Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 14, 2016 | Jun. 30, 2015 | |
Document Documentand Entity Information [Abstract] | |||
Entity Registrant Name | Performant Financial Corporation | ||
Trading Symbol | PFMT | ||
Entity Central Index Key | 1,550,695 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 49,693,878 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 80,360,152 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 71,182 | $ 80,298 |
Trade accounts receivable, net of allowance for doubtful accounts of $386 and $32, respectively | 17,965 | 15,047 |
Deferred income taxes | 7,170 | 7,605 |
Prepaid expenses and other current assets | 12,933 | 12,559 |
Income tax receivable | 0 | 4,394 |
Debt issuance costs, current portion | 1,078 | 986 |
Total current assets | 110,328 | 120,889 |
Property, equipment, and leasehold improvements, net | 25,515 | 27,647 |
Identifiable intangible assets, net | 25,074 | 29,093 |
Goodwill | 82,522 | 82,522 |
Debt issuance costs, net of current portion | 1,038 | 2,456 |
Other assets | 179 | 222 |
Total assets | 244,656 | 262,829 |
Current liabilities: | ||
Current maturities of notes payable | 9,076 | 9,820 |
Accrued salaries and benefits | 4,761 | 5,380 |
Accounts payable | 929 | 1,370 |
Other current liabilities | 5,615 | 8,452 |
Income taxes payable | 895 | 0 |
Estimated liability for appeals | 19,118 | 18,625 |
Net payable to client | 14,400 | 12,110 |
Total current liabilities | 54,794 | 55,757 |
Notes payable, net of current portion | 85,182 | 101,975 |
Deferred income taxes | 8,818 | 11,666 |
Other liabilities | 2,006 | 2,259 |
Total liabilities | $ 150,800 | $ 171,657 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.0001 par value. Authorized, 500,000 shares at December 31, 2015 and 2014, respectively; issued and outstanding, 49,479 and 49,350 shares at December 31, 2015 and 2014, respectively | $ 5 | $ 5 |
Additional paid-in capital | 61,808 | 57,329 |
Retained earnings | 32,043 | 33,838 |
Total stockholders’ equity | 93,856 | 91,172 |
Total liabilities and stockholders’ equity | $ 244,656 | $ 262,829 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 386 | $ 32 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 500,000,000 | 500,000,000 |
Common stock, issued shares | 49,479,000 | 49,350,000 |
Common stock, outstanding shares | 49,479,000 | 49,350,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||
Revenues | $ 159,381 | $ 195,378 | $ 255,302 |
Operating expenses: | |||
Salaries and benefits | 88,077 | 93,676 | 96,762 |
Other operating expenses | 64,596 | 74,433 | 85,671 |
Total operating expenses | 152,673 | 168,109 | 182,433 |
Income from operations | 6,708 | 27,269 | 72,869 |
Interest expense | (8,889) | (10,171) | (11,564) |
Interest income | 0 | 1 | 1 |
Income (loss) before provision for (benefit from) income taxes | (2,181) | 17,099 | 61,306 |
Provision for (benefit from) income taxes | (386) | 7,699 | 24,967 |
Net income (loss) | $ (1,795) | $ 9,400 | $ 36,339 |
Net income per share attributable to common shareholders (see Note 1) | |||
Basic (in dollars per share) | $ (0.04) | $ 0.19 | $ 0.77 |
Diluted (in dollars per share) | $ (0.04) | $ 0.19 | $ 0.74 |
Weighted average shares (see Note 1) | |||
Basic (in shares) | 49,415 | 48,816 | 47,492 |
Diluted (in shares) | 49,415 | 49,834 | 49,386 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (1,795) | $ 9,400 | $ 36,339 |
Other comprehensive income: | |||
Foreign currency translation adjustment | 31 | 0 | 0 |
Comprehensive income (loss) | $ (1,764) | $ 9,400 | $ 36,339 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Deficit) |
Beginning Balance (in shares) at Dec. 31, 2012 | 45,392 | |||
Beginning Balance at Dec. 31, 2012 | $ 24,073 | $ 4 | $ 35,970 | $ (11,901) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Exercise of stock options (in shares) | 2,924 | |||
Exercise of stock options | 1,768 | $ 1 | 1,767 | |
Stock-based compensation expense | 2,994 | 2,994 | ||
Income tax benefit (shortfall) from employee stock awards | 9,060 | 9,060 | ||
Other comprehensive income | 0 | |||
Net income (loss) | 36,339 | 36,339 | ||
Ending Balance (in shares) at Dec. 31, 2013 | 48,316 | |||
Ending Balance at Dec. 31, 2013 | 74,234 | $ 5 | 49,791 | 24,438 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Exercise of stock options (in shares) | 1,034 | |||
Exercise of stock options | 610 | 610 | ||
Stock-based compensation expense | 3,707 | 3,707 | ||
Income tax benefit (shortfall) from employee stock awards | 3,221 | 3,221 | ||
Other comprehensive income | 0 | |||
Net income (loss) | 9,400 | 9,400 | ||
Ending Balance (in shares) at Dec. 31, 2014 | 49,350 | |||
Ending Balance at Dec. 31, 2014 | 91,172 | $ 5 | 57,329 | 33,838 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Exercise of stock options (in shares) | 129 | |||
Exercise of stock options | (54) | (54) | ||
Stock-based compensation expense | 5,009 | 5,009 | ||
Income tax benefit (shortfall) from employee stock awards | (507) | (507) | ||
Other comprehensive income | 31 | 31 | ||
Net income (loss) | (1,795) | (1,795) | ||
Ending Balance (in shares) at Dec. 31, 2015 | 49,479 | |||
Ending Balance at Dec. 31, 2015 | $ 93,856 | $ 5 | $ 61,808 | $ 32,043 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (1,795) | $ 9,400 | $ 36,339 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
(Gain) loss on disposal of assets | (585) | 33 | 1 |
Depreciation and amortization | 13,368 | 12,450 | 10,655 |
Deferred income taxes | (2,943) | (1,703) | (1,708) |
Stock-based compensation | 5,009 | 3,707 | 2,994 |
Interest expense from debt issuance costs and amortization of discount note payable | 1,242 | 1,177 | 1,247 |
Changes in operating assets and liabilities: | |||
Trade accounts receivable | (2,918) | 4,602 | 3,395 |
Prepaid expenses and other current assets | (374) | (8,159) | (1,524) |
Income tax receivable | 4,394 | (4,394) | 0 |
Other assets | 174 | 57 | 451 |
Accrued salaries and benefits | (619) | (6,446) | 2,538 |
Accounts payable | (441) | (1,013) | 980 |
Other current liabilities | (1,766) | 1,873 | (2,941) |
Income taxes payable | 895 | (103) | (327) |
Deferred revenue | 0 | 0 | (2,187) |
Estimated liability for appeals | 493 | 3,342 | 10,905 |
Net payable to client | 2,290 | 12,110 | 0 |
Other liabilities | (253) | 933 | 388 |
Net cash provided by operating activities | 16,171 | 27,866 | 61,206 |
Cash flows from investing activities: | |||
Proceeds from sale of property, equipment, and leasehold improvements | 1,268 | 0 | 0 |
Purchase of property, equipment, and leasehold improvements | (7,895) | (10,146) | (12,503) |
Net cash used in investing activities | (6,627) | (10,146) | (12,503) |
Cash flows from financing activities: | |||
Repayment of notes payable | (17,537) | (21,509) | (14,465) |
Debt issuance costs paid | 0 | (653) | 0 |
Taxes paid related to net share settlement of stock awards | (90) | 0 | 0 |
Proceeds from exercise of stock options | 37 | 610 | 1,768 |
Income tax benefit from employee stock awards | 22 | 3,221 | 9,060 |
Payment of purchase obligation | (1,123) | (1,000) | (1,000) |
Net cash used in financing activities | (18,691) | (19,331) | (4,637) |
Effect of foreign currency exchange rate changes on cash | 31 | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | (9,116) | (1,611) | 44,066 |
Cash and cash equivalents at beginning of year | 80,298 | 81,909 | 37,843 |
Cash and cash equivalents at end of year | 71,182 | 80,298 | 81,909 |
Supplemental disclosures of cash flow information: | |||
Cash paid (received) for income taxes | (2,726) | 10,185 | 17,396 |
Cash paid for interest | $ 7,650 | $ 8,978 | $ 10,294 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies (a) Organization and Nature of Business Performant Financial Corporation (the Company) is a leading provider of technology-enabled recovery and analytics services in the United States. The Company's services help identify, restructure and recover delinquent or defaulted assets and improper payments for both government and private clients in a broad range of markets. Company clients typically operate in complex and regulated environments and outsource their recovery needs in order to reduce losses on billions of dollars of defaulted student loans, improper healthcare payments and delinquent state tax and federal treasury receivables. The Company generally provides our services on an outsourced basis, where we handle many or all aspects of the clients’ recovery processes. The Company’s consolidated financial statements include the operations of Performant Financial Corporation (PFC), its wholly owned subsidiary Performant Business Services, Inc., and its wholly owned subsidiaries Performant Recovery, Inc. (Recovery), Performant Technologies, Inc., and Performant Europe Ltd. Effective August 13, 2012, we changed the name of our wholly owned subsidiary from DCS Business Services, Inc. (DCSBS) to Performant Business Services, Inc., and DCSBS’ wholly owned subsidiaries from Diversified Collection Services, Inc. (DCS), and Vista Financial, Inc. (VFI), to Performant Recovery, Inc., and Performant Technologies, Inc., respectively. PFC is a Delaware corporation headquartered in California and was formed in 2003. Performant Business Services, Inc. is a Nevada corporation founded in 1997. Recovery is a California corporation founded in 1976. Performant Technologies, Inc. is a California corporation that was formed in 2004. The Company is managed and operated as one business, with a single management team that reports to the Chief Executive Officer. (b) Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP. The Company consolidates entities in which it has controlling financial interest, and as of December 31, 2015 , all of the Company’s subsidiaries are 100% owned. All significant intercompany balances and transactions have been eliminated in consolidation. (c) Use of Estimates in the Preparation of Consolidated Financial Statements The preparation of the consolidated financial statements in conformity with U.S. GAAP, requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, primarily accounts receivable, intangible assets, goodwill, estimated liability for appeals, accrued expenses, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Our actual results could differ from those estimates. (d) Cash and Cash Equivalents Cash and cash equivalents include demand deposits and highly liquid debt instruments with original maturities of three months or less when purchased. These investments can include money market funds that invest in highly liquid U.S. government and agency obligations, certificates of deposit, bankers’ acceptances, and commercial paper. The Company collects monies on behalf of its clients. Cash is often held on behalf of the clients in various trust accounts and is subsequently remitted to the clients based on contractual agreements. Cash held in these trust accounts for contracting agencies is not included in the Company’s assets (Note 11(a)). (e) Hosted Service Installation and Implementation Deliverables In 2008, the Company entered into a long-term contract to provide hosted services to a client beginning in March 2009. The Company determined that certain installation and implementation deliverables were not separate units of accounting within the contract, and should be combined for revenue recognition purposes with the hosted service deliverable. Accordingly, revenue for these contract elements is being taken ratably from the commencement of hosted services in March 2009 through the contract period of March 2018. Additionally, the Company deferred the direct incremental costs associated with the installation and implementation deliverables, with the costs being expensed ratably from the March 2009 commencement of services through March 2018. (f) Property, Equipment, and Leasehold Improvements Property, equipment, and leasehold improvements are stated at cost, net of accumulated depreciation. Furniture and equipment are depreciated using the straight-line method over estimated useful lives ranging from 5 to 7 years. Buildings are depreciated using the straight-line method over 31.5 years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated life of the asset or the remaining term of the lease. Computer software and computer hardware are depreciated using the straight-line method over 3 years and 5 years, respectively. Maintenance and repairs are charged to expense as incurred. Improvements that extend the useful lives of assets are capitalized. When property is sold or retired, the cost and the related accumulated depreciation are removed from the consolidated balance sheet and any gain or loss from the transaction is included in the consolidated statements of operations. (g) Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price and related costs over the fair value assigned to the net assets of businesses acquired. Goodwill is not amortized, but instead is reviewed for impairment at least annually. Impairment is the condition that exists when the carrying amount of goodwill is not recoverable and its carrying amount exceeds its fair value. The Company performed a Step 1 impairment assessment as of November 30, 2015 and concluded that it was not necessary to perform a Step 2 impairment assessment. Going forward, the Company intends to perform its assessment of whether it is more likely than not that goodwill fair value is less than its carrying amount in November of each year, one month earlier than the December date that had previously been in effect. The reason the date was moved from December 31 to November 30 is to allow the Company more time to evaluate its assessment prior to reporting its results. The Company performed a qualitative assessment of whether it is more likely than not that goodwill fair value is less than its carrying amount for 2014 and 2013 and concluded that there was no need to perform an impairment test. Identifiable intangible assets consist of customer contracts and related relationships, a perpetual license, and covenants not to compete. Customer contracts and related relationships are amortized over their estimated useful life of 4 to 20 years. The perpetual license is amortized over its estimated useful life of 5 years. (h) Impairment of Long-Lived Assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets or intangibles may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. For the year ended December 31, 2015, an impairment expense of $0.2 million was recognized to account for the loss of a client and it has been included in the other operating expenses in the consolidated statements of operations. The Company did not recognize an impairment expense for intangible assets in 2014 and 2013. (i) System Developments The Company follows the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Subtopic 350-40, Internal-Use Software , which specifies that costs incurred during the application stage of development should be capitalized. All other costs are expensed as incurred. During 2015 , 2014 and 2013 , costs of $7.0 million , $7.2 million and $4.9 million respectively, were capitalized for projects in the application stage of development, with depreciation expense of $4.8 million , $4.0 million and $2.6 million respectively, for completed projects. (j) Debt Issuance Costs Debt issuance costs represent loan and legal fees paid in connection with the issuance of long-term debt. Debt issuance costs are amortized to interest expense in accordance with key terms of the notes as amended. (k) Revenues, Accounts Receivable, and Estimated Liability for Appeals Revenue is recognized upon the collection of defaulted loan and debt payments. Loan rehabilitation revenue is recognized when the rehabilitated loans are sold (funded) by clients. Incentive revenue is recognized upon receipt of official notification of incentive award from customers. Under the Company’s RAC contract with CMS, the Company recognizes revenues when the healthcare provider has paid CMS for a given claim or has agreed to an offset against other claims by the provider. Providers have the right to appeal a claim and may pursue additional appeals if the initial appeal is found in favor of CMS. The Company accrues an estimated liability for appeals at the time revenue is recognized based on the Company's estimate of the amount of revenue probable of being refunded to CMS following successful appeal. In addition, if the Company's estimate of the liability for appeals with respect to revenues recognized during a prior period changes, the Company increases or decreases current period accruals based on such change in estimated liability. At December 31, 2015 , a total of $19.0 million was presented as an allowance against revenue, representing the Company’s estimate of claims that may be overturned. Of this amount, $0.0 million was related to amounts in accounts receivable and $19.0 million was related to commissions which had already been received. The zero allowance against accounts receivable at December 31, 2015 is due to the fact that the receivable from CMS is netted against an offsetting payable for overturned audits, and at December 31, 2015, the amount of the payable exceeded the amount of the receivable as discussed in note 1(l). In addition to the $19.0 million related to the RAC contract with CMS, the Company has accrued $0.1 million of additional estimated liability for appeals related to other healthcare contracts. The total accrued liability for appeals of $19.1 million has therefore been presented in the caption estimated liability for appeals at December 31, 2015. Similarly, at December 31, 2014, the total appeals-related liability was $18.6 million , comprised of an estimated liability for appeals of $18.6 million . The $19.1 million balance at December 31, 2015 and the $18.6 million balance as of December 31, 2014, represents the Company’s best estimate of the probable amount of losses related to appeals of claims for which commissions were previously collected. In addition to the $19.1 million amount accrued at December 31, 2015 , the Company estimates that it is reasonably possible that it could be required to pay an additional amount up to approximately $5.4 million as a result of potentially successful appeals. To the extent that required payments by the Company exceed the amount accrued, revenues in the applicable period would be reduced by the amount of the excess. For the year ended December 31, 2015 , the Company had 3 clients whose individual revenues exceeded 10% of the Company’s total revenues. The dollar amount and percent of total revenue of each of the 3 clients is summarized in the table below (in thousands): Rank 2015 Revenue Percent of total revenue 1 $37,878 23.8% 2 31,709 19.9% 3 17,696 11.1% For the year ended December 31, 2014 , the Company had 4 clients whose individual revenues exceeded 10% of the Company’s total revenues. The dollar amount and percent of total revenue of each of the 4 clients is summarized in the table below (in thousands): Rank 2014 Revenue Percent of total revenue 1 $53,211 27.2% 2 29,444 15.1% 3 29,171 14.9% 4 24,855 12.7% For the year ended December 31, 2013 , the Company had 4 clients whose individual revenues exceeded 10% of the Company’s total revenues. The dollar amount and percent of total revenue of each of the 4 clients is summarized in the table below (in thousands): Rank 2013 Revenue Percent of total revenue 1 $66,820 26.2% 2 51,566 20.2% 3 42,056 16.5% 4 30,902 12.1% Revenue from the largest three customers was 55% , 57% and 63% of total revenue in 2015 , 2014 and 2013 , respectively. Accounts receivable due from these three customers were 54% , 39% and 59% of total trade receivables at December 31, 2015 , 2014 and 2013 , respectively. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company determines the allowance for doubtful accounts by specific identification. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts was $0.4 million and $0.0 million for December 31, 2015 and December 31, 2014 , respectively. (l) Net Payable to Client The Company nets outstanding accounts receivable invoices from an audit & recovery contract against payables for overturned audits. The overturned audits are netted against current fees due on the invoice to the client when they are processed by the client’s system. The "Net payable to client" balance of $14.4 million represents the excess of payables of $15.4 million for overturned audits offset by outstanding accounts receivable of $1.0 million at December 31, 2015. At December 31, 2014, the “Net payable to client” balance of $12.1 million represents the excess of payables of $14.2 million for overturned audits offset by outstanding accounts receivable of $2.1 million . (m) Prepaid Expenses and Other Current Assets At December 31, 2015 , Prepaid expenses and other current assets includes $5.7 million of amounts estimated to become due from subcontractors. The Company employs subcontractors to audit claims as part of an audit & recovery contract, and to the extent that audits by these subcontractors are overturned on appeal, the fees associated with such claims are contractually refundable to the Company. At December 31, 2015 , the receivable associated with estimated future overturns of subcontractor audits was $5.7 million . In addition, at December 31, 2015 , Prepaid expenses and other current assets includes a net receivable of $3.8 million for subcontractor fees for already overturned audits refundable to the Company once the Company refunds its fees to the client as prime contractor. By comparison, at December 31, 2014 , the receivable associated with the estimated future overturns of subcontractor audits was $5.6 million , and the receivable for subcontractor fees for already overturned audits refundable to the Company once the Company refunds its fees to the client as prime contractor was $3.0 million . (n) Legal Expenses The Company recognizes legal fees related to litigation as they are incurred. (o) Comprehensive Income The Company has a single component of comprehensive income on the Consolidated Statements of Comprehensive Income related to foreign currency translation adjustments for its subsidiary Performant Europe Ltd. as of December 31, 2015. The Company had no components of comprehensive income other than its net income in 2014 and 2013. (p) Fair Value of Financial Instruments The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, short-term debt and long-term debt. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate their fair values based on or due to their short-term maturities. The carrying values of short-term debt and long-term debt approximate fair value, in which their variable interest rates approximate market rates. (q) Income Taxes The Company accounts for income taxes under the asset-and-liability method. Deferred income tax assets and liabilities are recognized for future tax consequences attributable to differences between the carrying value of assets and liabilities for financial reporting purposes and for taxation purposes. Deferred income tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred income tax assets and liabilities is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. (r) Stock Options The Company accounts for its employee stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation – Stock Compensation . FASB ASC Topic 718 requires that all employee stock-based compensation is recognized as a cost in the financial statements and that for equity-classified awards, such cost is measured at the grant date fair value of the award. The Company estimates grant date fair value using the Black-Scholes-Merton option-pricing model. FASB ASC Topic 718 also requires that excess tax benefits recognized in equity related to stock option exercises are reflected as financing cash inflows. The Company recognized an income tax shortfall resulting from the exercise of stock options in 2015 of $0.5 million . The Company recognized income tax benefits resulting from the exercise of stock options in 2014 and 2013 of $3.2 million and $9.1 million , respectively. (s) Earnings per Share For the years ended December 31, 2015, 2014, and 2013, basic earnings per share is calculated by dividing net income available to common shareholders by the sum of the weighted average number of common shares outstanding during the year. Diluted earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of common shares and dilutive common shares equivalents outstanding during the period. The Company’s common share equivalents consist of stock options, restricted stock units, and performance stock units. The following table reconciles the basic to diluted weighted average shares outstanding using the treasury stock method (shares in thousands): Years Ended December 31, 2015 2014 2013 Weighted average shares outstanding – basic 49,415 48,816 47,492 Dilutive effect of stock options — 1,018 1,894 Weighted average shares outstanding – diluted 49,415 49,834 49,386 The following table shows the number of shares of Common Stock subject to options and restricted stock awards that were outstanding for the years ended December 2015, 2014 and 2013, which were not included in the net income per diluted share calculation because to do so would have been anti-dilutive: Years Ended December 31, 2015 2014 2013 Number of shares 4,430,292 (a) 2,894,013 2,617,064 (a) Includes 3,812,516 options to purchase shares at exercise prices greater than the average market price of the common stock and 617,776 options to purchase shares that were excluded because the effect of including them was anti-dilutive. (t) Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued an ASU that amends the FASB ASC by creating a new Topic 606, Revenue from Contracts with Customers. The new guidance will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance on revenue recognition throughout the Industry Topics of the Codification. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. In addition, an entity should disclose sufficient qualitative and quantitative information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. This amendment is to be either retrospectively adopted to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. On July 9, 2015, the FASB decided to defer the effective date by one year, to annual reporting periods beginning on or after December 15, 2017, including interim periods within that reporting period. The FASB also voted to permit early adoption of the guidance but no earlier than the original effective date. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” in conjunction with their initiative to reduce complexity in accounting standards. This new guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with presentation of a debt discount. ASU 2015-03 is effective for the annual and interim periods beginning on or after December 15, 2015, with early adoption permitted. We are currently evaluating the impact of the adoption of this guidance to our consolidated financial statements. In August 2014, the FASB issued Accounting Standards Update No. 2014-15, “Presentation of Financial Statements - Going Concern”, which addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known, and reasonably knowable, at the date that the financial statements are issued. This new guidance will be effective for the first interim period within annual reporting periods beginning after December 31, 2016 with early adoption permitted. We have not adopted this guidance early and are currently evaluating the effect on our consolidated financial statements. In September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments,” that eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. This new guidance is effective for annual and interim periods beginning after December 15, 2015, with early adoption permitted. The adoption of ASU 2015-16 is not expected to have a material impact on the Company’s consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, “Income Taxes: Balance Sheet Classification of Deferred Taxes” which simplifies the current presentation of separately classifying deferred tax assets and deferred tax liabilities as current and noncurrent in a classified balance sheet by requiring companies to present them as noncurrent. This new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within such annual reporting periods with early adoption permitted. We have not adopted this guidance early and are currently evaluating the effect on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases”, which, for operating leases, requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. This new guidance is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. We have not adopted this guidance early and are currently evaluating the effect on the Company’s consolidated financial statements. |
Property, Equipment, and Leaseh
Property, Equipment, and Leasehold Improvements | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Equipment, and Leasehold Improvements | Property, Equipment, and Leasehold Improvements Property, equipment, and leasehold improvements consist of the following at December 31, 2015 and 2014 (in thousands): December 31, 2015 December 31, 2014 Land $ 1,122 $ 1,767 Building and leasehold improvements 6,053 5,966 Furniture, equipment, and automobile 5,390 5,193 Computer hardware and software 67,353 60,229 79,918 73,155 Less accumulated depreciation and amortization (54,403 ) (45,508 ) Property, equipment and leasehold improvements, net $ 25,515 $ 27,647 Depreciation and amortization expense of property, equipment and leasehold improvements was $9.3 million , $8.7 million and $6.9 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. During 2015, the Company sold land in Texas for $1.3 million in cash for a gain of $0.6 million . |
Identifiable Intangible Assets
Identifiable Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Identifiable Intangible Assets | Identifiable Intangible Assets Identifiable intangible assets consist of the following at December 31, 2015 and 2014 (in thousands): December 31, 2015 Gross Amounts Accumulated Amortization Net Amortizable intangibles: Customer contracts and related relationships $ 62,215 $ (37,886 ) $ 24,329 Perpetual license 3,313 (2,568 ) 745 Total intangible assets $ 65,528 $ (40,454 ) $ 25,074 December 31, 2014 Gross Amounts Accumulated Amortization Net Amortizable intangibles: Customer contracts and related relationships $ 62,451 $ (34,774 ) $ 27,677 Perpetual license 3,313 (1,897 ) 1,416 Total intangible assets $ 65,764 $ (36,671 ) $ 29,093 For the years ended December 31, 2015 , 2014 and 2013 , amortization expense related to intangible assets amounted to $3.8 million , $3.7 million and $3.7 million , respectively. The estimated aggregate amortization expense for each of the five following fiscal years is as follows (in thousands): Year Ending December 31, Amount 2016 $ 3,740 2017 3,140 2018 3,067 2019 3,063 2020 3,016 Thereafter 9,048 Total $ 25,074 |
Credit Agreement
Credit Agreement | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Credit Agreement | Credit Agreement On March 19, 2012, we, through our wholly owned subsidiary, entered into a $147.5 million credit agreement, as amended and restated, with Madison Capital Funding LLC as administrative agent, ING Capital LLC as syndication agent, and other lenders party thereto. The senior credit facility consists of (i) a $57.0 million term A loan that matures in March 2017, (ii) a $79.5 million term B loan that matures in March 2018, and (iii) a $11.0 million revolving credit facility that expires in March 2017. On June 28, 2012, we amended the credit agreement to increase the amount of our borrowings under our term B loan by $19.5 million . On November 4, 2014, the Agreement was further amended to, among other things, modify a number of existing covenants and add new covenants requiring the Company to maintain a minimum cash balance, comply with an interest coverage ratio and achieve minimum EBITDA levels. Scheduled payments under the Agreement for the next five years and thereafter are as follows (in thousands): Year Ending December 31, Amount 2016 $9,076 2017 8,429 2018 76,753 2019 — Total $94,258 The Term A Loan is charged interest either at Prime (subject to a 2.5% floor) + 4.25% or LIBOR (subject to a 1.5% floor) + 5.25% , which was 6.75% at December 31, 2015 . The Term A loan requires quarterly payments of $2.1 million , with the remaining outstanding principal balance due March 19, 2017 . As of December 31, 2015 , the Term A loan ending balance, including the current portion was $15.9 million . The Term B loan is charged interest at Prime + 4.75% (subject to a 2.50% floor) or LIBOR (subject to a 1.50% floor) + 5.75% which was 7.25% at December 31, 2015 . The Term B loan requires quarterly payments of $0.2 million beginning in June 2012, with the outstanding principal balance due March 19, 2018 . As of December 31, 2015 , the Term B loan ending balance, including the current portion was $78.4 million . The Company has a line of credit under the Agreement which allows for borrowings of up to $11 million . Borrowings accrue interest at Prime + 4.25% or LIBOR + 5.25% , which was 6.75% at December 31, 2015 . Both the Prime and the LIBOR alternatives are subject to minimum rate floors. In addition, a facility fee of 0.5% is assessed on the commitment amount. There were no outstanding borrowings under this line of credit at December 31, 2015 , but there are letters of credit outstanding in the amount of $2.0 million , leaving remaining borrowing capacity under the line of credit of $9.0 million at December 31, 2015 . The Agreement contains certain restrictive financial covenants, which require, among other things, that we meet a minimum fixed charge coverage ratio of 1.20 and maximum total debt to EBITDA ratio of 3.25 . Additionally, these covenants restrict the Company and its subsidiaries’ ability to incur certain types or amounts of indebtedness, incur liens on certain assets, make material changes in corporate structure or the nature of its business, dispose of material assets, engage in a change in control transaction, make certain foreign investments, enter into certain restrictive agreements, or engage in certain transactions with affiliates. We were in compliance with all such covenants at December 31, 2015 . The Agreement contains a prepayment provision which requires the Company to perform an annual excess cash flow computation based on earnings before interest, taxes, depreciation and amortization compared to changes in working capital. Based on the results of this computation, in May 2015 and May 2014, the Company made payments of $7.0 million and $11.5 million , respectively, to the lenders. In addition, the Company made a prepayment of $1.3 million to the lenders in July 2015 from the sale of land in San Angelo, TX. As part of our March 19, 2012 credit agreement (the Agreement), debt issuance costs of $5.0 million were capitalized, including $1.5 million of agent fees paid to an entity associated with our majority stockholder, and $0.8 million paid to third parties for legal and other services and a grant of 215,000 shares of Common Stock issued as compensation to an investment bank acting as financial advisor valued at approximately $2.8 million , based upon a price of $13 per share. These costs are being amortized to expense over the life of the new loans. The Company capitalized an additional $0.8 million related to our June 28, 2012 amendment to the Agreement, which included $0.2 million of agent fees paid to an entity associated with our majority stockholders, and $0.0 million paid to third parties for legal and other services. Debt issuance costs are being amortized to interest expense over the life of the new loans. Accumulated amortization of debt issuance costs amounted to $4.3 million at December 31, 2015 . On November 4, 2014, the Company entered into Amendment No. 2 to its Credit Agreement (Second Amendment) in which certain financial covenants were amended and additional financial covenants were added. Under the Second Amendment, the total debt to EBITDA ratio, which required the Company to maintain a ratio of 3.25 to1.0 as of September 30, 2014 was revised as follows: • for the computation periods ending December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015 and December 31, 2015, the Company must maintain a total debt to EBITDA ratio of 5.00 to1.0 • for the computation periods ending March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016, the Company must maintain a total debt to EBITDA ratio of 4.75 to1.0; and • for each computation period ending March 31, 2017 and thereafter, the Company must maintain a total debt to EBITDA ratio of 3.25 to1.0 In addition, the fixed charge coverage ratio of 1.20 to1.0, which was in effect for every computation period under the Credit Agreement as of September 30, 2014, has been revised under the Second Amendment to apply only to the computation periods ending September 30, 2014, March 31, 2017, and each computation period thereafter. The Second Amendment also added an interest coverage ratio, defined as the ratio of EBITDA compared to interest expense paid in cash for the computation period. Under this new financial covenant, the Company is required to maintain: • an interest coverage ratio not to be less than 2.25 to1.0 for the computation periods ending December 31, 2014, March 31, 2015, June 30,2015, September 30, 2015, and December 31, 2015; and • an interest coverage ratio not to be less than of 2.50 to1.0 for the computation period ending March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016. In addition, among other things, under the Second Amendment, the Company is now required to maintain minimum adjusted cash balances of $35.0 million from November 4, 2014 through December 31, 2015, and minimum adjusted cash balances of $30.0 million from January 1, 2016 through December 31, 2016. Further, under the Second Amendment, the Company must maintain EBITDA for any trailing twelve month period of not less than $20.0 million beginning with the month ending November 30, 2014 through the month ending December 31, 2016. Also, pursuant to the terms of the Second Amendment, the lenders are not required to make new loans or issue new letters of credit under the Company's line of credit when the total debt to EBITDA ratio exceeds 3.25 to 1.0. Lastly, under the Second Amendment, capital expenditures of the Company in the years ending December 31, 2014, December 31, 2015, and December 31, 2016, are not permitted to exceed $12.5 million . We were in compliance with all such Second Amendment covenants at December 31, 2015 . Interest charged under the Credit Agreement as revised by the Second Amendment is a function of the total debt to EBITDA ratio, adjusted quarterly. When the total debt to EBITDA ratio is greater than 4.0 to1.00, the Term A loan is charged interest either at Prime + 4.75% or LIBOR + 5.75% , while the Term B loan is charged interest either at Prime + 5.25% or LIBOR + 6.25% . When the total debt to EBITDA ratio is equal to or less than 4.0 to1.00, the Term A loan is charged interest either at Prime + 4.25% or LIBOR + 5.25% , while the Term B loan is charged interest either at Prime + 4.75% or LIBOR + 5.75% . Fees for the Second Amendment of $ 0.5 million were paid to the lenders on November 4, 2014. Due t o delays in the award of the new contracts by CMS and the Department of Education, significant limitations on our audit and recovery activity during the CMS contract transition period, suspension of student loan placements to us from the Department of Education during the contract transition period and recovery fee reductions in the student lending market, we have been actively restructuring both our variable and fixed expenses consistent with our reduced operations and in order to maintain compliance with our debt covenants. Our current financial projections show that we expect to be able to maintain compliance with our covenants through the second quarter of 2017. However, the factors noted above have had and, until resolved, will continue to have a significant negative effect on our revenues and earnings and our ability to continue to comply with our covenants. Accordingly, we expect to seek further modifications to the covenants from our lenders or refinance our indebtedness. Our inability to maintain long-term compliance with our debt covenants, or to refinance or restructure the terms of our indebtedness on commercially reasonable terms or at all, would have an adverse effect, which could be material on our business, financial condition and results of operations, as well as our ability to satisfy our debt obligations. On February 19, 2016, the Company entered into Amendment No. 4 to its Credit Agreement (Fourth Amendment) in which certain financial covenants were amended and additional financial covenants were added. Please see footnote 12 - Subsequent Events. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company leases office facilities and certain equipment. In August 2013, we entered into a new lease agreement for office space for approximately 15,667 square feet in Grants Pass, Oregon. Future minimum rental commitments under non-cancelable leases as of December 31, 2015 are as follows (in thousands): Year Ending December 31, Amount 2016 $ 2,201 2017 1,764 2018 942 2019 872 2020 842 Thereafter 310 Total $ 6,931 Lease expense was $3.0 million , $2.9 million and $2.6 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Capital Stock | Capital Stock Since August 15, 2012, the authorized Common Stock has been 500,000,000 shares and the authorized preferred stock has been 50,000,000 shares. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | Stock-based Compensation (a) Stock Options Under the terms of the Performant Financial Corporation 2007 Stock Option Plan, incentive and nonqualified stock options may be granted for up to 4,000,000 shares of the Company’s authorized but unissued Common Stock. Options granted under the Performant Financial Corporation 2007 Stock Option Plan generally vest over a five -year period. Performant Financial Corporation 2007 Stock Option Plan was terminated on the completion of its initial public offering in August 2012. No shares of our common stock are available under our 2007 Stock Option Plan other than for satisfying exercises of stock options granted under this plan prior to termination. The terms of the Performant Financial Corporation 2012 Stock Incentive Plan provide for the granting of incentive stock options within the meaning of Section 422 of the Code to employees and the granting of nonstatutory stock options, restricted stock, stock appreciation rights, stock unit awards and cash-based awards to employees, non-employee directors and consultants. The Company has reserved 6,550,000 shares of common stock under the 2012 Plan. Options granted under the Performant Financial Corporation 2012 Stock Incentive Plan generally vest over periods of four or five -years. The exercise price of incentive stock options shall generally not be less than 100% of the fair market value of the Common Stock subject to the option on the date that the option is granted. The exercise price of nonqualified stock options shall generally not be less than 85% of the fair market value of the Common Stock subject to the option on the date that the option is granted. Options issued under the Plans have a maximum term of 10 years and vest over schedules determined by the board of directors. Options issued under the Plans generally provide for immediate vesting of unvested shares in the event of a sale of the Company. Total stock-based compensation expense charged as salaries and benefits expense in the consolidated statements of operations was $5.0 million , $3.7 million and $3.0 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively. The following table sets forth a summary of our stock option activity for the year ended December 31: Outstanding Options Weighted average exercise price per share Weighted average remaining contractual life (Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2012 7,909,724 $ 3.85 5.89 Granted 313,600 11.85 Forfeited (102,381 ) 10.05 Exercised (2,908,122 ) 0.60 Outstanding at December 31, 2013 5,212,821 6.03 6.62 Granted 254,000 9.69 Forfeited (410,625 ) 10.53 Exercised (1,032,813 ) 0.62 Outstanding at December 31, 2014 4,023,383 7.18 6.41 Granted 294,500 3.57 Forfeited (171,625 ) 8.25 Exercised (29,135 ) 1.26 Outstanding December 31, 2015 4,117,123 $ 6.92 5.64 $ 1,211 Vested, exercisable, and expected to vest (1) at December 31, 2015 4,058,257 $ 6.90 5.62 $ 1,211 Exercisable at December 31, 2015 2,935,723 $ 6.16 4.87 $ 1,211 (1) Options expected to vest reflect an estimated forfeiture rate. The weighted-average grant-date exercise price of stock options granted during the years ended December 31, 2015 , 2014 and 2013 was $3.57 , $9.69 and $11.85 , respectively, per share. The aggregate intrinsic value of our stock options (the amount by which the market price of the stock on the date of exercise exceeded the exercise price of the option) exercised during the years ended December 31, 2015 , 2014 and 2013 , was $0.1 million , $8.8 million and $31.3 million , respectively. At December 31, 2015 , 2014 , and 2013 , there was $4.7 million , $7.5 million and $10.5 million , respectively, of unrecognized stock-based compensation expense related to non-vested stock-based compensation arrangements, which the Company expects to recognize over a weighted-average period of 1.91 years as stock-based compensation expense. Net cash proceeds from the exercise of stock options were $0.04 million , $0.6 million and $1.8 million during 2015, 2014 and 2013, respectively. For the years ended December 31, 2015 , 2014 and 2013 , we realized a $(0.5) million , $3.2 million and $9.1 million tax benefit from the exercise of stock options, respectively. The fair value of each option grant was estimated using the Black-Scholes option pricing model. Expected volatilities are calculated based on the historical volatility data of comparable peer companies over a term comparable to the expected term of the options issued. The expected term of the award is determined based on the average of the vesting term and the contractual term. Management monitors share option exercise and employee termination patterns to estimate forfeiture rates within the valuation model. Separate groups of employees that have similar groups of employees with similar historical exercise behavior are considered separately for valuation purposes. We estimated the fair value of options granted using a Black-Scholes option pricing model with the following assumptions: For the Years Ended December 31, 2015 2014 2013 Expected volatility 48.6% 51.0% 54.2% Expected dividends —% —% —% Expected term (years) 6.1 6.1 6.2 Risk-free interest rate 1.7% 1.9% 1.5% Weighted-average estimated fair value of options granted during the year $1.71 $4.85 $6.23 Valuation and Amortization Method – The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option pricing model. The fair value is then amortized on a straight line basis over the requisite service periods of the awards, which is generally the vesting period. Stock options typically have a ten year life from the grant date and vesting periods of four to five years. The fair value of the Company’s common stock is based on the market price of the stock on the date of grant. Expected Term – The Company’s expected term represents the period that the Company’s stock-based awards are expected to be outstanding. For awards granted subject only to service vesting requirements, the Company utilizes the simplified method under the provisions of FASB ASC 718-10-S99-1 (Staff Accounting Bulletin No. 107) for estimating the expected term of the stock-based award. Expected Volatility – Because there is insufficient history of the Company’s stock price returns, the Company lacks sufficient historical volatility data for its equity awards. Accordingly, the Company calculates the expected volatility using a composite made up of comparable peer companies and an approximate 54% company weighting over a term comparable to the expected term of the options issued. Expected Dividend – The Company has never paid dividends on its common shares and currently does not intend to do so. Accordingly, the dividend yield percentage is zero for all periods. Risk-Free Interest Rate – The risk-free interest rate used in the Black Scholes valuation method is based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of our stock options. (b) Restricted Stock Units The following table summarizes restricted stock unit activity for the year ended December 31: Weighted average Number of grant date Awards fair value Outstanding at December 31, 2013 5,263 $ 10.59 Granted 488,545 9.27 Forfeited (30,900 ) 9.26 Vested and converted to shares (1,316 ) 10.59 Outstanding at December 31, 2014 461,592 $ 9.28 Granted 954,860 3.30 Forfeited (57,475 ) 8.77 Vested and converted to shares (129,703 ) 9.15 Outstanding at December 31, 2015 1,229,274 $ 4.67 Expected to vest at December 31, 2015 1,167,859 $ 4.67 Share-based compensation cost for restricted stock units ("RSUs") is measured based on the closing fair market value of the Company's common stock on the date of grant. The Company recognizes share-based compensation cost over the award's requisite service period on a straight-line basis for time-based RSUs and on a graded basis for RSUs that are contingent on the achievement of performance conditions. The Company recognizes a benefit (shortfall) from share-based compensation in the Consolidated Statements of Shareholders' Equity. The majority of RSUs that vested in 2015 were net-share settled such that the Company withheld shares with value equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld were approximately 30,000 shares for 2015, and were based on the value of the RSUs on their respective vesting dates as determined by the Company’s closing stock price. These net-share settlements had the effect of share repurchases by the Company as they reduced the number of shares that would have otherwise been issued as a result of the vesting and did not represent an expense to the Company. At December 31, 2015 and 2014 , there was $ 4.1 million and $3.5 million of compensation expense yet to be recognized related to non-vested restricted stock units. The unrecognized expense as of December 31, 2015 is expected to be recognized over the remaining weighted-average vested period of 2.4 years . 129,703 and 1,316 of the restricted stock units vested during the years ended December 31, 2015 and 2014 , respectively. Restricted stock units granted under the Performant Financial Corporation 2012 Stock Incentive Plan generally vest over periods between one and four years. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2015 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan The Company has a 401(k) Salary Deferral Plan (the Plan) covering all full-time employees who have met certain service requirements. Employees may contribute a portion of their salary up to the maximum limit established by the Internal Revenue Code for such plans. Employer contributions are discretionary. No matching contributions were made during 2015 , 2014 and 2013 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s income tax expense (benefit) consists of the following (in thousands): 2015 2014 2013 Current: Federal $ 1,393 $ 6,802 $ 21,526 State 1,164 2,600 5,149 2,557 9,402 26,675 Deferred: Federal $ (2,578 ) $ (1,625 ) $ (866 ) State (365 ) (78 ) (842 ) (2,943 ) (1,703 ) (1,708 ) Total expense (benefit) $ (386 ) $ 7,699 $ 24,967 The reconciliation between the amount computed by applying the U.S. federal statutory rate of 35% to income before taxes and the Company's tax provision for 2015, 2014, and 2013 is as follows: 2015 2014 2013 Federal income at the statutory rate 35 % 35 % 35 % State income tax, net of federal benefit (26 )% 10 % 5 % Permanent differences (9 )% 2 % 1 % Work Opportunity Credit 9 % (1 )% — % Return to provision true-up 4 % — % — % Other 4 % (1 )% — % 17 % 45 % 41 % The following table summarizes the components of the Company’s deferred tax assets and liabilities as of December 31, 2015 , and 2014 (in thousands): 2015 2014 Deferred tax assets Bad debt reserve $ 164 $ 13 Vacation accrual 628 685 Nonqualified stock options 4,598 3,059 Debt issuance costs 454 643 Acquisition costs 103 630 State tax deferral 709 934 Deferred revenue 194 273 State tax credits 301 305 Net operating loss 170 110 Estimated liability for appeals 5,708 5,313 Other 114 304 Total deferred tax assets 13,143 12,269 Valuation allowance (452 ) (349 ) Total deferred tax assets net of valuation allowance 12,691 11,920 Deferred tax liabilities: Identifiable intangible assets (9,157 ) (10,227 ) Fixed assets (5,160 ) (5,732 ) Other (22 ) (22 ) Total deferred tax liabilities (14,339 ) (15,981 ) Net deferred tax liabilities $ (1,648 ) $ (4,061 ) The Company believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets, except for certain state tax credits. Income tax expense is allocated to the subsidiaries included in the consolidated tax return on the basis of the subsidiaries’ stand-alone tax provision. The Company has valuation allowances of approximately $0.5 million and $0.3 million , as of December 31, 2015 and December 31, 2014, respectively, primarily related to California enterprise zone tax credits for which it is not more likely than not that the tax benefit will be realized. The Company has state tax credits of $0.3 million , which, due to the Assembly Bill 93 and Senate Bill 90 signed on July 11, 2013, are now limited to a 10 year carryforward, and will expire in 2024. The Company has state net operating loss carryforwards of $0.4 million which expire in 2020 . The following table reconciles the Company’s unrecognized tax benefits as of December 31, 2015 from its unrecognized tax benefits as of December 31, 2013 (in thousands): Unrecognized tax benefits balance at December 31, 2013 $ 546 Increase related to prior year tax positions 444 Decrease related to prior year tax positions (42 ) Increase related to current year tax positions — Settlements — Lapse of statute of limitations — Unrecognized tax benefits balance at December 31, 2014 948 Increase related to prior year tax positions 217 Decrease related to prior year tax positions (145 ) Increase related to current year tax positions — Settlements — Lapse of statute of limitations (125 ) Unrecognized tax benefits balance at December 31, 2015 $ 895 At December 31, 2015 and 2014 , we had approximately $0.9 million and $0.9 million of unrecognized tax benefits, respectively. We do not expect any significant change in unrecognized tax benefits during the next twelve months. The Company records interest expense and penalties related to unrecognized tax benefits in income tax expense. The amount of accrued interest was not material at December 31, 2015 and 2014 , respectively. No penalties were recognized in 2014 or accrued at December 31, 2015 , and 2014 respectively. Unrecognized tax benefits of approximately $0.9 million which, if recognized, would favorably affect the Company’s effective income tax rate. The Company files federal and state income tax returns. For years before 2011, the Company is no longer subject to California, Texas, and certain state state tax examinations. For tax year before 2012, the Company is no longer subject to Federal and certain other state tax examinations. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Our notes payable are held by a number of lenders, some of whom also invested in and held our stock during 2012 and 2013. As a result, these entities are considered related parties. Interest expense under these arrangements totaled $10.3 million for the year ended December 31, 2013 . |
Other Commitments and Contingen
Other Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure Commitments And Contingencies Additional Information [Abstract] | |
Other Commitments and Contingencies | Other Commitments and Contingencies (a) Trust Funds The Company collects principal and interest payments and collection costs on defaulted loans for various contracting agencies. Cash collections for some of the Company’s customers are held in trust in bank accounts controlled by the Company. The Company remits trust funds to the contracting agencies on a regular basis. The amount of cash held in trust and the related liability are separated from and not included in the Company’s assets and liabilities. Cash held in trust for customers totaled $0.7 million and $9.7 million at December 31, 2015 and 2014 , respectively. (b) Litigation The Company, during the ordinary course of its operations, has been named in various legal suits and claims, several of which are still pending. In the opinion of management and the Company’s legal counsel, such legal actions will not have a material effect on the Company’s financial position or results of operations or cash flows. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 19, 2016, Performant Business Services, Inc., which is a wholly-owned subsidiary of Performant Financial Corporation (the “Company”) and is the borrower under that certain Credit Agreement dated as March 19, 2012 with Madison Capital Funding LLC, as agent (the “Agent”) and the lenders party thereto from time to time (as amended, the “Credit Agreement”), entered into Amendment No. 4 to the Credit Agreement (the “Fourth Amendment”). The Company and certain other of its subsidiaries are guarantors of the obligations under the Credit Agreement. Pursuant to the Fourth Amendment, the Company’s financial covenants were modified as follows: • The annual capital expenditure limitation of $12.5 million , which was in effect for the year ending December 31, 2016, has been revised under the Fourth Amendment to be $8 million for the years ending December 31, 2016 and December 31, 2017. • The total debt to EBITDA ratio of 3.25 to1.0, which was in effect for the computation periods ending as of March 31, 2017 and June 30, 2017, has been revised under the Fourth Amendment to be 4.75 to 1.0 for those periods. • The interest coverage ratio of 2.50 to 1.0, which was in effect for the computation period ending as of December 31, 2016, has been revised under the Fourth Amendment to be 2.0 to 1.0 for the computation period ending as of December 31, 2016 and 1.75 to 1.0 for the computation periods ending as March 31, 2017 and June 30, 2017. • The fixed charge coverage ratio of 1.20 to1.0, which was in effect for the quarterly computation periods under the Credit Agreement ending as of March 31, 2017 through December 31, 2017, has been revised under the Fourth Amendment to apply only to the computation periods ending as September 30, 2017 and December 31, 2017. • The required minimum adjusted cash balance of $30.0 million , which was in effect from March 31, 2016 through December 31, 2016, has been revised under the Fourth Amendment to be $10.0 million from March 31, 2016 through September 30, 2016. • The minimum trailing twelve month EBITDA of $20.0 million , which was in effect from March 31, 2016 through December 31, 2016, has been revised under the Fourth Amendment by shortening such period to extend until June 30, 2016. Interest charged under the Credit Agreement as revised by the Fourth Amendment with respect to the Term A loan revolving loan advances is now charged either at Prime + 5.75% or LIBOR + 6.75% , and interest with respect to the Term B loan is now charged either at Prime + 6.25% or LIBOR + 7.25% . In connection with the Fourth Amendment, the Company voluntarily prepaid $22.5 million under the Credit Agreement, which was applied ratably to the Term A loan and the Term B loan. In addition, the Company deposited $7.5 million into a deposit account which is subject to the exclusive control of the Agent. Pursuant to the Fourth Amendment, these funds will be remitted to the Agent for application to the term loans or other obligations, as applicable, under the Credit Agreement on the earlier to occur of (i) September 30, 2016 (or such later date not more than thirty (30) days thereafter as may be agreed by Agent in its sole discretion) and (ii) the occurrence and continuation of an event of default; however, all or a portion of these funds may also be returned the Company if the Agent and the requisite lenders under the Credit Agreement elect otherwise in their sole discretion. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS For the years ended December 31, 2015 , 2014 and 2013 Allowance for doubtful accounts (in thousands): Description Balance at Beginning of Period Additions Charged against Revenue Recoveries Charge-offs Balance at End of Period 2015 $ 32 354 — — $ 386 2014 $ 32 — — — $ 32 2013 $ 65 — 2 (35 ) $ 32 Estimated allowance and liability for appeals (in thousands): Description Balance at Beginning of Additions Charged against Revenue Appeals found in Providers Favor Balance at End of Period 2015 $ 18,625 2,109 (1,616 ) $ 19,118 * 2014 $ 16,443 8,624 (6,442 ) $ 18,625 * 2013 $ 5,577 12,791 (1,925 ) $ 16,443 * * Includes $0 , $0 , and $1,160 related to the estimated allowance for appeals that apply to uncollected accounts receivable as of 2015 , 2014 and 2013 , respectively. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Organization and Nature of Business | Organization and Nature of Business Performant Financial Corporation (the Company) is a leading provider of technology-enabled recovery and analytics services in the United States. The Company's services help identify, restructure and recover delinquent or defaulted assets and improper payments for both government and private clients in a broad range of markets. Company clients typically operate in complex and regulated environments and outsource their recovery needs in order to reduce losses on billions of dollars of defaulted student loans, improper healthcare payments and delinquent state tax and federal treasury receivables. The Company generally provides our services on an outsourced basis, where we handle many or all aspects of the clients’ recovery processes. The Company’s consolidated financial statements include the operations of Performant Financial Corporation (PFC), its wholly owned subsidiary Performant Business Services, Inc., and its wholly owned subsidiaries Performant Recovery, Inc. (Recovery), Performant Technologies, Inc., and Performant Europe Ltd. Effective August 13, 2012, we changed the name of our wholly owned subsidiary from DCS Business Services, Inc. (DCSBS) to Performant Business Services, Inc., and DCSBS’ wholly owned subsidiaries from Diversified Collection Services, Inc. (DCS), and Vista Financial, Inc. (VFI), to Performant Recovery, Inc., and Performant Technologies, Inc., respectively. PFC is a Delaware corporation headquartered in California and was formed in 2003. Performant Business Services, Inc. is a Nevada corporation founded in 1997. Recovery is a California corporation founded in 1976. Performant Technologies, Inc. is a California corporation that was formed in 2004. The Company is managed and operated as one business, with a single management team that reports to the Chief Executive Officer. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP. The Company consolidates entities in which it has controlling financial interest, and as of December 31, 2015 , all of the Company’s subsidiaries are 100% owned. All significant intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates in the Preparation of Consolidated Financial Statements | Use of Estimates in the Preparation of Consolidated Financial Statements The preparation of the consolidated financial statements in conformity with U.S. GAAP, requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, primarily accounts receivable, intangible assets, goodwill, estimated liability for appeals, accrued expenses, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Our actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include demand deposits and highly liquid debt instruments with original maturities of three months or less when purchased. These investments can include money market funds that invest in highly liquid U.S. government and agency obligations, certificates of deposit, bankers’ acceptances, and commercial paper. The Company collects monies on behalf of its clients. Cash is often held on behalf of the clients in various trust accounts and is subsequently remitted to the clients based on contractual agreements. Cash held in these trust accounts for contracting agencies is not included in the Company’s assets (Note 11(a)). |
Hosted Service Installation and Implementation Deliverables | Hosted Service Installation and Implementation Deliverables In 2008, the Company entered into a long-term contract to provide hosted services to a client beginning in March 2009. The Company determined that certain installation and implementation deliverables were not separate units of accounting within the contract, and should be combined for revenue recognition purposes with the hosted service deliverable. Accordingly, revenue for these contract elements is being taken ratably from the commencement of hosted services in March 2009 through the contract period of March 2018. Additionally, the Company deferred the direct incremental costs associated with the installation and implementation deliverables, with the costs being expensed ratably from the March 2009 commencement of services through March 2018. |
Property, Equipment, and Leasehold Improvements | Property, Equipment, and Leasehold Improvements Property, equipment, and leasehold improvements are stated at cost, net of accumulated depreciation. Furniture and equipment are depreciated using the straight-line method over estimated useful lives ranging from 5 to 7 years. Buildings are depreciated using the straight-line method over 31.5 years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated life of the asset or the remaining term of the lease. Computer software and computer hardware are depreciated using the straight-line method over 3 years and 5 years, respectively. Maintenance and repairs are charged to expense as incurred. Improvements that extend the useful lives of assets are capitalized. When property is sold or retired, the cost and the related accumulated depreciation are removed from the consolidated balance sheet and any gain or loss from the transaction is included in the consolidated statements of operations. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price and related costs over the fair value assigned to the net assets of businesses acquired. Goodwill is not amortized, but instead is reviewed for impairment at least annually. Impairment is the condition that exists when the carrying amount of goodwill is not recoverable and its carrying amount exceeds its fair value. The Company performed a Step 1 impairment assessment as of November 30, 2015 and concluded that it was not necessary to perform a Step 2 impairment assessment. Going forward, the Company intends to perform its assessment of whether it is more likely than not that goodwill fair value is less than its carrying amount in November of each year, one month earlier than the December date that had previously been in effect. The reason the date was moved from December 31 to November 30 is to allow the Company more time to evaluate its assessment prior to reporting its results. The Company performed a qualitative assessment of whether it is more likely than not that goodwill fair value is less than its carrying amount for 2014 and 2013 and concluded that there was no need to perform an impairment test. Identifiable intangible assets consist of customer contracts and related relationships, a perpetual license, and covenants not to compete. Customer contracts and related relationships are amortized over their estimated useful life of 4 to 20 years. The perpetual license is amortized over its estimated useful life of 5 years. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets or intangibles may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. |
System Developments | System Developments The Company follows the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Subtopic 350-40, Internal-Use Software , which specifies that costs incurred during the application stage of development should be capitalized. All other costs are expensed as incurred. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs represent loan and legal fees paid in connection with the issuance of long-term debt. Debt issuance costs are amortized to interest expense in accordance with key terms of the notes as amended. |
Revenues, Accounts Receivable, and Estimated Liability for Appeals | Revenues, Accounts Receivable, and Estimated Liability for Appeals Revenue is recognized upon the collection of defaulted loan and debt payments. Loan rehabilitation revenue is recognized when the rehabilitated loans are sold (funded) by clients. Incentive revenue is recognized upon receipt of official notification of incentive award from customers. Under the Company’s RAC contract with CMS, the Company recognizes revenues when the healthcare provider has paid CMS for a given claim or has agreed to an offset against other claims by the provider. Providers have the right to appeal a claim and may pursue additional appeals if the initial appeal is found in favor of CMS. The Company accrues an estimated liability for appeals at the time revenue is recognized based on the Company's estimate of the amount of revenue probable of being refunded to CMS following successful appeal. In addition, if the Company's estimate of the liability for appeals with respect to revenues recognized during a prior period changes, the Company increases or decreases current period accruals based on such change in estimated liability. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company determines the allowance for doubtful accounts by specific identification. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. To the extent that required payments by the Company exceed the amount accrued, revenues in the applicable period would be reduced by the amount of the excess. |
Legal Expenses | Legal Expenses The Company recognizes legal fees related to litigation as they are incurred. |
Comprehensive Income | Comprehensive Income The Company has a single component of comprehensive income on the Consolidated Statements of Comprehensive Income related to foreign currency translation adjustments for its subsidiary Performant Europe Ltd. as of December 31, 2015. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, short-term debt and long-term debt. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate their fair values based on or due to their short-term maturities. The carrying values of short-term debt and long-term debt approximate fair value, in which their variable interest rates approximate market rates. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset-and-liability method. Deferred income tax assets and liabilities are recognized for future tax consequences attributable to differences between the carrying value of assets and liabilities for financial reporting purposes and for taxation purposes. Deferred income tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred income tax assets and liabilities is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. |
Stock Options | Stock Options The Company accounts for its employee stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation – Stock Compensation . FASB ASC Topic 718 requires that all employee stock-based compensation is recognized as a cost in the financial statements and that for equity-classified awards, such cost is measured at the grant date fair value of the award. The Company estimates grant date fair value using the Black-Scholes-Merton option-pricing model. FASB ASC Topic 718 also requires that excess tax benefits recognized in equity related to stock option exercises are reflected as financing cash inflows. |
Earnings per Share | Earnings per Share For the years ended December 31, 2015, 2014, and 2013, basic earnings per share is calculated by dividing net income available to common shareholders by the sum of the weighted average number of common shares outstanding during the year. Diluted earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of common shares and dilutive common shares equivalents outstanding during the period. The Company’s common share equivalents consist of stock options, restricted stock units, and performance stock units. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued an ASU that amends the FASB ASC by creating a new Topic 606, Revenue from Contracts with Customers. The new guidance will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance on revenue recognition throughout the Industry Topics of the Codification. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. In addition, an entity should disclose sufficient qualitative and quantitative information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. This amendment is to be either retrospectively adopted to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. On July 9, 2015, the FASB decided to defer the effective date by one year, to annual reporting periods beginning on or after December 15, 2017, including interim periods within that reporting period. The FASB also voted to permit early adoption of the guidance but no earlier than the original effective date. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” in conjunction with their initiative to reduce complexity in accounting standards. This new guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with presentation of a debt discount. ASU 2015-03 is effective for the annual and interim periods beginning on or after December 15, 2015, with early adoption permitted. We are currently evaluating the impact of the adoption of this guidance to our consolidated financial statements. In August 2014, the FASB issued Accounting Standards Update No. 2014-15, “Presentation of Financial Statements - Going Concern”, which addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known, and reasonably knowable, at the date that the financial statements are issued. This new guidance will be effective for the first interim period within annual reporting periods beginning after December 31, 2016 with early adoption permitted. We have not adopted this guidance early and are currently evaluating the effect on our consolidated financial statements. In September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments,” that eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. This new guidance is effective for annual and interim periods beginning after December 15, 2015, with early adoption permitted. The adoption of ASU 2015-16 is not expected to have a material impact on the Company’s consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, “Income Taxes: Balance Sheet Classification of Deferred Taxes” which simplifies the current presentation of separately classifying deferred tax assets and deferred tax liabilities as current and noncurrent in a classified balance sheet by requiring companies to present them as noncurrent. This new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within such annual reporting periods with early adoption permitted. We have not adopted this guidance early and are currently evaluating the effect on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases”, which, for operating leases, requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. This new guidance is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. We have not adopted this guidance early and are currently evaluating the effect on the Company’s consolidated financial statements. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Details of Revenue by Major Customers | The dollar amount and percent of total revenue of each of the 3 clients is summarized in the table below (in thousands): Rank 2015 Revenue Percent of total revenue 1 $37,878 23.8% 2 31,709 19.9% 3 17,696 11.1% For the year ended December 31, 2014 , the Company had 4 clients whose individual revenues exceeded 10% of the Company’s total revenues. The dollar amount and percent of total revenue of each of the 4 clients is summarized in the table below (in thousands): Rank 2014 Revenue Percent of total revenue 1 $53,211 27.2% 2 29,444 15.1% 3 29,171 14.9% 4 24,855 12.7% For the year ended December 31, 2013 , the Company had 4 clients whose individual revenues exceeded 10% of the Company’s total revenues. The dollar amount and percent of total revenue of each of the 4 clients is summarized in the table below (in thousands): Rank 2013 Revenue Percent of total revenue 1 $66,820 26.2% 2 51,566 20.2% 3 42,056 16.5% 4 30,902 12.1% |
Reconciliation of Basic to Diluted Weighted Average Shares Outstanding | The following table reconciles the basic to diluted weighted average shares outstanding using the treasury stock method (shares in thousands): Years Ended December 31, 2015 2014 2013 Weighted average shares outstanding – basic 49,415 48,816 47,492 Dilutive effect of stock options — 1,018 1,894 Weighted average shares outstanding – diluted 49,415 49,834 49,386 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table shows the number of shares of Common Stock subject to options and restricted stock awards that were outstanding for the years ended December 2015, 2014 and 2013, which were not included in the net income per diluted share calculation because to do so would have been anti-dilutive: Years Ended December 31, 2015 2014 2013 Number of shares 4,430,292 (a) 2,894,013 2,617,064 (a) Includes 3,812,516 options to purchase shares at exercise prices greater than the average market price of the common stock and 617,776 options to purchase shares that were excluded because the effect of including them was anti-dilutive. |
Property, Equipment, and Leas23
Property, Equipment, and Leasehold Improvements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Equipment and Leasehold Improvements | Property, equipment, and leasehold improvements consist of the following at December 31, 2015 and 2014 (in thousands): December 31, 2015 December 31, 2014 Land $ 1,122 $ 1,767 Building and leasehold improvements 6,053 5,966 Furniture, equipment, and automobile 5,390 5,193 Computer hardware and software 67,353 60,229 79,918 73,155 Less accumulated depreciation and amortization (54,403 ) (45,508 ) Property, equipment and leasehold improvements, net $ 25,515 $ 27,647 |
Identifiable Intangible Assets
Identifiable Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Identifiable Intangible Assets | Identifiable intangible assets consist of the following at December 31, 2015 and 2014 (in thousands): December 31, 2015 Gross Amounts Accumulated Amortization Net Amortizable intangibles: Customer contracts and related relationships $ 62,215 $ (37,886 ) $ 24,329 Perpetual license 3,313 (2,568 ) 745 Total intangible assets $ 65,528 $ (40,454 ) $ 25,074 December 31, 2014 Gross Amounts Accumulated Amortization Net Amortizable intangibles: Customer contracts and related relationships $ 62,451 $ (34,774 ) $ 27,677 Perpetual license 3,313 (1,897 ) 1,416 Total intangible assets $ 65,764 $ (36,671 ) $ 29,093 |
Schedule of Estimated Aggregate Amortization Expense | The estimated aggregate amortization expense for each of the five following fiscal years is as follows (in thousands): Year Ending December 31, Amount 2016 $ 3,740 2017 3,140 2018 3,067 2019 3,063 2020 3,016 Thereafter 9,048 Total $ 25,074 |
Credit Agreement (Tables)
Credit Agreement (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Payments Under Credit Agreement | Scheduled payments under the Agreement for the next five years and thereafter are as follows (in thousands): Year Ending December 31, Amount 2016 $9,076 2017 8,429 2018 76,753 2019 — Total $94,258 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Rental Commitments Under Non-Cancelable Leases | Future minimum rental commitments under non-cancelable leases as of December 31, 2015 are as follows (in thousands): Year Ending December 31, Amount 2016 $ 2,201 2017 1,764 2018 942 2019 872 2020 842 Thereafter 310 Total $ 6,931 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Option Activity | The following table sets forth a summary of our stock option activity for the year ended December 31: Outstanding Options Weighted average exercise price per share Weighted average remaining contractual life (Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2012 7,909,724 $ 3.85 5.89 Granted 313,600 11.85 Forfeited (102,381 ) 10.05 Exercised (2,908,122 ) 0.60 Outstanding at December 31, 2013 5,212,821 6.03 6.62 Granted 254,000 9.69 Forfeited (410,625 ) 10.53 Exercised (1,032,813 ) 0.62 Outstanding at December 31, 2014 4,023,383 7.18 6.41 Granted 294,500 3.57 Forfeited (171,625 ) 8.25 Exercised (29,135 ) 1.26 Outstanding December 31, 2015 4,117,123 $ 6.92 5.64 $ 1,211 Vested, exercisable, and expected to vest (1) at December 31, 2015 4,058,257 $ 6.90 5.62 $ 1,211 Exercisable at December 31, 2015 2,935,723 $ 6.16 4.87 $ 1,211 (1) Options expected to vest reflect an estimated forfeiture rate. |
Assumptions to Estimate Fair Value Options | We estimated the fair value of options granted using a Black-Scholes option pricing model with the following assumptions: For the Years Ended December 31, 2015 2014 2013 Expected volatility 48.6% 51.0% 54.2% Expected dividends —% —% —% Expected term (years) 6.1 6.1 6.2 Risk-free interest rate 1.7% 1.9% 1.5% Weighted-average estimated fair value of options granted during the year $1.71 $4.85 $6.23 |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | The following table summarizes restricted stock unit activity for the year ended December 31: Weighted average Number of grant date Awards fair value Outstanding at December 31, 2013 5,263 $ 10.59 Granted 488,545 9.27 Forfeited (30,900 ) 9.26 Vested and converted to shares (1,316 ) 10.59 Outstanding at December 31, 2014 461,592 $ 9.28 Granted 954,860 3.30 Forfeited (57,475 ) 8.77 Vested and converted to shares (129,703 ) 9.15 Outstanding at December 31, 2015 1,229,274 $ 4.67 Expected to vest at December 31, 2015 1,167,859 $ 4.67 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax Expense (Benefit) | The Company’s income tax expense (benefit) consists of the following (in thousands): 2015 2014 2013 Current: Federal $ 1,393 $ 6,802 $ 21,526 State 1,164 2,600 5,149 2,557 9,402 26,675 Deferred: Federal $ (2,578 ) $ (1,625 ) $ (866 ) State (365 ) (78 ) (842 ) (2,943 ) (1,703 ) (1,708 ) Total expense (benefit) $ (386 ) $ 7,699 $ 24,967 |
Reconciliation of Federal Statutory Income Tax Expense to Actual Income Tax Expense | The reconciliation between the amount computed by applying the U.S. federal statutory rate of 35% to income before taxes and the Company's tax provision for 2015, 2014, and 2013 is as follows: 2015 2014 2013 Federal income at the statutory rate 35 % 35 % 35 % State income tax, net of federal benefit (26 )% 10 % 5 % Permanent differences (9 )% 2 % 1 % Work Opportunity Credit 9 % (1 )% — % Return to provision true-up 4 % — % — % Other 4 % (1 )% — % 17 % 45 % 41 % |
Components of Deferred Tax Assets and Liabilities | The following table summarizes the components of the Company’s deferred tax assets and liabilities as of December 31, 2015 , and 2014 (in thousands): 2015 2014 Deferred tax assets Bad debt reserve $ 164 $ 13 Vacation accrual 628 685 Nonqualified stock options 4,598 3,059 Debt issuance costs 454 643 Acquisition costs 103 630 State tax deferral 709 934 Deferred revenue 194 273 State tax credits 301 305 Net operating loss 170 110 Estimated liability for appeals 5,708 5,313 Other 114 304 Total deferred tax assets 13,143 12,269 Valuation allowance (452 ) (349 ) Total deferred tax assets net of valuation allowance 12,691 11,920 Deferred tax liabilities: Identifiable intangible assets (9,157 ) (10,227 ) Fixed assets (5,160 ) (5,732 ) Other (22 ) (22 ) Total deferred tax liabilities (14,339 ) (15,981 ) Net deferred tax liabilities $ (1,648 ) $ (4,061 ) |
Unrecognized Tax Benefits | The following table reconciles the Company’s unrecognized tax benefits as of December 31, 2015 from its unrecognized tax benefits as of December 31, 2013 (in thousands): Unrecognized tax benefits balance at December 31, 2013 $ 546 Increase related to prior year tax positions 444 Decrease related to prior year tax positions (42 ) Increase related to current year tax positions — Settlements — Lapse of statute of limitations — Unrecognized tax benefits balance at December 31, 2014 948 Increase related to prior year tax positions 217 Decrease related to prior year tax positions (145 ) Increase related to current year tax positions — Settlements — Lapse of statute of limitations (125 ) Unrecognized tax benefits balance at December 31, 2015 $ 895 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2015USD ($)segmentCustomer | Dec. 31, 2014USD ($)Customer | Dec. 31, 2013USD ($)Customer | |
Property, Plant and Equipment [Line Items] | |||
Number of segments | segment | 1 | ||
Impairment | $ 200,000 | $ 0 | $ 0 |
Capitalized internal use software | 7,000,000 | 7,200,000 | 4,900,000 |
Capitalized internal use software, depreciation expense | 4,800,000 | 4,000,000 | $ 2,600,000 |
Allowance against accounts receivable | 19,000,000 | ||
Estimated liability for appeals | 19,118,000 | $ 18,625,000 | |
Estimated additional liability for appeals | $ 5,400,000 | ||
Number of clients whose individual revenues exceeded 10% of total revenues | Customer | 3 | 4 | 4 |
Allowance against accounts receivable | $ 386,000 | $ 32,000 | |
Net payable to client | 14,400,000 | 12,110,000 | |
Payable for overturned audits | 15,400,000 | 14,200,000 | |
Outstanding accounts receivable | 1,000,000 | 2,100,000 | |
Due from subcontractors | 5,700,000 | ||
Receivable future overturned audits | 5,700,000 | 5,600,000 | |
Receivable, already overturned audits | 3,800,000 | 3,000,000 | |
Tax benefit from the exercise of stock options | $ (500,000) | $ 3,200,000 | $ 9,100,000 |
Furniture Fixtures And Equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives of property (in years) | 5 years | ||
Furniture Fixtures And Equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives of property (in years) | 7 years | ||
Building | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives of property (in years) | 31 years 6 months | ||
Computer hardware and software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives of property (in years) | 3 years | ||
Computer hardware and software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives of property (in years) | 5 years | ||
Customer contracts and related relationships | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Identifiable intangible assets estimated useful lives (in years) | 4 years | ||
Customer contracts and related relationships | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Identifiable intangible assets estimated useful lives (in years) | 20 years | ||
Perpetual license | |||
Property, Plant and Equipment [Line Items] | |||
Identifiable intangible assets estimated useful lives (in years) | 5 years | ||
The largest three customers | Revenue | Customer Concentration Risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk percentage | 55.00% | 57.00% | 63.00% |
The largest three customers | Accounts Receivable | Customer Concentration Risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk percentage | 54.00% | 39.00% | 59.00% |
Other Healthcare Contracts | |||
Property, Plant and Equipment [Line Items] | |||
Estimated liability for appeals | $ 100,000 | ||
Estimated Liability for Appeals | |||
Property, Plant and Equipment [Line Items] | |||
Appeals-related liability | $ 18,600,000 | ||
Commissions | |||
Property, Plant and Equipment [Line Items] | |||
Allowance against accounts receivable | 19,000,000 | ||
Accounts Receivable | |||
Property, Plant and Equipment [Line Items] | |||
Allowance against accounts receivable | $ 0 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies Details of Revenue by Major Customers (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue, Major Customer [Line Items] | |||
Revenues | $ 159,381 | $ 195,378 | $ 255,302 |
Customer 1 | Customer Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Revenues | $ 37,878 | $ 53,211 | $ 66,820 |
Customer 1 | Revenue | Customer Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Percent of total revenue | 23.80% | 27.20% | 26.20% |
Customer 2 | Customer Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Revenues | $ 31,709 | $ 29,444 | $ 51,566 |
Customer 2 | Revenue | Customer Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Percent of total revenue | 19.90% | 15.10% | 20.20% |
Customer 3 | Customer Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Revenues | $ 17,696 | $ 29,171 | $ 42,056 |
Customer 3 | Revenue | Customer Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Percent of total revenue | 11.10% | 14.90% | 16.50% |
Customer 4 | Customer Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Revenues | $ 24,855 | $ 30,902 | |
Customer 4 | Revenue | Customer Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Percent of total revenue | 12.70% | 12.10% |
Summary of Significant Accoun31
Summary of Significant Accounting Policies Reconciliation of Basic to Diluted Weighted Average Shares Outstanding (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Weighted average shares outstanding – basic (in shares) | 49,415 | 48,816 | 47,492 |
Dilutive effect of stock options (in shares) | 0 | 1,018 | 1,894 |
Weighted average shares outstanding – diluted (in shares) | 49,415 | 49,834 | 49,386 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies Schedule of anti-dilutive securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares | 4,430,292 | 2,894,013 | 2,617,064 |
Options To Purchase Shares At Exercise Prices Greater Than The Average Market Price Of The Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares | 3,812,516 | ||
Options To Purchase Shares That Were Excluded Because The Effect Of Including Them Was Anti-dilutive | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares | 617,776 |
Property, Equipment, and Leas33
Property, Equipment, and Leasehold Improvement (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment Gross | $ 79,918 | $ 73,155 |
Less accumulated depreciation and amortization | (54,403) | (45,508) |
Property, equipment and leasehold improvements, net | 25,515 | 27,647 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment Gross | 1,122 | 1,767 |
Building and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment Gross | 6,053 | 5,966 |
Furniture, equipment, and automobile | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment Gross | 5,390 | 5,193 |
Computer hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment Gross | $ 67,353 | $ 60,229 |
Property, Equipment, and Leas34
Property, Equipment, and Leasehold Improvements - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense of property, equipment and leasehold improvements | $ 9,300 | $ 8,700 | $ 6,900 |
Proceeds from sale of property, equipment, and leasehold improvements | 1,268 | $ 0 | $ 0 |
TEXAS | |||
Property, Plant and Equipment [Line Items] | |||
Proceeds from sale of property, equipment, and leasehold improvements | 1,300 | ||
Gain | $ 600 |
Identifiable Intangible Asset35
Identifiable Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amounts | $ 65,528 | $ 65,764 |
Accumulated Amortization | (40,454) | (36,671) |
Net | 25,074 | 29,093 |
Customer contracts and related relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amounts | 62,215 | 62,451 |
Accumulated Amortization | (37,886) | (34,774) |
Net | 24,329 | 27,677 |
Perpetual license | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amounts | 3,313 | 3,313 |
Accumulated Amortization | (2,568) | (1,897) |
Net | $ 745 | $ 1,416 |
Identifiable Intangible Asset36
Identifiable Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Amortization expense | $ 3.8 | $ 3.7 | $ 3.7 |
Identifiable Intangible Asset37
Identifiable Intangible Assets Schedule of Estimated Aggregate Amortization Expense (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
2,016 | $ 3,740 | |
2,017 | 3,140 | |
2,018 | 3,067 | |
2,019 | 3,063 | |
2,020 | 3,016 | |
Thereafter | 9,048 | |
Net | $ 25,074 | $ 29,093 |
Credit Agreement - Additional I
Credit Agreement - Additional Information (Detail) | Jun. 28, 2012USD ($) | Mar. 19, 2012USD ($)shares | Mar. 19, 2012USD ($)$ / shares | Dec. 31, 2015USD ($) | Jul. 31, 2015USD ($) | May. 31, 2015USD ($) | May. 31, 2014USD ($) |
Line of Credit Facility [Line Items] | |||||||
Grant of common stock to investment bank acting as advisor (in shares) | shares | 215,000 | ||||||
Value of granted shares to investment bank | $ 2,800,000 | ||||||
Excess cash flow for prepayment of debt | $ 7,000,000 | $ 11,500,000 | |||||
Capitalized debt issuance cost | $ 800,000 | $ 5,000,000 | $ 5,000,000 | ||||
Payments to third parties for legal and other services | 0 | ||||||
Grant of shares based on price (in dollars per share) | $ / shares | $ 13 | ||||||
Accumulated amortization of debt issuance costs | $ 4,300,000 | ||||||
Credit Agreement | |||||||
Line of Credit Facility [Line Items] | |||||||
Recapitalized amount under credit agreement | 147,500,000 | $ 147,500,000 | |||||
Term B Loan | |||||||
Line of Credit Facility [Line Items] | |||||||
Recapitalized amount under credit agreement | 19,500,000 | 79,500,000 | 79,500,000 | $ 78,400,000 | |||
Interest rate (as a percent) | 7.25% | ||||||
Quarterly payments of principal | $ 200,000 | ||||||
Expiry date of line of credit | Mar. 19, 2018 | ||||||
Term B Loan | Prime Rate Plus | |||||||
Line of Credit Facility [Line Items] | |||||||
Floor rate (as a percent) | 2.50% | ||||||
Basis spread on variable rate (as a percent) | 4.75% | ||||||
Term B Loan | LIBOR Plus | |||||||
Line of Credit Facility [Line Items] | |||||||
Floor rate (as a percent) | 1.50% | ||||||
Basis spread on variable rate (as a percent) | 5.75% | ||||||
Term B Loan | Series A Preferred Stock | |||||||
Line of Credit Facility [Line Items] | |||||||
Fees paid in conjunction with the credit agreement | 800,000 | 800,000 | |||||
Agent fee to an entity associated with majority stockholders | $ 200,000 | ||||||
Term A, Term B and revolving credit facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Agent fee to an entity associated with majority stockholders | 1,500,000 | ||||||
Term A Loan | |||||||
Line of Credit Facility [Line Items] | |||||||
Recapitalized amount under credit agreement | 57,000,000 | 57,000,000 | $ 15,900,000 | ||||
Interest rate (as a percent) | 6.75% | ||||||
Quarterly payments of principal | $ 2,100,000 | ||||||
Expiry date of line of credit | Mar. 19, 2017 | ||||||
Term A Loan | Prime Rate Plus | |||||||
Line of Credit Facility [Line Items] | |||||||
Floor rate (as a percent) | 2.50% | ||||||
Basis spread on variable rate (as a percent) | 4.25% | ||||||
Term A Loan | LIBOR Plus | |||||||
Line of Credit Facility [Line Items] | |||||||
Floor rate (as a percent) | 1.50% | ||||||
Basis spread on variable rate (as a percent) | 5.25% | ||||||
Revolving credit facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Recapitalized amount under credit agreement | $ 11,000,000 | $ 11,000,000 | |||||
Line of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Interest rate (as a percent) | 6.75% | ||||||
Borrowing under line of credit, maximum | $ 11,000,000 | ||||||
Facility commitment fee (as a percent) | 0.50% | ||||||
Letter of credit outstanding | $ 2,000,000 | ||||||
Remaining borrowing capacity under the line of credit | $ 9,000,000 | ||||||
Excess cash flow for prepayment of debt | $ 1,300,000 | ||||||
Line of Credit | Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Fixed charge coverage ratio | 1.2 | ||||||
Line of Credit | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Total debt to EBITDA ratio | 3.25 | ||||||
Line of Credit | Prime Rate Plus | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 4.25% | ||||||
Line of Credit | LIBOR Plus | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 5.25% |
Credit Agreement Payment Under
Credit Agreement Payment Under Credit Agreement (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Debt Disclosure [Abstract] | |
2,016 | $ 9,076 |
2,017 | 8,429 |
2,018 | 76,753 |
2,019 | 0 |
Total | $ 94,258 |
Credit Agreement Amendment No.
Credit Agreement Amendment No. 2 (Details) | Nov. 04, 2014USD ($) | Sep. 30, 2014 | Jun. 28, 2012USD ($) | Mar. 31, 2017 | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | |||||||||
Debt issuance cost | $ 0 | ||||||||
Amendment Number Two to Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Total debt to EBITDA ratio | 4 | 3.25 | 3.25 | 5 | |||||
Interest coverage ratio | 1.20 | 2.25 | |||||||
Cash balances | $ 35,000,000 | $ 35,000,000 | |||||||
Debt issuance cost | $ 500,000 | ||||||||
Scenario, Forecast | Amendment Number Two to Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Total debt to EBITDA ratio | 3.25 | 4.75 | |||||||
Capital expenditures | $ 12,500,000 | ||||||||
Interest coverage ratio | 2.50 | ||||||||
Cash balances | $ 30,000,000 | $ 30,000,000 | $ 30,000,000 | ||||||
EBITDA | $ 20,000,000 | ||||||||
Maximum | Term A-2 Loan | Amendment Number Two to Credit Agreement | London Interbank Offered Rate (LIBOR) | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated rate (as a percent) | 5.75% | ||||||||
Maximum | Term A-2 Loan | Amendment Number Two to Credit Agreement | Prime Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated rate (as a percent) | 4.75% | ||||||||
Maximum | Term B Loan | Amendment Number Two to Credit Agreement | London Interbank Offered Rate (LIBOR) | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated rate (as a percent) | 6.25% | ||||||||
Maximum | Term B Loan | Amendment Number Two to Credit Agreement | Prime Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated rate (as a percent) | 5.25% | ||||||||
Minimum | Term A-2 Loan | Amendment Number Two to Credit Agreement | London Interbank Offered Rate (LIBOR) | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated rate (as a percent) | 5.25% | ||||||||
Minimum | Term A-2 Loan | Amendment Number Two to Credit Agreement | Prime Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated rate (as a percent) | 4.25% | ||||||||
Minimum | Term B Loan | Amendment Number Two to Credit Agreement | London Interbank Offered Rate (LIBOR) | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated rate (as a percent) | 5.75% | ||||||||
Minimum | Term B Loan | Amendment Number Two to Credit Agreement | Prime Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated rate (as a percent) | 4.75% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2013ft² | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Commitment And Contingencies [Line Items] | ||||
Lease expense | $ | $ 3 | $ 2.9 | $ 2.6 | |
Oregon | ||||
Commitment And Contingencies [Line Items] | ||||
New lease agreement (in square feet) | ft² | 15,667 |
Commitments and Contingencies F
Commitments and Contingencies Future Minimum Rental Commitments Under Non-Cancelable Leases (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,016 | $ 2,201 |
2,017 | 1,764 |
2,018 | 942 |
2,019 | 872 |
2,020 | 842 |
Thereafter | 310 |
Total | $ 6,931 |
Capital Stock - Additional Info
Capital Stock - Additional Information (Detail) - shares | Dec. 31, 2015 | Dec. 31, 2014 | Aug. 15, 2012 |
Equity [Abstract] | |||
Common stock, authorized shares | 500,000,000 | 500,000,000 | 500,000,000 |
Convertible preferred stock, Authorized shares | 50,000,000 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 5,000 | $ 3,700 | $ 3,000 |
Granted (in dollars per share) | $ 3.57 | $ 9.69 | $ 11.85 |
Aggregate intrinsic value of stock options exercised | $ 100 | $ 8,800 | $ 31,300 |
Unrecognized stock-based compensation | $ 4,700 | 7,500 | 10,500 |
Recognition period (in years) | 1 year 10 months 28 days | ||
Proceeds from exercise of stock options | $ 40 | 600 | 1,800 |
Tax benefit from the exercise of stock options | $ (500) | $ 3,200 | $ 9,100 |
Estimated life of stock options (in years) | 10 years | ||
Expected volatility, company weighting (as a percent) | 54.00% | ||
Expected dividends (as a percent) | 0.00% | 0.00% | 0.00% |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 4 years | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 5 years | ||
2007 Stock Option Plan | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 5 years | ||
Nonqualified Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise price of stock options, percentage of common stock fair market value | 85.00% | ||
2012 Stock Incentive Plan | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 4 years | ||
2012 Stock Incentive Plan | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 5 years | ||
Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise price of stock options, percentage of common stock fair market value | 100.00% | ||
Stock Option | 2007 Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of common stock shares available for future issuance | 4,000,000 | ||
Stock Option | 2012 Stock Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of common stock shares available for future issuance | 6,550,000 | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares paid for tax withholding | 30,000 | ||
Compensation expense that has yet to be recognized | $ 4,100 | $ 3,500 | |
Remaining weighted average vesting period (in years) | 2 years 5 months 5 days | ||
Restricted Stock | 2012 Stock Incentive Plan | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 1 year | ||
Restricted Stock | 2012 Stock Incentive Plan | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 4 years | ||
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of units vested (in shares) | 129,703 | 1,316 |
Stock-based Compensation Stock
Stock-based Compensation Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Weighted average exercise price per share | ||||
Granted (in dollars per share) | $ 3.57 | $ 9.69 | $ 11.85 | |
Options | ||||
Outstanding Options | ||||
Options Outstanding (in shares) | 4,023,383 | 5,212,821 | 7,909,724 | |
Granted (in shares) | 294,500 | 254,000 | 313,600 | |
Forfeited (in shares) | (171,625) | (410,625) | (102,381) | |
Exercised (in shares) | (29,135) | (1,032,813) | (2,908,122) | |
Options Outstanding (in shares) | 4,117,123 | 4,023,383 | 5,212,821 | 7,909,724 |
Vested or expected to vest (in shares) | 4,058,257 | |||
Exercisable (in shares) | 2,935,723 | |||
Weighted average exercise price per share | ||||
Options Outstanding (in dollars per share) | $ 7.18 | $ 6.03 | $ 3.85 | |
Granted (in dollars per share) | 3.57 | 9.69 | 11.85 | |
Forfeited (in dollars per share) | 8.25 | 10.53 | 10.05 | |
Exercised (in dollars per share) | 1.26 | 0.62 | 0.60 | |
Options Outstanding (in dollars per share) | 6.92 | $ 7.18 | $ 6.03 | $ 3.85 |
Vested or expected to vest (in dollars per share) | 6.90 | |||
Exercisable (in dollars per share) | $ 6.16 | |||
Weighted average remaining contractual life (Years) | ||||
Options Outstanding (in years) | 5 years 7 months 22 days | 6 years 4 months 28 days | 6 years 7 months 13 days | 5 years 10 months 21 days |
Vested or expected to vest (in years) | 5 years 7 months 12 days | |||
Exercisable (in years) | 4 years 10 months 14 days | |||
Aggregate Intrinsic Value (in thousands) | ||||
Options Outstanding | $ 1,211 | |||
Vested or expected to vest | 1,211 | |||
Exercisable | $ 1,211 |
Stock-based Compensation Assump
Stock-based Compensation Assumptions to Estimate Fair Value Options (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Expected volatility (as a percent) | 48.60% | 51.00% | 54.20% |
Expected dividends (as a percent) | 0.00% | 0.00% | 0.00% |
Expected term (years) | 6 years 29 days | 6 years 29 days | 6 years 2 months 12 days |
Risk-free interest rate (as a percent) | 1.70% | 1.90% | 1.50% |
Weighted-average estimated fair value of options granted during the year (in dollars per share) | $ 1.71 | $ 4.85 | $ 6.23 |
Stock-based Compensation Restri
Stock-based Compensation Restricted Stock Units Activity (Details) - Restricted Stock Units - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | |
Number of Awards | |||
Balance, beginning of period (in shares) | 461,592 | 5,263 | |
Granted (in shares) | 954,860 | 488,545 | |
Forfeited (in shares) | (57,475) | (30,900) | |
Vested and converted to shares (in shares) | (129,703) | (1,316) | |
Balance, end of period (in shares) | 1,229,274 | 461,592 | |
Expected to vest (in shares) | 1,167,859 | ||
Weighted average grant date fair value | |||
Balance, beginning of period (in dollars per share) | $ 9.28 | $ 10.59 | |
Granted (in dollars per share) | 3.30 | 9.27 | |
Forfeited (in dollars per share) | 8.77 | 9.26 | |
Vested and converted to shares (in dollars per share) | 9.15 | 10.59 | |
Balance, end of period (in dollars per share) | $ 9.28 | $ 10.59 | $ 4.67 |
Expected to vest (in dollars per share) | $ 4.67 |
Income Taxes Income Tax Expense
Income Taxes Income Tax Expense (Benefit) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||
Federal | $ 1,393 | $ 6,802 | $ 21,526 |
State | 1,164 | 2,600 | 5,149 |
Current, total | 2,557 | 9,402 | 26,675 |
Deferred: | |||
Federal | (2,578) | (1,625) | (866) |
State | (365) | (78) | (842) |
Deferred, total | (2,943) | (1,703) | (1,708) |
Total expense (benefit) | $ (386) | $ 7,699 | $ 24,967 |
Income Taxes Reconciliation of
Income Taxes Reconciliation of Federal Statutory Income Tax Expense to Actual Income Tax Expense (Detail) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Federal income at the statutory rate | 35.00% | 35.00% | 35.00% |
State income tax, net of federal benefit | (26.00%) | 10.00% | 5.00% |
Permanent differences | (9.00%) | 2.00% | 1.00% |
Work Opportunity Credit | 9.00% | (1.00%) | 0.00% |
Return to provision true-up | 4.00% | 0.00% | 0.00% |
Other | 4.00% | (1.00%) | 0.00% |
Total income tax expense, percentage | 17.00% | 45.00% | 41.00% |
Income Taxes Components of Defe
Income Taxes Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets | ||
Bad debt reserve | $ 164 | $ 13 |
Vacation accrual | 628 | 685 |
Nonqualified stock options | 4,598 | 3,059 |
Debt issuance costs | 454 | 643 |
Acquisition costs | 103 | 630 |
State tax deferral | 709 | 934 |
Deferred revenue | 194 | 273 |
State tax credits | 301 | 305 |
Estimated liability for appeals | 170 | 110 |
Net operating loss | 5,708 | 5,313 |
Other | 114 | 304 |
Total deferred tax assets | 13,143 | 12,269 |
Valuation allowance | (452) | (349) |
Total deferred tax assets net of valuation allowance | 12,691 | 11,920 |
Deferred tax liabilities: | ||
Identifiable intangible assets | (9,157) | (10,227) |
Fixed assets | (5,160) | (5,732) |
Other | (22) | (22) |
Total deferred tax liabilities | (14,339) | (15,981) |
Total deferred tax liabilities | $ (1,648) | $ (4,061) |
Income Taxes Unrecognized Tax B
Income Taxes Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits, beginning balance | $ 948 | $ 546 |
Increase related to prior year tax positions | 217 | 444 |
Decrease related to prior year tax positions | (145) | (42) |
Increase related to current year tax positions | 0 | 0 |
Settlements | 0 | 0 |
Lapse of statute of limitations | (125) | 0 |
Unrecognized tax benefits, ending balance | $ 895 | $ 948 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax [Line Items] | |||
Valuation Allowance | $ 452 | $ 349 | |
Unrecognized tax benefits | 895 | 948 | $ 546 |
Unrecognized tax benefits that would impact effective tax rate | 900 | ||
State | |||
Income Tax [Line Items] | |||
Valuation Allowance | 500 | $ 300 | |
Tax credits carried forward | 300 | ||
Net operating loss carryforward | $ 400 | ||
Net operating loss carryforward, expiration year | 2,020 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2013USD ($) | |
Related Party Transactions [Abstract] | |
Interest expense under these arrangements | $ 10.3 |
Other Commitments and Conting54
Other Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Disclosure Other Commitments And Contingencies Additional Information [Abstract] | ||
Cash held in trust for customers | $ 0.7 | $ 9.7 |
Subsequent Events (Details)
Subsequent Events (Details) | Feb. 19, 2016USD ($) | Nov. 04, 2014 | Sep. 30, 2014 | Mar. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) |
Amendment Number Two to Credit Agreement | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Total debt to EBITDA ratio | 4 | 3.25 | 3.25 | 5 | |||||||
Interest coverage ratio | 1.20 | 2.25 | |||||||||
Cash balances | $ 35,000,000 | $ 35,000,000 | |||||||||
Scenario, Forecast | Amendment Number Two to Credit Agreement | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Capital expenditures | $ 12,500,000 | ||||||||||
Total debt to EBITDA ratio | 3.25 | 4.75 | |||||||||
Interest coverage ratio | 2.50 | ||||||||||
Cash balances | $ 30,000,000 | $ 30,000,000 | 30,000,000 | ||||||||
EBITDA | 20,000,000 | ||||||||||
Maximum | Prime Rate | Term A-2 Loan | Amendment Number Two to Credit Agreement | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Stated rate (as a percent) | 4.75% | ||||||||||
Maximum | Prime Rate | Term B Loan | Amendment Number Two to Credit Agreement | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Stated rate (as a percent) | 5.25% | ||||||||||
Maximum | London Interbank Offered Rate (LIBOR) | Term A-2 Loan | Amendment Number Two to Credit Agreement | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Stated rate (as a percent) | 5.75% | ||||||||||
Maximum | London Interbank Offered Rate (LIBOR) | Term B Loan | Amendment Number Two to Credit Agreement | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Stated rate (as a percent) | 6.25% | ||||||||||
Subsequent Event | Amendment Number Four to Credit Agreement | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Repayments of notes payable and line of credit | $ 22,500,000 | ||||||||||
Deposit | $ 7,500,000 | ||||||||||
Deposit repayment period | 30 days | ||||||||||
Subsequent Event | Scenario, Forecast | Amendment Number Two to Credit Agreement | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Capital expenditures | 12,500,000 | ||||||||||
Total debt to EBITDA ratio | 3.25 | ||||||||||
Interest coverage ratio | 2.50 | ||||||||||
Cash balances | $ 30,000,000 | 30,000,000 | 30,000,000 | ||||||||
EBITDA | $ 20,000,000 | ||||||||||
Subsequent Event | Scenario, Forecast | Amendment Number Four to Credit Agreement | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Capital expenditures | $ 8,000,000 | ||||||||||
Total debt to EBITDA ratio | 4.75 | ||||||||||
Interest coverage ratio | 1.75 | 2 | |||||||||
Cash balances | $ 10,000,000 | ||||||||||
Subsequent Event | Maximum | Prime Rate | Term A-2 Loan | Amendment Number Two to Credit Agreement | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Stated rate (as a percent) | 5.75% | ||||||||||
Subsequent Event | Maximum | Prime Rate | Term B Loan | Amendment Number Two to Credit Agreement | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Stated rate (as a percent) | 6.25% | ||||||||||
Subsequent Event | Maximum | London Interbank Offered Rate (LIBOR) | Term A-2 Loan | Amendment Number Two to Credit Agreement | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Stated rate (as a percent) | 6.75% | ||||||||||
Subsequent Event | Maximum | London Interbank Offered Rate (LIBOR) | Term B Loan | Amendment Number Two to Credit Agreement | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Stated rate (as a percent) | 7.25% |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Estimated Allowance and Liability for Appeals - RAC Contract | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | $ 18,625 | $ 16,443 | $ 5,577 |
Additions Charged against Revenue | 2,109 | 8,624 | 12,791 |
Appeals found in Providers Favor | (1,616) | (6,442) | (1,925) |
Balance at End of Period | 19,118 | 18,625 | 16,443 |
Allowance for doubtful accounts | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 32 | 32 | 65 |
Additions Charged against Revenue | 354 | 0 | 0 |
Recoveries | 0 | 0 | 2 |
Charge-offs | 0 | 0 | (35) |
Balance at End of Period | $ 386 | $ 32 | $ 32 |
Valuation and Qualifying Acco57
Valuation and Qualifying Accounts (Additional Information) (Detail) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Estimated Allowance and Liability for Appeals - RAC Contract | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Estimated allowance for appeals that apply to uncollected accounts receivable | $ 0 | $ 0 | $ 1,160,000 |