2,029 | 1,755 | |||
Accrued professional fees | 1,263 | 1,319 | |||
Amounts due to LHCG (2) | 17 | 2,196 | |||
Current portion of contingent earn-out | |||||
obligation (3) | 2,120 | 1,100 | |||
Other | 2,622 | 2,341 | |||
$ | 41,434 | $ | 41,945 | ||
-1 | As a condition of the sale of the Home Health Business to subsidiaries of LHC Group. Inc. (LHCG) the Company is responsible for any adjustments to Medicare and Medicaid billings prior to the closing. In connection with an internal evaluation of the Companys billing processes, it discovered documentation errors in a number of claims that it had submitted to Medicare. Consistent with applicable law, the Company voluntarily remitted $1,840,000 to the government in March 2014. The Company, using its best judgment, has estimated a total of $1,476,000 for billing adjustments remaining. | ||||
-2 | Amounts due to LHCG pursuant to a billing services arrangement between the Company and LHCG. | ||||
-3 | The Company acquired certain assets of CHHC on December 1, 2013 and acquired Aid & Assist on June 1, 2014. The purchase agreements for the acquisitions contained provisions for earn-out payments. The contingent earn-out obligations have been recorded at their fair values of $1,100,000 and $1,020,000, respectively, which is the present value of the Companys obligations of up to $2,250,000 and $1,168,000 for CHHC and Aid & Assist, respectively, based on probability- weighted estimates of the achievement of certain performance targets. |
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Long-Term Debt [Abstract] | ' | |||
Schedule Of Property Under Capital Leases | ' | |||
Asset Balances at | ||||
30-Sep-14 | ||||
Classes of Property | (Amounts in Thousands) | |||
Leasehold Improvements | $ | 2,974 | ||
Furniture & Equipment | 526 | |||
Computer Equipment | 431 | |||
Computer Software | 147 | |||
Less: Accumulated Depreciation | (190 | ) | ||
$ | 3,888 | |||
Schedule Of Future Minimum Payments For Capital Leases | ' | |||
Capital Lease | ||||
(Amounts In Thousands) | ||||
2014 | $ | 275 | ||
2015 | 1,105 | |||
2016 | 1,105 | |||
2017 | 1,105 | |||
2018 | 629 | |||
Total minimum lease payments | 4,219 | |||
Less: amount representing estimated | ||||
executory costs (such as taxes, | ||||
maintenance and insurance), including | ||||
profit thereon, included in total | ||||
minimum lease payments | (73 | ) | ||
Net minimum lease payments | 4,146 | |||
Less: amount representing interest (a) | (242 | ) | ||
Present value of net minimum lease | ||||
payments (b) | $ | 3,904 | ||
(a) | Amount necessary to reduce net minimum lease payments to present value calculated at the Companys incremental borrowing rate at lease inception. | |||
(b) | Reflected in the balance sheet as current and noncurrent obligations under capital leases of $978,000 and $2,926,000 respectively. |
Income_Taxes_Tables
Income Taxes (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Income Taxes [Abstract] | ' | ||||
Reconciliation Of Effective Tax Rate | ' | ||||
Three Months Ended | |||||
September 30, | |||||
2014 | 2013 | ||||
Federal income tax at statutory rate | 35 | % | 35 | % | |
State and local taxes, net of federal benefit | 5.9 | 6 | |||
Jobs tax credits, net | (9.7 | ) | (6.6 | ) | |
Nondeductible meals and entertainment | 1.1 | 1 | |||
Effective income tax rate | 32.3 | % | 35.4 | % | |
Nine Months Ended | |||||
September 30, | |||||
2014 | 2013 | ||||
Federal income tax at statutory rate | 35 | % | 35 | % | |
State and local taxes, net of federal benefit | 5.9 | 6 | |||
Jobs tax credits, net (1) | (8.9 | ) | (10.8 | ) | |
Nondeductible meals and entertainment | 0.6 | 0.8 | |||
Effective income tax rate | 32.6 | % | 31 | % | |
-1 | Included in the jobs tax credit for the nine months ended September 30, 2013 was a one-time benefit of a 7.2% reduction from the Companys statutory tax rate for the jobs tax credits earned in 2012 but not recorded until 2013. The federal employment opportunity tax credits were reinstated in 2013 and were not an allowable deduction in 2012. |
Significant_Accounting_Policie1
Significant Accounting Policies (Narrative) (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Share data in Thousands, unless otherwise specified | Feb. 07, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
state | item | |||||
state | ||||||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' |
Percentage of segment sold | 90.00% | ' | ' | ' | ' | ' |
Ownership percentage | 10.00% | ' | ' | ' | ' | ' |
Acquisitions of businesses | $20,000,000 | ' | ' | $7,186,000 | ' | ' |
Number of states in which the company operates | ' | 22 | ' | 22 | ' | ' |
Number of consumers | ' | ' | ' | 32,000 | ' | ' |
Number of locations | ' | ' | ' | 132 | ' | ' |
Allowances for doubtful accounts, number of aging categories | ' | ' | ' | 8 | ' | ' |
Goodwill impairment | ' | 0 | 0 | 0 | 0 | 0 |
Impairment of intangible assets excluding goodwill | ' | 0 | 0 | 0 | 0 | ' |
Deductible component of workers' compensation | ' | ' | ' | 350,000 | ' | ' |
Interest income received | ' | ' | $183,000 | $0 | $183,000 | ' |
Number of stock options included in calculation | ' | 646 | 641 | 646 | 641 | ' |
Shares of restricted stock awards | ' | 60 | 96 | 60 | 96 | ' |
Number of dilutive shares of outstanding stock options and restricted stock awards | ' | 208 | 242 | 216 | 183 | ' |
Number of stock incentive plans | ' | ' | ' | 2 | ' | ' |
Home & Community [Member] | ' | ' | ' | ' | ' | ' |
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' |
Number of states in which the company operates | ' | 3 | ' | 3 | ' | ' |
Restricted Stock [Member] | ' | ' | ' | ' | ' | ' |
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' |
Number of dilutive shares of outstanding stock options and restricted stock awards | ' | 19 | 42 | 12 | 40 | ' |
Minimum [Member] | ' | ' | ' | ' | ' | ' |
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' |
Intangible assets, estimated useful lives | ' | ' | ' | '2 years | ' | ' |
Maximum [Member] | ' | ' | ' | ' | ' | ' |
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' |
Intangible assets, estimated useful lives | ' | ' | ' | '25 years | ' | ' |
Significant_Accounting_Policie2
Significant Accounting Policies (Schedule Of Property, Plant And Equipment Useful Life) (Details) | 9 Months Ended |
Sep. 30, 2014 | |
Transportation Equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property and equipment useful life | '5 years |
Minimum [Member] | Computer Equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property and equipment useful life | '3 years |
Minimum [Member] | Furniture And Equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property and equipment useful life | '5 years |
Minimum [Member] | Computer Software [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property and equipment useful life | '5 years |
Maximum [Member] | Computer Equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property and equipment useful life | '5 years |
Maximum [Member] | Furniture And Equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property and equipment useful life | '7 years |
Maximum [Member] | Computer Software [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property and equipment useful life | '10 years |
Discontinued_Operations_Narrat
Discontinued Operations (Narrative) (Details) (USD $) | 0 Months Ended | 9 Months Ended | |
In Thousands, unless otherwise specified | Feb. 07, 2013 | Sep. 30, 2014 | Dec. 31, 2013 |
Discontinued Operations [Abstract] | ' | ' | ' |
Percentage of segment sold | 90.00% | ' | ' |
Ownership percentage | 10.00% | ' | ' |
Acquisitions of businesses | $20,000 | $7,186 | ' |
Accounts receivable, net | ' | ' | $625 |
Discontinued_Operations_Schedu
Discontinued Operations (Schedule Of Income Loss From Discontinued Operations) (Details) (USD $) | 3 Months Ended | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Discontinued Operations [Abstract] | ' | ' |
Net service revenues | ' | $6,475 |
Loss before income taxes | -344 | -1,509 |
Income tax benefit | -141 | -619 |
Net loss from discontinued operations | ($203) | ($890) |
Discontinued_Operations_Schedu1
Discontinued Operations (Schedule Of Gain On Sale Of Discontinued Operation) (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Discontinued Operations [Abstract] | ' |
Gain before income taxes | $18,838 |
Income tax benefit | -7,727 |
Net income from discontinued operations | $11,111 |
Acquisitions_Narrative_Details
Acquisitions (Narrative) (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Feb. 07, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Jun. 01, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 01, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Medical Services of America, Inc. and Coordinated Home and Health Care, LLC [Member] | Cura Partners, LLC [Member] | Cura Partners, LLC [Member] | Cura Partners, LLC [Member] | Cura Partners, LLC [Member] | Coordinated Home Health Care, LLC [Member] | Coordinated Home Health Care, LLC [Member] | South Carolina [Member] | Tennessee [Member] | Ohio [Member] | New Mexico [Member] | |||||||
Medical Services of America, Inc. [Member] | Medical Services of America, Inc. [Member] | Medical Services of America, Inc. [Member] | Coordinated Home Health Care, LLC [Member] | ||||||||||||||
item | item | item | item | ||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisitions of businesses | $20,000,000 | ' | ' | $7,186,000 | ' | ' | $12,325,000 | $7,186,000 | ' | ' | ' | ' | $11,725,000 | ' | ' | ' | ' |
Business acquisition, contingent earn-out obligation | ' | ' | ' | ' | ' | ' | ' | 1,020,000 | ' | 1,020,000 | ' | ' | 1,100,000 | ' | ' | ' | ' |
Business acquisition, contingent earn-out obligation, present value | ' | ' | ' | ' | ' | ' | ' | ' | 1,168,000 | 1,168,000 | ' | 2,250,000 | 2,250,000 | ' | ' | ' | ' |
Potential future consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,250,000 | ' | ' | ' | ' |
Total purchase price for business acquisition | ' | ' | ' | ' | ' | ' | ' | 8,206,000 | ' | ' | ' | ' | 12,825,000 | ' | ' | ' | ' |
Goodwill impairment | ' | 0 | 0 | 0 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Agencies Acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | 4 | 2 | ' |
Number of Offices | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16 |
Acquisition costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 543,000 | 660,000 | 660,000 | ' | ' | ' | ' |
Net service revenues | ' | $81,658,000 | $67,306,000 | $230,306,000 | $196,059,000 | ' | ' | ' | $3,295,000 | $4,358,000 | ' | $5,821,000 | $16,004,000 | ' | ' | ' | ' |
Acquisitions_Schedule_Of_Purch
Acquisitions (Schedule Of Purchase Price Components) (Details) (USD $) | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | |
In Thousands, unless otherwise specified | Feb. 07, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 01, 2014 | Sep. 30, 2014 |
Coordinated Home Health Care, LLC [Member] | Cura Partners, LLC [Member] | Cura Partners, LLC [Member] | |||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Cash | $20,000 | $7,186 | $11,725 | $7,186 | ' |
Contingent earn-out obligation (net of discount) | ' | ' | 1,100 | 1,020 | 1,020 |
Total purchase price | ' | ' | 12,825 | 8,206 | ' |
Net discount of contingent earn out obligation | ' | ' | $1,125 | $148 | ' |
Acquisitions_Schedule_Of_Purch1
Acquisitions (Schedule Of Purchase Price Allocation) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Jun. 01, 2014 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | Cura Partners, LLC [Member] | Coordinated Home Health Care, LLC [Member] | ||
Business Acquisition [Line Items] | ' | ' | ' | ' |
Goodwill | $64,237 | $60,026 | $4,331 | $9,488 |
Identifiable intangible assets | ' | ' | 3,950 | 3,300 |
Accounts receivable (net) | ' | ' | 521 | 888 |
Prepaid expenses | ' | ' | ' | 35 |
Furniture, fixtures and equipment | ' | ' | 65 | 58 |
Other current assets | ' | ' | 60 | ' |
Deposits | ' | ' | ' | 15 |
Accrued liabilities | ' | ' | -553 | -864 |
Accounts payable | ' | ' | -168 | -81 |
Other liabilities | ' | ' | ' | -14 |
Total purchase price allocation | ' | ' | $8,206 | $12,825 |
Goodwill_And_Intangible_Assets2
Goodwill And Intangible Assets (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Goodwill [Line Items] | ' | ' | ' | ' | ' |
Impairment of intangible assets excluding goodwill | $0 | $0 | $0 | $0 | ' |
Amortization expense | 710,000 | 339,000 | 1,719,000 | 1,017,000 | ' |
Impairment charge | $0 | $0 | $0 | $0 | $0 |
Minimum [Member] | ' | ' | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' | ' | ' |
Intangible assets, estimated useful lives | ' | ' | '2 years | ' | ' |
Maximum [Member] | ' | ' | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' | ' | ' |
Intangible assets, estimated useful lives | ' | ' | '25 years | ' | ' |
Goodwill_And_Intangible_Assets3
Goodwill And Intangible Assets (Changes In Goodwill By Segment) (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 |
Goodwill And Intangible Assets [Abstract] | ' |
Goodwill, at Beginning of Period | $60,026 |
Additions for Acquisitions | 4,331 |
Adjustments to previously recorded goodwill | -120 |
Goodwill, at End of Period | $64,237 |
Goodwill_And_Intangible_Assets4
Goodwill And Intangible Assets (Schedule Of Carrying Amount And Accumulated Amortization Of Intangible Asset) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross balance | $33,285 | $33,285 |
Additions | 50 | ' |
Additions for acquisitions | 3,950 | ' |
Accumulated amortization | -26,242 | -24,523 |
Net Balance | 11,043 | 8,762 |
Customer And Referral Relationships [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross balance | 26,346 | 26,346 |
Additions | 50 | ' |
Additions for acquisitions | 1,500 | ' |
Accumulated amortization | -22,123 | -21,138 |
Net Balance | 5,773 | 5,208 |
Trade Names And Trademarks [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross balance | 5,281 | 5,281 |
Additions for acquisitions | 1,900 | ' |
Accumulated amortization | -3,415 | -2,995 |
Net Balance | 3,766 | 2,286 |
State Licenses [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross balance | 150 | 150 |
Net Balance | 150 | 150 |
Non-competition Agreements [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross balance | 1,508 | 1,508 |
Additions for acquisitions | 550 | ' |
Accumulated amortization | -704 | -390 |
Net Balance | $1,354 | $1,118 |
Details_Of_Certain_Balance_She2
Details Of Certain Balance Sheet Accounts (Narrative) (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Details Of Certain Balance Sheet Accounts [Abstract] | ' | ' |
Contributions due after fund received, period | '5 days | ' |
Health insurance reimbursement and contribution due | $2,836 | $3,163 |
Details_Of_Certain_Balance_She3
Details Of Certain Balance Sheet Accounts (Schedule Of Prepaid Expenses And Other Current Assets) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Details Of Certain Balance Sheet Accounts [Abstract] | ' | ' |
Prepaid health insurance | $2,876 | $3,192 |
Prepaid workers' compensation and liability insurance | 1,623 | 1,173 |
Prepaid rent | 507 | 455 |
Workers' compensation insurance receivable | 940 | 821 |
Other | 991 | 594 |
Prepaid expenses and other current assets | $6,937 | $6,235 |
Details_Of_Certain_Balance_She4
Details Of Certain Balance Sheet Accounts (Schedule Of Accrued Expenses) (Details) (USD $) | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 | ||
Details Of Certain Balance Sheet Accounts [Abstract] | ' | ' | ||
Accrued payroll | $15,163 | $12,932 | ||
Accrued workers' compensation insurance | 13,527 | 13,347 | ||
Accrued health insurance | 3,217 | 3,731 | ||
Indemnification reserve | 1,476 | [1] | 3,224 | [1] |
Accrued payroll taxes | 2,029 | 1,755 | ||
Accrued professional fees | 1,263 | 1,319 | ||
Amounts due to LHCG | 17 | [2] | 2,196 | [2] |
Current portion of contingent earn-out obligation | 2,120 | [3] | 1,100 | [3] |
Other | 2,622 | 2,341 | ||
Accrued expenses | 41,434 | 41,945 | ||
Remittance payment | 1,840 | ' | ||
Estimated remaining remittance payment | 1,476 | ' | ||
Contingent earn-out obligation maximum | $2,250 | ' | ||
[1] | As a condition of the sale of the Home Health Business to subsidiaries of LHC Group. Inc. (LHCG) the Company is responsible for any adjustments to Medicare and Medicaid billings prior to the closing. In connection with an internal evaluation of the Companys billing processes, it discovered documentation errors in a number of claims that it had submitted to Medicare. Consistent with applicable law, the Company voluntarily remitted $1,840,000 to the government in March 2014. The Company, using its best judgment, has estimated a total of $1,476,000 for billing adjustments remaining. | |||
[2] | Amounts due to LHCG pursuant to a billing services arrangement between the Company and LHCG. | |||
[3] | The Company acquired certain assets of CHHC on December 1, 2013 and acquired Aid & Assist on June 1, 2014. The purchase agreements for the acquisitions contained provisions for earn-out payments. The contingent earn-out obligations have been recorded at their fair values of $1,100,000 and $1,020,000, respectively, which is the present value of the Companys obligations of up to $2,250,000 and $1,168,000 for CHHC and Aid & Assist, respectively, based on probability- weighted estimates of the achievement of certain performance targets. |
LongTerm_Debt_Narrative_Detail
Long-Term Debt (Narrative) (Details) (USD $) | 0 Months Ended | 9 Months Ended | 9 Months Ended | 0 Months Ended | ||||||||||||
Aug. 11, 2014 | Jul. 12, 2014 | Aug. 11, 2014 | Jul. 12, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Nov. 06, 2014 | Nov. 06, 2014 | Nov. 06, 2014 | Nov. 06, 2014 | |
Revolving Credit Loan [Member] | Revolving Credit Loan [Member] | Minimum [Member] | Maximum [Member] | Letters of Credit [Member] | London Interbank Offered Rate (LIBOR) [Member] | Base Rate [Member] | Federal Funds Rate [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |||||
Senior Secured Credit Facility [Member] | Senior Secured Credit Facility [Member] | Senior Secured Credit Facility [Member] | Revolving Credit Loan [Member] | Revolving Credit Loan [Member] | Revolving Credit Loan [Member] | Revolving Credit Loan [Member] | Revolving Credit Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||
item | Senior Secured Credit Facility [Member] | Amended Senior Secured Credit Facility [Member] | Revolving Credit Loan [Member] | Revolving Credit Loan [Member] | ||||||||||||
Senior Secured Credit Facility [Member] | Amended Senior Secured Credit Facility [Member] | |||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capital lease term | '48 months | '48 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capital lease agreement | ' | ' | $1,428,000 | $2,650,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum aggregate amount of revolving loans available | ' | ' | ' | ' | 55,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sublimit for issuance of letters of credit | ' | ' | ' | ' | 27,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Specified advance multiple used to determine funds availability under credit facility | ' | ' | ' | ' | 3.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate margin | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.50% | 1.60% | ' | ' | ' | 4.60% | 3.50% |
Maximum number of acquisitions in a year | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum single acquisition price | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowed capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | 7,000,000 | ' | ' |
Fee charged on unused portion of revolving credit facility | ' | ' | ' | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate | ' | ' | ' | ' | ' | ' | 3.00% | 3.30% | 2.00% | ' | ' | ' | ' | ' | ' | ' |
Total availability under the revolving credit loan facility | ' | ' | ' | ' | $40,304,000 | $42,279,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate margin over base rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.00% | ' | 0.50% | ' | ' | ' | ' |
LongTerm_Debt_Schedule_Of_Prop
Long-Term Debt (Schedule Of Property Under Capital Leases) (Details) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Capital Leased Assets [Line Items] | ' |
Less: Accumulated Depreciation | ($190) |
Capital leased assets, net | 3,888 |
Leasehold Improvements [Member] | ' |
Capital Leased Assets [Line Items] | ' |
Capital leased assets | 2,974 |
Furniture And Equipment [Member] | ' |
Capital Leased Assets [Line Items] | ' |
Capital leased assets | 526 |
Computer Equipment [Member] | ' |
Capital Leased Assets [Line Items] | ' |
Capital leased assets | 431 |
Computer Software [Member] | ' |
Capital Leased Assets [Line Items] | ' |
Capital leased assets | $147 |
LongTerm_Debt_Schedule_Of_Futu
Long-Term Debt (Schedule Of Future Minimum Payments For Capital Leases) (Details) (USD $) | Sep. 30, 2014 | |
In Thousands, unless otherwise specified | ||
Long-Term Debt [Abstract] | ' | |
2014 | $275 | |
2015 | 1,105 | |
2016 | 1,105 | |
2017 | 1,105 | |
2018 | 629 | |
Total minimum lease payments | 4,219 | |
Less: amount representing estimated executory costs (such as taxes, maintenance and insurance), including profit thereon, included in total minimum lease payments | -73 | |
Net minimum lease payments | 4,146 | |
Less: amount representing interest | -242 | [1] |
Present value of net minimum lease payments | 3,904 | [2] |
Current obligations under capital leases | 978 | |
Noncurrent obligations under capital leases | $2,926 | |
[1] | Amount necessary to reduce net minimum lease payments to present value calculated at the Companys incremental borrowing rate at lease inception. | |
[2] | Reflected in the balance sheet as current and noncurrent obligations under capital leases of $978,000 and $2,926,000 respectively. |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Taxes [Abstract] | ' | ' | ' | ' |
Statutory federal tax rate | 35.00% | 35.00% | 35.00% | 35.00% |
Income_Taxes_Reconciliation_Of
Income Taxes (Reconciliation Of Effective Tax Rate) (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |||
Components of Income Tax Expense (Benefit), Continuing Operations [Abstract] | ' | ' | ' | ' | ||
Federal income tax at statutory rate | 35.00% | 35.00% | 35.00% | 35.00% | ||
State and local taxes, net of federal benefit | 5.90% | 6.00% | 5.90% | 6.00% | ||
Jobs tax credits, net | -9.70% | -6.60% | -8.90% | [1] | -10.80% | [1] |
Nondeductible meals and entertainment | 1.10% | 1.00% | 0.60% | 0.80% | ||
Effective income tax rate | 32.30% | 35.40% | 32.60% | 31.00% | ||
One time jobs tax benefit | ' | ' | ' | 7.20% | ||
[1] | Included in the jobs tax credit for the nine months ended September 30, 2013 was a one-time benefit of a 7.2% reduction from the Companys statutory tax rate for the jobs tax credits earned in 2012 but not recorded until 2013. The federal employment opportunity tax credits were reinstated in 2013 and were not an allowable deduction in 2012. |
Segment_Data_Details
Segment Data (Details) | 9 Months Ended |
Sep. 30, 2014 | |
segment | |
Segment Data [Abstract] | ' |
Number of reporting units | 2 |
Number of operating segments | 1 |
Commitments_And_Contingencies_
Commitments And Contingencies (Details) | 9 Months Ended |
Sep. 30, 2014 | |
Commitments And Contingencies [Abstract] | ' |
Maximum term of employment agreements | '4 years |
Significant_Payors_Details
Significant Payors (Details) (State Governmental Agency [Member]) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | |
Service Revenues, Net [Member] | Service Revenues, Net [Member] | Service Revenues, Net [Member] | Service Revenues, Net [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' | ' |
Concentration risk, percentage | 52.10% | 58.90% | 53.70% | 59.10% | 59.10% | 65.60% |