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TO
Delaware | 7372 | 51-0391128 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) |
As soon as practicable after this Registration Statement becomes effective.
Large accelerated filer x | Accelerated filer o | |
Non-accelerated filer (Do not check if a smaller reporting company) o | Smaller reporting company o |
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Address, Including Zip | |||||||||
Code, and Telephone | |||||||||
Number, Including | |||||||||
State or Other Jurisdiction | Area Code, of | ||||||||
Exact Name of Registrant as | of Incorporation or | I.R.S. Employer | Principal Executive | ||||||
Specified in Its Charter | Organization | Identification Number | Offices | ||||||
Aspen Healthcare Metrics LLC | Delaware | 06-1672317 | c/o MedAssets, Inc. 100 North Point Center East, Suite 200 Alpharetta, Georgia 30022 (678) 323-2500 | ||||||
MedAssets Analytical Systems, LLC | Delaware | 20-2943091 | c/o MedAssets, Inc. 100 North Point Center East, Suite 200 Alpharetta, Georgia 30022 (678) 323-2500 | ||||||
MedAssets Supply Chain Systems, LLC | Delaware | 58-2612223 | c/o MedAssets, Inc. 100 North Point Center East, Suite 200 Alpharetta, Georgia 30022 (678) 323-2500 | ||||||
MedAssets Net Revenue Systems, LLC | Delaware | 43-2018849 | c/o MedAssets, Inc. 100 North Point Center East, Suite 200 Alpharetta, Georgia 30022 (678) 323-2500 | ||||||
Dominic & Irvine, LLC | Delaware | 20-4173534 | c/o MedAssets, Inc. 100 North Point Center East, Suite 200 Alpharetta, Georgia 30022 (678) 323-2500 | ||||||
MedAssets Services, LLC | Delaware | 20-8867606 | c/o MedAssets, Inc. 100 North Point Center East, Suite 200 Alpharetta, Georgia 30022 (678) 323-2500 | ||||||
Broadlane Intermediate Holdings, Inc. | Delaware | 80-0232632 | c/o MedAssets, Inc. 100 North Point Center East, Suite 200 Alpharetta, Georgia 30022 (678) 323-2500 | ||||||
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Address, Including Zip | |||||||||
Code, and Telephone | |||||||||
Number, Including | |||||||||
State or Other Jurisdiction | Area Code, of | ||||||||
Exact Name of Registrant as | of Incorporation or | I.R.S. Employer | Principal Executive | ||||||
Specified in Its Charter | Organization | Identification Number | Offices | ||||||
Broadlane NY, Inc. | Delaware | 26-1406974 | c/o MedAssets, Inc. 100 North Point Center East, Suite 200 Alpharetta, Georgia 30022 (678) 323-2500 | ||||||
MedAssets Ventures, LLC | Delaware | 45-2675946 | c/o MedAssets, Inc. 100 North Point Center East, Suite 200 Alpharetta, Georgia 30022 (678) 323-2500 | ||||||
MedAssets Insurance Solutions, LLC | Delaware | 27-3449890 | c/o MedAssets, Inc. 100 North Point Center East, Suite 200 Alpharetta, Georgia 30022 (678) 323-2500 | ||||||
Health Equipment Logistics and Planning, Inc. | Delaware | 27-2394723 | c/o MedAssets, Inc. 100 North Point Center East, Suite 200 Alpharetta, Georgia 30022 (678) 323-2500 | ||||||
Healthcare Performance Partners, Inc. | Delaware | 27-1204639 | c/o MedAssets, Inc. 100 North Point Center East, Suite 200 Alpharetta, Georgia 30022 (678) 323-2500 | ||||||
KP Select, Inc. | Delaware | 94-3385977 | c/o MedAssets, Inc. 100 North Point Center East, Suite 200 Alpharetta, Georgia 30022 (678) 323-2500 | ||||||
The Broadlane Group, Inc. | Delaware | 75-2851713 | c/o MedAssets, Inc. 100 North Point Center East, Suite 200 Alpharetta, Georgia 30022 (678) 323-2500 | ||||||
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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission becomes effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. |
PRELIMINARY PROSPECTUS
senior notes due 2018,
which have been registered under the
Securities Act of 1933, for any and all of its outstanding
8.0% senior notes due 2018.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME,
ON , 2011, UNLESS EXTENDED.
• | We are offering to exchange registered 8.0% senior notes due 2018 for any or all of our outstanding unregistered 8.0% senior notes. We refer herein to the unregistered notes as the “original notes.” We refer herein to the registered notes as the “exchange notes.” We refer herein to the exchange notes and the original notes, collectively, as the “notes.” |
• | The exchange offer expires at 5:00 P.M., New York City time, on , 2011, unless extended. We do not currently intend to extend the expiration date. |
• | The exchange offer is subject to customary conditions that may be waived by us. |
• | All original notes outstanding that are validly tendered and not validly withdrawn prior to the expiration of the exchange offer will be exchanged for the exchange notes. |
• | Tenders of original notes may be withdrawn at any time before 5:00 P.M., New York City time, on the expiration date of the exchange offer. |
• | The exchange of original notes for exchange notes will not be a taxable exchange for United States federal income tax purposes. |
• | We will not receive any proceeds from the exchange offer. |
• | The terms of the exchange notes to be issued are substantially identical to the terms of the original notes, except that the exchange notes will not have transfer restrictions and you will not have registration rights. |
• | If you fail to tender your original notes, you will continue to hold unregistered securities and it may be difficult for you to transfer them. |
• | There is no established trading market for the notes, and we do not intend to apply for listing of the exchange notes on any securities exchange or market quotation system. |
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EX-23.3 |
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The exchange offer | We are offering to exchange registered notes for any and all of our original notes. |
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You may only exchange outstanding notes issued in denominations of $2,000 and larger integral multiples of $1,000. The exchange notes are substantially identical to the original notes, except that the exchange notes will not have transfer restrictions and you will not have registration rights. | ||
Resale | Based upon interpretations by the staff of the Securities and Exchange Commission (the “SEC”) set forth in no action letters issued to unrelated third parties, we believe that you can transfer the exchange notes without complying with the registration and prospectus delivery provisions of the Securities Act if you: | |
• acquire the exchange notes in the ordinary course of your business; | ||
• are not and do not intend to become engaged in a distribution of the exchange notes; | ||
• are not an “affiliate” (within the meaning of the Securities Act) of ours; | ||
• are not a broker-dealer (within the meaning of the Securities Act) that acquired the original notes from us or our affiliates; and | ||
• are not a broker-dealer (within the meaning of the Securities Act) that acquired the original notes in a transaction as part of its market-making or other trading activities. | ||
If any of these conditions are not satisfied and you transfer any exchange note without delivering a proper prospectus or without qualifying for a registration exemption, you may incur liability under the Securities Act. See “The exchange offer—Purpose of the exchange offer.” | ||
Registration rights agreement | Under the registration rights agreement, we have agreed to use our commercially reasonable efforts to consummate the exchange offer or cause the original notes to be registered under the Securities Act to permit resales. If we are not in compliance with our obligations under the registration rights agreement, liquidated damages will accrue on the original notes in addition to the interest that otherwise is due on the original notes. If the exchange offer is completed on the terms and within the time period contemplated by this prospectus, no liquidated damages will be payable on the original notes. The exchange notes will not contain any provisions regarding the payment of liquidated damages. See “The exchange offer—Liquidated damages.” | |
Minimum condition | The exchange offer is not conditioned on any minimum aggregate principal amount of original notes being tendered in the exchange offer. | |
Expiration date | The exchange offer will expire at 5:00 P.M., New York City time, on , 2011, unless we extend it. We do not currently intend to extend the expiration date. | |
Exchange date | We will accept original notes for exchange at the time when all conditions of the exchange offer are satisfied or waived. We will |
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deliver the exchange notes promptly after we accept the original notes. | ||
Conditions to the exchange offer | Our obligation to complete the exchange offer is subject to certain conditions. We reserve the right to terminate or amend the exchange offer at any time prior to the expiration date upon the occurrence of certain specified events. See “The exchange offer—Conditions to the exchange offer.” | |
Withdrawal rights | You may withdraw the tender of your original notes at any time before the expiration of the exchange offer on the expiration date. Any original notes not accepted for any reason will be returned to you without expense as promptly as practicable after the expiration or termination of the exchange offer. | |
Procedures for tendering original notes | See “The exchange offer—How to tender.” | |
United States federal income tax consequences | The exchange of the original notes for the exchange notes will not be a taxable exchange for United States federal income tax purposes, and holders will not recognize any taxable gain or loss as a result of such exchange. See “Material United States federal income tax considerations.” | |
Effect on holders of original notes | If the exchange offer is completed on the terms and within the period contemplated by this prospectus, holders of original notes will have no further registration or other rights under the registration rights agreement, except under limited circumstances. See “The exchange offer—Other.” | |
Holders of original notes who do not tender their original notes will continue to hold those original notes. All untendered, and tendered but unaccepted, original notes will continue to be subject to the transfer restrictions provided for in the original notes and the indenture governing the original notes. | ||
To the extent that original notes are tendered and accepted in the exchange offer, the trading market, if any, for the original notes could be adversely affected. See “Risk factors—Risks associated with the exchange offer—You may not be able to sell your original notes if you do not exchange them for registered exchange notes in the exchange offer,” “Risk factors—Your ability to sell your original notes may be significantly more limited and the price at which you may be able to sell your original notes may be significantly lower if you do not exchange them for registered exchange notes in the exchange offer,” and “The exchange offer—Other.” | ||
Use of proceeds | We will not receive any proceeds from the issuance of the exchange notes pursuant to the exchange offer. | |
Exchange agent | Wells Fargo Bank, National Association is serving as the exchange agent in connection with the exchange offer. |
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Issuer | MedAssets, Inc. | |
Securities offered | $325.0 million in aggregate principal amount of 8.0% senior notes due 2018. | |
Maturity | November 15, 2018. | |
Interest payment dates | May 15 and November 15 of each year, commencing on November 15, 2011. | |
Ranking | The exchange notes will: | |
• be our general unsecured, senior obligations; | ||
• rank equally in right of payment with all of our existing and future senior debt; | ||
• be effectively junior in right of payment to our secured debt, including the Credit Agreement (as defined in “Risk factors— Our indebtedness could adversely affect our financial health and reduce the funds available to us for other purposes”), to the extent of the value of the assets securing such debt; | ||
• be structurally subordinated to all of the existing and future liabilities (including trade payables) of each of our subsidiaries that do not guarantee the notes; and | ||
• be senior in right of payment to all of our existing and future subordinated debt. | ||
The guarantees will: | ||
• be general unsecured, senior obligations of the guarantors; | ||
• rank equally in right of payment with all of the existing and future senior debt of the guarantors; | ||
• be effectively junior in right of payment to the secured debt of the guarantors, including the Credit Agreement, to the extent of the value of the assets securing such debt; | ||
• be structurally subordinated to all of the existing and future liabilities (including trade payables) of each non-guarantor subsidiaries; and | ||
• be senior in right of payment to all of the existing and future subordinated debt of the guarantors. |
As of June 30, 2011: |
• the outstanding indebtedness of MedAssets and the guarantors was $931.8 million, (which does not include $121.5 million due to be paid in January 2012 in connection with the Broadlane Acquisition, as defined herein) of which $606.8 million constituted senior secured indebtedness; |
• non-guarantor subsidiaries of MedAssets had no indebtedness outstanding; and |
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• an additional $149.0 million is available for borrowing under our revolving credit facility, all of which would have constituted secured indebtedness if borrowed. | ||
See “Description of exchange notes—Ranking.” | ||
Optional redemption | The exchange notes will be redeemable at our option, in whole or in part, at any time on or after November 15, 2014, at the redemption prices set forth in this prospectus, together with accrued and unpaid interest, if any, to the date of redemption. | |
At any time prior to November 15, 2013, we may redeem up to 35% of the aggregate original principal amount of the exchange notes with the proceeds of one or more equity offerings of our common shares at a redemption price of 108% of the principal amount of the exchange notes, together with accrued and unpaid interest, if any, to the date of redemption. | ||
At any time prior to November 15, 2014, we may also redeem some or all of the exchange notes at a price equal to 100% of the principal amount of the exchange notes plus accrued and unpaid interest plus a “make-whole” premium. | ||
Mandatory offers to purchase | The occurrence of a change of control will require us to offer to purchase from you all or a portion of your exchange notes at a price equal to 101% of their principal amount, together with accrued and unpaid interest, if any, to the date of purchase. | |
Certain asset dispositions may require us to use the proceeds from those asset dispositions to make an offer to purchase the exchange notes at 100% of their principal amount, together with accrued and unpaid interest, if any, to the date of purchase if certain indebtedness (with a corresponding permanent reduction in commitment, if applicable) or to invest in capital assets related to our business or capital stock of a restricted subsidiary (as defined under the heading “Description of exchange notes”). | ||
Guarantees | The exchange notes will be guaranteed on a senior unsecured basis by all of our restricted subsidiaries that guarantee our indebtedness under the Credit Agreement. All future domestic restricted subsidiaries that guarantee our indebtedness under the Credit Agreement will also guarantee the exchange notes. The guarantees will be released when the guarantees of our indebtedness under our Credit Agreement are released and in certain other circumstances as described in “Description of exchange notes—Subsidiary guarantees.” | |
Covenants | The exchange notes will be issued under an indenture with Wells Fargo Bank, National Association, as trustee. The indenture will, among other things, limit our ability and the ability of our restricted subsidiaries to: | |
• incur, assume or guarantee additional indebtedness; | ||
• issue redeemable stock and preferred stock; | ||
• pay dividends, make distributions or redeem or repurchase capital stock; | ||
• prepay, redeem or repurchase debt that is junior in right of payment to the exchange notes; |
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• make loans and investments; | ||
• grant or incur liens; | ||
• engage in sale/leaseback transactions; | ||
• restrict dividends, loans or asset transfers from our subsidiaries; | ||
• sell or otherwise dispose of assets, including capital stock of subsidiaries; | ||
• enter into transactions with affiliates; and | ||
• consolidate or merge with or into, or sell substantially all of our assets to, another person. | ||
These covenants will be subject to a number of important exceptions and qualifications. In addition, for as long as the exchange notes have an investment grade rating from both Standard & Poor’s Ratings Group, Inc. and Moody’s Investors Service, Inc., we will not be subject to certain of the covenants listed above. For more details, see “Description of exchange notes—Certain covenants.” | ||
Use of proceeds | We will not receive any proceeds from the issuance under the indenture governing the exchange offer. | |
Trustee | Wells Fargo Bank, National Association is the trustee for the holders of the exchange notes. | |
Governing law | The exchange notes, the indenture and the other documents for the offering of the exchange notes are governed by the laws of the State of New York. | |
Certain ERISA considerations | Each person investing the assets of any plan, account or arrangement subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), Section 4975 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) or any similar law should determine that the purchase, exchange, holding and disposition of the notes will comply with ERISA, the Code and other similar laws and will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or a similar violation under any applicable similar law. |
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Fiscal Year Ended December 31, | Six Months Ended | ||||||||||||||||||||||||||
(Unaudited and in thousands, except per share amounts) | 2006 | 2007 | 2008 | 2009 | 2010 | June 30, 2010 | June 30, 2011 | ||||||||||||||||||||
Consolidated statement of operations data: | |||||||||||||||||||||||||||
Net revenue: | |||||||||||||||||||||||||||
Administrative fees, net | $85,778 | $94,792 | $105,765 | $108,223 | $119,070 | $56,554 | $ | 116,397 | |||||||||||||||||||
Other service fees | 60,457 | 93,726 | 173,891 | 233,058 | 272,261 | 131,979 | 161,536 | ||||||||||||||||||||
Total net revenue | 146,235 | 188,518 | 279,656 | 341,281 | 391,331 | 188,533 | 277,933 | ||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||
Cost of revenue | 15,601 | 27,983 | 51,548 | 74,651 | 100,737 | 44,479 | 61,043 | ||||||||||||||||||||
Product development expenses | 7,163 | 7,785 | 16,393 | 18,994 | 20,011 | 10,193 | 12,875 | ||||||||||||||||||||
Selling and marketing expenses | 32,205 | 35,748 | 43,205 | 45,282 | 46,736 | 26,677 | 30,601 | ||||||||||||||||||||
General and administrative expenses | 55,363 | 64,817 | 91,481 | 110,661 | 124,379 | 64,098 | 95,911 | ||||||||||||||||||||
Acquisition and integration-related expenses | - | - | - | - | 21,591 | - | 18,971 | ||||||||||||||||||||
Depreciation | 4,822 | 7,115 | 9,793 | 13,211 | 19,948 | 8,833 | 10,907 | ||||||||||||||||||||
Amortization of intangibles | 11,738 | 15,778 | 23,442 | 28,012 | 31,027 | 12,110 | 40,472 | ||||||||||||||||||||
Impairment of property and equipment, goodwill and intangibles | 4,522 | 1,204 | 2,272 | - | 46,423 | - | - | ||||||||||||||||||||
Total operating expenses | 131,414 | 160,430 | 238,134 | 290,811 | 410,852 | 166,390 | 270,780 | ||||||||||||||||||||
Operating income (loss) | 14,821 | 28,088 | 41,522 | 50,470 | (19,521) | 22,143 | 7,153 | ||||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||||||
Interest expense | (10,921) | (20,391) | (21,271) | (18,114) | (27,508) | (7,739) | (36,124) | ||||||||||||||||||||
Other (expense) income | (3,917) | 3,115 | (1,921) | 417 | 650 | 202 | 280 | ||||||||||||||||||||
Income (loss) before income taxes | (17) | 10,812 | 18,330 | 32,773 | (46,379) | 14,606 | (28,691) | ||||||||||||||||||||
Income tax (benefit) | (8,860) | 4,516 | 7,489 | 12,826 | (14,255) | 5,792 | (10,033) | ||||||||||||||||||||
Net income (loss) | 8,843 | 6,296 | 10,841 | 19,947 | (32,124) | 8,814 | (18,658) | ||||||||||||||||||||
Preferred stock dividends and accretion | (14,713) | (16,094) | �� | - | - | - | - | - | |||||||||||||||||||
Net (loss) income attributable to common stockholders | $ (5,870) | $ (9,798) | $ 10,841 | $ 19,947 | $ (32,124) | $ 8,814 | $ | (18,658) | |||||||||||||||||||
(Loss) income per share basic | $ (0.67) | $ (0.75) | $ 0.22 | $ 0.36 | $ (0.57) | $ 0.16 | $ | (0.33) | |||||||||||||||||||
(Loss) income per share diluted | $ (0.67) | $ (0.75) | $ 0.21 | $ 0.34 | $ (0.57) | $ 0.15 | $ | (0.33) | |||||||||||||||||||
Shares used in per share calculation basic | 8,752 | 12,984 | 49,843 | 54,841 | 56,434 | 55,994 | 57,295 | ||||||||||||||||||||
Shares used in per share calculation diluted | 8,752 | 12,984 | 52,314 | 57,865 | 56,434 | 59,148 | 57,295 |
As of December 31, | As of June 30, | |||||||||||||||||||||||||||
(Unaudited and in thousands) | 2006 | 2007 | 2008 | 2009 | 2010 | 2010 | 2011 | |||||||||||||||||||||
Consolidated balance sheet data: | ||||||||||||||||||||||||||||
Cash | $23,459 | $136,952 | $5,429 | $5,498 | $46,836 | $- | $42,159 | |||||||||||||||||||||
Accounts receivable, net | 21,329 | 33,679 | 55,048 | 67,617 | 100,020 | 70,916 | 99,251 | |||||||||||||||||||||
Property and equipment, net | 23,494 | 32,490 | 42,417 | 54,960 | 77,737 | 61,245 | 81,803 | |||||||||||||||||||||
Total assets | 277,204 | 526,379 | 773,860 | 778,544 | 1,845,353 | 776,362 | 1,799,723 | |||||||||||||||||||||
Notes payable | 170,764 | 198,284 | 245,626 | 215,161 | 635,000 | 184,140 | 606,825 | |||||||||||||||||||||
Bonds payable | - | - | - | - | 325,000 | - | 325,000 | |||||||||||||||||||||
Total liabilities | 248,546 | 296,864 | 390,921 | 341,172 | 1,409,770 | 314,152 | 1,380,538 | |||||||||||||||||||||
Redeemable convertible preferred stock | 196,030 | - | - | - | - | - | - | |||||||||||||||||||||
Stockholders’ equity (deficit) | (167,372 | ) | 229,515 | 382,939 | 437,372 | 435,583 | 462,210 | 419,185 |
Fiscal Year Ended December 31, | Six Months Ended | |||||||||||||||||||||||||||
(Unaudited and in thousands) | 2006 | 2007 | 2008 | 2009 | 2010 | June 30, 2010 | June 30, 2011 | |||||||||||||||||||||
Consolidated cash flows and other financial data: | ||||||||||||||||||||||||||||
Net cash provided by operating activities | $26,126 | $41,624 | $52,128 | $60,303 | $105,911 | $35,784 | $37,307 | |||||||||||||||||||||
Net cash used in investing activities | (89,300 | ) | (107,654 | ) | (227,996 | ) | (46,462 | ) | (779,781 | ) | (18,900 | ) | (16,038 | ) | ||||||||||||||
Net cash provided by (used in) financing activities | 18,302 | 179,523 | 44,345 | (13,772 | ) | 715,208 | (22,382 | ) | (25,946 | ) |
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(Unaudited and in thousands, | Fiscal Year Ended December 31, | Six Months Ended | |||||||||||||||||||
except ratio amounts) | 2006 | 2007 | 2008 | 2009 | 2010 | June 30, 2010 | June 30, 2011 | ||||||||||||||
Other financial data: | |||||||||||||||||||||
EBITDA | $ | 26,833 | $ | 53,063 | $ | 72,969 | $ | 95,249 | $ | 35,566 | $ | 45,045 | $ | 59,585 | |||||||
Adjusted EBITDA | 50,753 | 60,571 | 89,716 | 111,438 | 128,040 | 53,206 | 85,223 | ||||||||||||||
Earnings | |||||||||||||||||||||
Pre-tax (loss) income | (17) | 10,812 | 18,330 | 32,773 | (46,379) | 14,606 | (28,691) | ||||||||||||||
Fixed charges | 10,921 | 20,391 | 21,271 | 18,114 | 27,508 | 7,739 | 36,124 | ||||||||||||||
Total earnings | 10,904 | 31,203 | 39,601 | 50,887 | (18,871) | 22,345 | 7,433 | ||||||||||||||
Total fixed charges | $ | 10,921 | $ | 20,391 | $ | 21,271 | $ | 18,114 | $ | 27,508 | $ | 7,739 | $ | 36,124 | |||||||
Ratio of earnings to fixed charges(1) | 1.0 | 1.5 | 1.9 | 2.8 | - | 2.9 | - | ||||||||||||||
Earnings deficiency to cover fixed charges | - | - | - | - | ($ | 46,379) | - | ($ | 28,691) |
(1) | For purposes of computing the ratio of earnings to fixed charges, earnings consist of earnings before income taxes plus fixed charges. Fixed charges consist of interest expense, amortization of debt issuance costs and the portion of rental expense that management believes is representative of the interest component of rental expense. Due to our loss, the ratio coverage was less than 1:1 in 2010 on an actual basis and for the six months ended June 30, 2011. |
Fiscal Year Ended December 31, | Six Months Ended | |||||||||||||
(Unaudited and in thousands) | 2006 | 2007 | 2008 | 2009 | 2010 | June 30, 2010 | June 30, 2011 | |||||||
Net income (loss) | $ 8,843 | $ 6,296 | $ 10,841 | $ 19,947 | ($32,124) | $ 8,814 | ($18,658) | |||||||
Depreciation | 4,822 | 7,115 | 9,793 | 13,211 | 19,948 | 8,833 | 10,907 | |||||||
Depreciation (included in cost of revenue) | 0 | 0 | 708 | 2,426 | 2,894 | 1,441 | 509 | |||||||
Amortization of intangibles | 11,738 | 15,778 | 23,442 | 28,012 | 31,027 | 12,110 | 40,472 | |||||||
Amortization of intangibles (included in cost of revenue) | 745 | 1,145 | 873 | 740 | 648 | 370 | 278 | |||||||
Interest expense, net of interest income(1) | 9,545 | 18,213 | 19,823 | 18,087 | 27,428 | 7,685 | 36,110 | |||||||
Income tax expense (benefit) | (8,860) | 4,516 | 7,489 | 12,826 | (14,255) | 5,792 | (10,033) | |||||||
EBITDA | 26,833 | 53,063 | 72,969 | 95,249 | 35,566 | 45,045 | 59,585 | |||||||
Impairment of intangibles(2) | 4,522 | 1,204 | 2,272 | - | 46,423 | - | - | |||||||
Share-based compensation expense(3) | 3,257 | 5,611 | 8,550 | 16,652 | 11,493 | 6,511 | 822 | |||||||
Debt issuance cost extinguishment(4) | 2,158 | - | - | - | - | - | - | |||||||
Rental income from capitalizing building lease(5) | (438) | (438) | (438) | (439) | (439) | (219) | (218) | |||||||
Litigation expenses(6) | 8,629 | - | - | - | - | - | - | |||||||
Purchase accounting adjustments(7) | 4,906 | 1,131 | 2,449 | (24) | 13,406 | - | 6,063 | |||||||
Interest rate swap cancellation(8) | - | - | 3,914 | - | - | - | - | |||||||
Acquisition and integration-related expenses(9) | 886 | - | - | - | 21,591 | 1,869 | 18,971 | |||||||
Adjusted EBITDA | $50,753 | $60,571 | $89,716 | $111,438 | $128,040 | $53,206 | $85,223 |
(1) | Interest income is included in other income (expense) and is not netted against interest expense in MedAssets’ Consolidated Statement of Operations. |
(2) | The impairment of intangibles during fiscal year ended December 31, 2006 and 2007 represents the write-off of in-process research and development from the Avega acquisition in 2006 and the XactiMed acquisition in May 2007, respectively. The impairment of intangibles during the fiscal year ended December 31, 2008 primarily relates to acquired developed technology from prior acquisitions, revenue cycle management trade name and internally developed software products, mainly due to the integration of Accuro’s operations and products. The impairment during the fiscal year ended December 31, 2010 primarily consisted of (i) a $44.5 million write-off of goodwill relating to our decision support services operating unit; and (ii) $1.3 million relating to an SCM trade name and a customer base intangible asset from prior acquisitions that were deemed to be impaired as part of the product and service offering integration associated with the Broadlane Acquisition (as defined herein). |
(3) | Represents non-cash share-based compensation expense for both employees and directors. We believe excluding this non-cash expense allows us to compare our operating performance without regard to the |
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impact of share-based compensation expense, which varies from period to period based on the amount and timing of grants. | ||
(4) | Represents the unamortized debt issuance costs upon refinancing our credit facilities. We believe this expense relating to our financing and investing activities does not relate to our continuing operating performance. | |
(5) | The imputed rental income recognized with respect to a capitalized building lease is deducted from net income (loss) due to its non-cash nature. We believe this income is not a useful measure of continuing operating performance. | |
(6) | These legal expenses related to litigation that was brought against one of our subsidiaries and settled in May 2006. This litigation, and associated litigation expense, is considered by management to be non-recurring as it relates to isolated litigation outside the ordinary course of business. | |
(7) | For the fiscal years ended December 2006 and 2007, these adjustments include the effect on revenue of adjusting acquired deferred revenue balances, net of any reduction in associated deferred costs, to fair value as of the respective acquisition dates for Avega and XactiMed. | |
For the fiscal years ended December 31, 2008 and 2009, these adjustments include the effect on revenue of adjusting acquired deferred revenue balances, net of any reduction in associated deferred costs, to fair value as of the respective acquisition dates for XactiMed and Accuro. |
Upon the acquisition of Broadlane Intermediate Holdings, Inc. (“Broadlane” and such acquisition, the “Broadlane Acquisition”) on November 16, 2010, we made certain purchase accounting adjustments that reflect the fair value of administrative fees related to customer purchases that occurred prior to November 16, 2010 but were reported to us subsequent to that. Under our revenue recognition accounting policy, which is in accordance with GAAP, these administrative fees would be ordinarily recorded as revenue when reported to us; however, the acquisition method of accounting requires us to estimate the amount of purchases occurring prior to the transaction date and to record the fair value of the administrative fees to be received from those purchases as an account receivable (as opposed to recognizing revenue when these transactions are reported to us) and record any corresponding revenue share obligation as a liability. |
(8) | During the fiscal year ended December 31, 2008, we recorded an expense associated with the cancellation of our interest rate swap arrangements. In connection with the cancellation, we paid the counterparty $3.9 million in termination fees. During 2010, we terminated an interest rate swap as part of the Broadlane Acquisition that was originally set to terminate in March 2012. In consideration of the early termination, we paid the swap counterparty, and incurred an expense of, $1.6 million for the fiscal year ended December 31, 2010. That termination amount is included in interest expense for the fiscal year ended December 31, 2010. We believe such expenses are infrequent in nature and not indicative of continuing operating performance. | |
(9) | Represents (i) transaction costs incurred (not related to the financing) to complete the Broadlane Acquisition such as due diligence, consulting and other relates fees; (ii) integration and restructuring-type costs associated with the Broadlane Acquisition, such as severance, retention, certain performance-related salary-based compensation, and operating infrastructure costs and (iii) acquisition-related fees associated with an unsuccessful acquisition attempt. We consider these charges to be non-operating expenses and unrelated to our underlying results of operations. |
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year ended December 31, 2010
Pro forma | ||||||||||||||
(In thousands, except per share amounts) | MedAssets | Broadlane | adjustments(a) | Pro forma | ||||||||||
Revenue | ||||||||||||||
Administrative fees, net | $ | 119,070 | $ | 103,160 | $ | 12,661 | $ | 234,891 | ||||||
Service fees | 272,261 | 49,504 | 745 | 322,510 | ||||||||||
Total net revenue | 391,331 | 152,664 | 13,406 | (b) | 557,401 | |||||||||
Operating expenses | ||||||||||||||
Cost of revenue | 100,737 | 68,585 | - | 169,322 | ||||||||||
Product development expenses | 20,011 | 11,254 | - | 31,265 | ||||||||||
Selling and marketing expenses | 46,736 | 6,937 | - | 53,673 | ||||||||||
General and administrative expenses | 124,379 | 26,038 | - | 150,417 | ||||||||||
Acquisition and integration-related expenses | 21,591 | 9,606 | (28,420) | (c) | 2,777 | |||||||||
Depreciation | 19,948 | 9,300 | (4,790) | (d) | 24,458 | |||||||||
Amortization of intangibles | 31,027 | 14,039 | 40,032 | (e) | 85,098 | |||||||||
Impairment of property and equipment, goodwill and intangibles | 46,423 | - | - | 46,423 | ||||||||||
Total operating expense | 410,852 | 145,759 | 6,822 | 563,433 | ||||||||||
Operating (loss) income | (19,521) | 6,905 | 6,584 | (6,032) | ||||||||||
Other income (expense) | ||||||||||||||
Interest (expense) | (27,508) | (13,804) | (31,032) | (f) | (72,344) | |||||||||
Loss on extinguishment of debt | - | (11,754) | 11,754 | (g) | - | |||||||||
Other income | 650 | 311 | (160) | (h) | 801 | |||||||||
Loss before income taxes | (46,379) | (18,342) | (12,854) | (77,575) | ||||||||||
Income tax benefit | (14,255) | (3,975) | (7,354) | (i) | (25,584) | |||||||||
Net loss | (32,124) | (14,367) | (5,500) | (51,991) | ||||||||||
Loss per share - basic | $ | (0.57) | - | - | $ | (0.92) | ||||||||
Loss per share - diluted | $ | (0.57) | - | - | $ | (0.92) | ||||||||
Shares used in per share calculation - basic | 56,434 | - | - | 56,434 | ||||||||||
Shares used in per share calculation - diluted | 56,434 | - | - | 56,434 |
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statement of operations
(a) | The pro forma adjustments do not reflect the following that is non-recurring and expected to result directly from the Broadlane Acquisition and which is expected to impact our statement of operations within twelve months following the acquisition: |
(b) | Upon acquiring Broadlane, we made a purchase accounting adjustment that reflects the fair value of administrative fees related to customer purchases that occurred prior to November 16, 2010, but were reported to us subsequent to that. Under our revenue recognition accounting policy, which is in accordance with GAAP, these administrative fees would be ordinarily recorded as revenue when reported to us; however, the acquisition method of accounting requires us to estimate the amount of purchases occurring prior to the transaction date and to record the fair value of the administrative fees to be received from those purchases as an account receivable (as opposed to recognizing revenue when these transactions are reported to us) and record any corresponding revenue share obligation as a liability. The $13.4 million represents the net amount of (i) $26.1 million in administrative fees based on vendor reporting received from the acquisition date up through December 31, 2010; (ii) a corresponding revenue share obligation of $13.4 million; and (iii) $0.7 in other service fees. |
(c) | Represents (i) the elimination of $20.0 million in transaction costs attributable to professional advisors and other fees directly associated with the completion of the Broadlane Acquisition which were recorded in MedAssets’ and Broadlane’s historical statement of operations for the fiscal year ended December 31, 2010; and (ii) the elimination of involuntary termination and integration costs associated with the Broadlane Acquisition which amounted to $8.4 million. |
(d) | For purposes of computing pro forma adjustments, we have estimated a fair value for the tangible fixed assets such as leasehold improvements, equipment and furniture and fixtures of $7.2 million based on our valuation study. The leasehold improvements, equipment and furniture and fixtures are being depreciated using the straight-line method over the estimated useful lives of one, five and seven years, respectively. In addition, Broadlane’s historical depreciation expense includes depreciation of capitalized software. We have estimated the value of the acquired developed technology assets (software) and included amortization expense for the fair value of the software in footnote (e). As a result, the amount in the pro forma condensed consolidated statement of operations represents the net adjustment to depreciation expense, which incorporates removing the effect of Broadlane’s historical software amortization that was included in depreciation expense. |
(e) | For purposes of computing pro forma adjustments, we have estimated a fair value for identifiable assets such as a non-compete agreement; developed technology assets, trade names and customer relationship assets of $419.9 million based on our valuation study. The non-compete agreement, trade names and developed technology assets are being amortized using the straight-line method over assumed estimated useful lives of one and one-half, three, and five years, respectively. Cost related to the customer relationship identified intangible asset is being amortized over an estimated useful life of ten years based on the estimated pattern of economic benefit that is expected to be realized from the customer relationships. As a result, the amount in the pro forma condensed consolidated statement of operations represents the incremental adjustment to amortization expense. |
Expected five year customer | ||||
relationship amortization | ||||
Year 1 | 55,769 | |||
Year 2 | 52,430 | |||
Year 3 | 48,923 | |||
Year 4 | 45,751 | |||
Year 5 | 42,411 |
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(f) | For purposes of computing pro forma adjustment for interest expense, we have made certain assumptions regarding our debt structure and interest rates on our outstanding debt. We have assumed no specific embedded features in the debt instruments, including embedded derivatives. The following reflects the pro forma adjustment to estimated interest expense (in thousands): |
Year ended | |||
December 31, | |||
2010 | |||
Senior secured term loan facility(1) | $ | 33,212 | |
Bonds payable(2) | 26,000 | ||
Revolving credit facility borrowings(3) | - | ||
Fees on outstanding letters of credit(4) | 38 | ||
Commitment fees(5) | 1,117 | ||
Total pro forma increase to cash interest expense | 60,367 | ||
Amortization of capitalized debt issuance costs(6) | 7,444 | ||
Interest accretion on deferred payment amount(7) | 3,569 | ||
Total pro forma increase to total interest expense | 71,380 | ||
Less: Reduction of MedAssets’ existing interest expense and fees(8) | (26,544) | ||
Less: Broadlane’s historical interest expense and fees(9) | (13,804) | ||
Total pro forma adjustment to interest expense | $ | 31,032 | |
(1) | Reflects estimated pro forma interest expense on the $635.0 million senior secured term loan facility at an assumed minimum LIBOR rate of 1.50% plus an applicable margin of 3.75%. The calculation of the estimated pro forma interest expense is inclusive of required quarterly principal repayments as per the terms of the senior secured credit facility. A 0.125% increase in the interest rate on the floating rate debt would result in an increase in total annual pro forma interest expense of approximately $0.8 million. | |
(2) | Reflects pro forma interest expense on the $325.0 million bonds at 8.0% per annum. | |
(3) | Reflects no assumed borrowings under the revolving credit facility. Interest on any borrowings under the revolving credit facility would be based on the prevailing LIBOR rate plus an applicable margin of 3.75%. | |
(4) | Reflects pro forma annual fees of 3.75% on outstanding letters of credit of $1.0 million. | |
(5) | Reflects pro forma commitment fees of 0.75% on the unused portion of the revolving credit facility. | |
(6) | Reflects non-cash amortization of estimated capitalized deferred financing costs over the term of the related facilities. | |
(7) | Reflects non-cash interest to accrete the deferred payment amount to face value. | |
(8) | Reflects MedAssets’ historical interest expense on its existing term loan, letter of credit fees and commitment fees on its unused revolving credit facility. Excludes interest expense on our finance obligation. | |
(9) | Reflects Broadlane’s historical interest expense on its existing senior term loan and commitment fees on its unused revolving credit facility. |
(g) | Reflects the pro forma adjustment to eliminate the loss on extinguishment of debt from Broadlane’s historical statements of operations relating to Broadlane’s refinancing of their senior term loan. Broadlane’s refinancing would not have occurred had the acquisition been completed as of the beginning of the period as the recorded loss was directly impacted by the acquisition; therefore, the loss was eliminated in the pro forma condensed consolidated statements of operations. | |
(h) | Reflects the pro forma adjustment to eliminate the effect of Broadlane’s interest rate swap and interest rate cap from Broadlane’s historical statement of operations. These transactions would not have occurred had the acquisition been completed as of the beginning of the period as the recorded amounts were directly impacted by the acquisition; therefore, they were eliminated in the pro forma condensed consolidated statements of operations. |
(i) | Represents the estimated pro forma tax adjustment resulting from the combination of the consolidated tax groups of MedAssets and Broadlane, consideration of their resulting tax attributes and the impact of the pro forma adjustments. The amount was calculated using the MedAssets blended statutory tax rate for the period. |
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• | the diversion of our management’s attention, as integrating the operations and assets of the acquired business requires a substantial amount of our management’s time; | |
• | difficulties associated with assimilating the operations of the acquired business, including differing technology, business systems and corporate cultures; |
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• | increased demand from customers for pricing concessions based on the broader product offering; | |
• | the ability to achieve operating and financial synergies anticipated to result from the Broadlane Acquisition; | |
• | greater than expected costs of integration; and | |
• | failure to retain key personnel and customers of Broadlane. |
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• | a material portion of our cash flow from operations must be dedicated to the payment of interest on and principal of our outstanding indebtedness, thereby reducing the funds available to us for other purposes, including working capital, acquisitions and capital expenditures; | |
• | our substantial degree of leverage could make us more vulnerable in the event of a downturn in general economic conditions or other adverse events in our business or our industry; | |
• | our substantial degree of leverage could impair our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes limiting our ability to maintain the value of our assets and operations; and | |
• | our revolving credit facility matures in November 2015 and our term loan facility matures in November 2016. If cash flow from operations is less than our debt service responsibilities, we may face financial risk that could increase interest expense and hinder our ability to refinance our debt obligations. |
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• | finance unanticipated working capital requirements; | |
• | develop or enhance our technological infrastructure and our existing products and services; | |
• | fund strategic relationships; | |
• | respond to competitive pressures; and | |
• | acquire complementary businesses, technologies, products or services. |
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• | use our commercially reasonable efforts cause to be filed a registration statement with the SEC with respect to a registered offer to exchange the original notes for exchange notes that will be issued under the same indenture, in the same aggregate principal amount as and with terms that are substantially identical in all material respects to the original notes, except that the exchange notes will not be subject to restrictions on transfer or to any increase in annual interest rate and will not have registration rights; |
• | use our commercially reasonable efforts to have the exchange offer registration statement remain effective under the Securities Act until the earlier of (i) 180 days after the closing date of the exchange offer and (ii) the date on which broker-dealers that receive exchange notes for their own account in exchange for original notes, where such original notes were acquired by such broker-dealers as a result of market-making activities or other trading activities, which broker-dealers we refer to herein as the “Participating Broker-Dealers”, have sold all exchange notes held by them; |
• | promptly after the effectiveness of the exchange offer registration statement, commence the exchange offer; and |
• | use our commercially reasonable efforts to complete the exchange offer no later than November 15, 2011. |
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• | we determine that the exchange offer is not available or the exchange offer may not be completed as soon as practicable after the last exchange date because it would violate any applicable law or applicable interpretations of the staff of the SEC; |
• | the Exchange Offer is not for any other reason completed by November 15, 2011; |
• | we receive a written request (“Shelf Request”) prior to the 30th day following the last exchange date from any initial purchaser representing that it holds original notes that are or were ineligible to be exchanged for exchange notes in the exchange offer, |
• | cause to be filed as soon as practicable after such determination, date or Shelf Request, as the case may be, a shelf registration statement providing for the sale of all the original notes by the selling holders thereof and |
• | file and have become effective both an exchange offer registration statement with respect to all original notes and a shelf registration statement (which may be a combined registration statement with the exchange offer registration statement) with respect to offers and sales of original notes held by the initial purchasers that were ineligible to be exchanged in the exchange offer. |
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• | the exchange offer is not completed (or, if required, the shelf registration statement is not declared effective) on or prior to November 15, 2011; or |
• | in the case of a shelf registration statement requested by an initial purchaser, if such shelf registration statement becomes effective and thereafter either ceases to be effective or the prospectus contained therein ceases to be usable at any time during the shelf effectiveness period and such failure to remain effective or usable exists for more than 30 days (whether or not consecutive) in any12-month period. |
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• | terminate the exchange offer and not accept for exchange any original notes if any of the events set forth below under “—Conditions to the exchange offer” shall have occurred and shall not have been waived by us; and |
• | amend the terms of the exchange offer in any manner, whether before or after any tender of the original notes. |
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Year | Percentage | |
2014 | 104.000% | |
2015 | 102.000% | |
2016 and thereafter | 100.000% |
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• | upon deposit of each global note with DTC’s custodian, DTC will credit portions of the principal amount of the global note to the accounts of the DTC participants designated by the initial purchasers; and | |
• | ownership of beneficial interests in each global note will be shown on, and transfer of ownership of those interests will be effected only through, records maintained by DTC (with respect to interests of DTC participants) and the records of DTC participants (with respect to other owners of beneficial interests in the global note). |
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• | a limited purpose trust company organized under the laws of the State of New York; | |
• | a “banking organization” within the meaning of the New York State Banking Law; | |
• | a member of the Federal Reserve System; | |
• | a “clearing corporation” within the meaning of the New York Uniform Commercial Code; and | |
• | a “clearing agency” registered under Section 17A of the Exchange Act. |
• | will not be entitled to have exchange notes represented by the global note registered in their names; | |
• | will not receive or be entitled to receive physical, certificated exchange notes; and | |
• | will not be considered the owners or holders of the exchange notes under the indenture for any purpose, including with respect to the giving of any direction, instruction or approval to the Trustee under the indenture. |
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• | DTC notifies us at any time that it is unwilling or unable to continue as depositary for the global notes and a successor depositary is not appointed within 90 days; | |
• | DTC ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days; | |
• | we, at our option, notify the Trustee that we elect to cause the issuance of certificated exchange notes; or | |
• | certain other events provided in the indenture should occur. |
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• | a dealer in securities or currencies; | |
• | a financial institution; | |
• | a regulated investment company; | |
• | a real estate investment trust; | |
• | a tax-exempt organization; | |
• | an insurance company; | |
• | a person holding the notes as part of a hedging, integrated, conversion or constructive sale transaction or a straddle; | |
• | a trader in securities that has elected themark-to-market method of accounting for your securities; | |
• | a person liable for alternative minimum tax; | |
• | a pass-through entity or a person who is an investor in a pass-through entity; | |
• | a U.S. Holder (as defined below) whose “functional currency” is not the U.S. dollar; or | |
• | a U.S. expatriate. |
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• | a holder of original notes will not recognize taxable gain or loss as a result of the exchange of original notes for exchange notes pursuant to the exchange offer; | |
• | the holding period of the exchange notes should include the holding period of the original notes surrendered in exchange therefor; and | |
• | a holder’s adjusted tax basis in the exchange notes should be the same as such holder’s adjusted tax basis in the original notes surrendered in exchange therefor. |
• | an individual citizen or resident of the United States; | |
• | a corporation (or any other entity treated as a corporation for United States federal income tax purposes) created or organized in or | |
• | under the laws of the United States, any state thereof or the District of Columbia; | |
• | an estate the income of which is subject to United States federal income taxation regardless of its source; or | |
• | a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person. |
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• | interest paid on the note is not effectively connected with your conduct of a trade or business in the United States; | |
• | you do not actually or constructively own 10% or more of the total combined voting power of all classes of our voting stock within the meaning of the Code and applicable United States Treasury regulations; | |
• | you are not a controlled foreign corporation that is related to us through stock ownership; | |
• | you are not a bank whose receipt of interest on a note is described in Section 881(c)(3)(A) of the Code; and | |
• | either (a) you provide your name and address on an IRSForm W-8BEN (or other applicable form), and certify, under penalties of perjury, that you are not a United States person as defined under the Code or (b) you hold your notes through certain financial intermediaries and satisfy the certification requirements of applicable United States Treasury regulations. Special certification rules apply toNon-U.S. Holders that are pass-through entities rather than corporations or individuals. |
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• | the gain is effectively connected with your conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a United States permanent establishment), in which case you will be taxed in the same manner as discussed above with respect to effectively connected interest, or | |
• | you are an individual who is present in the United States for 183 days or more in the taxable year of such disposition, and certain other conditions are met (in which case you will be subject to a 30% United States federal income tax on any gain recognized (except as otherwise provided by an applicable income tax treaty), which may be offset by certain United States source losses). |
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MedAssets Financial Statements: | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
Broadlane Financial Statements: | ||||
F-27 | ||||
F-28 | ||||
F-29 | ||||
F-30 | ||||
F-31 | ||||
F-32 | ||||
F-54 | ||||
F-55 | ||||
F-56 | ||||
F-57 | ||||
F-58 |
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June 30, | December 31, | |||||||
2011 | 2010 | |||||||
(Unaudited) | ||||||||
(In thousands, except share and per share amounts) | ||||||||
ASSETS | ||||||||
Current | ||||||||
Cash and cash equivalents | $ | 42,159 | $ | 46,836 | ||||
Accounts receivable, net of allowances of $4,556 and $5,256 as of June 30, 2011 and | ||||||||
December 31, 2010, respectively | 99,251 | 100,020 | ||||||
Deferred tax asset, current | 19,027 | 18,087 | ||||||
Prepaid expenses and other current assets | 16,863 | 19,811 | ||||||
Total current assets | 177,300 | 184,754 | ||||||
Property and equipment, net | 81,803 | 77,737 | ||||||
Other long term assets | ||||||||
Goodwill | 1,034,764 | 1,035,697 | ||||||
Intangible assets, net | 443,688 | 484,438 | ||||||
Other | 62,168 | 62,727 | ||||||
Other long term assets | 1,540,620 | 1,582,862 | ||||||
Total assets | $ | 1,799,723 | $ | 1,845,353 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 17,691 | $ | 18,107 | ||||
Accrued revenue share obligation and rebates | 62,322 | 57,744 | ||||||
Accrued payroll and benefits | 24,383 | 22,149 | ||||||
Other accrued expenses | 19,280 | 22,268 | ||||||
Deferred revenue, current portion | 44,790 | 36,533 | ||||||
Deferred purchase consideration (Note 3) | 121,551 | 119,912 | ||||||
Current portion of notes payable | 6,350 | 6,350 | ||||||
Current portion of finance obligation | 203 | 186 | ||||||
Total current liabilities | 296,570 | 283,249 | ||||||
Notes payable, less current portion | 600,475 | 628,650 | ||||||
Bonds payable (Note 6) | 325,000 | 325,000 | ||||||
Finance obligation, less current portion | 9,398 | 9,505 | ||||||
Deferred revenue, less current portion | 12,831 | 9,597 | ||||||
Deferred tax liability | 133,225 | 150,887 | ||||||
Other long term liabilities | 3,039 | 2,882 | ||||||
Total liabilities | 1,380,538 | 1,409,770 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity | ||||||||
Common stock, $0.01 par value, 150,000,000 shares authorized; 58,853,000 and 58,410,000 shares issued and outstanding as of June 30, 2011 and December 31, 2010, respectively | 589 | 584 | ||||||
Additional paid-in capital | 671,365 | 668,028 | ||||||
Accumulated other comprehensive loss | (1,082 | ) | — | |||||
Accumulated deficit | (251,687 | ) | (233,029 | ) | ||||
Total stockholders’ equity | 419,185 | 435,583 | ||||||
Total liabilities and stockholders’ equity | $ | 1,799,723 | $ | 1,845,353 | ||||
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Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Administrative fees, net | $ | 59,815 | $ | 27,964 | $ | 116,397 | $ | 56,554 | ||||||||||||
Other service fees | 87,559 | 67,163 | 161,536 | 131,979 | ||||||||||||||||
Total net revenue | 147,374 | 95,127 | 277,933 | 188,533 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Cost of revenue (inclusive of certain amortization expense) | 30,488 | 22,757 | 61,043 | 44,479 | ||||||||||||||||
Product development expenses | 6,202 | 4,823 | 12,875 | 10,193 | ||||||||||||||||
Selling and marketing expenses | 18,000 | 16,009 | 30,601 | 26,677 | ||||||||||||||||
General and administrative expenses | 46,770 | 31,947 | 95,911 | 64,098 | ||||||||||||||||
Acquisition and integration-related expenses | 6,828 | — | 18,971 | — | ||||||||||||||||
Depreciation | 5,228 | 4,540 | 10,907 | 8,833 | ||||||||||||||||
Amortization of intangibles | 20,232 | 6,026 | 40,472 | 12,110 | ||||||||||||||||
Total operating expenses | 133,748 | 86,102 | 270,780 | 166,390 | ||||||||||||||||
Operating income | 13,626 | 9,025 | 7,153 | 22,143 | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||
Interest (expense) | (18,075 | ) | (3,807 | ) | (36,124 | ) | (7,739 | ) | ||||||||||||
Other income | 109 | 135 | 280 | 202 | ||||||||||||||||
(Loss) income before income taxes | (4,340 | ) | 5,353 | (28,691 | ) | 14,606 | ||||||||||||||
Income tax (benefit) expense | (1,852 | ) | 2,059 | (10,033 | ) | 5,792 | ||||||||||||||
Net (loss) income | $ | (2,488 | ) | $ | 3,294 | $ | (18,658 | ) | $ | 8,814 | ||||||||||
Basic and diluted income per share: | ||||||||||||||||||||
Basic net (loss) income | $ | (0.04 | ) | $ | 0.06 | $ | (0.33 | ) | $ | 0.16 | ||||||||||
Diluted net (loss) income | $ | (0.04 | ) | $ | 0.06 | $ | (0.33 | ) | $ | 0.15 | ||||||||||
Weighted average shares — basic | 57,357 | 56,169 | 57,295 | 55,994 | ||||||||||||||||
Weighted average shares — diluted | 57,357 | 59,456 | 57,295 | 59,148 |
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Accumulated | ||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||
Common Stock | Paid-In | Comprehensive | Accumulated | Stockholders’ | ||||||||||||||||||||
Shares | Par Value | Capital | Income (Loss) | Deficit | Equity | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Balances at December 31, 2010 | 58,410 | $ | 584 | $ | 668,028 | $ | — | $ | (233,029 | ) | $ | 435,583 | ||||||||||||
Issuance of common stock from equity award exercises | 268 | 3 | 1,612 | — | — | 1,615 | ||||||||||||||||||
Issuance of common restricted stock (net of forfeitures) | 175 | 2 | — | — | — | 2 | ||||||||||||||||||
Stock compensation expense | — | — | 822 | — | — | 822 | ||||||||||||||||||
Excess tax benefit from equity award exercises | — | — | 903 | — | — | 903 | ||||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||
Unrealized loss from hedging activities (net of a tax expense of $671) | — | — | — | (1,082 | ) | — | (1,082 | ) | ||||||||||||||||
Net loss | — | — | — | — | (18,658 | ) | (18,658 | ) | ||||||||||||||||
Comprehensive loss | — | — | — | — | — | (19,740 | ) | |||||||||||||||||
Balances at June 30, 2011 | 58,853 | $ | 589 | $ | 671,365 | $ | (1,082 | ) | $ | (251,687 | ) | $ | 419,185 | |||||||||||
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Six Months Ended June 30, | ||||||||
2011 | 2010 | |||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Operating activities | ||||||||
Net (loss) income | $ | (18,658 | ) | $ | 8,814 | |||
Adjustments to reconcile (loss) income from continuing operations to net cash provided by operating activities: | ||||||||
Bad debt expense | 240 | 437 | ||||||
Depreciation | 11,417 | 10,274 | ||||||
Amortization of intangibles | 40,751 | 12,480 | ||||||
Loss on sale of assets | — | 1 | ||||||
Noncash stock compensation expense | 822 | 6,511 | ||||||
Excess tax benefit from exercise of equity awards | (943 | ) | (3,061 | ) | ||||
Amortization of debt issuance costs | 3,724 | 915 | ||||||
Noncash interest expense, net | 2,034 | 267 | ||||||
Deferred income tax (benefit) expense | (17,987 | ) | (247 | ) | ||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | 2,096 | (3,736 | ) | |||||
Prepaid expenses and other assets | 2,946 | (4,166 | ) | |||||
Other long-term assets | (2,750 | ) | (239 | ) | ||||
Accounts payable | 67 | 2,583 | ||||||
Accrued revenue share obligations and rebates | 4,055 | (361 | ) | |||||
Accrued payroll and benefits | 1,759 | (766 | ) | |||||
Other accrued expenses | (3,757 | ) | 2,486 | |||||
Deferred revenue | 11,491 | 3,592 | ||||||
Cash provided by operating activities | 37,307 | 35,784 | ||||||
Investing activities | ||||||||
Purchases of property, equipment and software | (5,361 | ) | (8,021 | ) | ||||
Capitalized software development costs | (10,677 | ) | (7,719 | ) | ||||
Acquisitions, net of cash acquired | — | (3,160 | ) | |||||
Cash used in investing activities | (16,038 | ) | (18,900 | ) | ||||
Financing activities | ||||||||
Repayment of notes payable | (28,175 | ) | (31,021 | ) | ||||
Repayment of finance obligations | (329 | ) | (329 | ) | ||||
Excess tax benefit from exercise of equity awards | 943 | 3,061 | ||||||
Issuance of common stock | 1,615 | 5,907 | ||||||
Cash used in financing activities | (25,946 | ) | (22,382 | ) | ||||
Net decrease in cash and cash equivalents | (4,677 | ) | (5,498 | ) | ||||
Cash and cash equivalents, beginning of period | 46,836 | 5,498 | ||||||
Cash and cash equivalents, end of period | $ | 42,159 | $ | — | ||||
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Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
1. | BUSINESS DESCRIPTION AND BASIS OF PRESENTATION |
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2. | RECENT ACCOUNTING PRONOUNCEMENTS |
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3. | ACQUISITION |
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Amounts | ||||||||||||
Previously | Amounts | |||||||||||
Recognized as of | Measurement | Recognized as of | ||||||||||
Acquisition Date | Period | Acquisition Date | ||||||||||
(Provisional)(1) | Adjustments | (Adjusted) | ||||||||||
Current assets(2) | $ | 56,402 | $ | 1,091 | $ | 57,493 | ||||||
Property and equipment | 13,941 | — | 13,941 | |||||||||
Other long term assets | 110 | — | 110 | |||||||||
Goodwill(3) | 567,326 | (934 | ) | 566,392 | ||||||||
Intangible assets | 419,900 | — | 419,900 | |||||||||
Total assets acquired | 1,057,679 | 157 | 1,057,836 | |||||||||
Current liabilities(4) | 35,832 | 998 | 36,830 | |||||||||
Other long term liabilities(5) | 156,447 | (841 | ) | 155,606 | ||||||||
Total liabilities assumed | 192,279 | 157 | 192,436 | |||||||||
Total purchase price | $ | 865,400 | $ | — | $ | 865,400 | ||||||
(1) | As previously reported in the Company’s 2010 Annual Report on Form10-K. | |
(2) | Represents: (i) a $1,147 increase to accounts receivable relating to administrative fees earned associated with customer purchases that occurred prior to the acquisition date in excess of what was originally estimated; (ii) a $238 reduction in deferred tax assets for the tax impact of the change in accounts receivable; and (iii) a $182 increase in deferred tax assets for the tax impact of the change in the self insurance liability described below. | |
(3) | Represents the cumulative change to goodwill for the changes in current assets, current liabilities and other long term liabilities. | |
(4) | Represents: (i) the revenue share obligation of $523 owed to customers associated with the additional administrative fees earned as noted above; and (ii) a $475 increase in the self insurance liability assumed at the acquisition date. | |
(5) | Represents a reduction in our uncertain tax positions based on a federal audit of Broadlane completed by the Internal Revenue Service in which they determined that no tax liability had been identified. |
4. | RESTRUCTURING ACTIVITIES |
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• | Involuntary employee terminations — we are reorganizing our SCM workforce and plan to eliminate redundant or unneeded positions in connection with combining our business operations. In connection with the workforce restructuring, we expect to incur severance, benefits and other employee related costs in the range of $3,400 to $5,400 to be incurred over the twelve to eighteen months following June 30, 2011. During the three and six months ended June 30, 2011, we expensed approximately $4,659 and $10,094, respectively, related to severance and other employee benefits in connection with our plan. As of June 30, 2011, we had approximately $4,041 included in current liabilities for these costs. |
• | System migration and standardization — we plan to integrate and standardize certain software platforms of the combined business operations. In connection with the system migration and standardization, we expect to incur costs up to $1,000 over the six to twelve months following June 30, 2011. During the three and six months ended June 30, 2011, we expensed approximately $2,025 and $3,077, respectively, related to consulting and other third-party services in connection with our plan. |
• | Facilities consolidation — we expect to consolidate office space in areas where we have common or redundant locations. We expect to incur costs in the range of $0 to $1,300 over the six to twelve months following June 30, 2011 relating to ceasing use of certain facilities. During the three and six months ended June 30, 2011, we expensed approximately $144 and $5,800, respectively, relating to exit costs associated with our office space consolidation. As of June 30, 2011, we had approximately $3,772 included in current liabilities for these costs. |
Accrued, | ||||||||||||||||
December 31, | Charges | Cash | Accrued, | |||||||||||||
2010 | Incurred | Payments | June 30, 2011 | |||||||||||||
Broadlane Restructuring Plan | ||||||||||||||||
Involuntary employee terminations | $ | 3,488 | $ | 10,094 | $ | (9,541 | ) | $ | 4,041 | |||||||
System migration and integration | — | 3,077 | (3,077 | ) | — | |||||||||||
Facility consolidation | — | 5,800 | (2,028 | ) | 3,772 | |||||||||||
Total Broadlane Restructuring Costs | $ | 3,488 | $ | 18,971 | $ | (14,646 | ) | $ | 7,813 |
5. | DEFERRED REVENUE |
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June 30, | December 31, | |||||||
2011 | 2010 | |||||||
Software and implementation fees | $ | 15,854 | $ | 15,290 | ||||
Service fees | 23,207 | 26,970 | ||||||
Administrative fees | 18,233 | 2,573 | ||||||
Other fees | 327 | 1,297 | ||||||
Deferred revenue, total | 57,621 | 46,130 | ||||||
Less: Deferred revenue, current portion | (44,790 | ) | (36,533 | ) | ||||
Deferred revenue, non-current portion | $ | 12,831 | $ | 9,597 | ||||
6. | NOTES AND BONDS PAYABLE |
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
Notes payable — senior | $ | 606,825 | $ | 635,000 | ||||
Bonds payable | 325,000 | 325,000 | ||||||
Total notes and bonds payable | 931,825 | 960,000 | ||||||
Less: current portions | (6,350 | ) | (6,350 | ) | ||||
Total long-term notes and bonds payable | $ | 925,475 | $ | 953,650 | ||||
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Year | Percentage | |||
2014 | 104 | % | ||
2015 | 102 | % | ||
2016 and thereafter | 100 | % |
Senior | ||||||||||||
Unsecured | ||||||||||||
Year | Term Loan | Notes | Total | |||||||||
2011 | $ | 3,175 | $ | — | $ | 3,175 | (1) | |||||
2012 | 6,350 | — | 6,350 | |||||||||
2013 | 6,350 | — | 6,350 | |||||||||
2014 | 6,350 | — | 6,350 | |||||||||
2015 | 6,350 | — | 6,350 | |||||||||
Thereafter | 578,250 | 325,000 | 903,250 | |||||||||
$ | 606,825 | $ | 325,000 | $ | 931,825 | |||||||
(1) | Represents the remaining quarterly principal payments due during the fiscal year ending December 31, 2011. |
7. | COMMITMENTS AND CONTINGENCIES |
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8. | STOCKHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Cost of revenue | $ | (425 | ) | $ | 661 | $ | 594 | $ | 1,227 | |||||||
Product development | 25 | 136 | 80 | 333 | ||||||||||||
Selling and marketing | (540 | ) | 802 | (250 | ) | 1,416 | ||||||||||
General and administrative | (1,581 | ) | 1,440 | 398 | 3,535 | |||||||||||
Total share-based compensation expense(1) | $ | (2,521 | ) | $ | 3,039 | $ | 822 | $ | 6,511 | |||||||
(1) | During the three months ended June 30, 2011, we recorded an adjustment to share-based compensation expense based on our probability assessment of performance achievement relating to certain performance-based restricted stock grants and SSAR grants. Refer to the footnote disclosure for further details. |
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9. | INCOME TAXES |
10. | INCOME (LOSS) PER SHARE |
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Three Months Ended June 30, | ||||||||
2011 | 2010 | |||||||
Numerator for Basic and Diluted (Loss) Income Per Share: | ||||||||
Net (loss) income | $ | (2,488 | ) | $ | 3,294 | |||
Denominator for basic (loss) income per share weighted average shares | 57,357,000 | 56,169,000 | ||||||
Effect of dilutive securities: | ||||||||
Stock options | — | 2,243,000 | ||||||
Stock settled stock appreciation rights | — | 511,000 | ||||||
Restricted stock and stock warrants | — | 533,000 | ||||||
Denominator for diluted (loss) income per share — adjusted weighted average shares and assumed conversions | 57,357,000 | 59,456,000 | ||||||
Basic (loss) income per share: | ||||||||
Basic net (loss) income per common share | $ | (0.04 | ) | $ | 0.06 | |||
Diluted net (loss) income per share: | ||||||||
Diluted net (loss) income per common share | $ | (0.04 | ) | $ | 0.06 | |||
Six Months Ended June 30, | ||||||||
2011 | 2010 | |||||||
Numerator for Basic and Diluted (Loss) Income Per Share: | ||||||||
Net (loss) income | $ | (18,658 | ) | $ | 8,814 | |||
Denominator for basic (loss) income per share weighted average shares | 57,295,000 | 55,994,000 | ||||||
Effect of dilutive securities: | ||||||||
Stock options | — | 2,166,000 | ||||||
Stock settled stock appreciation rights | — | 465,000 | ||||||
Restricted stock and stock warrants | — | 523,000 | ||||||
Denominator for diluted (loss) income per share — adjusted weighted average shares and assumed conversions | 57,295,000 | 59,148,000 | ||||||
Basic (loss) income per share: | ||||||||
Basic net (loss) income per common share | $ | (0.33 | ) | $ | 0.16 | |||
Diluted net (loss) income per share: | ||||||||
Diluted net (loss) income per common share | $ | (0.33 | ) | $ | 0.15 | |||
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Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Stock options | 1,185,000 | 28,000 | 1,359,000 | 34,000 | ||||||||||||
SSARs | 110,000 | 118,000 | 168,000 | 135,000 | ||||||||||||
Restricted stock and stock warrants | 440,000 | — | 464,000 | — | ||||||||||||
Total | 1,735,000 | 146,000 | 1,991,000 | 169,000 |
11. | SEGMENT INFORMATION |
• | Revenue Cycle Management. Our RCM segment provides a comprehensive suite of software and services spanning the hospital, health system and other ancillary healthcare provider revenue cycle workflow — from patient admission and financial responsibility, patient financial liability estimation, charge capture, case management, contract management and health information management through claims processing and accounts receivable management. Our workflow solutions, together with our data management and business intelligence tools, increase revenue capture and cash collections, reduce accounts receivable balances and increase regulatory compliance. |
• | Spend and Clinical Resource Management. Our SCM segment provides a comprehensive suite of technology-enabled services that help our customers manage their expense categories. Our solutions lower supply and medical device pricing and utilization by managing the procurement process through our group purchasing organization (“GPO”) portfolio of contracts, consulting services and business intelligence tools. |
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Three Months Ended June 30, 2011 | ||||||||||||||||
RCM | SCM | Corporate | Total | |||||||||||||
Results of Operations: | ||||||||||||||||
Revenue: | ||||||||||||||||
Gross administrative fees(1) | $ | — | $ | 93,799 | $ | — | $ | 93,799 | ||||||||
Revenue share obligation(1) | — | (33,984 | ) | — | (33,984 | ) | ||||||||||
Other service fees | 56,262 | 31,297 | — | 87,559 | ||||||||||||
Total net revenue | 56,262 | 91,112 | — | 147,374 | ||||||||||||
Total operating expenses | 48,208 | 78,672 | 6,868 | 133,748 | ||||||||||||
Operating income (loss) | 8,054 | 12,440 | (6,868 | ) | 13,626 | |||||||||||
Interest (expense) | — | (14 | ) | (18,061 | ) | (18,075 | ) | |||||||||
Other income | 7 | (11 | ) | 113 | 109 | |||||||||||
Income (loss) before | ||||||||||||||||
income taxes | $ | 8,061 | $ | 12,415 | $ | (24,816 | ) | $ | (4,340 | ) | ||||||
Income tax expense (benefit) | 2,883 | 4,318 | (9,053 | ) | (1,852 | ) | ||||||||||
Net income (loss) | 5,178 | 8,097 | (15,763 | ) | (2,488 | ) | ||||||||||
Segment Adjusted EBITDA | $ | 14,251 | $ | 37,355 | $ | (7,328 | ) | $ | 44,278 |
(1) | These are non-GAAP measures. See “Use of Non-GAAP Financial Measures” section for additional information. |
As of June 30, 2011 | ||||||||||||||||
RCM | SCM | Corporate | Total | |||||||||||||
Financial Position: | ||||||||||||||||
Accounts receivable, net | $ | 45,875 | $ | 53,347 | $ | 29 | $ | 99,251 | ||||||||
Other assets | 483,000 | 1,094,968 | 122,504 | 1,700,472 | ||||||||||||
Total assets | 528,875 | 1,148,315 | 122,533 | 1,799,723 | ||||||||||||
Accrued revenue share obligation | — | 62,322 | — | 62,322 | ||||||||||||
Deferred revenue | 29,312 | 28,309 | — | 57,621 | ||||||||||||
Notes payable | — | — | 606,825 | 606,825 | ||||||||||||
Bonds payable | — | — | 325,000 | 325,000 | ||||||||||||
Other liabilities | 13,229 | 24,114 | 291,427 | 328,770 | ||||||||||||
Total liabilities | $ | 42,541 | $ | 114,745 | $ | 1,223,252 | $ | 1,380,538 |
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Three Months Ended June 30, 2010 | ||||||||||||||||
RCM | SCM | Corporate | Total | |||||||||||||
Results of Operations: | ||||||||||||||||
Revenue: | ||||||||||||||||
Gross administrative fees(1) | $ | — | $ | 42,873 | $ | — | $ | 42,873 | ||||||||
Revenue share obligation(1) | — | (14,909 | ) | — | (14,909 | ) | ||||||||||
Other service fees | 52,502 | 14,661 | — | 67,163 | ||||||||||||
Total net revenue | 52,502 | 42,625 | — | 95,127 | ||||||||||||
Total operating expenses | 44,160 | 31,185 | 10,757 | 86,102 | ||||||||||||
Operating income (loss) | 8,342 | 11,440 | (10,757 | ) | 9,025 | |||||||||||
Interest (expense) | — | — | (3,807 | ) | (3,807 | ) | ||||||||||
Other income (loss) | 19 | (10 | ) | 126 | 135 | |||||||||||
Income (loss) before income taxes | $ | 8,361 | $ | 11,430 | $ | (14,438 | ) | $ | 5,353 | |||||||
Income tax (benefit) | 3,282 | 4,449 | (5,672 | ) | 2,059 | |||||||||||
Net income (loss) | 5,079 | 6,981 | (8,766 | ) | 3,294 | |||||||||||
Segment Adjusted EBITDA | $ | 16,942 | $ | 15,100 | $ | (6,648 | ) | $ | 25,394 |
(1) | These are non-GAAP measures. See “Use of Non-GAAP Financial Measures” section for additional information. |
Six Months Ended June 30, 2011 | ||||||||||||||||
RCM | SCM | Corporate | Total | |||||||||||||
Results of Operations: | ||||||||||||||||
Revenue: | ||||||||||||||||
Gross administrative fees(1) | $ | — | $ | 184,124 | $ | — | $ | 184,124 | ||||||||
Revenue share obligation(1) | — | (67,727 | ) | — | (67,727 | ) | ||||||||||
Other service fees | 107,487 | 54,049 | — | 161,536 | ||||||||||||
Total net revenue | 107,487 | 170,446 | — | 277,933 | ||||||||||||
Total operating expenses | 95,391 | 159,482 | 15,907 | 270,780 | ||||||||||||
Operating income (loss) | 12,096 | 10,964 | (15,907 | ) | 7,153 | |||||||||||
Interest (expense) | — | (14 | ) | (36,110 | ) | (36,124 | ) | |||||||||
Other income | 13 | 40 | 227 | 280 | ||||||||||||
Income (loss) before income taxes | $ | 12,109 | $ | 10,990 | $ | (51,790 | ) | $ | (28,691 | ) | ||||||
Income tax expense (benefit) | 4,235 | 3,843 | (18,111 | ) | (10,033 | ) | ||||||||||
Net income (loss) | 7,874 | 7,147 | (33,679 | ) | (18,658 | ) | ||||||||||
Segment Adjusted EBITDA | $ | 25,721 | $ | 73,505 | $ | (14,003 | ) | $ | 85,223 |
(1) | These are non-GAAP measures. See “Use of Non-GAAP Financial Measures” section for additional information. |
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Six Months Ended June 30, 2010 | ||||||||||||||||
RCM | SCM | Corporate | Total | |||||||||||||
Results of Operations: | ||||||||||||||||
Revenue: | ||||||||||||||||
Gross administrative fees(1) | $ | — | $ | 85,902 | $ | — | $ | 85,902 | ||||||||
Revenue share obligation(1) | — | (29,348 | ) | — | (29,348 | ) | ||||||||||
Other service fees | 104,404 | 27,575 | — | 131,979 | ||||||||||||
Total net revenue | 104,404 | 84,129 | — | 188,533 | ||||||||||||
Total operating expenses | 89,337 | 57,196 | 19,857 | 166,390 | ||||||||||||
Operating income (loss) | 15,067 | 26,933 | (19,857 | ) | 22,143 | |||||||||||
Interest (expense) | — | — | (7,739 | ) | (7,739 | ) | ||||||||||
Other income (loss) | 33 | (67 | ) | 236 | 202 | |||||||||||
Income (loss) before income taxes | $ | 15,100 | $ | 26,866 | $ | (27,360 | ) | $ | 14,606 | |||||||
Income tax (benefit) | 6,001 | 10,675 | (10,884 | ) | 5,792 | |||||||||||
Net income (loss) | 9,099 | 16,191 | (16,476 | ) | 8,814 | |||||||||||
Segment Adjusted EBITDA | $ | 32,387 | $ | 34,094 | $ | (13,275 | ) | $ | 53,206 |
(1) | These are non-GAAP measures. See “Use of Non-GAAP Financial Measures” section for additional information. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
RCM Adjusted EBITDA | $ | 14,251 | $ | 16,942 | $ | 25,721 | $ | 32,387 | ||||||||
SCM Adjusted EBITDA | 37,355 | 15,100 | 73,505 | 34,094 | ||||||||||||
Total reportable Segment Adjusted EBITDA | 51,606 | 32,042 | 99,226 | 66,481 | ||||||||||||
Depreciation | (3,959 | ) | (3,661 | ) | (8,573 | ) | (7,131 | ) | ||||||||
Depreciation (included in cost of revenue) | (254 | ) | (719 | ) | (509 | ) | (1,441 | ) | ||||||||
Amortization of intangibles | (20,232 | ) | (6,026 | ) | (40,472 | ) | (12,110 | ) | ||||||||
Amortization of intangibles (included in cost of revenue) | (139 | ) | (185 | ) | (278 | ) | (370 | ) | ||||||||
Interest expense, net of interest income(1) | (7 | ) | 36 | — | 54 | |||||||||||
Income tax expense | (7,201 | ) | (7,730 | ) | (8,077 | ) | (16,675 | ) | ||||||||
Share-based compensation expense(2) | 788 | (1,697 | ) | (1,379 | ) | (3,518 | ) | |||||||||
Purchase accounting adjustments(3) | (499 | ) | — | (6,063 | ) | — | ||||||||||
Acquisition and integration-related expenses(4) | (6,828 | ) | — | (18,851 | ) | — | ||||||||||
Total reportable segment net income | 13,275 | 12,060 | 15,024 | 25,290 | ||||||||||||
Corporate net loss | (15,763 | ) | (8,766 | ) | (33,682 | ) | (16,476 | ) | ||||||||
Consolidated net (loss) income | $ | (2,488 | ) | $ | 3,294 | $ | (18,658 | ) | $ | 8,814 |
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(1) | Interest income is included in other income (expense) and is not netted against interest expense in our Condensed Consolidated Statement of Operations. | |
(2) | Represents non-cash share-based compensation to both employees and directors. We believe excluding this non-cash expense allows us to compare our operating performance without regard to the impact of share-based compensation, which varies from period to period based on amount and timing of grants. | |
(3) | Upon acquiring Broadlane, we made certain purchase accounting adjustments that reflects the fair value of administrative fees related to customer purchases that occurred prior to November 16, 2010 but were reported to us subsequent to that. Under our revenue recognition accounting policy, which is in accordance with GAAP, these administrative fees would be ordinarily recorded as revenue when reported to us; however, the acquisition method of accounting requires us to estimate the amount of purchases occurring prior to the transaction date and to record the fair value of the administrative fees to be received from those purchases as an account receivable (as opposed to recognizing revenue when these transactions are reported to us) and record any corresponding revenue share obligation as a liability. For the three months ended June 30, 2011, the $499 represents: (i) the net amount of $544 in gross administrative fees and $178 in other service fees primarily based on vendor reporting received from April 1, 2011 through June 30, 2011 that related to periods prior to the acquisition date; and (ii) a corresponding revenue share obligation of $223. For the six months ended June 30, 2011, the $6,063 represents: (i) the net amount of $9,157 in gross administrative fees and $1,572 in other service fees primarily based on vendor reporting received from January 1, 2011 through June 30, 2011 that related to periods prior to the acquisition date; and (ii) a corresponding revenue share obligation of $4,666. The reduction of the deferred revenue balances materially affectsperiod-to-period financial performance comparability and revenue and earnings growth in future periods subsequent to the acquisition and is not indicative of changes in underlying results of operations. | |
(4) | Amount was attributable to integration and restructuring-type costs associated with the Broadlane Acquisition, such as severance, retention, certain performance-related salary-based compensation, and operating infrastructure costs. We expect to continue to incur costs in future periods to fully integrate the Broadlane Acquisition, including but not limited to the alignment of service offerings and the standardization of the legacy Broadlane accounting policies to our existing accounting policies and procedures. |
12. | DERIVATIVE FINANCIAL INSTRUMENTS |
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Fair Value of Financial Instruments | ||||||||||
Balance Sheet | As of June 30, | As of December 31, | ||||||||
Location | 2011 | 2010 | ||||||||
(Unaudited) | ||||||||||
Derivative Liabilities | ||||||||||
Derivatives designated as hedging instruments — interest rate contracts | Other long term liabilities | $1,753 | $ | — | ||||||
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Amount of (Loss) or Gain | Amount of (Loss) or Gain | |||||||||||||||
Recognized in OCI on Derivative | Recognized in OCI on Derivative | |||||||||||||||
(Effective Portion) | (Effective Portion) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(Unaudited) | ||||||||||||||||
Derivatives designated as cash flow hedges | ||||||||||||||||
Total (loss) or gain recognized in other comprehensive income — interest rate contracts | $ | (1,753 | ) | $ | 469 | $ | (1,753 | ) | $ | 540 | ||||||
13. | FAIR VALUE MEASUREMENTS |
• | Cash and cash equivalents: The carrying value reported in the Condensed Consolidated Balance Sheets for these items approximates fair value due to the high credit standing of the financial institutions holding these items and their liquid nature; |
• | Accounts receivable, net: The carrying value reported in the Condensed Consolidated Balance Sheets is net of allowances for doubtful accounts which includes a degree of counterparty non-performance risk; |
• | Accounts payable and current liabilities: The carrying value reported in the Condensed Consolidated Balance Sheets for these items approximates fair value, which is the likely amount for which the liability with short settlement periods would be transferred to a market participant with a similar credit standing as the Company; |
• | Finance obligation: The carrying value of our finance obligation reported in the Condensed Consolidated Balance Sheets approximates fair value based on current interest rates; and |
• | Notes payable: The carrying value of our long-term notes payable reported in the Condensed Consolidated Balance Sheets approximates fair value since they bear interest at variable rates. Refer to Note 6. |
14. | RELATED PARTY TRANSACTION |
15. | SUBSEQUENT EVENTS |
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F-27
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December 31, | December 31, | |||||||
2009 | 2008 | |||||||
(In thousands, except | ||||||||
share and per share data) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 31,703 | $ | 31,488 | ||||
Accounts receivable, net | 10,843 | 8,230 | ||||||
Deferred income taxes, net | 6,930 | 8,067 | ||||||
Prepaid income taxes | 2,214 | 18,400 | ||||||
Prepaid expenses and other | 3,650 | 2,817 | ||||||
Total current assets | 55,340 | 69,002 | ||||||
Property and equipment at cost, net | 10,081 | 10,529 | ||||||
Software and website development costs, less accumulated amortization of $7,128 and $1,850 at December 31, 2009 and December 31, 2008, respectively | 16,827 | 16,379 | ||||||
Intangible assets, less accumulated amortization of $22,106 and $6,062 at December 31, 2009 and December 31, 2008, respectively | 189,874 | 205,918 | ||||||
Goodwill | 183,120 | 185,086 | ||||||
Deferred financing costs, net | 5,506 | 7,951 | ||||||
Other | 279 | 278 | ||||||
Total assets | $ | 461,027 | $ | 495,143 | ||||
LIABILITIES & STOCKHOLDER’S EQUITY | ||||||||
Current liabilities: | ||||||||
Accrued payroll and payroll taxes | $ | 3,882 | $ | 2,805 | ||||
Deferred revenue | 413 | 344 | ||||||
Supplier and offeror rebates | 22,115 | 20,463 | ||||||
Accounts payable and other accrued liabilities | 8,380 | 6,391 | ||||||
Interest payable, related party | 2,436 | 2,833 | ||||||
Accrued bonus compensation | 2,398 | 9,160 | ||||||
Current portion of senior term loan | 410 | 1,400 | ||||||
Total current liabilities | 40,034 | 43,396 | ||||||
Senior term loan, less current portion | 128,190 | 138,250 | ||||||
Senior subordinated notes, related party, net of discount of $2,520 and $4,685 at December 31, 2009 and December 31, 2008, respectively | 40,021 | 58,287 | ||||||
Deferred income taxes, net | 63,181 | 67,403 | ||||||
Interest rate swap liability | 3,329 | 4,085 | ||||||
Other long-term liabilities | 1,605 | 2,073 | ||||||
Total liabilities | 276,360 | 313,494 | ||||||
Stockholder’s equity: | ||||||||
Common stock, $0.01 par value; authorized 100 shares; issued and outstanding 100 shares | — | — | ||||||
Additional paid-in capital | 202,533 | 195,592 | ||||||
Accumulated deficit | (17,866 | ) | (13,943 | ) | ||||
Total stockholder’s equity | 184,667 | 181,649 | ||||||
Total liabilities and stockholder’s equity | $ | 461,027 | $ | 495,143 | ||||
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Period from | Period from | |||||||||||||||||||
August 16, 2008 to | January 1, 2008 to | |||||||||||||||||||
2009 | December 31, 2008 | August 15, 2008 | 2007 | |||||||||||||||||
(Successor) | (Successor) | (Predecessor) | (Predecessor) | |||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Administrative fees, net | ||||||||||||||||||||
External | $ | 117,730 | $ | 27,582 | $ | 57,128 | $ | 88,259 | ||||||||||||
Affiliated | — | — | 14,095 | 21,008 | ||||||||||||||||
Total administrative fees, net | 117,730 | 27,582 | 71,223 | 109,267 | ||||||||||||||||
Other service fees | ||||||||||||||||||||
External | 49,794 | 14,497 | 21,203 | 29,609 | ||||||||||||||||
Affiliated | — | — | 1,361 | 3,078 | ||||||||||||||||
Total other service fees | 49,794 | 14,497 | 22,564 | 32,687 | ||||||||||||||||
Total revenue, net | 167,524 | 42,079 | 93,787 | 141,954 | ||||||||||||||||
Expenses: | ||||||||||||||||||||
Cost of revenue | 69,327 | 21,907 | 37,268 | 51,206 | ||||||||||||||||
Product development | 13,275 | 4,643 | 7,917 | 14,056 | ||||||||||||||||
Selling and marketing | 6,937 | 1,845 | 3,719 | 3,819 | ||||||||||||||||
General and administrative | 30,822 | 13,049 | 36,893 | 33,215 | ||||||||||||||||
Depreciation | 9,169 | 7,923 | 2,608 | 9,183 | ||||||||||||||||
Amortization of intangibles | 15,950 | 1,520 | 5,613 | 1,712 | ||||||||||||||||
Total operating expenses | 145,480 | 50,887 | 94,018 | 113,191 | ||||||||||||||||
Operating income/(loss) | 22,044 | (8,808 | ) | (231 | ) | 28,763 | ||||||||||||||
Interest expense | (24,721 | ) | (8,832 | ) | (259 | ) | (465 | ) | ||||||||||||
Investment earnings | 51 | 64 | 446 | 1,277 | ||||||||||||||||
Loss on extinguishment of debt | (3,074 | ) | — | — | — | |||||||||||||||
Other income/(loss), net | 4 | — | (86 | ) | (27 | ) | ||||||||||||||
Gain/(loss) on interest rate swap | 756 | (4,085 | ) | — | — | |||||||||||||||
Income/(loss) before income taxes | (4,940 | ) | (21,661 | ) | (130 | ) | 29,548 | |||||||||||||
Income tax (expense)/benefit | 1,017 | 7,718 | (1,312 | ) | (11,841 | ) | ||||||||||||||
Income/(loss) from continuing operations | (3,923 | ) | (13,943 | ) | (1,442 | ) | 17,707 | |||||||||||||
Discontinued operations | ||||||||||||||||||||
Income from operations | — | — | — | 25 | ||||||||||||||||
Net gain from sale of NOA | — | — | — | 1,223 | ||||||||||||||||
Income tax expense | — | — | — | (556 | ) | |||||||||||||||
Income from discontinued operations | — | — | — | 692 | ||||||||||||||||
Net income/(loss) | (3,923 | ) | (13,943 | ) | (1,442 | ) | 18,399 | |||||||||||||
Less preferred stock dividends | — | — | 1,093 | 1,750 | ||||||||||||||||
Net income/(loss) attributable to common stockholders | $ | (3,923 | ) | $ | (13,943 | ) | $ | (2,535 | ) | $ | 16,649 | |||||||||
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Common Stock | Additional | Total | ||||||||||||||||||
Issued | Par | Paid-In | Accumulated | Stockholders’ | ||||||||||||||||
Shares | Value | Capital | Deficit | Equity | ||||||||||||||||
(In thousands, except share data) | ||||||||||||||||||||
Balances, December 31, 2006 | 29,094,849 | $ | 3 | $ | 34,771 | $ | (23,825 | ) | $ | 10,949 | ||||||||||
Net income | — | — | — | 18,399 | 18,399 | |||||||||||||||
Tax benefit related to non-qualified stock option exercises | — | — | 125 | — | 125 | |||||||||||||||
Exercise of stock options | 86,101 | — | 171 | — | 171 | |||||||||||||||
Equity-based compensation | — | — | 2,722 | — | 2,722 | |||||||||||||||
Contributed services | — | — | 69 | — | 69 | |||||||||||||||
Preferred stock dividends | — | — | (1,750 | ) | — | (1,750 | ) | |||||||||||||
Balances, December 31, 2007 | 29,180,950 | 3 | 36,108 | (5,426 | ) | 30,685 | ||||||||||||||
Net loss | — | — | — | (1,442 | ) | (1,442 | ) | |||||||||||||
Tax benefit related to non-qualified stock option exercises | — | — | 6,599 | — | 6,599 | |||||||||||||||
Tax benefit related to ISO disqualified dispositions | — | — | 948 | — | 948 | |||||||||||||||
Exercise of stock options | 188,152 | — | 238 | — | 238 | |||||||||||||||
Equity-based compensation | — | — | 6,932 | — | 6,932 | |||||||||||||||
Preferred stock dividends | — | — | — | (1,093 | ) | (1,093 | ) | |||||||||||||
Balances, August 15, 2008 | 29,369,102 | 3 | 50,825 | (7,961 | ) | 42,867 | ||||||||||||||
Successor period from August 16, 2008 to December 31, 2009: | ||||||||||||||||||||
Initial capitalization | 100 | — | 195,592 | — | 195,592 | |||||||||||||||
Net loss | — | — | — | (13,943 | ) | (13,943 | ) | |||||||||||||
Balances, December 31, 2008 | 100 | — | 195,592 | (13,943 | ) | 181,649 | ||||||||||||||
Net loss | — | — | — | (3,923 | ) | (3,923 | ) | |||||||||||||
Capital contribution | — | — | 6,332 | — | 6,332 | |||||||||||||||
Equity-based compensation | — | — | 609 | — | 609 | |||||||||||||||
Balances, December 31, 2009 | 100 | $ | — | $ | 202,533 | $ | (17,866 | ) | $ | 184,667 | ||||||||||
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Period from | Period from | |||||||||||||||||||
August 16, 2008 to | January 1, 2008 to | |||||||||||||||||||
2009 | December 31, 2008 | August 15, 2008 | 2007 | |||||||||||||||||
(Successor) | (Successor) | (Predecessor) | (Predecessor) | |||||||||||||||||
(In thousands) | ||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income/(loss) | $ | (3,923 | ) | $ | (13,943 | ) | $ | (1,442 | ) | $ | 18,399 | |||||||||
Adjustments to reconcile net income/(loss) to cash provided by/(used in) operating activities: | ||||||||||||||||||||
Depreciation and amortization | 25,119 | 9,443 | 8,221 | 10,895 | ||||||||||||||||
Bad debt expense | 236 | 109 | 156 | 214 | ||||||||||||||||
Lease recovery | (89 | ) | (76 | ) | — | (52 | ) | |||||||||||||
Deferred income tax expense/(benefit) | (3,658 | ) | (8,792 | ) | 2,948 | 764 | ||||||||||||||
Contributed services | — | — | — | 69 | ||||||||||||||||
Interest rate swap (gain)/loss | (756 | ) | 4,085 | — | — | |||||||||||||||
Equity-based compensation | 609 | — | 6,932 | 2,722 | ||||||||||||||||
Excess tax benefit related to stock option exercises | — | — | (7,547 | ) | (125 | ) | ||||||||||||||
Issuance of notes in lieu of interest | 1,186 | 472 | — | — | ||||||||||||||||
Amortization of deferred financing costs and debt discount | 2,450 | 970 | 112 | 180 | ||||||||||||||||
Loss on extinguishment of debt | 3,074 | — | — | — | ||||||||||||||||
(Gain)/loss on sale of equipment | (3 | ) | — | 86 | 27 | |||||||||||||||
Pre-tax income from discontinued operations | — | — | — | (25 | ) | |||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||
(Increase)/decrease in accounts receivable | (1,960 | ) | 29,874 | 200 | (195 | ) | ||||||||||||||
Decrease in accounts receivable from affiliate | — | — | 307 | 50 | ||||||||||||||||
(Increase)/decrease in prepaids and other current assets | (833 | ) | (215 | ) | 430 | (36 | ) | |||||||||||||
(Increase)/decrease in other assets | (51 | ) | (119 | ) | 9 | — | ||||||||||||||
(Increase)/decrease in prepaid income taxes | 16,186 | (757 | ) | (7,880 | ) | 1,777 | ||||||||||||||
Increase/(decrease) in supplier and offeror rebates | 1,652 | 538 | (14,312 | ) | 780 | |||||||||||||||
Increase/(decrease) in deferred revenue | 69 | (738 | ) | 215 | — | |||||||||||||||
Increase/(decrease) in accrued interest | (7 | ) | 1,143 | — | — | |||||||||||||||
Increase/(decrease) in accrued interest, related party | (397 | ) | 3,306 | — | — | |||||||||||||||
Increase/(decrease) in other liabilities | (4,078 | ) | (11,588 | ) | 8,396 | 1,832 | ||||||||||||||
Net cash used in operating activities from discontinued operations | — | — | — | (180 | ) | |||||||||||||||
34,826 | 13,712 | (3,169 | ) | 37,096 | ||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Return of purchase price from escrow | 2,991 | — | — | — | ||||||||||||||||
Cost of acquisition, net of cash acquired | (1,331 | ) | (351,393 | ) | — | — | ||||||||||||||
Proceeds from sale of property and equipment | 3 | — | — | — | ||||||||||||||||
Purchase of property and equipment | (3,350 | ) | (902 | ) | (929 | ) | (5,594 | ) | ||||||||||||
Capitalized software and website development costs | (5,725 | ) | (2,731 | ) | (3,434 | ) | (8,644 | ) | ||||||||||||
(7,412 | ) | (355,026 | ) | (4,363 | ) | (14,238 | ) | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Capital contributions | 6,332 | 184,482 | — | — | ||||||||||||||||
Proceeds from senior term loan | — | 140,000 | — | — | ||||||||||||||||
Payments on senior term loan | (11,050 | ) | (350 | ) | — | — | ||||||||||||||
Proceeds from senior subordinated notes, related party | — | 57,500 | — | — | ||||||||||||||||
Payments on senior subordinated notes, related party | (21,617 | ) | — | — | — | |||||||||||||||
Premium on early payments on senior subordinated notes, related party | (864 | ) | — | — | — | |||||||||||||||
Payments on revolving credit facility | — | — | — | (14,000 | ) | |||||||||||||||
Debt issue costs | — | (8,606 | ) | — | — | |||||||||||||||
Proceeds from stock options exercised | — | — | 238 | 171 | ||||||||||||||||
Excess tax benefit related to stock option exercises | — | — | 7,547 | 125 | ||||||||||||||||
Payment of dividends on preferred stock | — | (224 | ) | (875 | ) | (1,750 | ) | |||||||||||||
(27,199 | ) | 372,802 | 6,910 | (15,454 | ) | |||||||||||||||
Net increase/(decrease) in cash and cash equivalents | 215 | 31,488 | (622 | ) | 7,404 | |||||||||||||||
Cash and cash equivalents at beginning of period | 31,488 | — | 30,975 | 23,571 | ||||||||||||||||
Cash and cash equivalents at end of period | $ | 31,703 | $ | 31,488 | $ | 30,353 | $ | 30,975 | ||||||||||||
Supplemental disclosures of cash flow information: | ||||||||||||||||||||
Income taxes paid/(refunded) | $ | (13,547 | ) | $ | 190 | $ | 5,776 | $ | 10,152 | |||||||||||
Interest paid | $ | 21,675 | $ | 3,002 | $ | 75 | $ | 171 |
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Table of Contents
(1) | Nature of Operations |
(2) | Summary of Significant Accounting Policies |
(a) | Basis of Presentation |
(b) | Reclassifications |
(c) | Use of Estimates |
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Table of Contents
(d) | Subsequent Events |
(e) | Cash and Cash Equivalents |
(f) | Financial Instruments and Concentration of Credit Risk |
(g) | Property and Equipment |
Estimated | ||
Category | Useful Life | |
Furniture and fixtures | 5-7 years | |
Office and computer equipment | 3-7 years | |
Leasehold improvements | 3-15 years |
(h) | Capitalized Software Costs |
(i) | Goodwill and Intangible Assets |
F-33
Table of Contents
(j) | Impairment |
(k) | Derivative Financial Instruments |
(l) | Income Taxes |
F-34
Table of Contents
(m) | Revenue Recognition |
• | The estimates of refunded fees are made for a large pool of homogeneous items with similar characteristics |
• | Reliable estimates of the expected returns can be made on a timely basis |
• | There is sufficient company-specific historical basis upon which to estimate the returns and we believe such historical experience is predictive of future events |
• | The amount of administrative fees reported are fixed, other than the customer’s right of return |
F-35
Table of Contents
(n) | Equity-Based Compensation |
(o) | Recently Issued Accounting Standards |
F-36
Table of Contents
(3) | Mergers and Acquisitions |
F-37
Table of Contents
Purchase price calculation: | ||||
Cash paid in exchange for equity interests | $ | 373,757 | ||
Contribution of equity from previous investors | 11,110 | |||
Transaction costs | 9,452 | |||
Total purchase price | $ | 394,319 | ||
Allocation of purchase price: | ||||
Current assets | $ | 91,005 | ||
Property and equipment | 11,378 | |||
Software | 15,661 | |||
Intangible assets | 211,980 | |||
Goodwill | 185,933 | |||
Other non-current assets | 6,077 | |||
Current liabilities | (49,607 | ) | ||
Non-current liabilities | (78,108 | ) | ||
Total purchase price allocated | $ | 394,319 | ||
Estimated | ||||||||
Fair Value | Life (in Years) | |||||||
Favorable leaseholds | $ | 350 | 2 — 4 years | |||||
Broadlane trade name | 22,460 | Indefinite | ||||||
Workforce Management trade name | 700 | 10 years | ||||||
The Preference Group trade name | 200 | 10 years | ||||||
Manufacturer and distributor contracts | 99,390 | 10 years | ||||||
Customer network | 88,880 | 15 years | ||||||
Total identifiable intangible assets | $ | 211,980 | ||||||
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Table of Contents
(4) | Property and Equipment |
December 31, | ||||||||
2009 | 2008 | |||||||
Furniture and fixtures | $ | 1,136 | $ | 985 | ||||
Office and computer equipment | 9,857 | 6,808 | ||||||
Leasehold improvements | 4,353 | 4,215 | ||||||
15,346 | 12,008 | |||||||
Less accumulated depreciation and amortization | (5,265 | ) | (1,479 | ) | ||||
Property and equipment, net | $ | 10,081 | $ | 10,529 | ||||
(5) | Software and Web Site Development |
• | Broadlane’s enterprise resource planning (ERP) system, |
• | Software applications to improve the operational efficiency and functionality of Contract Management System (CMS), |
• | Broadlane’s proprietary“procure-to-pay” solution (P2P), a requisitioning and procurement application supporting centralized purchasing services, |
• | OnRamp® client portal, |
• | Cost analysis software program, and |
• | wfxtm Workforce Exchange, a labor application that assists clients in the management and tracking of both full-time and temporary clinical labor |
• | Broadlane’s data console, a platform for primarily mid-market client supply chain decision-making |
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(6) | Goodwill and Intangible Assets |
Balance, December 31, 2007 | $ | — | ||
Acquisition | 185,933 | |||
Adjustment for uncertain tax positions | (822 | ) | ||
Backlog revenue adjustment(1) | (39 | ) | ||
Tax adjustment | 14 | |||
Balance, December 31, 2008 | 185,086 | |||
Return of purchase price from escrow | (2,991 | ) | ||
Backlog revenue adjustment(1) | (889 | ) | ||
Tax adjustment | 584 | |||
Acquisition | 1,330 | |||
Balance, December 31, 2009 | $ | 183,120 | ||
(1) | Represents fees collected for revenue earned prior to the Transaction date. The revenue associated with these fees is not deemed revenue of the Successor as no legal performance obligation is assumed by the Successor. |
December 31, 2009 | December 31, 2008 | |||||||||||||||
Carrying | Accumulated | Carrying | Accumulated | |||||||||||||
Value | Amortization | Value | Amortization | |||||||||||||
Favorable leaseholds | $ | 350 | $ | (130 | ) | $ | 350 | $ | (36 | ) | ||||||
Broadlane trade name | 22,460 | — | 22,460 | — | ||||||||||||
Workforce Management trade name | 700 | (96 | ) | 700 | (26 | ) | ||||||||||
The Preference Group trade name | 200 | (28 | ) | 200 | (8 | ) | ||||||||||
Manufacturer and distributor contracts | 99,390 | (13,690 | ) | 99,390 | (3,754 | ) | ||||||||||
Customer network | 88,880 | (8,162 | ) | 88,880 | (2,238 | ) | ||||||||||
Totals | $ | 211,980 | $ | (22,106 | ) | $ | 211,980 | $ | (6,062 | ) | ||||||
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2010 | $ | 16,045 | ||
2011 | 16,045 | |||
2012 | 15,982 | |||
2013 | 15,950 | |||
2014 | 15,950 | |||
Thereafter | 87,442 | |||
Total | $ | 167,414 | ||
(7) | Related Party Transactions |
(a) | Management Outsourcing Agreement |
(b) | Other Services Agreements |
(c) | Office Lease Guarantees |
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Table of Contents
(d) | Shared Services |
(e) | Revenues Generated from Other Entities with Stockholder Representation |
(f) | Activity Related to the Company’s Stock Option and Purchase Plan |
(8) | Lease Obligations |
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Table of Contents
2010 | $ | 5,585 | ||
2011 | 4,677 | |||
2012 | 1,566 | |||
2013 | 16 | |||
Total | $ | 11,844 | ||
(9) | Debt |
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Outstanding at | Outstanding at | |||||||||||||
December 31, | December 31, | Maturity Dates | ||||||||||||
2009 | 2008 | (Fiscal Year) | Interest rates | |||||||||||
Senior term loan | $ | 128,600 | $ | 139,650 | 2013 | LIBOR* rate plus applicable margin (a) (5.25%) (b) | ||||||||
Senior subordinated notes (net of $2,520 and $4,685 discount, respectively) | 40,021 | 58,287 | 2014 | (i) Basic interest rate — 12% on principal amount (ii) PIK (c) interest rate — 2% on principal amount | ||||||||||
Revolving line of credit | — | — | 2013 | LIBOR* rate plus applicable margin (a) (5.25%) (b) |
* | The greater of London Interbank Offered Rate (“LIBOR”) or 3.25%. As of December 31, 2009 the applicable rate is 3.25%. |
(a) | Applicable margin is based on total leverage ratio |
(b) | If the total leverage ratio is greater than or equal to 3.5 to 1.0, the applicable margin used for the next quarterly interest payment is 5.25% |
If the total leverage ratio is less than 3.5 to 1.0, the applicable margin used for the next quarterly interest payment is 4.75% Broadlane’s applicable margin at December 31, 2009 is 5.25% |
(c) | Paid-in-kind interest rate (PIK) |
Price | ||||
Twelve-month period ending on August 15, in the year: | ||||
2009 | 105.0 | % | ||
2010 | 104.0 | % | ||
2011 | 103.0 | % | ||
2012 | 102.0 | % | ||
2013 and thereafter | 100.0 | % |
F-44
Table of Contents
(a) | Loan Covenants |
(b) | Financial Ratios and Default Provisions |
(10) | Derivative Financial Instrument |
F-45
Table of Contents
(11) | Fair Value Measurements |
December 31, 2009 | December 31, 2008 | |||||||||||||||
Carrying | Fair Value | Carrying | Fair Value | |||||||||||||
Value | (Level 2) | Value | (Level 2) | |||||||||||||
Interest rate swap liability | $ | 3,329 | 3,329 | $ | 4,085 | 4,085 |
F-46
Table of Contents
December 31, 2009 | December 31, 2008 | |||||||||||||||
Carrying | Fair Value | Carrying | Fair Value | |||||||||||||
Value | (Level 2) | Value | (Level 2) | |||||||||||||
Senior term loan(1) | $ | 128,600 | 108,966 | $ | 139,650 | 139,650 | ||||||||||
Senior subordinated notes, related party(2) | $ | 40,021 | 40,021 | $ | 58,287 | 58,287 |
(1) | The fair value of our senior term loan is estimated based on the current rate available to us. The difference between the fair value of our senior term loan and its carrying value is due to the rate available at December 31, 2009 being lower than the interest rate on our debt obligation at that date. |
(2) | The difference between market interest rate and the rate in existence on our senior subordinated debt is assumed to represent the premium paid for such debt being unsecured plus a size risk premium. As such, the carrying value approximates the fair value. |
(12) | Discontinued Operations |
(13) | Employee Benefit Plans |
F-47
Table of Contents
August 16, 2008 to | January 1, 2008 to | |||||||||||
2009 | December 31, 2008 | August 15, 2008 | 2007 | |||||||||
(Successor) | (Successor) | (Predecessor) | (Predecessor) | |||||||||
Expected volatility | 27% | 27% | 50% | 50% | ||||||||
Risk-free interest rate | 1.87% — 2.66% | 2.83% | 2.80% | 4.51% — 4.86% | ||||||||
Expected life | 4.5 years | 4.5 years | 6 years | 6 years | ||||||||
Expected dividend yield | 0% | 0% | 0% | 0% |
F-48
Table of Contents
Weighted Average | ||||||||||||||||
Exercise Price | Aggregate | Weighted Average | ||||||||||||||
Options | per Share | Intrinsic Value | Remaining Life | |||||||||||||
(In millions) | ||||||||||||||||
Outstanding at December 31, 2006 | 10,401,847 | $ | 4.27 | |||||||||||||
Granted | 611,823 | 10.53 | ||||||||||||||
Exercised | (86,101 | ) | 1.99 | |||||||||||||
Forfeited | (885,213 | ) | 4.26 | |||||||||||||
Expired | — | — | ||||||||||||||
Outstanding at December 31, 2007 | 10,042,356 | $ | 4.23 | |||||||||||||
Granted | 1,210,543 | 6.94 | ||||||||||||||
Exercised | (310,699 | ) | 4.12 | |||||||||||||
Forfeited | (629,516 | ) | 4.81 | |||||||||||||
Expired | — | — | ||||||||||||||
Outstanding at August 15, 2008 | 10,312,684 | $ | 4.52 | $ | 52.4 | 4.54 years | ||||||||||
Weighted Average | ||||||||
Common | Grant Date Fair | |||||||
Units | Value per Unit | |||||||
Outstanding at August 16, 2008 | — | $ | — | |||||
Granted | 19,042,323 | 0.09 | ||||||
Forfeited | — | — | ||||||
Outstanding at December 31, 2008 | 19,042,323 | $ | 0.09 | |||||
Granted | 6,312,800 | 0.08 | ||||||
Forfeited | (7,452,733 | ) | 0.09 | |||||
Outstanding at December 31, 2009 | 17,902,390 | $ | 0.09 | |||||
F-49
Table of Contents
(14) | Income Taxes |
August 16, 2008 to | January 1, 2008 to | ||||||||||||||||
2009 | December 31, 2008 | August 15, 2008 | 2007 | ||||||||||||||
(Successor) | (Successor) | (Predecessor) | (Predecessor) | ||||||||||||||
Current income tax expense/(benefit): | |||||||||||||||||
Federal | $ | 2,899 | $ | 722 | $ | (1,840 | ) | $ | 10,203 | ||||||||
State | 1,038 | 352 | 204 | 874 | |||||||||||||
3,937 | 1,074 | (1,636 | ) | 11,077 | |||||||||||||
Deferred income tax expense/(benefit): | |||||||||||||||||
Federal | (4,722 | ) | (8,274 | ) | 2,748 | 648 | |||||||||||
State | (232 | ) | (518 | ) | 200 | 116 | |||||||||||
(4,954 | ) | (8,792 | ) | 2,948 | 764 | ||||||||||||
Income tax expense/(benefit) | $ | (1,017 | ) | $ | (7,718 | ) | $ | 1,312 | $ | 11,841 | |||||||
August 16, 2008 to | January 1, 2008 to | ||||||||||||||||
2009 | December 31, 2008 | August 15, 2008 | 2007 | ||||||||||||||
Tax provision at statutory federal rate | $ | (1,708 | ) | $ | (7,587 | ) | $ | (55 | ) | $ | 10,411 | ||||||
State and local income taxes, net of federal benefit | 312 | (206 | ) | 674 | 219 | ||||||||||||
Non-deductible meals and entertainment | 163 | 74 | 85 | 134 | |||||||||||||
Non-deductible stock option forfeitures | — | — | 188 | 686 | |||||||||||||
Non-deductible Transaction expenses | — | — | 2,522 | — | |||||||||||||
Benefit of disqualification of ISO’s | — | — | (2,109 | ) | — | ||||||||||||
Non-deductible equity compensation | 213 | — | — | — | |||||||||||||
Other non-deductible expenses | 3 | 1 | 7 | 391 | |||||||||||||
Income tax expense/(benefit) | $ | (1,017 | ) | $ | (7,718 | ) | $ | 1,312 | $ | 11,841 | |||||||
F-50
Table of Contents
December 31 | ||||||||
2009 | 2008 | |||||||
Deferred tax assets: | ||||||||
Revenue recognized for tax purposes in excess of revenue for financial reporting purposes | $ | 6,511 | $ | 7,551 | ||||
Derivative financial instrument, principally due to differences in basis for tax and financial reporting purposes | 1,198 | 1,471 | ||||||
Property and equipment, principally due to differences in depreciation | 965 | 1,729 | ||||||
Other | 829 | 1,014 | ||||||
Total deferred tax assets | 9,503 | 11,765 | ||||||
Deferred tax liabilities: | ||||||||
Intangible assets, principally due to differences in amortization | (65,754 | ) | (71,101 | ) | ||||
Total deferred tax liabilities | (65,754 | ) | (71,101 | ) | ||||
Net deferred tax liabilities | $ | (56,251 | ) | $ | (59,336 | ) | ||
F-51
Table of Contents
(15) | Claims, Lawsuits, and Other Legal Matters |
(16) | Subsequent Events |
F-52
Table of Contents
F-53
Table of Contents
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
(Unaudited) | ||||||||
(In thousands, except share and | ||||||||
per share data) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 48,145 | $ | 31,703 | ||||
Accounts receivable, net | 11,881 | 10,843 | ||||||
Deferred income taxes, net | 7,212 | 6,930 | ||||||
Prepaid income taxes | 1,828 | 2,214 | ||||||
Prepaid expenses and other | 3,033 | 3,650 | ||||||
Total current assets | 72,099 | 55,340 | ||||||
Property and equipment at cost, net | 7,312 | 10,081 | ||||||
Software and website development costs, less accumulated amortization of $12,023 and $7,128 at September 30, 2010 and December 31, 2009, respectively | 18,756 | 16,827 | ||||||
Intangible assets, less accumulated amortization of $34,140 and $22,106 at September 30, 2010 and December 31, 2009, respectively | 177,840 | 189,874 | ||||||
Goodwill | 184,115 | 183,120 | ||||||
Deferred financing costs, net | 2,130 | 5,506 | ||||||
Other | 134 | 279 | ||||||
Total assets | $ | 462,386 | $ | 461,027 | ||||
LIABILITIES & STOCKHOLDER’S EQUITY | ||||||||
Current liabilities: | ||||||||
Accrued payroll and payroll taxes | $ | 6,243 | $ | 3,882 | ||||
Deferred revenue | 915 | 413 | ||||||
Supplier and offeror rebates | 24,448 | 22,115 | ||||||
Accounts payable and other accrued liabilities | 12,070 | 10,778 | ||||||
Interest payable, related party | — | 2,436 | ||||||
Current portion of senior term loan | 10,228 | 410 | ||||||
Total current liabilities | 53,904 | 40,034 | ||||||
Senior term loan, less current portion and net of discount of $2,340 at September 30, 2010 and $0 at December 31, 2009 | 166,532 | 128,190 | ||||||
Senior subordinated notes, related party, net of discount of $2,520 at December 31, 2009 | — | 40,021 | ||||||
Deferred income taxes, net | 59,057 | 63,181 | ||||||
Interest rate swap liability | 3,017 | 3,329 | ||||||
Other long-term liabilities | 1,226 | 1,605 | ||||||
Total liabilities | 283,736 | 276,360 | ||||||
Stockholder’s equity: | ||||||||
Common stock, $0.01 par value; authorized 100 shares; issued and outstanding 100 shares | — | — | ||||||
Additional paid-in capital | 203,391 | 202,533 | ||||||
Accumulated deficit | (24,741 | ) | (17,866 | ) | ||||
Total stockholder’s equity | 178,650 | 184,667 | ||||||
Total liabilities and stockholder’s equity | $ | 462,386 | $ | 461,027 | ||||
F-54
Table of Contents
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Administrative fees, net | $ | 30,179 | $ | 29,505 | $ | 88,121 | $ | 86,801 | ||||||||||||
Other service fees | 14,164 | 11,870 | 42,525 | 35,890 | ||||||||||||||||
Total revenue, net | 44,343 | 41,375 | 130,646 | 122,691 | ||||||||||||||||
Expenses: | ||||||||||||||||||||
Cost of revenue | 19,884 | 17,520 | 58,777 | 50,769 | ||||||||||||||||
Product development | 3,033 | 2,906 | 9,534 | 9,539 | ||||||||||||||||
Selling and marketing | 1,806 | 1,846 | 5,909 | 4,834 | ||||||||||||||||
General and administrative | 8,286 | 7,443 | 22,798 | 20,617 | ||||||||||||||||
Depreciation | 934 | 916 | 2,971 | 2,854 | ||||||||||||||||
Amortization of intangibles | 5,773 | 5,339 | 16,929 | 15,829 | ||||||||||||||||
Total operating expenses | 39,716 | 35,970 | 116,918 | 104,442 | ||||||||||||||||
Operating income | 4,627 | 5,405 | 13,728 | 18,249 | ||||||||||||||||
Interest expense | (3,698 | ) | (6,475 | ) | (11,922 | ) | (18,936 | ) | ||||||||||||
Investment earnings | 2 | 1 | 3 | 51 | ||||||||||||||||
Gain on bargain purchase | — | — | 226 | — | ||||||||||||||||
Loss on disposal of assets | (21 | ) | — | (76 | ) | — | ||||||||||||||
Other income | 6 | 4 | 6 | 4 | ||||||||||||||||
Loss on extinguishment of debt | — | — | (11,754 | ) | — | |||||||||||||||
Loss on interest rate cap | (105 | ) | — | (384 | ) | — | ||||||||||||||
Gain/(loss) on interest rate swap | 183 | (495 | ) | 312 | 451 | |||||||||||||||
Income/(loss) before income taxes | 994 | (1,560 | ) | (9,861 | ) | (181 | ) | |||||||||||||
Income tax (expense)/benefit | (454 | ) | 575 | 2,986 | (368 | ) | ||||||||||||||
Net income/(loss) | $ | 540 | $ | (985 | ) | $ | (6,875 | ) | $ | (549 | ) | |||||||||
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Table of Contents
Condensed Consolidated Statements of Changes in Stockholder’s Equity
Common Stock | Additional | Total | ||||||||||||||||||
Issued | Par | Paid-in | Accumulated | Stockholder’s | ||||||||||||||||
Shares | Value | Capital | Deficit | Equity | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands, except share data) | ||||||||||||||||||||
Balances, December 31, 2009 | 100 | $ | — | $ | 202,533 | $ | (17,866 | ) | $ | 184,667 | ||||||||||
Tax benefit related to escrow release | — | — | 321 | — | 321 | |||||||||||||||
Equity-based compensation | — | — | 537 | — | 537 | |||||||||||||||
Net loss | — | — | — | (6,875 | ) | (6,875 | ) | |||||||||||||
Balances, September 30, 2010 | 100 | $ | — | $ | 203,391 | $ | (24,741 | ) | $ | 178,650 | ||||||||||
F-56
Table of Contents
Nine Months Ended | ||||||||
September 30, | September 30, | |||||||
2010 | 2009 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (6,875 | ) | $ | (549 | ) | ||
Adjustments to reconcile net loss to cash provided by operating activities: | ||||||||
Depreciation and amortization | 19,900 | 18,683 | ||||||
Bad debt expense | 84 | 174 | ||||||
Deferred income tax benefit | (4,390 | ) | (1,966 | ) | ||||
Interest rate swap gain | (312 | ) | (451 | ) | ||||
Interest rate cap loss | 384 | — | ||||||
Equity-based compensation | 537 | 459 | ||||||
Issuance of notes in lieu of interest | 83 | 948 | ||||||
Amortization of deferred financing costs and debt discount | 858 | 1,926 | ||||||
Gain on bargain purchase | (226 | ) | — | |||||
(Gain)/loss on disposal of assets | 76 | (3 | ) | |||||
Loss on extinguishment of debt | 11,754 | — | ||||||
Lease recovery | (20 | ) | — | |||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||
Increase in accounts receivable | (904 | ) | (885 | ) | ||||
(Increase)/decrease in prepaid and other current assets | 624 | (393 | ) | |||||
Increase in other assets | (239 | ) | (49 | ) | ||||
Decrease in prepaid income taxes | 387 | 15,875 | ||||||
Increase in supplier and offeror rebates | 2,333 | 1,023 | ||||||
Increase/(decrease) in deferred revenue | 502 | (146 | ) | |||||
Increase/(decrease) in accrued interest | 439 | (880 | ) | |||||
Decrease in accrued interest, related party | (2,436 | ) | (105 | ) | ||||
Increase/(decrease) in other liabilities | 2,818 | (6,272 | ) | |||||
Net cash provided by operating activities | 25,377 | 27,389 | ||||||
Cash flows from investing activities: | ||||||||
Acquisitions, net of cash acquired | (1,850 | ) | — | |||||
Return of purchase price from escrow | — | 2,991 | ||||||
Proceeds from sale of property and equipment | 13 | 3 | ||||||
Purchase of property and equipment | (194 | ) | (439 | ) | ||||
Capitalized software and website development costs | (6,045 | ) | (4,015 | ) | ||||
Net cash used in investing activities | (8,076 | ) | (1,460 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from senior term loan | 177,300 | — | ||||||
Payments on senior term loan | (129,500 | ) | (1,050 | ) | ||||
Payments on senior subordinated notes, related party | (42,624 | ) | — | |||||
Premium on early payments on senior subordinated notes, related party | (1,705 | ) | — | |||||
Debt issue costs | (4,651 | ) | — | |||||
Tax benefit related to escrow release | 321 | — | ||||||
Net cash used in financing activities | (859 | ) | (1,050 | ) | ||||
Net increase in cash and cash equivalents | 16,442 | 24,879 | ||||||
Cash and cash equivalents at beginning of period | 31,703 | 31,488 | ||||||
Cash and cash equivalents at end of period | $ | 48,145 | $ | 56,367 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Income taxes paid/(refunded) | $ | 711 | $ | (13,542 | ) | |||
Interest paid | $ | 12,990 | $ | 17,218 |
F-57
Table of Contents
(1) | Nature of Operations |
(2) | Summary of Significant Accounting Policies |
(a) | Basis of Presentation |
(b) | Principles of Consolidation |
(c) | Reclassifications |
(d) | Use of Estimates |
F-58
Table of Contents
(e) | Recently Issued Accounting Standards |
(3) | Acquisitions |
F-59
Table of Contents
(4) | Related Party Transactions |
(5) | Debt |
F-60
Table of Contents
F-61
Table of Contents
Outstanding at | Outstanding at | |||||||||||||
September 30, | December 31, | Maturity Dates | ||||||||||||
2010 | 2009 | (Fiscal Year) | Interest Rates | |||||||||||
Senior term loan (Restated Credit Agreement; net of $2,340 discount at September 30, 2010) | $ | 176,760 | $ | — | 2015 | Higher of LIBOR(1) or 2.00% plus applicable margin of 4.00% | ||||||||
Senior term loan | — | 128,600 | 2013 | Higher of LIBOR or 3.25% plus applicable margin(2) | ||||||||||
Senior subordinated notes (net of $2,520 discount at December 31, 2009) | — | 40,021 | 2014 | (i) Basic interest rate — 12% on principal amount | ||||||||||
(ii) PIK(3) interest rate — 2% on principal amount | ||||||||||||||
Revolving line of credit (Restated Credit Agreement) | — | — | 2015 | Higher of LIBOR(1) or 2.00% plus applicable margin of 4.00% | ||||||||||
Revolving line of credit | — | — | 2013 | Higher of LIBOR or 3.25% plus applicable margin(2) |
(1) | The greater of London Interbank Offered Rate (“LIBOR”) or 2.00%. As of September 30, 2010 the applicable rate is 2.00%. |
(2) | Applicable margin is based on total leverage ratio. If the total leverage ratio is greater than or equal to 3.5 to 1.0, the applicable margin used for the next quarterly interest payment is 5.25%. If the total leverage ratio is less than 3.5 to 1.0, the applicable margin used for the next quarterly interest payment is 4.75%. |
(3) | Paid-in-kind interest rate (“PIK”) |
F-62
Table of Contents
(6) | Derivative Financial Instruments |
(7) | Fair Value Measurements |
F-63
Table of Contents
September 30, 2010 | December 31, 2009 | |||||||||||||||
Carrying | Fair Value | Carrying | Fair Value | |||||||||||||
Value | (Level 2) | Value | (Level 2) | |||||||||||||
Assets | ||||||||||||||||
Interest rate cap | $ | 25 | 25 | — | — | |||||||||||
Liabilities | ||||||||||||||||
Interest rate swap | 3,017 | 3,017 | 3,329 | 3,329 |
September 30, 2010 | December 31, 2009 | |||||||||||||||
Carrying | Fair Value | Carrying | Fair Value | |||||||||||||
Value | (Level 2) | Value | (Level 2) | |||||||||||||
Senior term loan(1) | $ | 176,760 | 178,204 | $ | 128,600 | 108,966 | ||||||||||
Senior subordinated notes, related party(2) | — | — | 40,021 | 40,021 |
(1) | The fair value of our senior term loan is estimated based on the current rates available to us. |
F-64
Table of Contents
(2) | The difference between market interest rate and the rate in existence on our senior subordinated debt at December 31, 2009 is assumed to represent the premium paid for such debt being unsecured plus a size risk premium. As such, the carrying value approximates the fair value. |
(8) | Employee Benefit Plans |
September 30, | September 30, | |||
2010 | 2009 | |||
Expected volatility | 27% | 27% | ||
Risk-free interest rate | 1.46% — 2.38% | 1.87% — 2.83% | ||
Expected life | 4.5 years | 4.5 years | ||
Expected dividend yield | 0% | 0% |
(9) | Claims, Lawsuits, and Other Legal Matters |
F-65
Table of Contents
(10) | Entry into a Material Definitive Agreement |
(11) | Subsequent Events |
F-66
Table of Contents
Table of Contents
Item 20. | Indemnification of Directors and Officers. |
II-1
Table of Contents
Item 21. | Exhibits and Financial Statement Schedules. |
Item 22. | Undertakings. |
(a) | The undersigned registrant hereby undertakes: |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(A) | to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
(B) | to reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and | |
(C) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. | |
(4) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statements as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
II-2
Table of Contents
(5) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(A) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(B) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; | |
(C) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(D) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(b) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering. |
(c) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
(d) | The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
(e) | The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
II-3
Table of Contents
By: | * |
Title: | President and Chief Executive Officer |
Signature | Title | Date | ||||
* Name: John A. Bardis | Chairman of the Board of Directors, President and Chief Executive Officer (Principal Executive Officer) | September 30, 2011 | ||||
* Name: Charles O. Garner | Chief Financial Officer (Principal Financial Officer) | September 30, 2011 | ||||
* Name: Lance M. Culbreth | Chief Accounting Officer (Principal Accounting Officer) | September 30, 2011 | ||||
* Name: Rand A. Ballard | Director, Chief Operating Officer | September 30, 2011 | ||||
* Name: Samantha Trotman Burman | Director | September 30, 2011 | ||||
* Name: Harris Hyman IV | Director | September 30, 2011 |
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* Name: Vernon R. Loucks, Jr. | Director | September 30, 2011 | ||||
* Name: Terrence J. Mulligan | Director | September 30, 2011 | ||||
* Name: C.A. Lance Piccolo | Director | September 30, 2011 | ||||
* Name: John C. Rutherford | Director | September 30, 2011 | ||||
* Name: Samuel K. Skinner | Director | September 30, 2011 | ||||
* Name: Bruce F. Wesson | Director | September 30, 2011 |
* | The undersigned, by signing his name hereto, signs and executes this Amendment No. 1 to the Registration Statement onForm S-4 pursuant to the Powers of Attorney executed by the above-named directors and officers and previously filed with the Securities and Exchange Commission. |
By: | /s/ Jonathan H. Glenn |
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By: | /s/ Jonathan H. Glenn |
Title: | Vice President and Secretary |
* Name: Daniel Piro | President (Principal Executive Officer) | September 30, 2011 | ||||
* Name: Lance M. Culbreth | Vice President, Treasurer and Assistant Secretary (Principal Financial Officer) (Principal Accounting Officer) | September 30, 2011 | ||||
* Name: John A. Bardis | Director | September 30, 2011 | ||||
* Name: Rand A. Ballard | Director | September 30, 2011 |
* | The undersigned, by signing his name hereto, signs and executes this Amendment No. 1 to the Registration Statement onForm S-4 pursuant to the Powers of Attorney executed by the above-named directors and officers and previously filed with the Securities and Exchange Commission. |
By: | /s/ Jonathan H. Glenn |
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Table of Contents
By: | /s/ Jonathan H. Glenn |
Title: | Vice President and Secretary |
* Name: Stephanie Alexander | President (Principal Executive Officer) | September 30, 2011 | ||||
* Name: Lance M. Culbreth | Vice President, Treasurer and Assistant Secretary (Principal Financial Officer) (Principal Accounting Officer) | September 30, 2011 | ||||
* Name: John A. Bardis | Director | September 30, 2011 | ||||
* Name: Rand A. Ballard | Director | September 30, 2011 |
* | The undersigned, by signing his name hereto, signs and executes this Amendment No. 1 to the Registration Statement onForm S-4 pursuant to the Powers of Attorney executed by the above-named directors and officers and previously filed with the Securities and Exchange Commission. |
By: | /s/ Jonathan H. Glenn |
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Table of Contents
By: | /s/ Jonathan H. Glenn |
Title: | Vice President and Secretary |
* Name: Joseph Greskoviak | President (Principal Executive Officer) | September 30, 2011 | ||||
* Name: Lance M. Culbreth | Vice President, Treasurer and Assistant Secretary (Principal Financial Officer) (Principal Accounting Officer) | September 30, 2011 | ||||
* Name: John A. Bardis | Director | September 30, 2011 | ||||
* Name: Rand A. Ballard | Director | September 30, 2011 |
* | The undersigned, by signing his name hereto, signs and executes this Amendment No. 1 to the Registration Statement onForm S-4 pursuant to the Powers of Attorney executed by the above-named directors and officers and previously filed with the Securities and Exchange Commission. |
By: | /s/ Jonathan H. Glenn |
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Table of Contents
By: | /s/ Jonathan H. Glenn |
Title: | Vice President and Secretary |
* Name: Rand A. Ballard | Vice President, Director (Principal Executive Officer) | September 30, 2011 | ||||
* Name: Lance M. Culbreth | Vice President, Treasurer and Assistant Secretary (Principal Financial Officer) (Principal Accounting Officer) | September 30, 2011 | ||||
* Name: John A. Bardis | Director | September 30, 2011 |
* | The undersigned, by signing his name hereto, signs and executes this Amendment No. 1 to the Registration Statement onForm S-4 pursuant to the Powers of Attorney executed by the above-named directors and officers and previously filed with the Securities and Exchange Commission. |
By: | /s/ Jonathan H. Glenn |
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Table of Contents
By: | /s/ Jonathan H. Glenn |
Title: | Vice President and Secretary |
* Name: Joseph Greskoviak | President (Principal Executive Officer) | September 30, 2011 | ||||
* Name: Lance M. Culbreth | Vice President, Treasurer and Assistant Secretary (Principal Financial Officer) (Principal Accounting Officer) | September 30, 2011 | ||||
* Name: John A. Bardis | Director | September 30, 2011 | ||||
* Name: Rand A. Ballard | Director | September 30, 2011 |
* | The undersigned, by signing his name hereto, signs and executes this Amendment No. 1 to the Registration Statement onForm S-4 pursuant to the Powers of Attorney executed by the above-named directors and officers and previously filed with the Securities and Exchange Commission. |
By: | /s/ Jonathan H. Glenn |
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Table of Contents
By: | /s/ Jonathan H. Glenn |
Title: | Vice President and Secretary |
* Name: John A. Bardis | President, Director (Principal Executive Officer) | September 30, 2011 | ||||
* Name: Lance M. Culbreth | Vice President, Treasurer and Assistant Secretary (Principal Financial Officer) (Principal Accounting Officer) | September 30, 2011 | ||||
* Name: Rand A. Ballard | Director | September 30, 2011 |
* | The undersigned, by signing his name hereto, signs and executes this Amendment No. 1 to the Registration Statement onForm S-4 pursuant to the Powers of Attorney executed by the above-named directors and officers and previously filed with the Securities and Exchange Commission. |
By: | /s/ Jonathan H. Glenn |
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Table of Contents
By: | /s/ Jonathan H. Glenn |
Title: | Vice President and Secretary |
* Name: Joseph Greskoviak | President (Principal Executive Officer) | September 30, 2011 | ||||
* Name: Lance M. Culbreth | Vice President, Treasurer and Assistant Secretary (Principal Financial Officer) (Principal Accounting Officer) | September 30, 2011 | ||||
* Name: John A. Bardis | Director | September 30, 2011 | ||||
* Name: Rand A. Ballard | Director | September 30, 2011 |
* | The undersigned, by signing his name hereto, signs and executes this Amendment No. 1 to the Registration Statement onForm S-4 pursuant to the Powers of Attorney executed by the above-named directors and officers and previously filed with the Securities and Exchange Commission. |
By: | /s/ Jonathan H. Glenn |
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Table of Contents
By: | /s/ Jonathan H. Glenn |
Title: | Vice President and Secretary |
* Name: Joseph Greskoviak | President (Principal Executive Officer) | September 30, 2011 | ||||
* Name: Lance M. Culbreth | Vice President, Treasurer and Assistant Secretary (Principal Financial Officer) (Principal Accounting Officer) | September 30, 2011 | ||||
* Name: John A. Bardis | Director | September 30, 2011 | ||||
* Name: Rand A. Ballard | Director | September 30, 2011 |
* | The undersigned, by signing his name hereto, signs and executes this Amendment No. 1 to the Registration Statement onForm S-4 pursuant to the Powers of Attorney executed by the above-named directors and officers and previously filed with the Securities and Exchange Commission. |
By: | /s/ Jonathan H. Glenn |
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Table of Contents
By: | /s/ Jonathan H. Glenn |
Title: | Vice President and Secretary |
* Name: Joseph Greskoviak | President (Principal Executive Officer) | September 30, 2011 | ||||
* Name: Lance M. Culbreth | Vice President, Treasurer and Assistant Secretary (Principal Financial Officer) (Principal Accounting Officer) | September 30, 2011 | ||||
* Name: John A. Bardis | Director | September 30, 2011 | ||||
* Name: Rand A. Ballard | Director | September 30, 2011 |
* | The undersigned, by signing his name hereto, signs and executes this Amendment No. 1 to the Registration Statement onForm S-4 pursuant to the Powers of Attorney executed by the above-named directors and officers and previously filed with the Securities and Exchange Commission. |
By: | /s/ Jonathan H. Glenn |
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Table of Contents
By: | /s/ Jonathan H. Glenn |
Title: | Vice President and Secretary |
* Name: Joseph Greskoviak | President (Principal Executive Officer) | September 30, 2011 | ||||
* Name: Lance M. Culbreth | Vice President, Treasurer and Assistant Secretary (Principal Financial Officer) (Principal Accounting Officer) | September 30, 2011 | ||||
* Name: John A. Bardis | Director | September 30, 2011 | ||||
* Name: Rand A. Ballard | Director | September 30, 2011 |
* | The undersigned, by signing his name hereto, signs and executes this Amendment No. 1 to the Registration Statement onForm S-4 pursuant to the Powers of Attorney executed by the above-named directors and officers and previously filed with the Securities and Exchange Commission. |
By: | /s/ Jonathan H. Glenn |
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Table of Contents
By: | /s/ Jonathan H. Glenn |
Title: | Vice President and Secretary |
* Name: Joseph Greskoviak | President (Principal Executive Officer) | September 30, 2011 | ||||
* Name: Lance M. Culbreth | Vice President, Treasurer and Assistant Secretary (Principal Financial Officer) (Principal Accounting Officer) | September 30, 2011 | ||||
* Name: John A. Bardis | Director | September 30, 2011 | ||||
* Name: Rand A. Ballard | Director | September 30, 2011 |
* | The undersigned, by signing his name hereto, signs and executes this Amendment No. 1 to the Registration Statement onForm S-4 pursuant to the Powers of Attorney executed by the above-named directors and officers and previously filed with the Securities and Exchange Commission. |
By: | /s/ Jonathan H. Glenn |
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Table of Contents
By: | /s/ Jonathan H. Glenn |
Title: | Vice President and Secretary |
* Name: Joseph Greskoviak | President (Principal Executive Officer) | September 30, 2011 | ||||
* Name: Lance M. Culbreth | Vice President, Treasurer and Assistant Secretary (Principal Financial Officer) (Principal Accounting Officer) | September 30, 2011 | ||||
* Name: John A. Bardis | Director | September 30, 2011 | ||||
* Name: Rand A. Ballard | Director | September 30, 2011 |
* | The undersigned, by signing his name hereto, signs and executes this Amendment No. 1 to the Registration Statement onForm S-4 pursuant to the Powers of Attorney executed by the above-named directors and officers and previously filed with the Securities and Exchange Commission. |
By: | /s/ Jonathan H. Glenn |
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Table of Contents
By: | /s/ Jonathan H. Glenn |
Title: | Vice President and Secretary |
* Name: Joseph Greskoviak | President (Principal Executive Officer) | September 30, 2011 | ||||
* Name: Lance M. Culbreth | Vice President, Treasurer and Assistant Secretary (Principal Financial Officer) (Principal Accounting Officer) | September 30, 2011 | ||||
* Name: John A. Bardis | Director | September 30, 2011 | ||||
* Name: Rand A. Ballard | Director | September 30, 2011 |
* | The undersigned, by signing his name hereto, signs and executes this Amendment No. 1 to the Registration Statement onForm S-4 pursuant to the Powers of Attorney executed by the above-named directors and officers and previously filed with the Securities and Exchange Commission. |
By: | /s/ Jonathan H. Glenn |
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Table of Contents
By: | /s/ Jonathan H. Glenn |
Title: | Vice President and Secretary |
* Name: Joseph Greskoviak | President (Principal Executive Officer) | September 30, 2011 | ||||
* Name: Lance M. Culbreth | Vice President, Treasurer and Assistant Secretary (Principal Financial Officer) (Principal Accounting Officer) | September 30, 2011 | ||||
* Name: John A. Bardis | Director | September 30, 2011 | ||||
* Name: Rand A. Ballard | Director | September 30, 2011 |
* | The undersigned, by signing his name hereto, signs and executes this Amendment No. 1 to the Registration Statement onForm S-4 pursuant to the Powers of Attorney executed by the above-named directors and officers and previously filed with the Securities and Exchange Commission. |
By: | /s/ Jonathan H. Glenn |
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Exhibit No. | Exhibit Description | |||
3 | .1 | Amended and Restated Certificate of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed on March 24, 2008) | ||
3 | .2 | Amended and Restated By-laws of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed on March 24, 2008) | ||
3 | .3 | Certificate of Formation of Aspen Healthcare Metrics LLC (f/k/a Aspen Acquisition LLC), as amended† | ||
3 | .4 | Limited Liability Company Agreement of Aspen Healthcare Metrics LLC (f/k/a Aspen Acquisition LLC)† | ||
3 | .5 | Amended and Restated Certificate of Formation of MedAssets Analytical Systems, LLC (f/k/a Aspen Healthcare Information Services, LLC), as amended† | ||
3 | .6 | Limited Liability Company Agreement of MedAssets Analytical Systems, LLC (f/k/a Aspen Healthcare Information Services, LLC)† | ||
3 | .7 | Certificate of Formation of MedAssets Supply Chain Systems, LLC, as amended† | ||
3 | .8 | Limited Liability Company Agreement of MedAssets Supply Chain Systems, LLC† | ||
3 | .9 | Certificate of Formation of MedAssets Net Revenue Systems, LLC (f/k/a OSI Systems, LLC), as amended† | ||
3 | .10 | Limited Liability Company Agreement of MedAssets Net Revenue Systems, LLC (f/k/a OSI Systems, LLC)† | ||
3 | .11 | Certificate of Formation of Dominic & Irvine, LLC (f/k/a Dolphin Acquisition, LLC), as amended† | ||
3 | .12 | Amended and Restated Limited Liability Company Agreement of Dominic & Irvine (f/k/a Dolphin Acquisition, LLC)† | ||
3 | .13 | Certificate of Formation of MedAssets Services LLC (f/k/a MedAssets Financial Services LLC), as amended† | ||
3 | .14 | Amended and Restated Limited Liability Company Agreement of MedAssets Services LLC (f/k/a MedAssets Financial Services LLC)† | ||
3 | .15 | Certificate of Incorporation of Broadlane Intermediate Holdings, Inc., as amended† | ||
3 | .16 | By-laws of Broadlane Intermediate Holdings, Inc.† |
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Exhibit No. | Exhibit Description | |||
3 | .17 | Certificate of Incorporation of Broadlane NY, Inc., as amended† | ||
3 | .18 | By-laws of Broadlane NY, Inc.† | ||
3 | .19 | Certificate of Formation of MedAssets Ventures, LLC (f/k/a Broadlane Ventures, LLC), as amended† | ||
3 | .20 | Operating Agreement of MedAssets Ventures, LLC (f/k/a Broadlane Ventures, LLC), as amended† | ||
3 | .21 | Certificate of Formation MedAssets Insurance Solutions, LLC (f/k/a Broadlane Ventures I, LLC), as amended† | ||
3 | .22 | Operating Agreement of MedAssets Insurance Solutions, LLC (f/k/a Broadlane Ventures I, LLC), as amended† | ||
3 | .23 | Certificate of Incorporation of Health Equipment Logistics and Planning, Inc., as amended† | ||
3 | .24 | By-laws of Health Equipment Logistics and Planning, Inc.† | ||
3 | .25 | Certificate of Incorporation of KP Select, Inc.† | ||
3 | .26 | By-laws of KP Select, Inc.† | ||
3 | .27 | Amended and Restated Certificate of Incorporation of The Broadlane Group, Inc. (f/k/a Broadlane, Inc. and Tendex, Inc.), as amended† | ||
3 | .28 | By-laws of The Broadlane Group, Inc. (f/k/a Broadlane, Inc. and Tendex, Inc.)† | ||
3 | .29 | Certificate of Incorporation of Healthcare Performance Partners, Inc. (f/k/a HPP Acquisition, Inc.), as amended† | ||
3 | .30 | By-Laws of Healthcare Performance Partners, Inc. (f/k/a HPP Acquisition, Inc.), as amended† | ||
4 | .1 | Indenture, dated as of November 16, 2010, among MedAssets, Inc., the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on November 19, 2010) (the “Indenture”) | ||
4 | .2 | Registration Rights Agreement, dated November 16, 2010 by and among the Company, the guarantors named therein and J.P. Morgan Securities LLC, for itself and on behalf of the several initial purchasers listed therein† | ||
4 | .3 | Form of Exchange Global 8.0% Senior Notes due 2018 (Incorporated by reference to Exhibit B of the Indenture) | ||
5 | .1 | Opinion of Willkie Farr & Gallagher LLP† |
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Exhibit No. | Exhibit Description | |||
10 | .1 | MedAssets Inc. 2004 Long-Term Incentive Plan (as amended) (Incorporated by reference to Exhibit 10.3 to the Company’s Registration Statement on Form S-1 No. 333-145693) | ||
10 | .2 | 1999 Stock Incentive Plan (as amended) (Incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form S-1 No. 333-145693) | ||
10 | .3 | Credit Agreement, dated as of November 16, 2010, among MedAssets, Inc., each financial institution from time to time party thereto, Barclays Bank PLC, as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer, Bank of America, National Association, Fifth Third Bank and Raymond James Bank, FSB, as Co-Documentation Agents and General Electric Corporation as Senior Managing Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 19, 2010) | ||
10 | .4 | Employment Agreement, dated as of August 21, 2007, by and between the Company and Jonathan H. Glenn (Incorporated by reference to Exhibit 10.6 to the Company’s Registration Statement on Form S-1 No. 333-145693) | ||
10 | .5 | Form of Indemnification Agreement entered into by the Company with each of its executive officers and directors (Incorporated by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-1 No. 333-145693) | ||
10 | .6 | MedAssets, Inc. Long Term Performance Incentive Plan (Incorporated by reference to Annex A to the Company’s Definitive Proxy Statement on Form DEF 14A filed on September 30, 2008) | ||
10 | .7 | Form of Stock Appreciation Right (non-performance based) Grant Notice and Agreement (Incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K filed on March 11, 2009) | ||
10 | .8 | Form of Stock Appreciation Right (performance based) Grant Notice and Agreement (Incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K filed on March 11, 2009) | ||
10 | .9 | Form of Restricted Stock (non-performance based) Grant Notice and Agreement (Incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K filed on March 11, 2009) | ||
10 | .10 | Form of Restricted Stock (performance based) Grant Notice and Agreement (Incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K filed on March 11, 2009) | ||
10 | .11 | Employment Agreement, dated as of November 16, 2010, by and between the Company and Patrick Ryan (Incorporated by reference to Exhibit 10.3 to the Company’s current report on Form 8-K filed on November 19, 2010) | ||
10 | .12 | Amended and Restated Employment Agreement, dated May 2, 2011, by and between the Company and John A. Bardis (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form10-Q filed August 8, 2011) |
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Exhibit No. | Exhibit Description | |||
10 | .13 | Amended and Restated Employment Agreement, dated May 2, 2011, by and between the Company and Rand A. Ballard (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form10-Q filed August 8, 2011) | ||
10 | .14 | Amended and Restated Employment Agreement, dated May 2, 2011, by and between the Company and Charles Garner (Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form10-Q filed August 8, 2011) | ||
10 | .15 | Amended and Restated Employment Agreement, dated May 2, 2011, by and between the Company and Lance M. Culbreth (Incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form10-Q filed August 8, 2011) | ||
10 | .16 | Separation and Release Agreement, dated as of September 6, 2011, between MedAssets, Inc., MedAssets Services, LLC, and Mr. L. Neil Hunn (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form8-K filed on September 7, 2011) | ||
12 | .1 | Statement re Computation of Ratio of Earnings to Fixed Charges† | ||
21 | .1 | List of Company Subsidiaries† | ||
23 | .1 | Consent of KPMG, LLP (Atlanta) with respect to the consolidated financial statements of the Company | ||
23 | .2 | Consent of KPMG, LLP (Dallas) with respect to the consolidated financial statements of Broadlane | ||
23 | .3 | Consent of BDO USA, LLP with respect to the consolidated financial statements of the Company | ||
23 | .4 | Consent of Willkie Farr & Gallagher LLP (included in the opinion referred to in 5.1 above)† | ||
24 | .1 | Power of Attorney with respect to the Company and the Subsidiary Guarantors (included in the signature pages hereto)† | ||
25 | .1 | Statement of Eligibility of Trustee† | ||
99 | .1 | Form of Letter of Transmittal† | ||
99 | .2 | Form of Notice of Guaranteed Delivery† |
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Exhibit No. | Exhibit Description | |||
99 | .3 | Form of Letter to Clients† | ||
99 | .4 | Form of Letter to Nominees† |
† | Previously filed. |
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