Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 17, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | BioTelemetry, Inc. | ||
Entity Central Index Key | 1,574,774 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 429,848,034 | ||
Entity Common Stock, Shares Outstanding | 28,370,987 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 23,052 | $ 18,986 |
Healthcare accounts receivable, net of allowance for doubtful accounts of $12,198 and $11,185 at December 31, 2016 and 2015, respectively | 14,594 | 15,179 |
Other accounts receivable, net of allowance for doubtful accounts of $665 and $416 at December 31, 2016 and 2015, respectively | 12,261 | 8,997 |
Inventory | 5,176 | 2,378 |
Prepaid expenses and other current assets | 4,477 | 1,505 |
Total current assets | 59,560 | 47,045 |
Property and equipment, net | 25,823 | 25,554 |
Intangible assets, net | 33,472 | 19,981 |
Goodwill | 41,068 | 29,831 |
Deferred tax asset | 36,636 | |
Other assets | 2,425 | 1,732 |
Total assets | 198,984 | 124,143 |
Current liabilities: | ||
Accounts payable | 12,425 | 8,496 |
Accrued liabilities | 13,698 | 11,230 |
Current portion of capital leases obligations | 162 | 287 |
Current portion of long-term debt | 1,250 | 1,250 |
Deferred revenue | 3,972 | 2,625 |
Total current liabilities | 31,507 | 23,888 |
Deferred tax liability | 1,233 | |
Long-term portion of capital lease obligations | 126 | 101 |
Long-term debt | 23,911 | 21,944 |
Other long-term liabilities | 4,526 | 1,051 |
Total liabilities | 60,070 | 48,217 |
Shareholders' equity | ||
Common stock-$.001 par value as of December 31, 2016 and 2015; 200,000,000 shares authorized as of December 31, 2016 and 2015; 28,261,503 and 27,277,939 shares issued and outstanding at December 31, 2016 and 2015, respectively | 28 | 27 |
Paid-in capital | 281,642 | 272,070 |
Accumulated other comprehensive loss | (34) | (12) |
Accumulated deficit | (142,722) | (196,159) |
Total shareholders' equity | 138,914 | 75,926 |
Total liabilities and shareholders' equity | $ 198,984 | $ 124,143 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
CONSOLIDATED BALANCE SHEETS | ||
Healthcare accounts receivable, net of allowance for doubtful accounts (in dollars) | $ 12,198 | $ 11,185 |
Other accounts receivable, net of allowance for doubtful accounts (in dollars) | $ 665 | $ 416 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 28,261,503 | 27,277,939 |
Common stock, shares outstanding | 28,261,503 | 27,277,939 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue: | |||
Healthcare | $ 165,664 | $ 145,963 | $ 133,178 |
Research | 32,565 | 21,853 | 19,744 |
Technology | 10,103 | 10,697 | 13,656 |
Total revenue | 208,332 | 178,513 | 166,578 |
Cost of revenue: | |||
Healthcare | 53,559 | 51,693 | 54,942 |
Research | 18,395 | 12,728 | 10,646 |
Technology | 6,928 | 7,535 | 7,526 |
Total cost of revenue: | 78,882 | 71,956 | 73,114 |
Gross profit | 129,450 | 106,557 | 93,464 |
Operating expenses: | |||
General and administrative | 55,877 | 47,882 | 45,131 |
Sales and marketing | 28,636 | 27,936 | 28,805 |
Bad debt expense | 9,931 | 8,047 | 9,347 |
Research and development | 8,355 | 7,111 | 7,396 |
Other charges | 8,639 | 6,063 | 7,098 |
Total operating expenses | 111,438 | 97,039 | 97,777 |
Income (loss) from operations | 18,012 | 9,518 | (4,313) |
Interest and other loss, net | (2,242) | (1,622) | (7,793) |
Income (loss) before income taxes | 15,770 | 7,896 | (12,106) |
Benefit from (provision for) income taxes | 37,667 | (468) | 2,313 |
Net income (loss) | 53,437 | 7,428 | (9,793) |
Other comprehensive loss: | |||
Foreign currency translation loss | (22) | (12) | |
Comprehensive income (loss) | $ 53,415 | $ 7,416 | $ (9,793) |
Net income (loss) per common share: | |||
Basic (in dollars per share) | $ 1.91 | $ 0.27 | $ (0.37) |
Diluted (in dollars per share) | $ 1.75 | $ 0.26 | $ (0.37) |
Weighted average number of common shares outstanding: | |||
Basic (in shares) | 27,920,150 | 27,116,300 | 26,444,626 |
Diluted (in shares) | 30,489,081 | 29,089,211 | 26,444,626 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities | |||
Net income (loss) | $ 53,437 | $ 7,428 | $ (9,793) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Bad debt expense | 9,931 | 8,047 | 9,347 |
Depreciation | 10,547 | 8,987 | 8,858 |
Non-cash lease expense (income) | 170 | (14) | 355 |
Non-cash tax (benefit) expense | (38,141) | 245 | (2,499) |
Stock-based compensation | 6,502 | 4,952 | 4,037 |
Amortization of intangibles | 3,722 | 3,501 | 3,692 |
Accretion of debt discount and amortization of deferred charges | 217 | 259 | |
Loss on extinguishment of debt | 203 | ||
Changes in operating assets and liabilities: | |||
Healthcare and other accounts receivable | (8,707) | (7,677) | (12,795) |
Inventory | (753) | 188 | 299 |
Prepaid expenses and other assets | (763) | (3) | (128) |
Accounts payable | 3,145 | (4,699) | 47 |
Accrued and other liabilities | (456) | (464) | 788 |
Liability associated with the Civil Investigative Demand | (6,400) | 6,400 | |
Net cash provided by operating activities | 38,851 | 14,350 | 8,811 |
Investing activities | |||
Acquisition of businesses, net of cash acquired | (24,970) | (14,100) | |
Purchases of property and equipment and investment in internally developed software | (10,899) | (13,600) | (12,781) |
Investment in equity method investee | (312) | ||
Net cash used in investing activities | (36,181) | (13,600) | (26,881) |
Financing activities | |||
Proceeds related to the exercising of stock options and employee stock purchase plan | 2,519 | 1,222 | 1,400 |
Tax payments related to the vesting of shares | (2,333) | (1,575) | (349) |
Issuance of long-term debt | 41,838 | ||
Borrowings under revolving loans | 14,500 | ||
Principal payments on revolving loans | (11,500) | ||
Principal payments on long-term debt | (1,438) | (938) | (26,434) |
Principal payments on capital lease obligations | (321) | (480) | (529) |
Net cash provided by (used in) financing activities | 1,427 | (1,771) | 15,926 |
Effect of exchange rate changes on cash | (31) | ||
Net increase (decrease) in cash and cash equivalents | 4,066 | (1,021) | (2,144) |
Cash and cash equivalents-beginning of period | 18,986 | 20,007 | 22,151 |
Cash and cash equivalents-end of period | 23,052 | 18,986 | 20,007 |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | 1,273 | 1,044 | 856 |
Cash paid for taxes | $ 359 | $ 384 | $ 148 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Balance at Dec. 31, 2013 | $ 26 | $ 260,597 | $ (193,794) | $ 66,829 | |
Balance (in shares) at Dec. 31, 2013 | 25,812,754 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Exercise of stock options and purchase of shares related to the employee stock purchase plan | $ 1 | 1,050 | 1,051 | ||
Exercise of stock options and purchase of shares related to the employee stock purchase plan (in shares) | 503,036 | ||||
Stock-based compensation | 4,037 | 4,037 | |||
Stock-based compensation (in shares) | 195,437 | ||||
Issuance of stock related to business combinations | 1,552 | 1,552 | |||
Issuance of stock related to business combinations (in shares) | 182,021 | ||||
Net income (loss) | (9,793) | (9,793) | |||
Balance at Dec. 31, 2014 | $ 27 | 267,236 | (203,587) | 63,676 | |
Balance (in shares) at Dec. 31, 2014 | 26,693,248 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Exercise of stock options and purchase of shares related to the employee stock purchase plan | 1,222 | 1,222 | |||
Exercise of stock options and purchase of shares related to the employee stock purchase plan (in shares) | 268,448 | ||||
Stock-based compensation | 4,952 | 4,952 | |||
Stock-based compensation (in shares) | 451,116 | ||||
RSUs withheld to cover taxes | (1,575) | (1,575) | |||
RSUs withheld to cover taxes ( in shares ) | (167,090) | ||||
Issuance of stock related to business combinations | 235 | 235 | |||
Issuance of stock related to business combinations (in shares) | 32,217 | ||||
Currency translation adjustment | $ (12) | (12) | |||
Net income (loss) | 7,428 | 7,428 | |||
Balance at Dec. 31, 2015 | $ 27 | 272,070 | (12) | (196,159) | 75,926 |
Balance (in shares) at Dec. 31, 2015 | 27,277,939 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Exercise of stock options and purchase of shares related to the employee stock purchase plan | $ 1 | 2,518 | 2,519 | ||
Exercise of stock options and purchase of shares related to the employee stock purchase plan (in shares) | 473,034 | ||||
Stock-based compensation | 6,502 | 6,502 | |||
Stock-based compensation (in shares) | 444,878 | ||||
RSUs withheld to cover taxes | (2,333) | (2,333) | |||
RSUs withheld to cover taxes ( in shares ) | (178,867) | ||||
Issuance of stock related to business combinations | 2,885 | 2,885 | |||
Issuance of stock related to business combinations (in shares) | 244,519 | ||||
Currency translation adjustment | (22) | (22) | |||
Net income (loss) | 53,437 | 53,437 | |||
Balance at Dec. 31, 2016 | $ 28 | $ 281,642 | $ (34) | $ (142,722) | $ 138,914 |
Balance (in shares) at Dec. 31, 2016 | 28,261,503 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2016 | |
Organization and Description of Business | |
Organization and Description of Business | 1. Organization and Description of Business BioTelemetry, Inc. ("BioTelemetry," "Company", "we," "our" or "us"), a Delaware corporation, provides cardiac monitoring services, cardiac monitoring device manufacturing and central core laboratory services. We operate under three reportable segments: (1) Healthcare, (2) Research and (3) Technology. The Healthcare segment is focused on the diagnosis and monitoring of cardiac arrhythmias, or heart rhythm disorders. We offer cardiologists and electrophysiologists a full spectrum of solutions which provides them with a single source of cardiac monitoring services. These services range from the differentiated mobile cardiac telemetry service ("MCT") service marketed as Mobile Cardiac Outpatient Telemetry TM ("MCOTâ„¢") or External Cardiac Ambulatory Telemetry ("ECAT"), to wireless and trans telephonic event, Holter, Pacemaker and International Normalized Ratio ("INR") monitoring. Since we became focused on cardiac monitoring in 1999, we have developed a proprietary integrated patient management platform that incorporates a wireless data transmission network, Food and Drug Administration ("FDA") cleared algorithms and medical devices and 24-hour monitoring service centers. The Research segment is engaged in central core laboratory services providing cardiac monitoring, imaging services, scientific consulting and data management services for drug and medical device trials. The Technology segment focuses on the development, manufacturing, testing and marketing of medical devices to medical companies, clinics and hospitals. On December 1, 2016, the Company entered into a Share and Asset Purchase Agreement ("Agreement") with Telcare, Inc. ("Telcare") pursuant to which the Company acquired the stock of Telcare Medical Supply, Inc. and certain assets of Telcare. The total consideration paid at closing amounted to $7,000 in cash, with the potential for a performance-based earn out up to $5,000 upon reaching certain milestones, as defined in the Agreement. The fair value of the total consideration transferred in the acquisition, including contingent consideration, was $9,700 at the acquisition date. Telcare is included in the Technology segment. On May 11, 2016, the Company completed the acquisition of VirtualScopics, Inc. ("VirtualScopics"), a leading provider of clinical trial imaging solutions. The all cash Tender Offer commenced on April 8, 2016 and ended on May 9, 2016, pursuant to which the business and operations of VirtualScopics were acquired by the Company. The total consideration paid at closing amounted to $14,970, net of cash acquired of $849. VirtualScopics is included in the Research segment. On April 1, 2016, the Company entered into an Asset Purchase Agreement ("APA") with DELTA Danish Electronics, Light, and Acoustics ("DELTA"), pursuant to which the Company acquired substantially all of the assets of the ePatch division of DELTA ("ePatch"), inclusive of all products and indications currently under development. The total consideration paid at closing amounted to $3,000 in cash and 244,519 shares of the Company's common stock valued at $2,885. In addition, there is the potential for a performance-based earn out up to $3,000 upon reaching certain milestones, as defined in the APA. The fair value of the total consideration transferred in the acquisition, including contingent consideration, was $6,490 at the acquisition date. ePatch is included in the Technology segment. In June 2014, we completed the acquisition of the assets of RadCore Lab, LLC ("RadCore"), an imaging core lab serving the biopharmaceutical and medical device research market. RadCore is included in the Research segment. In April 2014, we completed the acquisition of substantially all of the assets of Biomedical Systems Corporation's ("BMS") cardiac event monitoring, Holter monitoring and mobile telemetry monitoring services. BMS is primarily included in the Healthcare segment. In January 2014, we completed the acquisition of Mednet Healthcare Technologies, Inc., Heartcare Corporation of America, Inc., Universal Medical, Inc. and Universal Medical Laboratory, Inc. (together, "Mednet"). Mednet provides cardiac monitoring services and is an original equipment manufacturer of cardiac monitoring devices. Mednet is included in the Healthcare and Technology segment. Our common stock is traded on The NASDAQ Global Select Market under our symbol, "BEAT." |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include the accounts of BioTelemetry and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. Fair Value of Financial Instruments Fair value is defined as the exit price, the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as defined below. Observable inputs are inputs a market participant would use in valuing an asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's own assumptions about the factors a market participant would use in valuing an asset or liability developed using the best information available in the circumstances. The classification of an asset's or liability's level within the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Level 1—Quoted prices in active markets for an identical asset or liability. Level 2—Inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability. Level 3—Inputs that are unobservable for the asset or liability, based on the Company's own assumptions about the assumptions a market participant would use in pricing the asset or liability. Our financial instruments consist primarily of cash and cash equivalents, Healthcare accounts receivable, other accounts receivable, accounts payable, short-term debt and long-term debt. With the exception of the long-term debt, the carrying value of these financial instruments approximates their fair value because of their short-term nature (classified as Level 1). For long-term debt, based on the borrowing rates currently available, the fair value was determined to be $25,813 as of December 31, 2016. This is equal to the nominal value, which is the carrying value, exclusive of debt discount and deferred charges (classified as Level 2). The fair value of contingent consideration is measured on a recurring basis using unobservable inputs such as projected payment dates, probabilities of meeting specified milestones and other such variables resulting in payment amounts which are discounted back to present value using a probability-weighted discounted cash flow model (classified as Level 3). Adjustments to contingent consideration are recorded under other charges. In addition to the recurring fair value measurements, the fair value of assets acquired and liabilities assumed in connection with a business combination are recorded at the acquisition date, using a discounted cash flow model (classified as Level 3). This valuation technique requires the Company to make certain assumptions, including, but not limited to, future operating performance and cash flows, royalty rate and other such variables which are discounted to present value using a discount rate that reflects the risk factors associated with future cash flow, the characteristics of the assets acquired and liabilities assumed and the experience of the acquired business. Cash and Cash Equivalents Cash and cash equivalents are held in financial institutions or in custodial accounts with financial institutions. Cash equivalents are defined as liquid investments and money market funds with maturity from date of purchase of 90 days or less that are readily convertible into cash and have minimal interest rate risk. Accounts Receivable and Allowance for Doubtful Accounts Healthcare accounts receivable is related to the Healthcare segment and is recorded at the time revenue is recognized, net of contractual allowances, and is presented on the consolidated balance sheet net of an allowance for doubtful accounts. The ultimate collection of accounts receivable may not be known for several months after services have been provided and billed. We record an allowance for doubtful accounts based on the aging of receivables using historical data. The percentages and amounts used to record bad debt expense and the allowance for doubtful accounts are supported by various methods and analyses, including current and historical cash collections and the aging of receivables by payor. Because of continuing changes in the health care industry and third-party reimbursement, it is possible that our estimates of collectability could change, which could have a material impact on our operations and cash flows. Other accounts receivable is related to the Technology and Research segments and is recorded at the time revenue is recognized, or when products are shipped or services are performed. We estimate an allowance for doubtful accounts on a specific account basis, and consider several factors in our analysis including customer specific information and the aging of the account. We write-off receivables when the likelihood for collection is remote and when we believe collection efforts have been fully exhausted and we do not intend to devote additional resources in attempting to collect. We perform write-offs on a monthly basis. In the Healthcare segment, we wrote-off $8,440 and $7,082 of receivables for the years ended December 31, 2016 and 2015, respectively. The impact was a reduction of gross accounts receivable and a reduction in the allowance for doubtful accounts. There were no material write-offs in the Technology and Research segments. Additionally, we recorded bad debt expense of $9,931, $8,047 and $9,347 for the years ended December 31, 2016, 2015 and 2014, respectively. Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents, Healthcare accounts receivables and other accounts receivables. We maintain our cash and cash equivalents with high quality financial institutions to mitigate this risk. We perform ongoing credit evaluations of our customers and generally do not require collateral. We record an allowance for doubtful accounts in accordance with the procedures described above. Past-due amounts are written-off against the allowance for doubtful accounts when collections are believed to be unlikely and all collection efforts have ceased. At December 31, 2016, 2015 and 2014, one payor, Medicare, accounted for 11%, 13% and 16%, respectively, of our gross accounts receivable. Inventory Inventory is valued at the lower of cost (using first-in, first-out cost method) or market (net realizable value or replacement cost). Management reviews inventory for specific future usage, and estimates of impairment of individual inventory items are recorded to reduce inventory to the lower of cost or market. Property and Equipment Property and equipment is recorded at cost, except for assets acquired in business combinations, which are recorded at fair value as of the acquisition date. Depreciation is recorded over the estimated useful life of each class of depreciable assets, and is computed using the straight-line method. Leasehold improvements are amortized over the shorter of the estimated asset life or term of the lease. Repairs and maintenance costs are charged to expense as incurred. Costs of additions and improvements are capitalized. Impairment of Long-Lived Assets The carrying value of long-lived assets, other than goodwill and indefinite-lived intangible assets, is evaluated when events or changes in circumstances indicate the carrying value may not be recoverable or the useful life has changed. We consider historical performance and anticipated future results in our evaluation of potential impairment. Accordingly, when indicators of impairment are present, we evaluate the carrying value of these assets in relation to the operating performance of the business and the undiscounted cash flows expected to result from the use of these assets. If the carrying amount of a long-lived asset exceeds its expected undiscounted cash flows, an impairment charge is recognized to the extent the carrying amount exceeds it's fair value. Equity Method Investments We account for investments using the equity method of accounting if the investment provides us the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company's ownership interest in the voting stock of the investee ranges between 20% and 50%, although other factors, such as representation on the investee's board of directors, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investment is recorded at cost in the consolidated balance sheets under other assets and adjusted for dividends received and our share of the investee's earnings or losses together with other-than-temporary impairments which are recorded through interest and other loss, net in the consolidated statements of operations and comprehensive income (loss). Goodwill and Acquired Intangible Assets Goodwill is the excess of the purchase price of an acquired business over the amounts assigned to assets acquired and liabilities assumed in a business combination. In accordance with ASC 350, Intangibles—Goodwill and Other ("ASC 350"), goodwill is reviewed for impairment annually, or when events arise that could indicate that an impairment exists. Initially, we qualitatively assess whether it is more-likely-than-not that an impairment exists for each of our reporting units. Such qualitative factors can include, among others, industry and market conditions, present and anticipated sales and cost factors, overall financial performance and relevant entity-specific events. If we conclude based on our qualitative assessment that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value, we perform a two-step impairment test in accordance with ASC 350. In the first step, we compare the fair value of our reporting units to the carrying value of the reporting units. If the carrying value of the net assets assigned to the reporting units exceeds the fair value of the reporting units, then the second step of the impairment test is performed in order to determine the implied fair value of the reporting units' goodwill. If the carrying value of the reporting units' goodwill exceeds the implied fair value of those reporting units, an impairment loss equal to the difference is recorded. For the purpose of performing our goodwill impairment analysis, we consider our business to be comprised of three reporting units: Healthcare, Technology and Research. When performing a quantitative analysis, we calculate the fair value of the reporting units utilizing a weighting of the income and market approaches. The income approach is based on a discounted cash flow methodology that includes assumptions for, among other things, forecasted income, cash flow, growth rates, income tax rates, expected tax benefits and long-term discount rates, all of which require significant judgment. The market approach utilizes our market data as well as market data from publicly-traded companies that are similar to us. There are inherent uncertainties related to these factors and the judgment applied in the analysis. We believe that the combination of an income and a market approach provides a reasonable basis to estimate the fair value of our reporting units. Acquired intangible assets are recorded at fair value on the acquisition date. The estimated fair values and useful lives of intangible assets are determined by assessing many factors including estimates of future operating performance and cash flows of the acquired business, the characteristics of the intangible assets and the experience of the acquired business. Independent appraisal firms may assist with the valuation of acquired assets. The impairment test for indefinite-lived intangible assets other than goodwill consists of a comparison of the fair value of the indefinite-lived intangible asset to the carrying value of the asset. We estimate the fair value of the indefinite-lived intangibles using the relief from royalty method. Revenue Recognition We recognize approximately 79% of our total revenue from patient monitoring services in our Healthcare segment. We receive a significant portion of this revenue from third-party commercial payors and governmental entities. We also receive reimbursement directly from patients through co-pays, deductibles and self-pay arrangements. Revenue from the Medicare program is based on reimbursement rates set by CMS. Revenue from contracted commercial payors is recorded at the negotiated contractual rate. Revenue from non-contracted commercial payors is recorded at net realizable value based on historical payment patterns. Adjustments to the estimated net realizable value, based on final settlement with the third-party payors, are recorded upon settlement. If we do not have consistent historical information regarding collectability from a given payor, revenue is recognized when cash is received. Unearned amounts are appropriately deferred until service has been completed. For the years ended December 31, 2016, 2015 and 2014, revenue from Medicare as a percentage of total revenue was 33%, 34% and 32%, respectively. Research revenue includes revenue for core laboratory services. Our Research revenue is provided on a fee-for-service basis, and revenue is recognized as the related services are performed. We also provide consulting services on a time and materials basis and recognize revenue as we perform the services. Our site support revenue, consisting of equipment rentals and sales along with related supplies and logistics management, are recognized at the time of sale or over the rental period. Under a typical contract, customers pay us a portion of our fee for these services upon contract execution as an upfront deposit, some of which is typically non-refundable upon contract termination. Unearned revenue, including upfront deposits, are deferred, and then recognized as the services are performed. Revenue in our Technology segment is received from the sale of products, product repair and supplies which are recognized when shipped, or as service is completed. For arrangements with multiple deliverables, the revenue is allocated to each element (both delivered and undelivered items) based on their relative selling prices or management's best estimate of their selling prices, when vendor-specific or third-party evidence is unavailable. We record reimbursements received for out-of-pocket expenses, including freight, incurred as revenue in the accompanying consolidated statements of operations and comprehensive income (loss). Revenue generally is recognized net of any taxes collected from customers and subsequently remitted to government authorities. Stock-Based Compensation ASC 718, Compensation—Stock Compensation ("ASC 718"), addresses the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for: (i) equity instruments of the enterprise or (ii) liabilities that are based on the fair value of the enterprise's equity instruments or that may be settled by the issuance of such equity instruments. ASC 718 requires that an entity measures the cost of equity-based service awards based on the grant-date fair value of the award and recognizes the cost of such awards over the period during which the employee is required to provide service in exchange for the award (the vesting period). ASC 718 requires that an entity measure the cost of liability-based service awards based on current fair value that is remeasured subsequently at each reporting date through the settlement date. The compensation expense associated with performance stock units is recognized over the period between when the performance conditions are deemed probable of achievement and when the awards are vested. We account for equity awards issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. Research and Development Costs Research and development costs are charged to expense as incurred. Income Taxes We account for income taxes under the liability method, as described in ASC 740, Income Taxes ("ASC 740"). Deferred income taxes are recognized for the tax consequences of temporary differences between the tax and financial statement reporting bases of assets and liabilities. When we determine that we will not be able to realize our deferred tax assets, we adjust the carrying value of the deferred tax asset through the valuation allowance. We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (i) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Net Income (Loss) Per Share We compute net income (loss) per share in accordance with ASC 260, Earnings Per Share. Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by giving effect to all potential dilutive common shares, including stock options and Restricted Stock Units ("RSUs"). The following table presents the calculation of historical basic and diluted net income (loss) per share: Year Ended December 31, 2016 2015 2014 (in thousands, except per share amounts) Numerator: Net income (loss) $ $ $ ) Denominator: Weighted average shares used in computing basic net income (loss) per share Potential dilutive common shares due to dilutive stock option and restricted stock units — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares used in computing diluted net income (loss) per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) per share: Basic net income (loss) per share $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted net income (loss) per share $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ If the outstanding vested options or RSUs were exercised or converted into common stock, the result would be anti-dilutive for the year ended December 31, 2014. Accordingly, basic and diluted net loss per share are the same for the year ended December 31, 2014. Additionally, certain stock options, which are priced higher than the market price of our shares as of December 31, 2016 and 2015, would be anti-dilutive and therefore have been excluded from the weighted average shares used in computing diluted net income per share. These options could become dilutive in future periods. Segment Information ASC 280, Segment Reporting, establishes standards for reporting information regarding operating segments in annual financial statements. Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group in making decisions on how to allocate resources and assess performance. We report our business under three segments: Healthcare, Research and Technology. The Healthcare segment is focused on the monitoring of cardiac arrhythmias or heart rhythm disorders in a health care setting. The Research segment provides central core laboratory services in a research environment, which includes certain equipment rental and device sales. The Technology segment focuses on the development, manufacturing, testing and marketing of medical devices to medical companies, clinics and hospitals. Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, Improvements to Employee Share-Based Payment Accounting. The standard revises the accounting for certain aspects of share-based compensation arrangements and requires any excess tax benefits or tax deficiencies to be recorded directly in the income statement when such awards vest or settle. In addition, the cash flows related to any excess tax benefits will no longer be separately classified as a financing activity, but will rather be classified as an operating activity, along with all other income tax cash flows. The standard also makes certain changes to the way the treasury stock method is applied when calculating diluted net income per share, as well as allows for a policy election to account for forfeitures as they occur, rather than using the estimation method currently prescribed by ASC 718. The standard is effective for annual and interim periods beginning after December 15, 2016, with early adoption permitted. We elected to early adopt the standard during the fourth quarter of 2016. The standard requires the recognition of any pre-adoption date net operating loss ("NOL") carryforwards from share-based compensation arrangements to be recognized on a modified retrospective basis, through an opening retained earnings adjustment on January 1, 2016. Any income tax effects from share-based compensation arrangements arising after January 1, 2016 will be recognized prospectively in the income statement during the period of adoption. Upon adoption, we recognized all previously unrecognized tax benefits which resulted in a cumulative-effect adjustment of $1,752 to our accumulated deficit. These previously unrecognized tax benefits were recorded as a deferred tax asset, which was fully offset by a valuation allowance on January 1, 2016, thus there was no net impact from the adoption of ASU 2016-09 as of the same date. In addition, we recognized excess tax benefits as an adjustment to our previously reported benefit from (provision for) income taxes of $127, $362 and $94 for the quarters ended March 31, 2016, June 30, 2016 and September 30, 2016, respectively. The weighted average number of common shares outstanding for calculating diluted net income per share increased by 340,000 to 550,000 for each quarter of 2016. Basic and diluted net income per share increased by $0.01 for the three months ended June 30, 2016. Net income per share for the three months ended March 30, 2016 and September 30, 2016 were not changed by the adoption of ASU 2016-09. Recast quarterly net income and basic and diluted net income per share for the first three quarters of 2016 is disclosed in Note 17. Our adoption of the standard did not have any impact to our consolidated statements of cash flows as no NOL carryforwards from share-based compensation arrangements were recognized prior to January 1, 2016, due to our use of the "with and without" method of accounting for equity-generated NOL carryforwards. We have elected to continue to estimate forfeitures under the true-up provision of ASC 718. The adoption of this standard decreased our effective tax rate by 11.1% for the year ended December 31, 2016. Accounting Pronouncements Not Yet Adopted In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. The standard eliminates step two in the current two-step impairment test under ASC 350. Under the new standard, a goodwill impairment will be recorded for any excess of a reporting unit's carrying value over its fair value. A prospective transition approach is required. The standard is effective for annual and interim reporting periods beginning after December 15, 2019 with early adoption permitted for annual and interim goodwill impairment testing dates after January 1, 2017. We plan to early adopt the standard at the time of our 2017 goodwill impairment testing date and do not expect the standard to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases. The standard will require lessees to recognize most leases on their balance sheet and makes selected changes to lessor accounting. The standard is effective for annual and interim reporting periods beginning after December 15, 2018. A modified retrospective transition approach is required, with certain practical expedients available. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. The standard will require inventory to be measured at the lower of cost or net realizable value. The guidance will not apply to inventories for which cost is determined using the last-in, first-out method or the retail inventory method. The standard is effective for annual and interim reporting periods beginning after December 15, 2016. We are currently evaluating the impact that the adoption of this standard will have on Telcare, which was acquired in December 2016. We do not expect the adoption of this standard to have a material impact on the other components of our business. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which has been updated through several revisions and clarifications since its original issuance. The standard will require revenue recognized to represent the transfer of promised goods or services to customers at an amount that reflects the consideration which a company expects to receive in exchange for those goods or services. The standard also requires new, expanded disclosures regarding revenue recognition. The standard will be effective January 1, 2018 with early adoption permissible beginning January 1, 2017. We are currently evaluating the transition method we will elect. We are evaluating the specific impacts the standard will have on Healthcare revenue, particularly related to the valuation of revenue, accounts receivable and bad debt expense. We are evaluating the impact the standard will have on Research revenue, which involves reviewing a large number of long-term contracts. We do not expect the standard to have a material impact on Technology revenue. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2016 | |
Acquisitions | |
Acquisitions | 3. Acquisitions Telcare, Inc. On December 1, 2016, the Company, through its wholly-owned subsidiary BioTelemetry Care Management, LLC, entered into the Agreement with Telcare pursuant to which the Company acquired the stock of Telcare Medical Supply, Inc. and certain assets of Telcare Inc. The total consideration paid at closing amounted to $7,000 in cash, with the potential for a performance-based earn out up to $5,000 upon reaching certain financial milestones. The fair value of the total consideration transferred in the acquisition, including contingent consideration, was $9,700 at the acquisition date. The acquisition of Telcare provides us the opportunity to apply our expertise in remote monitoring to the diabetes market and increases our presence in the digital population health management market. We accounted for the transaction as a business combination, and as such, all assets acquired and liabilities assumed were recorded at their estimated fair values. The excess of the fair value of the purchase price over the fair value of the net assets acquired has been recognized as goodwill, which represents the expected future benefits arising from the assembled workforce and other synergies attributable to cost savings opportunities. The Company recognized $3,363 of goodwill as a result of the acquisition, all of which has been assigned to the Technology segment. We expect $578 of this goodwill will be deductible for tax purposes. The amounts below represent our preliminary fair value estimates as of December 31, 2016 and are subject to subsequent adjustment as additional information is obtained during the applicable measurement period. The primary areas of these preliminary estimates that are not yet finalized related to certain tangible assets acquired and liabilities assumed, including deferred taxes and inventory, as well as the identifiable intangible assets. The Company expects to finalize all accounting for the acquisition of Telcare within one year of the acquisition date. The total consideration and related preliminary allocation for Telcare is summarized as follows: Amount Weighted Fair value of assets acquired: Other accounts receivable $ Inventory Prepaid expenses and other current assets Property and equipment Other assets Identifiable intangible assets: Customer relationships 5 Technology 5 Tradename Indefinite ​ ​ ​ ​ ​ ​ Total identifiable intangible assets ​ ​ ​ ​ ​ ​ Total assets acquired ​ ​ ​ ​ ​ ​ Fair value of liabilities assumed: Accounts payable Accrued liabilities Deferred revenue ​ ​ ​ ​ ​ ​ Total liabilities assumed ​ ​ ​ ​ ​ ​ Total identifiable net assets Goodwill ​ ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The acquisition has been included within the consolidated results of operations and financial condition from the date of the acquisition. For the period from December 1, 2016 to December 31, 2016, Telcare contributed revenue of $1,081 and net income of $286 to our consolidated results of operations. The following unaudited pro forma financial information has been prepared using historical financial results of the Company and Telcare as if the acquisition had occurred as of January 1, 2015. Certain adjustments related to the elimination of transaction costs, as well as the addition of depreciation and amortization related to fair value adjustments on the tangible and identifiable intangible assets acquired, have been reflected for the purposes of the unaudited pro forma financial information presented below. We believe the assumptions used in preparing the unaudited pro forma financial information are reasonable, but not necessarily indicative of actual results should the acquisition have occurred on January 1, 2015. Pro forma financial information for the periods presented is summarized as follows: Year Ended December 31, Unaudited pro forma information 2016 2015 Revenue $ $ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ ​ ​ ​ ​ ​ ​ ​ ​ Net income per common share: Basic $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of common shares outstanding: Basic ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent Consideration The Agreement includes the potential for a performance-based earn out up to $5,000 upon reaching certain milestones. The fair value of the contingent consideration associated with the Telcare acquisition was $2,700 as of the acquisition date and at December 31, 2016 and is included as a component of other liabilities in the accompanying consolidated balance sheets. The following summarizes the changes in our contingent consideration during the year ended December 31, 2016: Total Contingent Consideration Balance at December 31, 2015 — Purchase price contingent consideration $ ​ ​ ​ ​ ​ Balance at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ VirtualScopics, Inc . On March 25, 2016, the Company, through its wholly-owned subsidiary BioTelemetry Research Acquisition Corporation, entered into a definitive Agreement and Plan of Merger ("Merger Agreement") with VirtualScopics, a leading provider of clinical trial imaging solutions. Under the terms of the Merger Agreement, the Company purchased: (i) any and all outstanding shares of VirtualScopics' $0.001 par value common stock for $4.05 per share; (ii) any and all outstanding shares of VirtualScopics' $0.001 par value Series A and Series B Convertible Preferred Stock for $336.30 per share; and (iii) any and all outstanding shares of VirtualScopics' $0.001 par value Series C-1 Convertible Preferred Stock for $920.00 per share. The all cash acquisition of VirtualScopics was completed on May 11, 2016. The total consideration paid at closing amounted to $14,970, net of cash acquired of $849. The acquisition of VirtualScopics expands the Company's existing clinical research offerings and gives the Company further access to established customer relationships. We accounted for the transaction as a business combination, and as such, all assets acquired and liabilities assumed were recorded at their estimated fair values. The excess of the consideration paid over the fair value of the net assets acquired has been recognized as goodwill, which represents the expected future benefits arising from the assembled workforce and other synergies attributable to cost savings opportunities. The Company recognized $4,693 of goodwill as a result of the acquisition, all of which has been assigned to the Research segment. We do not expect that any of this goodwill will be deductible for tax purposes. The amounts below represent our preliminary fair value estimates as of December 31, 2016 and are subject to subsequent adjustment as additional information is obtained during the applicable measurement period. A measurement period adjustment was recorded in the fourth quarter of 2016 related to the recognition of a $272 deferred tax liability. The primary area of these preliminary allocations that are not yet finalized related to certain liabilities assumed. The Company expects to finalize all accounting for the acquisition of VirtualScopics within one year of the acquisition date. The total consideration and related preliminary allocation for VirtualScopics is summarized as follows: Amount Weighted Fair value of assets acquired: Cash and cash equivalents $ Other accounts receivable Inventory Prepaid expenses and other current assets Property and equipment Identifiable intangible assets: Customer relationships Technology Backlog ​ ​ ​ ​ ​ ​ ​ ​ Total identifiable intangible assets ​ ​ ​ ​ ​ ​ ​ ​ Total assets acquired ​ ​ ​ ​ ​ ​ ​ ​ Fair value of liabilities assumed: Accounts payable Accrued liabilities Current portion of capital lease obligations Current portion of long-term debt Deferred revenue Deferred tax liability Long-term capital lease obligations Long-term debt ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities assumed ​ ​ ​ ​ ​ ​ ​ ​ Total identifiable net assets Goodwill ​ ​ ​ ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The acquisition has been included within the consolidated results of operations and financial condition from the date of the acquisition. For the period from May 11, 2016 to December 31, 2016, VirtualScopics contributed revenue of $12,264 and net income of $1,442 to our consolidated results of operations. The following unaudited pro forma financial information has been prepared using historical financial results of the Company and VirtualScopics as if the acquisition had occurred as of January 1, 2015. Certain adjustments related to the elimination of transaction costs and acquisition-related indebtedness, as well as the addition of depreciation and amortization related to fair value adjustments on the tangible and identifiable intangible assets acquired, have been reflected for the purposes of the unaudited pro forma financial information presented below. No adjustments for synergies or certain other expected benefits of the acquisition have been included. We believe the assumptions used in preparing the unaudited pro forma financial information are reasonable, but not necessarily indicative of actual results should the acquisitions have occurred on January 1, 2015. Pro forma financial information for the periods presented is summarized as follows: Year Ended December 31, Unaudited pro forma information 2016 2015 Revenue $ $ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ ​ ​ ​ ​ ​ ​ ​ ​ Net income per common share: Basic $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of common shares outstanding: Basic ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ePatch Division of DELTA Danish Electronics, Light, and Acoustics On April 1, 2016, the Company, through its wholly-owned subsidiary BioTelemetry Technology ApS, entered into an APA with DELTA, pursuant to which the Company acquired substantially all of the assets of the ePatch division of DELTA, inclusive of all products and indications currently under development. The total consideration paid at closing amounted to $3,000 in cash and 244,519 shares of the Company's common stock valued at $2,885. In addition, there is the potential for a performance-based earn out up to $3,000 upon reaching certain milestones, as defined in the APA. The fair value of the total consideration transferred in the ePatch acquisition, including contingent consideration, was $6,490 at the acquisition date. The ePatch acquisition is expected to generate future cost savings for the Company and will provide control over proprietary components for the Company's next generation MCOT TM device. We accounted for the transaction as a business combination, and as such, all assets acquired and liabilities assumed were recorded at their estimated fair values. The excess of the fair value of the purchase price over the fair value of the net assets acquired has been recognized as goodwill, which represents the expected future benefits arising from the assembled workforce and other synergies attributable to cost savings opportunities. The Company recognized $3,181 of goodwill as a result of the acquisition, all of which has been assigned to the Technology segment. We expect all of this goodwill to be deductible for tax purposes. The amounts below represent our preliminary fair value estimates as of December 31, 2016 and are subject to subsequent adjustment as additional information is obtained during the applicable measurement period. During the fourth quarter, we reduced the allocation to the technology intangible asset by $200 as a result of additional information obtained during the measurement period. The primary area of these preliminary allocations that are not yet finalized related to certain liabilities assumed. The Company expects to finalize all accounting for the ePatch acquisition within one year of the acquisition date. The total consideration and related preliminary allocation for the ePatch acquisition is summarized as follows: Amount Weighted Fair value of assets acquired: Inventory $ Property and equipment Identifiable intangible assets: Customer relationships 10 Technology 10 Trade names Indefinite ​ ​ ​ ​ ​ ​ Total identifiable intangible assets ​ ​ ​ ​ ​ ​ Total assets acquired ​ ​ ​ ​ ​ ​ Fair value of liabilities assumed: Accrued liabilities ​ ​ ​ ​ ​ ​ Total liabilities assumed ​ ​ ​ ​ ​ ​ Total identifiable net assets Goodwill ​ ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ While the ePatch acquisition provides control over proprietary components of our next generation cardiac monitoring device, the acquisition did not have a material effect on our consolidated results of operations. Contingent Consideration The APA includes the potential for a performance-based earn out up to $3,000 upon reaching certain milestones. The fair value of the contingent consideration associated with the ePatch acquisition was $605 as of the acquisition date and at December 31, 2016 and is included as a component of other liabilities in the accompanying consolidated balance sheets. The following summarizes the changes in our contingent consideration during the year ended December 31, 2016: Total Contingent Consideration Balance at December 31, 2015 — Purchase price contingent consideration $ ​ ​ ​ ​ ​ Balance at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ RadCore Lab, LLC On June 3, 2014, we acquired the assets of RadCore Lab, an imaging core lab serving the biopharmaceutical and medical device research market. This acquisition broadens our offerings and adds new oncology, musculoskeletal and neurological imaging capabilities, supported by a state-of-the-art, cloud-based analysis platform. We paid $400 in cash at closing and 22,513 shares of our common stock, valued at $200 at closing. While this acquisition provides growth potential, the acquisition of RadCore did not have a material effect on our consolidated financial condition, results of operations or cash flows. Biomedical Systems Corporation On April 3, 2014, we completed the acquisition of substantially all of the assets of BMS cardiac event monitoring, Holter monitoring and mobile telemetry monitoring services. The acquisition gave us access to internally developed Holter software and to established customer relationships. We paid $8,000 in cash at closing and 62,859 shares of our common stock, valued at $650 at closing. While the acquisition has been included within the consolidated results of operations and financial condition from the date of the acquisition, BMS did not have a material effect on our consolidated results of operations or cash flows. The purchase price allocation was completed in the first quarter of 2015. The amounts below represent the final fair value of assets acquired. Amount Weighted Fair value of assets acquired: Property and equipment $ Idsentifiable intangible assets: Customer relationships Technology Covenants not to compete ​ ​ ​ ​ ​ ​ ​ ​ Total identifiable intangible assets ​ ​ ​ ​ ​ ​ ​ ​ Total assets acquired ​ ​ ​ ​ ​ ​ ​ ​ Goodwill ​ ​ ​ ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill recorded in connection with this acquisition is attributable to synergies expected to arise from cost savings opportunities. All of the recorded goodwill is included in the Healthcare segment. Mednet Healthcare Technologies, Inc. On January 31, 2014, we acquired Mednet. Mednet provides cardiac monitoring services and is an original equipment manufacturer of cardiac monitoring devices. The acquisition gave us access to established customer relationships. Upon the closing of the transaction, we acquired all of the issued and outstanding capital stock, and Mednet became a wholly-owned subsidiary. We paid $5,500 in cash at closing and 128,866 shares of our common stock, valued at $940 at closing. In addition, as a result of the acquisition, we assumed indebtedness from Mednet in the aggregate amount of $9,720, including interest. The acquisition has been included within the consolidated results of operations and financial condition from the date of the acquisition. The purchase price allocation was completed in the first quarter of 2015. The amounts below represent the final fair value of assets acquired. Amount Weighted Fair value of assets acquired: Cash and cash equivalents $ ) Healthcare accounts receivable Inventory Property and equipment Other assets Identifiable intangible assets: Customer relationships 13 Technology 5 Covenants not to compete 5 Tradename Indefinite ​ ​ ​ ​ ​ ​ Total identifiable intangible assets ​ ​ ​ ​ ​ ​ Total assets acquired ​ ​ ​ ​ ​ ​ Fair value of liabilities assumed: Accounts payable Accrued liabilities Other liabilities Long-term debt, capital leases, note payable and related interest ​ ​ ​ ​ ​ ​ Total liabilities assumed ​ ​ ​ ​ ​ ​ Total identifiable net assets ) Goodwill ​ ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill recorded in connection with this acquisition is attributable to the assembled workforce and synergies expected to arise from cost savings opportunities. All of the recorded goodwill is included in the Healthcare segment. The unaudited pro forma information below presents combined results of operations as if the acquisition had occurred at the beginning of the period presented instead of January 31, 2014. The pro forma information presented below does not include anticipated synergies or certain other expected benefits of the acquisition and should not be used as a predictive measure of our future results of operations. Mednet contributed $23,355 in revenue for the year ended December 31, 2014. Unaudited pro forma information Year ended Revenue $ ​ ​ ​ ​ ​ Net loss ) ​ ​ ​ ​ ​ Net loss per common share: Basic and diluted $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of shares: Basic and diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2016 | |
Inventory | |
Inventory | 4. Inventory Inventory consists of the following: December 31, 2016 2015 Raw materials and supplies $ $ Finished goods ​ ​ ​ ​ ​ ​ ​ ​ Total inventory $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventory, which includes purchased parts, materials, direct labor and applied manufacturing overhead, is stated at the lower of cost or net realizable value, with cost determined by use of the first-in, first-out method. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property and Equipment | |
Property and Equipment | 5. Property and Equipment Property and equipment consists of the following: December 31, Estimated 2016 2015 Cardiac monitoring devices, device parts and components 3 - 5 $ $ Computers and purchased software 3 - 5 Equipment, tools and molds 3 - 5 Furniture and fixtures 7 Leasehold improvements Life of lease Capital leases 3 - 7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total property and equipment, at cost Less accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total property and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation expense associated with property and equipment, inclusive of amortization of assets recorded under capital leases, was $10,547, $8,987 and $8,858, for the years ended December 31, 2016, 2015 and 2014, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets Goodwill was recognized at the time of our acquisitions. The carrying amount of goodwill as of December 31, 2016 and 2015 was $41,068 and $29,831, respectively. The increase in goodwill during the year ended December 31, 2016 relates to our current year acquisitions. The changes in the carrying amounts of goodwill by segment were as follows: Reporting Segment Healthcare Research Technology Total Balance at December 31, 2014 $ $ $ $ Goodwill acquired during the year — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2015 $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill acquired during the year — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2016 $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2016, 2015 and 2014, we performed our required annual impairment test of goodwill and indefinite-lived intangible assets. Based on these impairment tests, we determined that there was no impairment. The gross carrying amounts and accumulated amortization of our intangible assets as of December 31, 2016 and 2015 are as follows: December 31, Estimated 2016 2015 Customer relationships 5 - 15 $ $ Technology including internally developed software 3 - 10 Backlog 1 - 4 Covenants not to compete 5 - 7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total intangible assets, gross ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships ) ) Technology including internally developed software ) ) Backlog ) ) Covenants not to compete ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total accumulated amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Indefinite-lived trade names ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total intangible assets, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The estimated amortization expense for the next five years and thereafter is summarized as follows at December 31, 2016: 2017 $ 2018 2019 2020 2021 Thereafter ​ ​ ​ ​ ​ Total estimated amortization $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization expense for the years ended December 31, 2016, 2015 and 2014 was $3,722, $3,501 and $3,692, respectively. |
Equity Method Investment
Equity Method Investment | 12 Months Ended |
Dec. 31, 2016 | |
Equity Method Investment | |
Equity Method Investment | 7. Equity Method Investment In December 2015, we acquired an ownership interest in Well Bridge Health, Inc. ("WellBridge") through the conversion of an outstanding note receivable and the related accrued interest. The investment is accounted for under the equity method. In December 2015, the equity method basis difference of $891 was allocated to equity method goodwill. As of December 31, 2016, our investment in WellBridge represented 30% of its outstanding stock. A summary of our investment in Wellbridge is as follows: Year Ended January 1, 2016 balance $ Capital contributions Loss in equity method investment ) ​ ​ ​ ​ ​ December 31, 2016 balance $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses | |
Accrued Expenses | 8. Accrued Expenses Accrued expenses consists of the following: December 31, 2016 2015 Accrued compensation $ $ Accrued professional fees Accrued taxes Accrued interest Other ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Credit Agreement
Credit Agreement | 12 Months Ended |
Dec. 31, 2016 | |
Credit Agreement | |
Credit Agreement | 9. Credit Agreement Credit Agreement On December 30, 2014, we entered into a Credit Agreement with Healthcare Financial Solutions, LLC, ("HFS"), previously The General Electric Capital Corporation ("GE Capital"), as agent for the lenders ("Lenders"), and as a lender and swingline lender. Pursuant to the Credit Agreement, the Lenders agreed to make loans to us as follows: (i) Term Loans in an amount of $25,000 as of the closing date with an uncommitted ability to increase such Term Loans up to an amount not to exceed $10,000 and (ii) Revolving Loans up to $15,000. As of December 31, 2016, $3,000 was drawn on the Revolving Loans. The loan, inclusive of Term Loans and Revolving Loans, is recorded on our consolidated balance sheet in the amount of $25,161, which is net of a debt discount and deferred charges of $651. The loans bear interest at an annual rate of LIBOR plus 4.0%, subject to a LIBOR floor of 1.0%. The outstanding principal of the Term Loans will be paid as follows: • beginning April 1, 2015, the principal amount of the Term Loans will be repaid, on a quarterly basis, in installments of $312, plus accrued interest; • beginning January 1, 2018, the principal amount of the Term Loans will be repaid, on a quarterly basis, in installments of $625, plus accrued interest; and • beginning October 1, 2019, the remaining $16,563, along with any outstanding Revolving Loans, will be paid in full on or before December 30, 2019, or such earlier date upon an acceleration of the Term Loan by the Lenders upon an event of default or termination by us. The loan is secured by substantially all of our assets and by a pledge of the capital stock of our U.S. based subsidiaries as well as a pledge of 65% of the capital stock of our foreign subsidiaries. Covenants The Credit Agreement contains affirmative and financial covenants regarding the operations of our business and certain negative covenants that, among other things, limit our ability to incur additional indebtedness, grant certain liens, make certain investments, merge or consolidate, make certain restricted payments and engage in certain asset dispositions, including a sale of all, or substantially all, of our property. As of December 31, 2016, we were in compliance with our covenants. The Credit Agreement also contains excess payment terms based on the Company's financial position. No excess payments will become due in 2017 as a result of our financial position as of December 31, 2016. Debt Extinguishment In December 2014, we used the proceeds of the loan to repay in full the $17,411 outstanding balances of the existing debt. In connection with this repayment, we incurred a debt extinguishment loss of $372, included in interest and other (loss), net in our consolidated statements of operations and comprehensive income (loss). This loss includes a pre-payment penalty paid as well as the write-off of the unamortized deferred financing fees related to the existing debt. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | 10. Commitments and Contingencies Leases We lease our principal administrative and service facilities as well as office equipment under non-cancelable operating leases expiring at various dates through 2026. The terms of the leases are renewable at the end of the lease term. Payments made under operating leases are charged to operations on a straight-line basis over the period of the lease. Differences between straight-line expense and cash payments are recorded as deferred rent. Rent expense was $4,217, $3,777 and $3,721 for the years ended December 31, 2016, 2015 and 2014, respectively. We have entered into and acquired capital leases with various expiration dates through 2020 which were used to finance equipment, furniture and monitoring devices. Future minimum lease payments under non-cancelable operating and capital leases are summarized as follows at December 31, 2016: Operating Capital 2017 $ $ 2018 2019 2020 2021 — Thereafter — ​ ​ ​ ​ ​ ​ ​ ​ Total minimum lease payments $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Other Charges
Other Charges | 12 Months Ended |
Dec. 31, 2016 | |
Other Charges | |
Other Charges | 11. Other Charges We account for expenses associated with exit or disposal activities in accordance with ASC 420, Exit or Disposal Cost Obligations, and record the expenses in other charges in our consolidated statements of operations and comprehensive income (loss), and record the related accrual in the accrued expenses line of our consolidated balance sheets. We account for expenses associated with our acquisitions and certain litigation as other charges as incurred. These expenses were primarily a result of legal fees related to patent litigation in which we are the plaintiff and activities surrounding our acquisitions. Other charges are costs that are not considered necessary to the ongoing business operations. A summary of these expenses is as follows: Year ended December 31, 2016 2015 2014 Legal fees $ $ $ Professional fees Severance and employee related costs Other costs — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Shareholders' Equity | |
Shareholders' Equity | 12. Shareholders' Equity Common Stock As of December 31, 2016 and 2015, we were authorized to issue 200,000,000 shares of common stock. As of December 31, 2016 and 2015, we had 28,261,503 and 27,277,939 shares outstanding, respectively. Preferred Stock We maintain an unregistered blank check preferred stock class. As of December 31, 2016 and 2015, there were no shares authorized and outstanding. Stock-Based Compensation 2008 Equity Incentive Plan Our 2008 Equity Incentive Plan (the "2008 Plan") became effective on March 18, 2008. The 2008 Plan permits our Board of Directors to grant incentive stock options to employees and non-qualified stock options, restricted stock, performance stock and other stock-based incentive awards to officers, directors, employees and consultants. On that date, we began granting options to purchase shares of common stock to employees, executives, directors and consultants. Under the terms of the 2008 Plan, all available shares in the 2003 Equity Incentive Plan ("the 2003 Plan") share reserve automatically rolled into the 2008 Plan. Any cancellations or forfeitures of granted options under the 2003 Plan also automatically roll into the 2008 Plan. Beginning on January 1, 2009, and each year thereafter, the number of options available to be granted under the plan will increase by the lesser of 4% of the total number of common shares outstanding or 1,500,000 shares. Options granted under the 2008 Plan have exercise prices not less than the fair market value at the date of grant and have an expiration date of no greater than 10 years from the date of grant. There is no predetermined vesting schedule provided in the 2008 Plan, and vesting is determined by the Board of Directors on the date of grant. The 2008 Plan had 2,637,019 shares available for grant as of December 31, 2016. Stock option activity is summarized for the years ended December 31, 2016, 2015 and 2014 as follows: Number of Weighted Options outstanding as of December 31, 2013 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Cancelled ) Exercised ) ​ ​ ​ ​ ​ ​ ​ ​ Options outstanding as of December 31, 2014 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Cancelled ) Exercised ) ​ ​ ​ ​ ​ ​ ​ ​ Options outstanding as of December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Cancelled ) Exercised ) ​ ​ ​ ​ ​ ​ ​ ​ Options outstanding as of December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ A summary of total outstanding stock options as of December 31, 2016 is as follows: Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted Weighted Number Weighted Weighted $1.93 - $3.17 $ $ $3.18 - $6.43 $6.44 - $9.87 $9.88 - $15.74 $15.75 - $30.00 $30.01 - $30.98 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $1.93 - $30.98 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The table below summarizes certain additional information with respect to our options: (In thousands) 2016 2015 2014 Aggregate intrinsic value of options outstanding at year-end $ $ $ Aggregate intrinsic value of options exercisable at year-end Aggregate intrinsic value of options exercised during the year Weighted average grant date fair value per option Total cash received from the exercise of stock options for the year ended December 31, 2016, 2015 and 2014 was $1,470, $291 and $529, respectively. RSU activity is summarized for the years ended December 31, 2016, 2015 and 2014 as follows: Number Weighted Average RSUs outstanding as of December 31, 2013 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Forfeited ) Vested ) ​ ​ ​ ​ ​ ​ ​ ​ RSUs outstanding as of December 31, 2014 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Forfeited ) Vested ) ​ ​ ​ ​ ​ ​ ​ ​ RSUs outstanding as of December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Forfeited ) Vested ) ​ ​ ​ ​ ​ ​ ​ ​ RSUs outstanding as of December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ In addition, a summary of total outstanding RSUs as of December 31, 2016 is as follows: Range of Grant Date Fair Value RSUs $7.44 - $9.57 $9.58 - $15.74 ​ ​ ​ ​ ​ $7.44 - $15.74 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance stock unit ("PSU") activity is summarized for the years ended December 31, 2016, 2015 and 2014 as follows: Number Weighted Average PSUs outstanding as of December 31, 2013 — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted $ Forfeited — — Vested — — ​ ​ ​ ​ ​ ​ ​ ​ PSUs outstanding as of December 31, 2014 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted — — Forfeited ) Vested — — ​ ​ ​ ​ ​ ​ ​ ​ PSUs outstanding as of December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted — — Forfeited — — Vested ) ​ ​ ​ ​ ​ ​ ​ ​ PSUs outstanding as of December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation expense is only recognized for outstanding PSUs where the performance conditions are deemed probable for achievement. For PSUs deemed probable for achievement, stock-based compensation expense is recognized ratably over the expected vesting period. For the years ended December 31, 2016, 2015 and 2014, we incurred PSU expenses of $444, $711 and $0, respectively. We do not expect to recognize any stock-based compensation expense over the year ended December 31, 2017 related to outstanding PSUs. Performance stock options ("PSOs") are valued and stock-based compensation expense is only recognized once the performance conditions of the outstanding PSOs have been met. For the years ended December 31, 2016, 2015 and 2014, we incurred PSO expenses of $1,297, $0 and $0, respectively. During 2016, 100,000 PSOs vested which have an exercise price of $18.33, a vest date fair value of $12.97 and an expected and contractual term of 10 years. PSO activity is summarized for the years ended December 31, 2016 and 2015 as follows: Number PSOs outstanding as of December 31, 2014 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Cancelled — ​ ​ ​ ​ ​ PSOs outstanding as of December 31, 2015 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted — Cancelled — ​ ​ ​ ​ ​ PSOs outstanding as of December 31, 2016 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ We estimate the fair value of our share-based awards using the Black-Scholes option valuation model. The Black-Scholes option valuation model requires the use of certain subjective assumptions. The most significant of these assumptions are the estimates of the expected volatility of the market price of our stock and the expected term of the award. We base our estimates of expected volatility on the historical average of our stock price. The expected term represents the period of time that share-based awards granted are expected to be outstanding. Other assumptions used in the Black-Scholes option valuation model include the risk-free interest rate and expected dividend yield. The risk-free interest rate for periods pertaining to the contractual life of each option is based on the U.S. Treasury yield of a similar duration in effect at the time of grant. We have never paid, and do not expect to pay, dividends in the foreseeable future. The fair value of our share-based awards was estimated at the date of grant using the following weighted average assumptions: Year Ended 2016 2015 2014 Expected volatility % % % Expected term (in years) Weighted average risk-free interest rate % % % Expected dividends % % % Based on our historical experience of options and RSUs that cancel before becoming fully vested, we have assumed an annualized forfeiture rate of 8.57% for options, 6.43% for RSUs and 0.00% for PSOs and PSUs. While we early adopted ASU 2016-09 in the year ended December 31, 2016, we have elected to continue to estimate forfeitures under the true-up provision of ASC 718. We will record additional expense if the actual forfeiture rate is lower than estimated, and will record a recovery of prior expense if the actual forfeiture rate is higher than estimated. The total compensation cost of options granted but not yet vested at December 31, 2016, 2015 and 2014 was $5,858, $3,608 and $2,744, respectively, which is expected to be recognized over a weighted average period of 2.91 years, 2.66 years and 2.68 years, respectively. Unvested stock options as of December 31, 2016 and 2015 were 842,347 and 837,915, respectively. As of December 31, 2016 and 2015, the weighted average grant date fair values per unvested option were $7.58 and $4.82, respectively. The stock-based compensation expense related to unvested RSUs not yet recognized at December 31, 2016, 2015 and 2014 was approximately $3,036, $2,869 and $1,979, respectively, which is expected to be recognized over a weighted average period of 1.43 years, 1.69 years and 1.50 years, respectively. Unvested RSUs as of December 31, 2016 and 2015 were 592,349 and 690,936, respectively. As of December 31, 2016 and 2015, the weighted average grant date fair values per unvested RSU were $9.86 and $6.85, respectively. Employee Stock Purchase Plan In July 2008, we made available an Employee Stock Purchase Plan ("ESPP") in which substantially all of our full-time employees became eligible to participate effective March 18, 2008. Under the ESPP, employees may contribute through payroll deductions up to 15% of their compensation toward the purchase of our common stock, or $21, whichever is lower. The price per share is equal to the lower of 85% of the fair market price on the first day of the offering period, or 85% of the fair market price on the day of purchase. Proceeds received from the issuance of shares are credited to shareholders' equity in the period that the shares are issued. In 2016, 150,888 shares were purchased in accordance with the ESPP. Net proceeds from the issuance of shares of common stock under the ESPP for the year ended December 31, 2016 were $1,049. In January 2016, the number of shares available for grant was increased by 272,779, per the ESPP documents. At December 31, 2016, 625,176 shares remain available for purchase under the ESPP. For the years ended December 31, 2016, 2015 and 2014, we incurred ESPP expenses of $520, $420 and $408, respectively. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2016 | |
Employee Benefit Plan | |
Employee Benefit Plan | 13. Employee Benefit Plan We sponsor a 401(k) Retirement Savings Plan (the "Plan") for all eligible employees who meet certain requirements. Participants may contribute, on a pre-tax basis, up to the maximum allowable amount pursuant to Section 401(k) of the Internal Revenue Code ("IRC"). The plan also includes a Roth feature, allowing after-tax contributions, up to the maximum allowable amount pursuant to Section 401(k) of the IRC. We are not required to contribute to the Plan. In January 2014, we adopted an amendment to the Plan that allowed for an employer matching contribution of 100% of the first 3% of the employees' salary, and 50% of the next 2% of the employees' salary. For the years ended December 31, 2016, 2015 and 2014, we contributed $2,115, $1,786 and $1,483, respectively. Employer contributions vest immediately. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | 14. Income Taxes We have deferred income tax assets totaling $47,636 at December 31, 2016, consisting primarily of federal and state net operating loss and credit carryforwards. Our benefit from income taxes for 2016 of $37,667 primarily relates to the reduction of our valuation allowance, partially offset by adjustments to deferred taxes and state taxes levied on current year taxable income. Deferred taxes result from temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and the amounts used for income tax purposes. As of December 31, 2016, our deferred income tax assets were primarily the result of federal and state net operating losses, stock-based compensation and allowance for doubtful accounts. A valuation allowance of $95 and $49,759 was recorded against our deferred income tax asset balance as of December 31, 2016 and 2015, respectively. For the year ended December 31, 2016, we recorded a release of federal and state valuation allowance of $51,630 on the basis of management's reassessment of the amount of deferred income tax assets that are more-likely-than-not to be realized. As of each reporting date, the Company's management considers new evidence, both positive and negative, that could impact management's view with regard to future realization of deferred income tax assets. As of December 31, 2016, management determined that sufficient positive evidence exists to conclude that it is more-likely-than-not that the net deferred income tax assets of $36,636 are realizable, and therefore, reduced the valuation allowance accordingly. The significant components of our deferred taxes are as follows: December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ $ Research and development and AMT credit carryforwards Stock option grants Allowance for doubtful accounts Deferred revenue Other, net ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets Less valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax assets Deferred tax liabilities: Property, plant and equipment ) ) Intangible assets ) ) Prepaid insurance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax asset (liability) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciliations between expected income taxes computed at the federal rate of 35% for each of the years ended December 31, 2016, 2015 and 2014, and the (benefit from) provision for income taxes is as follows: Years ended December 31, 2016 2015 2014 Income tax provision (benefit) at statutory rate $ $ $ ) State income tax, net of federal benefit ) Research and development — ) Deferred tax asset adjustments — — Unrecognized tax benefit — — Other (Decrease) increase in valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Benefit from) provision for income taxes $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2016, we had federal net operating loss carryforwards of approximately $86,868 to offset future federal taxable income expiring in various years starting in 2024 through 2036. At December 31, 2016, we had state net operating loss carryforwards of $43,203, which expire in various years starting in 2017 through 2036. The timing and manner in which we can utilize our net operating loss carryforwards and future income tax deductions in any year may be limited by provisions of the IRC. Section 382 of the IRC imposes limitations on a corporation's ability to utilize net operating losses if it experiences an "ownership change." Section 383 of the IRC imposes similar limitations on other tax attributes such as research and development credits. Currently, a portion of our loss carryforwards is limited under Section 382 and therefore, is not included in the total net operating losses disclosed above. The components of our (benefit from) provision for income taxes are summarized as follows: Year Ended 2016 2015 Current: Federal $ $ State ​ ​ ​ ​ ​ ​ ​ ​ Total provision for income taxes ​ ​ ​ ​ ​ ​ ​ ​ Deferred: Federal ) State ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred (benefit from) provision for income taxes ) ​ ​ ​ ​ ​ ​ ​ ​ Total (benefit from) provision for income taxes $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The U.S. Internal Revenue Service concluded its examination of our U.S. federal tax returns for all years through 2011. Because of net operating losses, our U.S. federal tax returns statutes for those years will remain subject to examination until the losses are utilized. Additionally, state tax return statutes generally remain open due to operating losses. During 2016, we identified an uncertain tax position related to our research and development credits. As of December 31, 2015 and 2014, we have not identified any uncertain tax positions and therefore, we have no tax reserve recorded as of December 31, 2015 and 2014. The following summarizes the changes in our uncertain tax positions during the year ended December 31, 2016: Total Uncertain Tax Positions Balance at December 31, 2015 — Additions to uncertain tax positions related to prior years $ ​ ​ ​ ​ ​ Balance at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The balance of unrecognized tax benefits, if recognized, would affect the effective tax rate. We recognize interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations and comprehensive income (loss). As of December 31, 2016, we have not recorded any interest and penalties on our uncertain tax positions. It is reasonably possible that these unrecognized tax benefits could be resolved within the next twelve months that may result in a decrease in our effective tax rate. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information | |
Segment Information | 15. Segment Information We operate under three reportable segments: Healthcare, Research and Technology. The Healthcare segment is focused on the monitoring of cardiac arrhythmias or heart rhythm disorders with our comprehensive suite of cardiac monitoring solutions in a health care setting. The Research segment is engaged in central core laboratory services providing cardiac monitoring, imaging services, scientific consulting and data management services for drug and medical device trials. The Technology segment focuses on the development, manufacturing, testing and marketing of medical devices to medical companies, clinics and hospitals. Intercompany revenue relating to the manufacturing of devices by the Technology segment for the other segments is included on the intersegment revenue line. Expenses that can be specifically identified with a segment have been included as deductions in determining pre-tax segment income. Any remaining expenses including research and development costs incurred by the Technology segment for the benefit of the other segments as well as the elimination of costs associated with intercompany revenue are included in Corporate and Other. Also included in Corporate and Other is our net interest expense and other financing expenses. We do not allocate assets to the individual segments. Healthcare Research Technology Corporate Consolidated 2016 Revenue $ $ $ — $ Intersegment revenue — — $ ) — Income (loss) before income taxes ) Depreciation and amortization ) Capital expenditures — Healthcare Research Technology Corporate Consolidated 2015 Revenue $ $ $ — $ Intersegment revenue — $ ) — Income (loss) before income taxes ) Depreciation and amortization Capital expenditures — Healthcare Research Technology Corporate Consolidated 2014 Revenue $ $ $ — $ Intersegment revenue — — $ ) — Income (loss) before income taxes ) ) ) Depreciation and amortization Capital expenditures — |
Legal Proceedings
Legal Proceedings | 12 Months Ended |
Dec. 31, 2016 | |
Legal Proceedings | |
Legal Proceedings | 16. Legal Proceedings The final outcome of any current or future litigation or governmental or internal investigations cannot be accurately predicted, nor can we predict any resulting penalties, fines or other sanctions that may be imposed at the discretion of federal or state regulatory authorities. We record accruals for such contingencies to the extent that we conclude it is probable that a liability has been incurred and the amount of the loss can be estimated. CardioNet v. ScottCare Litigation In May 2012, CardioNet, Inc. ("CardioNet") filed suit against The ScottCare Corporation and Ambucor Health Solutions, Inc. ("ScottCare") in the U.S. District Court for the Eastern District of Pennsylvania (Civil Action No. 2:12-CV-2516- PBT) for patent infringement under the same five CardioNet patents that were at issue in the Mednet litigation, related to the making, use, sale and offering for sale of the ScottCare TeleSentry Mobile Cardiac Telemetry device and monitoring services. CardioNet is seeking an injunction against each defendant, as well as monetary damages. ScottCare has asserted counterclaims alleging the patents in the suit are invalid and not infringed. The trial court heard argument on motions for summary judgment and motions to limit expert testimony in June 2015, but has not yet issued rulings on these motions. ScottCare has dropped all invalidity challenges with respect to one of the patents in the suit. The parties are awaiting a trial date. Consistent with the accounting for contingent liabilities, no accrual has been recorded in the consolidated financial statements. We are vigorously pursuing our claims and defending against the counterclaims. CardioNet v. InfoBionic CardioNet, LLC and Braemar Manufacturing, LLC (collectively, "CardioNet") filed a patent infringement lawsuit against InfoBionic, Inc. ("InfoBionic") in May 2015, in the U.S. District Court for the District of Massachusetts ("District Court"), and filed an amended complaint in March 2016. CardioNet asserts that InfoBionic's MoMeâ„¢ Kardia System infringes CardioNet's U.S. Patent Nos. 6,225,901, 6,940,403, 7,212,850, 7,907,996, RE43,767 and 7,099,715 relating to collection and reporting of data. CardioNet seeks an injunction and enhanced damages for willful infringement because InfoBionic had prior knowledge of some or all of the asserted patents. CardioNet is also asserting claims for unfair competition and misappropriation of trade secrets due to its discovery that InfoBionic is in unauthorized possession of confidential and proprietary CardioNet materials, including source code. The District Court held a claim construction hearing in November 2016. CardioNet is seeking leave to add an infringement claim for CardioNet's U.S. Patent No. 7,941,207 to the complaint. Dates for expert discovery and trial have not been set. In response to CardioNet's infringement assertion, in August 2015, InfoBionic filed petitions at the U.S. Patent and Trademark Office ("USPTO") for Inter Partes review ("IPR") of the '901, '403, '850, and '996 patents. In February 2016, the USPTO denied institution of the August 2015 petitions for the '850 and '996 patents. In June 2016, InfoBionic filed a second set of petitions directed to the '850 and '996 patents. The USPTO denied institution of that second set of petitions in December 2016. In December 2016, the USPTO also upheld the validity of claim 10 of the '403 patent, but found that the other challenged claims of the '901 and '403 patents are unpatentable. The '901 and '403 patents were set to expire in March 2017. InfoBionic is estopped from presenting any invalidity defense at the court that it raised or could have raised in the IPR for claim 10 of the '403 patent. In late January 2017, InfoBionic filed an IPR petition challenging the '767 patent. CardioNet's preliminary response is due in late April or early May 2017, and a decision regarding institution will issue in late July or early August 2017. If the Patent Trial and Appeal Board denies institution, then the proceeding is over. If the Appeal Board decides to institute, a final written decision would be expected in late summer of 2018. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data (Unaudited) | |
Quarterly Financial Data (Unaudited) | 17. Quarterly Financial Data (Unaudited) The following tables summarize the unaudited quarterly financial data for the last two fiscal years. Net Income, basic net income per share and diluted net income per share for the first three quarters of 2016 have been recast in accordance with the adoption of ASU 2016-09. First Second Third Fourth (in thousands, except per share amount) 2016 Total revenue $ $ $ $ Gross profit Other charges Income from operations Net income Basic net income per share $ $ $ $ Diluted net income per share $ $ $ $ 2015 Total revenue $ $ $ $ Gross profit Other charges Income from operations Net (loss) income ) Basic net (loss) income per share $ ) $ $ $ Diluted net (loss) income per share $ ) $ $ $ |
Schedule II
Schedule II | 12 Months Ended |
Dec. 31, 2016 | |
Schedule II | |
Schedule II | SCHEDULE II Beginning Additions Deductions Ending Allowance for Doubtful Accounts Year ended December 31, 2016 $ $ $ ) $ Year ended December 31, 2015 $ $ $ ) $ Year ended December 31, 2014 $ $ $ ) $ |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of BioTelemetry and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the exit price, the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as defined below. Observable inputs are inputs a market participant would use in valuing an asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's own assumptions about the factors a market participant would use in valuing an asset or liability developed using the best information available in the circumstances. The classification of an asset's or liability's level within the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Level 1—Quoted prices in active markets for an identical asset or liability. Level 2—Inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability. Level 3—Inputs that are unobservable for the asset or liability, based on the Company's own assumptions about the assumptions a market participant would use in pricing the asset or liability. Our financial instruments consist primarily of cash and cash equivalents, Healthcare accounts receivable, other accounts receivable, accounts payable, short-term debt and long-term debt. With the exception of the long-term debt, the carrying value of these financial instruments approximates their fair value because of their short-term nature (classified as Level 1). For long-term debt, based on the borrowing rates currently available, the fair value was determined to be $25,813 as of December 31, 2016. This is equal to the nominal value, which is the carrying value, exclusive of debt discount and deferred charges (classified as Level 2). The fair value of contingent consideration is measured on a recurring basis using unobservable inputs such as projected payment dates, probabilities of meeting specified milestones and other such variables resulting in payment amounts which are discounted back to present value using a probability-weighted discounted cash flow model (classified as Level 3). Adjustments to contingent consideration are recorded under other charges. In addition to the recurring fair value measurements, the fair value of assets acquired and liabilities assumed in connection with a business combination are recorded at the acquisition date, using a discounted cash flow model (classified as Level 3). This valuation technique requires the Company to make certain assumptions, including, but not limited to, future operating performance and cash flows, royalty rate and other such variables which are discounted to present value using a discount rate that reflects the risk factors associated with future cash flow, the characteristics of the assets acquired and liabilities assumed and the experience of the acquired business. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents are held in financial institutions or in custodial accounts with financial institutions. Cash equivalents are defined as liquid investments and money market funds with maturity from date of purchase of 90 days or less that are readily convertible into cash and have minimal interest rate risk. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Healthcare accounts receivable is related to the Healthcare segment and is recorded at the time revenue is recognized, net of contractual allowances, and is presented on the consolidated balance sheet net of an allowance for doubtful accounts. The ultimate collection of accounts receivable may not be known for several months after services have been provided and billed. We record an allowance for doubtful accounts based on the aging of receivables using historical data. The percentages and amounts used to record bad debt expense and the allowance for doubtful accounts are supported by various methods and analyses, including current and historical cash collections and the aging of receivables by payor. Because of continuing changes in the health care industry and third-party reimbursement, it is possible that our estimates of collectability could change, which could have a material impact on our operations and cash flows. Other accounts receivable is related to the Technology and Research segments and is recorded at the time revenue is recognized, or when products are shipped or services are performed. We estimate an allowance for doubtful accounts on a specific account basis, and consider several factors in our analysis including customer specific information and the aging of the account. We write-off receivables when the likelihood for collection is remote and when we believe collection efforts have been fully exhausted and we do not intend to devote additional resources in attempting to collect. We perform write-offs on a monthly basis. In the Healthcare segment, we wrote-off $8,440 and $7,082 of receivables for the years ended December 31, 2016 and 2015, respectively. The impact was a reduction of gross accounts receivable and a reduction in the allowance for doubtful accounts. There were no material write-offs in the Technology and Research segments. Additionally, we recorded bad debt expense of $9,931, $8,047 and $9,347 for the years ended December 31, 2016, 2015 and 2014, respectively. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents, Healthcare accounts receivables and other accounts receivables. We maintain our cash and cash equivalents with high quality financial institutions to mitigate this risk. We perform ongoing credit evaluations of our customers and generally do not require collateral. We record an allowance for doubtful accounts in accordance with the procedures described above. Past-due amounts are written-off against the allowance for doubtful accounts when collections are believed to be unlikely and all collection efforts have ceased. At December 31, 2016, 2015 and 2014, one payor, Medicare, accounted for 11%, 13% and 16%, respectively, of our gross accounts receivable. |
Inventory | Inventory Inventory is valued at the lower of cost (using first-in, first-out cost method) or market (net realizable value or replacement cost). Management reviews inventory for specific future usage, and estimates of impairment of individual inventory items are recorded to reduce inventory to the lower of cost or market. |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost, except for assets acquired in business combinations, which are recorded at fair value as of the acquisition date. Depreciation is recorded over the estimated useful life of each class of depreciable assets, and is computed using the straight-line method. Leasehold improvements are amortized over the shorter of the estimated asset life or term of the lease. Repairs and maintenance costs are charged to expense as incurred. Costs of additions and improvements are capitalized. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The carrying value of long-lived assets, other than goodwill and indefinite-lived intangible assets, is evaluated when events or changes in circumstances indicate the carrying value may not be recoverable or the useful life has changed. We consider historical performance and anticipated future results in our evaluation of potential impairment. Accordingly, when indicators of impairment are present, we evaluate the carrying value of these assets in relation to the operating performance of the business and the undiscounted cash flows expected to result from the use of these assets. If the carrying amount of a long-lived asset exceeds its expected undiscounted cash flows, an impairment charge is recognized to the extent the carrying amount exceeds it's fair value. |
Equity Method Investments | Equity Method Investments We account for investments using the equity method of accounting if the investment provides us the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company's ownership interest in the voting stock of the investee ranges between 20% and 50%, although other factors, such as representation on the investee's board of directors, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investment is recorded at cost in the consolidated balance sheets under other assets and adjusted for dividends received and our share of the investee's earnings or losses together with other-than-temporary impairments which are recorded through interest and other loss, net in the consolidated statements of operations and comprehensive income (loss). |
Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets Goodwill is the excess of the purchase price of an acquired business over the amounts assigned to assets acquired and liabilities assumed in a business combination. In accordance with ASC 350, Intangibles—Goodwill and Other ("ASC 350"), goodwill is reviewed for impairment annually, or when events arise that could indicate that an impairment exists. Initially, we qualitatively assess whether it is more-likely-than-not that an impairment exists for each of our reporting units. Such qualitative factors can include, among others, industry and market conditions, present and anticipated sales and cost factors, overall financial performance and relevant entity-specific events. If we conclude based on our qualitative assessment that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value, we perform a two-step impairment test in accordance with ASC 350. In the first step, we compare the fair value of our reporting units to the carrying value of the reporting units. If the carrying value of the net assets assigned to the reporting units exceeds the fair value of the reporting units, then the second step of the impairment test is performed in order to determine the implied fair value of the reporting units' goodwill. If the carrying value of the reporting units' goodwill exceeds the implied fair value of those reporting units, an impairment loss equal to the difference is recorded. For the purpose of performing our goodwill impairment analysis, we consider our business to be comprised of three reporting units: Healthcare, Technology and Research. When performing a quantitative analysis, we calculate the fair value of the reporting units utilizing a weighting of the income and market approaches. The income approach is based on a discounted cash flow methodology that includes assumptions for, among other things, forecasted income, cash flow, growth rates, income tax rates, expected tax benefits and long-term discount rates, all of which require significant judgment. The market approach utilizes our market data as well as market data from publicly-traded companies that are similar to us. There are inherent uncertainties related to these factors and the judgment applied in the analysis. We believe that the combination of an income and a market approach provides a reasonable basis to estimate the fair value of our reporting units. Acquired intangible assets are recorded at fair value on the acquisition date. The estimated fair values and useful lives of intangible assets are determined by assessing many factors including estimates of future operating performance and cash flows of the acquired business, the characteristics of the intangible assets and the experience of the acquired business. Independent appraisal firms may assist with the valuation of acquired assets. The impairment test for indefinite-lived intangible assets other than goodwill consists of a comparison of the fair value of the indefinite-lived intangible asset to the carrying value of the asset. We estimate the fair value of the indefinite-lived intangibles using the relief from royalty method. |
Revenue Recognition | Revenue Recognition We recognize approximately 79% of our total revenue from patient monitoring services in our Healthcare segment. We receive a significant portion of this revenue from third-party commercial payors and governmental entities. We also receive reimbursement directly from patients through co-pays, deductibles and self-pay arrangements. Revenue from the Medicare program is based on reimbursement rates set by CMS. Revenue from contracted commercial payors is recorded at the negotiated contractual rate. Revenue from non-contracted commercial payors is recorded at net realizable value based on historical payment patterns. Adjustments to the estimated net realizable value, based on final settlement with the third-party payors, are recorded upon settlement. If we do not have consistent historical information regarding collectability from a given payor, revenue is recognized when cash is received. Unearned amounts are appropriately deferred until service has been completed. For the years ended December 31, 2016, 2015 and 2014, revenue from Medicare as a percentage of total revenue was 33%, 34% and 32%, respectively. Research revenue includes revenue for core laboratory services. Our Research revenue is provided on a fee-for-service basis, and revenue is recognized as the related services are performed. We also provide consulting services on a time and materials basis and recognize revenue as we perform the services. Our site support revenue, consisting of equipment rentals and sales along with related supplies and logistics management, are recognized at the time of sale or over the rental period. Under a typical contract, customers pay us a portion of our fee for these services upon contract execution as an upfront deposit, some of which is typically non-refundable upon contract termination. Unearned revenue, including upfront deposits, are deferred, and then recognized as the services are performed. Revenue in our Technology segment is received from the sale of products, product repair and supplies which are recognized when shipped, or as service is completed. For arrangements with multiple deliverables, the revenue is allocated to each element (both delivered and undelivered items) based on their relative selling prices or management's best estimate of their selling prices, when vendor-specific or third-party evidence is unavailable. We record reimbursements received for out-of-pocket expenses, including freight, incurred as revenue in the accompanying consolidated statements of operations and comprehensive income (loss). Revenue generally is recognized net of any taxes collected from customers and subsequently remitted to government authorities. |
Stock-Based Compensation | Stock-Based Compensation ASC 718, Compensation—Stock Compensation ("ASC 718"), addresses the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for: (i) equity instruments of the enterprise or (ii) liabilities that are based on the fair value of the enterprise's equity instruments or that may be settled by the issuance of such equity instruments. ASC 718 requires that an entity measures the cost of equity-based service awards based on the grant-date fair value of the award and recognizes the cost of such awards over the period during which the employee is required to provide service in exchange for the award (the vesting period). ASC 718 requires that an entity measure the cost of liability-based service awards based on current fair value that is remeasured subsequently at each reporting date through the settlement date. The compensation expense associated with performance stock units is recognized over the period between when the performance conditions are deemed probable of achievement and when the awards are vested. We account for equity awards issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. |
Research and Development Costs | Research and Development Costs Research and development costs are charged to expense as incurred. |
Income Taxes | Income Taxes We account for income taxes under the liability method, as described in ASC 740, Income Taxes ("ASC 740"). Deferred income taxes are recognized for the tax consequences of temporary differences between the tax and financial statement reporting bases of assets and liabilities. When we determine that we will not be able to realize our deferred tax assets, we adjust the carrying value of the deferred tax asset through the valuation allowance. We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (i) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share We compute net income (loss) per share in accordance with ASC 260, Earnings Per Share. Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by giving effect to all potential dilutive common shares, including stock options and Restricted Stock Units ("RSUs"). The following table presents the calculation of historical basic and diluted net income (loss) per share: Year Ended December 31, 2016 2015 2014 (in thousands, except per share amounts) Numerator: Net income (loss) $ $ ) Denominator: Weighted average shares used in computing basic net income (loss) per share Potential dilutive common shares due to dilutive stock option and restricted stock units — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares used in computing diluted net income (loss) per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) per share: Basic net income (loss) per share $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted net income (loss) per share $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ If the outstanding vested options or RSUs were exercised or converted into common stock, the result would be anti-dilutive for the year ended December 31, 2014. Accordingly, basic and diluted net loss per share are the same for the year ended December 31, 2014. Additionally, certain stock options, which are priced higher than the market price of our shares as of December 31, 2016 and 2015, would be anti-dilutive and therefore have been excluded from the weighted average shares used in computing diluted net income per share. These options could become dilutive in future periods. |
Segment Information | Segment Information ASC 280, Segment Reporting, establishes standards for reporting information regarding operating segments in annual financial statements. Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group in making decisions on how to allocate resources and assess performance. We report our business under three segments: Healthcare, Research and Technology. The Healthcare segment is focused on the monitoring of cardiac arrhythmias or heart rhythm disorders in a health care setting. The Research segment provides central core laboratory services in a research environment, which includes certain equipment rental and device sales. The Technology segment focuses on the development, manufacturing, testing and marketing of medical devices to medical companies, clinics and hospitals. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, Improvements to Employee Share-Based Payment Accounting. The standard revises the accounting for certain aspects of share-based compensation arrangements and requires any excess tax benefits or tax deficiencies to be recorded directly in the income statement when such awards vest or settle. In addition, the cash flows related to any excess tax benefits will no longer be separately classified as a financing activity, but will rather be classified as an operating activity, along with all other income tax cash flows. The standard also makes certain changes to the way the treasury stock method is applied when calculating diluted net income per share, as well as allows for a policy election to account for forfeitures as they occur, rather than using the estimation method currently prescribed by ASC 718. The standard is effective for annual and interim periods beginning after December 15, 2016, with early adoption permitted. We elected to early adopt the standard during the fourth quarter of 2016. The standard requires the recognition of any pre-adoption date net operating loss ("NOL") carryforwards from share-based compensation arrangements to be recognized on a modified retrospective basis, through an opening retained earnings adjustment on January 1, 2016. Any income tax effects from share-based compensation arrangements arising after January 1, 2016 will be recognized prospectively in the income statement during the period of adoption. Upon adoption, we recognized all previously unrecognized tax benefits which resulted in a cumulative-effect adjustment of $1,752 to our accumulated deficit. These previously unrecognized tax benefits were recorded as a deferred tax asset, which was fully offset by a valuation allowance on January 1, 2016, thus there was no net impact from the adoption of ASU 2016-09 as of the same date. In addition, we recognized excess tax benefits as an adjustment to our previously reported benefit from (provision for) income taxes of $127, $362 and $94 for the quarters ended March 31, 2016, June 30, 2016 and September 30, 2016, respectively. The weighted average number of common shares outstanding for calculating diluted net income per share increased by 340,000 to 550,000 for each quarter of 2016. Basic and diluted net income per share increased by $0.01 for the three months ended June 30, 2016. Net income per share for the three months ended March 30, 2016 and September 30, 2016 were not changed by the adoption of ASU 2016-09. Recast quarterly net income and basic and diluted net income per share for the first three quarters of 2016 is disclosed in Note 17. Our adoption of the standard did not have any impact to our consolidated statements of cash flows as no NOL carryforwards from share-based compensation arrangements were recognized prior to January 1, 2016, due to our use of the "with and without" method of accounting for equity-generated NOL carryforwards. We have elected to continue to estimate forfeitures under the true-up provision of ASC 718. The adoption of this standard decreased our effective tax rate by 11.1% for the year ended December 31, 2016. Accounting Pronouncements Not Yet Adopted In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. The standard eliminates step two in the current two-step impairment test under ASC 350. Under the new standard, a goodwill impairment will be recorded for any excess of a reporting unit's carrying value over its fair value. A prospective transition approach is required. The standard is effective for annual and interim reporting periods beginning after December 15, 2019 with early adoption permitted for annual and interim goodwill impairment testing dates after January 1, 2017. We plan to early adopt the standard at the time of our 2017 goodwill impairment testing date and do not expect the standard to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases. The standard will require lessees to recognize most leases on their balance sheet and makes selected changes to lessor accounting. The standard is effective for annual and interim reporting periods beginning after December 15, 2018. A modified retrospective transition approach is required, with certain practical expedients available. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. The standard will require inventory to be measured at the lower of cost or net realizable value. The guidance will not apply to inventories for which cost is determined using the last-in, first-out method or the retail inventory method. The standard is effective for annual and interim reporting periods beginning after December 15, 2016. We are currently evaluating the impact that the adoption of this standard will have on Telcare, which was acquired in December 2016. We do not expect the adoption of this standard to have a material impact on the other components of our business. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which has been updated through several revisions and clarifications since its original issuance. The standard will require revenue recognized to represent the transfer of promised goods or services to customers at an amount that reflects the consideration which a company expects to receive in exchange for those goods or services. The standard also requires new, expanded disclosures regarding revenue recognition. The standard will be effective January 1, 2018 with early adoption permissible beginning January 1, 2017. We are currently evaluating the transition method we will elect. We are evaluating the specific impacts the standard will have on Healthcare revenue, particularly related to the valuation of revenue, accounts receivable and bad debt expense. We are evaluating the impact the standard will have on Research revenue, which involves reviewing a large number of long-term contracts. We do not expect the standard to have a material impact on Technology revenue. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Schedule of calculation of historical basic and diluted net income (loss) per share | Year Ended December 31, 2016 2015 2014 (in thousands, except per share amounts) Numerator: Net income (loss) $ $ $ ) Denominator: Weighted average shares used in computing basic net income (loss) per share Potential dilutive common shares due to dilutive stock option and restricted stock units — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares used in computing diluted net income (loss) per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) per share: Basic net income (loss) per share $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted net income (loss) per share $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Telcare | |
Acquisitions | |
Schedule of total consideration and related allocation for net assets acquired | Amount Weighted Fair value of assets acquired: Other accounts receivable $ Inventory Prepaid expenses and other current assets Property and equipment Other assets Identifiable intangible assets: Customer relationships 5 Technology 5 Tradename Indefinite ​ ​ ​ ​ ​ ​ Total identifiable intangible assets ​ ​ ​ ​ ​ ​ Total assets acquired ​ ​ ​ ​ ​ ​ Fair value of liabilities assumed: Accounts payable Accrued liabilities Deferred revenue ​ ​ ​ ​ ​ ​ Total liabilities assumed ​ ​ ​ ​ ​ ​ Total identifiable net assets Goodwill ​ ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of unaudited pro forma financial information | Year Ended December 31, Unaudited pro forma information 2016 2015 Revenue $ $ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ ​ ​ ​ ​ ​ ​ ​ ​ Net income per common share: Basic $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of common shares outstanding: Basic ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of changes in contingent consideration | Total Contingent Consideration Balance at December 31, 2015 — Purchase price contingent consideration $ ​ ​ ​ ​ ​ Balance at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
VirtualScopics | |
Acquisitions | |
Schedule of total consideration and related allocation for net assets acquired | Amount Weighted Fair value of assets acquired: Cash and cash equivalents $ Other accounts receivable Inventory Prepaid expenses and other current assets Property and equipment Identifiable intangible assets: Customer relationships Technology Backlog ​ ​ ​ ​ ​ ​ ​ ​ Total identifiable intangible assets ​ ​ ​ ​ ​ ​ ​ ​ Total assets acquired ​ ​ ​ ​ ​ ​ ​ ​ Fair value of liabilities assumed: Accounts payable Accrued liabilities Current portion of capital lease obligations Current portion of long-term debt Deferred revenue Deferred tax liability Long-term capital lease obligations Long-term debt ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities assumed ​ ​ ​ ​ ​ ​ ​ ​ Total identifiable net assets Goodwill ​ ​ ​ ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
ePatch Division | |
Acquisitions | |
Schedule of total consideration and related allocation for net assets acquired | Amount Weighted Fair value of assets acquired: Inventory $ Property and equipment Identifiable intangible assets: Customer relationships 10 Technology 10 Trade names Indefinite ​ ​ ​ ​ ​ ​ Total identifiable intangible assets ​ ​ ​ ​ ​ ​ Total assets acquired ​ ​ ​ ​ ​ ​ Fair value of liabilities assumed: Accrued liabilities ​ ​ ​ ​ ​ ​ Total liabilities assumed ​ ​ ​ ​ ​ ​ Total identifiable net assets Goodwill ​ ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of changes in contingent consideration | Total Contingent Consideration Balance at December 31, 2015 — Purchase price contingent consideration $ ​ ​ ​ ​ ​ Balance at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
BMS | |
Acquisitions | |
Schedule of total consideration and related allocation for net assets acquired | Amount Weighted Fair value of assets acquired: Property and equipment $ Identifiable intangible assets: Customer relationships Technology Covenants not to compete ​ ​ ​ ​ ​ ​ ​ ​ Total identifiable intangible assets ​ ​ ​ ​ ​ ​ ​ ​ Total assets acquired ​ ​ ​ ​ ​ ​ ​ ​ Goodwill ​ ​ ​ ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Mednet | |
Acquisitions | |
Schedule of total consideration and related allocation for net assets acquired | Amount Weighted Fair value of assets acquired: Cash and cash equivalents $ ) Healthcare accounts receivable Inventory Property and equipment Other assets Identifiable intangible assets: Customer relationships 13 Technology 5 Covenants not to compete 5 Tradename Indefinite ​ ​ ​ ​ ​ ​ Total identifiable intangible assets ​ ​ ​ ​ ​ ​ Total assets acquired ​ ​ ​ ​ ​ ​ Fair value of liabilities assumed: Accounts payable Accrued liabilities Other liabilities Long-term debt, capital leases, note payable and related interest ​ ​ ​ ​ ​ ​ Total liabilities assumed ​ ​ ​ ​ ​ ​ Total identifiable net assets ) Goodwill ​ ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of unaudited pro forma financial information | Unaudited pro forma information Year ended Revenue $ ​ ​ ​ ​ ​ Net loss ) ​ ​ ​ ​ ​ Net loss per common share: Basic and diluted $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of shares: Basic and diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory | |
Schedule of inventory | December 31, 2016 2015 Raw materials and supplies $ $ Finished goods ​ ​ ​ ​ ​ ​ ​ ​ Total inventory $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property and Equipment | |
Schedule of property and equipment | December 31, Estimated 2016 2015 Cardiac monitoring devices, device parts and components 3 - 5 $ $ Computers and purchased software 3 - 5 Equipment, tools and molds 3 - 5 Furniture and fixtures 7 Leasehold improvements Life of lease Capital leases 3 - 7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total property and equipment, at cost Less accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total property and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets | |
Schedule of changes in the carrying amounts of goodwill by segment | Reporting Segment Healthcare Research Technology Total Balance at December 31, 2014 $ $ $ $ Goodwill acquired during the year — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2015 $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill acquired during the year — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2016 $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of gross carrying amounts and accumulated amortization of the entity's intangible assets | December 31, Estimated 2016 2015 Customer relationships 5 - 15 $ $ Technology including internally developed software 3 - 10 Backlog 1 - 4 Covenants not to compete 5 - 7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total intangible assets, gross ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships ) ) Technology including internally developed software ) ) Backlog ) ) Covenants not to compete ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total accumulated amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Indefinite-lived trade names ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total intangible assets, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of estimated amortization expense for the next five years | 2017 $ 2018 2019 2020 2021 Thereafter ​ ​ ​ ​ ​ Total estimated amortization $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Equity Method Investment (Table
Equity Method Investment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity Method Investment | |
Summary of investment | Year Ended January 1, 2016 balance $ Capital contributions Loss in equity method investment ) ​ ​ ​ ​ ​ December 31, 2016 balance $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses | |
Schedule of accrued expenses | December 31, 2016 2015 Accrued compensation $ $ Accrued professional fees Accrued taxes Accrued interest Other ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Summary of the future minimum lease payments under non-cancelable operating and capital leases | Future minimum lease payments under non-cancelable operating and capital leases are summarized as follows at December 31, 2016: Operating Capital 2017 $ $ 2018 2019 2020 2021 — Thereafter — ​ ​ ​ ​ ​ ​ ​ ​ Total minimum lease payments $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Other Charges (Tables)
Other Charges (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Charges | |
Summary of expenses related to other charges | Year ended December 31, 2016 2015 2014 Legal fees $ $ $ Professional fees Severance and employee related costs Other costs — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of stock option activity | Number of Weighted Options outstanding as of December 31, 2013 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Cancelled ) Exercised ) ​ ​ ​ ​ ​ ​ ​ ​ Options outstanding as of December 31, 2014 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Cancelled ) Exercised ) ​ ​ ​ ​ ​ ​ ​ ​ Options outstanding as of December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Cancelled ) Exercised ) ​ ​ ​ ​ ​ ​ ​ ​ Options outstanding as of December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of total outstanding stock options | A summary of total outstanding stock options as of December 31, 2016 is as follows: Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted Weighted Number Weighted Weighted $1.93 - $3.17 $ $ $3.18 - $6.43 $6.44 - $9.87 $9.88 - $15.74 $15.75 - $30.00 $30.01 - $30.98 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $1.93 - $30.98 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of certain additional information with respect to options | (In thousands) 2016 2015 2014 Aggregate intrinsic value of options outstanding at year-end $ $ $ Aggregate intrinsic value of options exercisable at year-end Aggregate intrinsic value of options exercised during the year Weighted average grant date fair value per option |
Summary of RSU activity | Number Weighted Average RSUs outstanding as of December 31, 2013 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Forfeited ) Vested ) ​ ​ ​ ​ ​ ​ ​ ​ RSUs outstanding as of December 31, 2014 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Forfeited ) Vested ) ​ ​ ​ ​ ​ ​ ​ ​ RSUs outstanding as of December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Forfeited ) Vested ) ​ ​ ​ ​ ​ ​ ​ ​ RSUs outstanding as of December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of total outstanding RSUs | Range of Grant Date Fair Value RSUs $7.44 - $9.57 $9.58 - $15.74 ​ ​ ​ ​ ​ $7.44 - $15.74 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of weighted average assumptions used to estimate the fair value of the share-based awards | Year Ended 2016 2015 2014 Expected volatility % % % Expected term (in years) Weighted average risk-free interest rate % % % Expected dividends % % % |
PSU | |
Schedule of performance stock units activity | Number Weighted Average PSUs outstanding as of December 31, 2013 — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted $ Forfeited — — Vested — — ​ ​ ​ ​ ​ ​ ​ ​ PSUs outstanding as of December 31, 2014 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted — — Forfeited ) Vested — — ​ ​ ​ ​ ​ ​ ​ ​ PSUs outstanding as of December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted — — Forfeited — — Vested ) ​ ​ ​ ​ ​ ​ ​ ​ PSUs outstanding as of December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
PSOs | |
Schedule of performance stock units activity | Number PSOs outstanding as of December 31, 2014 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Cancelled — ​ ​ ​ ​ ​ PSOs outstanding as of December 31, 2015 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted — Cancelled — ​ ​ ​ ​ ​ PSOs outstanding as of December 31, 2016 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Schedule of the components of the entity's deferred tax assets and liabilities | December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ $ Research and development and AMT credit carryforwards Stock option grants Allowance for doubtful accounts Deferred revenue Other, net ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets Less valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax assets Deferred tax liabilities: Property, plant and equipment ) ) Intangible assets ) ) Prepaid insurance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax asset (liability) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of reconciliations between expected income taxes computed at the federal rate and the (benefit from) provision for income taxes | Years ended December 31, 2016 2015 2014 Income tax provision (benefit) at statutory rate $ $ $ ) State income tax, net of federal benefit ) Research and development — ) Deferred tax asset adjustments — — Unrecognized tax benefit — — Other (Decrease) increase in valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Benefit from) provision for income taxes $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of the components of the entity's (benefit from) provision for income taxes | Year Ended 2016 2015 Current: Federal $ $ State ​ ​ ​ ​ ​ ​ ​ ​ Total provision for income taxes ​ ​ ​ ​ ​ ​ ​ ​ Deferred: Federal ) State ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred (benefit from) provision for income taxes ) ​ ​ ​ ​ ​ ​ ​ ​ Total (benefit from) provision for income taxes $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of changes in certain tax positions | Total Uncertain Tax Positions Balance at December 31, 2015 — Additions to uncertain tax positions related to prior years $ ​ ​ ​ ​ ​ Balance at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information | |
Summary of financial information concerning the entity's reportable segments | Healthcare Research Technology Corporate Consolidated 2016 Revenue $ $ $ — $ Intersegment revenue — — $ ) — Income (loss) before income taxes ) Depreciation and amortization ) Capital expenditures — Healthcare Research Technology Corporate Consolidated 2015 Revenue $ $ $ — $ Intersegment revenue — $ ) — Income (loss) before income taxes ) Depreciation and amortization Capital expenditures — Healthcare Research Technology Corporate Consolidated 2014 Revenue $ $ $ — $ Intersegment revenue — — $ ) — Income (loss) before income taxes ) ) ) Depreciation and amortization Capital expenditures — |
Quarterly Financial Data (Una38
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data (Unaudited) | |
Summary of the unaudited quarterly financial data | First Second Third Fourth (in thousands, except per share amount) 2016 Total revenue $ $ $ $ Gross profit Other charges Income from operations Net income Basic net income per share $ $ $ $ Diluted net income per share $ $ $ $ 2015 Total revenue $ $ $ $ Gross profit Other charges Income from operations Net (loss) income ) Basic net (loss) income per share $ ) $ $ $ Diluted net (loss) income per share $ ) $ $ $ |
Organization and Description 39
Organization and Description of Business (Details) $ in Thousands | Dec. 01, 2016USD ($) | May 11, 2016USD ($) | Apr. 01, 2016USD ($)shares | Dec. 31, 2016USD ($)segment | Dec. 31, 2014USD ($) |
Organization and Description of Business | |||||
Number of Operating Segments | segment | 3 | ||||
Total consideration paid, net of cash acquired | $ 24,970 | $ 14,100 | |||
Telcare | |||||
Organization and Description of Business | |||||
Cash consideration | $ 7,000 | ||||
Maximum performance-based earn out | 5,000 | 5,000 | |||
Total consideration transferred | $ 9,700 | ||||
ePatch Division | |||||
Organization and Description of Business | |||||
Cash consideration | $ 3,000 | ||||
Consideration in common stock (in shares) | shares | 244,519 | ||||
Consideration in common stock | $ 2,885 | ||||
Maximum performance-based earn out | 3,000 | ||||
Total consideration transferred | $ 6,490 | ||||
VirtualScopics | |||||
Organization and Description of Business | |||||
Total consideration paid, net of cash acquired | $ 14,970 | ||||
Net of cash acquired | $ 849 | $ 849 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounts receivable and allowance for doubtful accounts | |||
Fair value of long-term debt | $ 25,813 | ||
Bad debt expense | 9,931 | $ 8,047 | $ 9,347 |
Healthcare | |||
Accounts receivable and allowance for doubtful accounts | |||
Allowance for Doubtful Accounts Receivable, Write-offs | $ 8,440 | $ 7,082 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Concentrations of Credit Risk (Details) - Gross accounts receivable - Credit concentration risk - customer | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Concentrations of credit risk | |||
Number of major customers | 1 | ||
Medicare | |||
Concentrations of credit risk | |||
Concentration risk (as a percent) | 11.00% | 13.00% | 16.00% |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Goodwill and Acquired Intangible assets (Details) - segment | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Acquired Intangible Assets | |||
Number of reporting units | 3 | ||
Revenue | Service concentration | Patient monitoring services | Healthcare | |||
Goodwill and Acquired Intangible Assets | |||
Concentration risk (as a percent) | 79.00% | ||
Revenue | Payor concentration | Medicare | |||
Goodwill and Acquired Intangible Assets | |||
Concentration risk (as a percent) | 33.00% | 34.00% | 32.00% |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Net Income (loss) & Segment Information (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016USD ($)$ / shares | Sep. 30, 2016USD ($)$ / shares | Jun. 30, 2016USD ($)$ / shares | Mar. 31, 2016USD ($)$ / shares | Dec. 31, 2015USD ($)$ / shares | Sep. 30, 2015USD ($)$ / shares | Jun. 30, 2015USD ($)$ / shares | Mar. 31, 2015USD ($)$ / shares | Dec. 31, 2016USD ($)segment$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | |
Numerator: | |||||||||||
Net income (loss) | $ | $ 40,448 | $ 4,195 | $ 4,697 | $ 4,097 | $ 2,848 | $ 2,478 | $ 2,171 | $ (69) | $ 53,437 | $ 7,428 | $ (9,793) |
Denominator: | |||||||||||
Weighted average shares used in computing basic net income (loss) per share | 27,920,150 | 27,116,300 | 26,444,626 | ||||||||
Potential dilutive common shares due to dilutive stock option and restricted stock units | 2,568,931 | 1,972,911 | |||||||||
Weighted average shares used in computing diluted net income (loss) per share | 30,489,081 | 29,089,211 | 26,444,626 | ||||||||
Net income (loss) per common share: | |||||||||||
Basic net income (loss) per share | $ / shares | $ 1.43 | $ 0.15 | $ 0.17 | $ 0.15 | $ 0.10 | $ 0.09 | $ 0.08 | $ 0 | $ 1.91 | $ 0.27 | $ (0.37) |
Diluted net income (loss) per share | $ / shares | $ 1.30 | $ 0.14 | $ 0.15 | $ 0.14 | $ 0.10 | $ 0.08 | $ 0.08 | $ 0 | $ 1.75 | $ 0.26 | $ (0.37) |
Segment Information | |||||||||||
Number of reportable segments | segment | 3 |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Recent Accounting Pronouncements | |||||||
Weighted average shares used in computing diluted net income (loss) per share | 30,489,081 | 29,089,211 | 26,444,626 | ||||
ASU 2016-09 | |||||||
Recent Accounting Pronouncements | |||||||
Adoption of ASU 2016-09 | $ 1,752 | ||||||
Excess tax benefit adjustment | $ 94,000 | $ 362,000 | $ 127,000 | ||||
Weighted average number diluted shares outstanding adjustment | 340,000 | 340,000 | 340,000 | 340,000 | |||
Weighted average shares used in computing diluted net income (loss) per share | 550,000 | 550,000 | 550,000 | 550,000 | |||
Basic and diluted net income (in dollars per share) | $ 0.01 | ||||||
Decrease in effective tax rate due to adoption of accounting standard (as a percent) | 11.10% |
Acquisitions - Telcare,Inc. (De
Acquisitions - Telcare,Inc. (Details) - USD ($) $ in Thousands | Dec. 01, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Fair value of liabilities assumed: | ||||||||||||
Goodwill | $ 41,068 | $ 29,831 | $ 41,068 | $ 29,831 | $ 29,596 | |||||||
Revenue | 53,957 | $ 53,055 | $ 52,680 | $ 48,640 | 46,774 | $ 43,492 | $ 44,812 | $ 43,435 | 208,332 | 178,513 | 166,578 | |
Net income | 40,448 | $ 4,195 | $ 4,697 | $ 4,097 | $ 2,848 | $ 2,478 | $ 2,171 | $ (69) | 53,437 | $ 7,428 | $ (9,793) | |
Telcare | ||||||||||||
Acquisitions | ||||||||||||
Cash consideration | $ 7,000 | |||||||||||
Maximum performance-based earn out | 5,000 | 5,000 | 5,000 | |||||||||
Total consideration transferred | 9,700 | |||||||||||
Amount of goodwill preliminarily expected to be deductible for tax purposes | $ 578 | |||||||||||
Maximum period for finalizing accounting for acquisition from acquisition date (in years) | 1 year | |||||||||||
Fair value of assets acquired: | ||||||||||||
Other accounts receivable | 235 | 235 | ||||||||||
Inventory | 1,834 | 1,834 | ||||||||||
Prepaid expenses and other current assets | 1,261 | 1,261 | ||||||||||
Property and equipment | 55 | 55 | ||||||||||
Other assets | 933 | 933 | ||||||||||
Identifiable intangible assets: | ||||||||||||
Total identifiable intangible assets | 2,800 | 2,800 | ||||||||||
Total assets acquired | 7,118 | 7,118 | ||||||||||
Fair value of liabilities assumed: | ||||||||||||
Accounts payable | 459 | 459 | ||||||||||
Accrued liabilities | 273 | 273 | ||||||||||
Deferred revenue | 49 | 49 | ||||||||||
Total liabilities assumed | 781 | 781 | ||||||||||
Total identifiable net assets | 6,337 | 6,337 | ||||||||||
Goodwill | 3,363 | 3,363 | ||||||||||
Net assets acquired | 9,700 | 9,700 | ||||||||||
Revenue | 1,081 | |||||||||||
Net income | 286 | |||||||||||
Telcare | Tradenames | ||||||||||||
Identifiable intangible assets: | ||||||||||||
Total identifiable intangible assets | 400 | 400 | ||||||||||
Telcare | Customer relationships | ||||||||||||
Identifiable intangible assets: | ||||||||||||
Total identifiable intangible assets | 400 | $ 400 | ||||||||||
Weighted Average Life (Years) | 5 years | |||||||||||
Telcare | Technology | ||||||||||||
Identifiable intangible assets: | ||||||||||||
Total identifiable intangible assets | $ 2,000 | $ 2,000 | ||||||||||
Weighted Average Life (Years) | 5 years |
Acquisitions - Pro Forma Financ
Acquisitions - Pro Forma Financial Information Telcare & VirtualScopics (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Telcare | ||
Unaudited pro forma information | ||
Revenue | $ 212,538 | $ 182,755 |
Net income | $ 50,693 | $ 948 |
Net income per common share: | ||
Basic (in dollars per share) | $ 1.82 | $ 0.03 |
Diluted (in dollars per share) | $ 1.66 | $ 0.03 |
Weighted average number of common shares outstanding: | ||
Basic (in shares) | 27,920,150 | 27,116,300 |
Diluted (in shares) | 30,489,081 | 29,089,211 |
VirtualScopics | ||
Unaudited pro forma information | ||
Revenue | $ 214,271 | $ 191,230 |
Net income | $ 55,413 | $ 7,232 |
Net income per common share: | ||
Basic (in dollars per share) | $ 1.98 | $ 0.27 |
Diluted (in dollars per share) | $ 1.82 | $ 0.25 |
Weighted average number of common shares outstanding: | ||
Basic (in shares) | 27,920,150 | 27,116,300 |
Diluted (in shares) | 30,489,081 | 29,089,211 |
Acquisitions - Contingent Consi
Acquisitions - Contingent Consideration (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 01, 2016 | Apr. 01, 2016 | |
ePatch Division | ||||
Contingent Consideration | ||||
Maximum performance-based earn out | $ 3,000 | |||
Fair value of contingent consideration | $ 605 | $ 605 | ||
Summary of changes in contingent consideration | ||||
Purchase price contingent consideration | 605 | |||
Ending balance | 605 | |||
ePatch Division | Other liabilities | ||||
Contingent Consideration | ||||
Fair value of contingent consideration | 605 | 605 | ||
Summary of changes in contingent consideration | ||||
Ending balance | 605 | |||
Telcare | ||||
Contingent Consideration | ||||
Maximum performance-based earn out | 5,000 | $ 5,000 | ||
Fair value of contingent consideration | 2,700 | 2,700 | ||
Summary of changes in contingent consideration | ||||
Purchase price contingent consideration | 2,700 | |||
Ending balance | 2,700 | |||
Telcare | Other liabilities | ||||
Contingent Consideration | ||||
Fair value of contingent consideration | 2,700 | $ 2,700 | ||
Summary of changes in contingent consideration | ||||
Ending balance | $ 2,700 |
Acquisitions - VirtualScopics,
Acquisitions - VirtualScopics, Inc. (Details) - USD ($) $ / shares in Units, $ in Thousands | May 11, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Acquisitions | |||||||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Total consideration paid, net of cash acquired | $ 24,970 | $ 14,100 | |||||||||||
Fair value of liabilities assumed: | |||||||||||||
Goodwill | $ 41,068 | $ 29,831 | $ 41,068 | 41,068 | $ 29,831 | 29,596 | |||||||
Revenue | 53,957 | $ 53,055 | $ 52,680 | $ 48,640 | 46,774 | $ 43,492 | $ 44,812 | $ 43,435 | 208,332 | 178,513 | 166,578 | ||
Net income | 40,448 | $ 4,195 | $ 4,697 | $ 4,097 | $ 2,848 | $ 2,478 | $ 2,171 | $ (69) | 53,437 | $ 7,428 | $ (9,793) | ||
VirtualScopics | |||||||||||||
Acquisitions | |||||||||||||
Total consideration paid, net of cash acquired | $ 14,970 | ||||||||||||
Maximum period for finalizing accounting for acquisition from acquisition date (in years) | 1 year | ||||||||||||
Fair value of assets acquired: | |||||||||||||
Cash and cash equivalents | $ 849 | 849 | 849 | 849 | |||||||||
Other accounts receivable | 3,679 | 3,679 | 3,679 | ||||||||||
Inventory | 111 | 111 | 111 | ||||||||||
Prepaid expenses and other current assets | 396 | 396 | 396 | ||||||||||
Property and equipment | 500 | 500 | 500 | ||||||||||
Identifiable intangible assets: | |||||||||||||
Total identifiable intangible assets | 10,300 | 10,300 | 10,300 | ||||||||||
Total assets acquired | 15,835 | 15,835 | 15,835 | ||||||||||
Fair value of liabilities assumed: | |||||||||||||
Accounts payable | 325 | 325 | 325 | ||||||||||
Accrued liabilities | 3,003 | 3,003 | 3,003 | ||||||||||
Current portion of capital lease obligations | 59 | 59 | 59 | ||||||||||
Current portion of long-term debt | 91 | 91 | 91 | ||||||||||
Deferred revenue | 700 | 700 | 700 | ||||||||||
Deferred tax liability | 272 | 272 | 272 | ||||||||||
Long-term capital lease obligations | 162 | 162 | 162 | ||||||||||
Long-term debt | 97 | 97 | 97 | ||||||||||
Total liabilities assumed | 4,709 | 4,709 | 4,709 | ||||||||||
Total identifiable net assets | 11,126 | 11,126 | 11,126 | ||||||||||
Goodwill | 4,693 | 4,693 | 4,693 | ||||||||||
Net assets acquired | 15,819 | 15,819 | 15,819 | ||||||||||
Revenue | 12,264 | ||||||||||||
Net income | 1,442 | ||||||||||||
VirtualScopics | Customer relationships | |||||||||||||
Identifiable intangible assets: | |||||||||||||
Total identifiable intangible assets | 5,200 | 5,200 | $ 5,200 | ||||||||||
Weighted Average Life (Years) | 12 years | ||||||||||||
VirtualScopics | Technology | |||||||||||||
Identifiable intangible assets: | |||||||||||||
Total identifiable intangible assets | 2,000 | 2,000 | $ 2,000 | ||||||||||
Weighted Average Life (Years) | 10 years | ||||||||||||
VirtualScopics | Backlog | |||||||||||||
Identifiable intangible assets: | |||||||||||||
Total identifiable intangible assets | $ 3,100 | $ 3,100 | $ 3,100 | ||||||||||
Weighted Average Life (Years) | 4 years | ||||||||||||
VirtualScopics | Common Stock | |||||||||||||
Acquisitions | |||||||||||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||||||||||
Share price (in dollars per share) | 4.05 | ||||||||||||
Series A and B Convertible Preferred Stock | VirtualScopics | |||||||||||||
Acquisitions | |||||||||||||
Share price (in dollars per share) | 336.30 | ||||||||||||
Preferred stock, par value (in dollars per share) | 0.001 | ||||||||||||
Series C-1 Convertible Preferred Stock | VirtualScopics | |||||||||||||
Acquisitions | |||||||||||||
Share price (in dollars per share) | 920 | ||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 |
Acquisitions - ePatch Division
Acquisitions - ePatch Division of DELTA Danish Electronics, Light, and Acoustics (Details) - USD ($) $ in Thousands | Apr. 01, 2016 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Fair value of liabilities assumed: | |||||
Goodwill | $ 41,068 | $ 41,068 | $ 29,831 | $ 29,596 | |
ePatch Division | |||||
Acquisitions | |||||
Cash consideration | $ 3,000 | ||||
Consideration in common stock (in shares) | 244,519 | ||||
Consideration in common stock | $ 2,885 | ||||
Maximum performance-based earn out | 3,000 | ||||
Total consideration transferred | $ 6,490 | ||||
Reduction in allocation for technology intangible asset | 200 | ||||
Maximum period for finalizing accounting for acquisition from acquisition date (in years) | 1 year | ||||
Fair value of assets acquired: | |||||
Inventory | 100 | 100 | |||
Property and equipment | 175 | 175 | |||
Identifiable intangible assets: | |||||
Total identifiable intangible assets | 3,300 | 3,300 | |||
Total assets acquired | 3,575 | 3,575 | |||
Fair value of liabilities assumed: | |||||
Accrued liabilities | 266 | 266 | |||
Total liabilities assumed | 266 | 266 | |||
Total identifiable net assets | 3,309 | 3,309 | |||
Goodwill | 3,181 | 3,181 | |||
Net assets acquired | 6,490 | 6,490 | |||
ePatch Division | Tradenames | |||||
Identifiable intangible assets: | |||||
Total identifiable intangible assets | 100 | 100 | |||
ePatch Division | Customer relationships | |||||
Identifiable intangible assets: | |||||
Total identifiable intangible assets | 400 | $ 400 | |||
Weighted Average Life (Years) | 10 years | ||||
ePatch Division | Technology | |||||
Identifiable intangible assets: | |||||
Total identifiable intangible assets | $ 2,800 | $ 2,800 | |||
Weighted Average Life (Years) | 10 years |
Acquisitions - RadCore Lab (Det
Acquisitions - RadCore Lab (Details) - RadCore $ in Thousands | Jun. 03, 2014USD ($)shares |
Acquisitions | |
Cash consideration | $ 400 |
Consideration in common stock (in shares) | shares | 22,513 |
Value of common stock issued for acquisition | $ 200 |
Acquisitions - Biomedical Syste
Acquisitions - Biomedical Systems Corporation (Details) - USD ($) $ in Thousands | Apr. 03, 2014 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Identifiable intangible assets: | |||||
Goodwill | $ 41,068 | $ 29,831 | $ 29,596 | ||
BMS | |||||
Acquisitions | |||||
Cash consideration | $ 8,000 | ||||
Consideration in common stock (in shares) | 62,859 | ||||
Value of common stock issued for acquisition | $ 650 | ||||
Fair value of assets acquired: | |||||
Property and equipment | $ 882 | ||||
Identifiable intangible assets: | |||||
Total identifiable intangible assets | 4,209 | ||||
Total assets acquired | 5,091 | ||||
Goodwill | 3,559 | ||||
Net assets acquired | 8,650 | ||||
BMS | Customer relationships | |||||
Identifiable intangible assets: | |||||
Total identifiable intangible assets | $ 2,100 | ||||
Weighted Average Life (Years) | 15 years | ||||
BMS | Technology | |||||
Identifiable intangible assets: | |||||
Total identifiable intangible assets | $ 1,849 | ||||
Weighted Average Life (Years) | 4 years | ||||
BMS | Covenants not to compete | |||||
Identifiable intangible assets: | |||||
Total identifiable intangible assets | $ 260 | ||||
Weighted Average Life (Years) | 7 years |
Acquisitions - Mednet Healthcar
Acquisitions - Mednet Healthcare Technologies (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 |
Fair value of liabilities assumed: | |||||
Goodwill | $ 29,596 | $ 41,068 | $ 29,831 | ||
Mednet | |||||
Acquisitions | |||||
Cash consideration | $ 5,500 | ||||
Consideration in common stock (in shares) | 128,866 | ||||
Value of common stock issued for acquisition | $ 940 | ||||
Fair value of assets acquired: | |||||
Cash and cash equivalents | $ (199) | ||||
Healthcare accounts receivable | 3,879 | ||||
Inventory | 311 | ||||
Property and equipment | 3,429 | ||||
Other assets | 317 | ||||
Identifiable intangible assets: | |||||
Total identifiable intangible assets | 9,220 | ||||
Total assets acquired | 16,957 | ||||
Fair value of liabilities assumed: | |||||
Accounts payable | 4,427 | ||||
Accrued liabilities | 2,932 | ||||
Other liabilities | 3,027 | ||||
Long-term debt, capital leases, note payable and related interest | $ 9,720 | 9,720 | |||
Total liabilities assumed | 20,106 | ||||
Total identifiable net assets | (3,149) | ||||
Goodwill | 9,589 | ||||
Net assets acquired | 6,440 | ||||
Unaudited pro forma information | |||||
Revenue from acquisition | 23,355 | ||||
Revenue | 170,076 | ||||
Net loss | $ (8,014) | ||||
Net loss per common share: Basic and diluted (in dollars per share) | $ (0.30) | ||||
Weighted average number of shares: Basic and diluted | 26,444,626 | ||||
Mednet | Tradenames | |||||
Identifiable intangible assets: | |||||
Total identifiable intangible assets | 700 | ||||
Mednet | Customer relationships | |||||
Identifiable intangible assets: | |||||
Total identifiable intangible assets | $ 6,500 | ||||
Weighted Average Life (Years) | 13 years | ||||
Mednet | Technology | |||||
Identifiable intangible assets: | |||||
Total identifiable intangible assets | $ 1,600 | ||||
Weighted Average Life (Years) | 5 years | ||||
Mednet | Covenants not to compete | |||||
Identifiable intangible assets: | |||||
Total identifiable intangible assets | $ 420 | ||||
Weighted Average Life (Years) | 5 years |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory | ||
Raw materials and supplies | $ 2,866 | $ 2,115 |
Finished goods | 2,310 | 263 |
Total inventory | $ 5,176 | $ 2,378 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property and equipment | |||
Total property and equipment, at cost | $ 85,893 | $ 80,133 | |
Less accumulated depreciation | (60,070) | (54,579) | |
Total property and equipment, net | 25,823 | 25,554 | |
Depreciation expense | 10,547 | 8,987 | $ 8,858 |
Cardiac monitoring devices, device parts and components | |||
Property and equipment | |||
Total property and equipment, at cost | $ 55,825 | 52,087 | |
Cardiac monitoring devices, device parts and components | Minimum | |||
Property and equipment | |||
Estimated Useful Life | 3 years | ||
Cardiac monitoring devices, device parts and components | Maximum | |||
Property and equipment | |||
Estimated Useful Life | 5 years | ||
Computers and purchased software | |||
Property and equipment | |||
Total property and equipment, at cost | $ 18,027 | 15,392 | |
Computers and purchased software | Minimum | |||
Property and equipment | |||
Estimated Useful Life | 3 years | ||
Computers and purchased software | Maximum | |||
Property and equipment | |||
Estimated Useful Life | 5 years | ||
Equipment, tools and molds | |||
Property and equipment | |||
Total property and equipment, at cost | $ 6,666 | 5,858 | |
Equipment, tools and molds | Minimum | |||
Property and equipment | |||
Estimated Useful Life | 3 years | ||
Equipment, tools and molds | Maximum | |||
Property and equipment | |||
Estimated Useful Life | 5 years | ||
Furniture and fixtures | |||
Property and equipment | |||
Estimated Useful Life | 7 years | ||
Total property and equipment, at cost | $ 1,467 | 1,863 | |
Leasehold improvements | |||
Property and equipment | |||
Total property and equipment, at cost | 3,171 | 3,049 | |
Capital leases | |||
Property and equipment | |||
Total property and equipment, at cost | $ 737 | $ 1,884 | |
Capital leases | Minimum | |||
Property and equipment | |||
Estimated Useful Life | 3 years | ||
Capital leases | Maximum | |||
Property and equipment | |||
Estimated Useful Life | 7 years |
Goodwill and Intangible Asset55
Goodwill and Intangible Assets - Changes In Carrying Amounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in the carrying amounts of goodwill by segment | ||
Balance at the beginning of the year | $ 29,831 | $ 29,596 |
Goodwill acquired during the year | 11,237 | 235 |
Balance at the end of the year | 41,068 | 29,831 |
Healthcare | ||
Changes in the carrying amounts of goodwill by segment | ||
Balance at the beginning of the year | 14,724 | 14,489 |
Goodwill acquired during the year | 235 | |
Balance at the end of the year | 14,724 | 14,724 |
Research | ||
Changes in the carrying amounts of goodwill by segment | ||
Balance at the beginning of the year | 11,950 | 11,950 |
Goodwill acquired during the year | 4,693 | |
Balance at the end of the year | 16,643 | 11,950 |
Technology | ||
Changes in the carrying amounts of goodwill by segment | ||
Balance at the beginning of the year | 3,157 | 3,157 |
Goodwill acquired during the year | 6,544 | |
Balance at the end of the year | $ 9,701 | $ 3,157 |
Goodwill and Intangible Asset56
Goodwill and Intangible Assets - Gross Carrying Amounts and Accumulated Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Intangible assets | |||
Total intangible assets, gross | $ 45,735 | $ 29,022 | |
Total accumulated amortization | (15,263) | (11,541) | |
Total intangible assets, net | 33,472 | 19,981 | |
Estimated amortization expense | |||
2,017 | 4,670 | ||
2,018 | 4,888 | ||
2,019 | 4,401 | ||
2,020 | 3,850 | ||
2,021 | 3,424 | ||
Thereafter | 9,239 | ||
Total estimated amortization | 30,472 | ||
Amortization expense | 3,722 | 3,501 | $ 3,692 |
Impairment of Goodwill and indefinite lived intangibles | 0 | 0 | $ 0 |
Tradenames | |||
Intangible assets | |||
Indefinite-lived trade names | 3,000 | 2,500 | |
Customer relationships | |||
Intangible assets | |||
Total intangible assets, gross | 16,700 | 10,700 | |
Total accumulated amortization | $ (3,809) | (2,520) | |
Customer relationships | Minimum | |||
Intangible assets | |||
Estimated Useful Life (Years) | 5 years | ||
Customer relationships | Maximum | |||
Intangible assets | |||
Estimated Useful Life (Years) | 15 years | ||
Technology including internally developed software | |||
Intangible assets | |||
Total intangible assets, gross | $ 21,135 | 13,522 | |
Total accumulated amortization | $ (6,588) | (5,422) | |
Technology including internally developed software | Minimum | |||
Intangible assets | |||
Estimated Useful Life (Years) | 3 years | ||
Technology including internally developed software | Maximum | |||
Intangible assets | |||
Estimated Useful Life (Years) | 10 years | ||
Backlog | |||
Intangible assets | |||
Total intangible assets, gross | $ 6,860 | 3,760 | |
Total accumulated amortization | $ (4,176) | (3,109) | |
Backlog | Minimum | |||
Intangible assets | |||
Estimated Useful Life (Years) | 1 year | ||
Backlog | Maximum | |||
Intangible assets | |||
Estimated Useful Life (Years) | 4 years | ||
Covenants not to compete | |||
Intangible assets | |||
Total intangible assets, gross | $ 1,040 | 1,040 | |
Total accumulated amortization | $ (690) | $ (490) | |
Covenants not to compete | Minimum | |||
Intangible assets | |||
Estimated Useful Life (Years) | 5 years | ||
Covenants not to compete | Maximum | |||
Intangible assets | |||
Estimated Useful Life (Years) | 7 years |
Equity Method Investment (Detai
Equity Method Investment (Details) - Well Bridge Health, Inc - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2016 | |
Summary of investments | ||
Beginning balance | $ 1,100 | |
Capital contributions | 312 | |
Loss in equity method investment | (287) | |
Ending balance | 1,125 | |
Equity Method Investments | 1,100 | $ 1,125 |
Percentage of ownership acquired | 30.00% | |
Goodwill | ||
Summary of investments | ||
Beginning balance | 891 | |
Equity Method Investments | $ 891 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued Expenses | ||
Accrued compensation | $ 7,831 | $ 6,454 |
Accrued professional fees | 2,841 | 1,858 |
Accrued taxes | 250 | 234 |
Accrued interest | 330 | 327 |
Other | 2,446 | 2,357 |
Total | $ 13,698 | $ 11,230 |
Credit Agreement (Details)
Credit Agreement (Details) - USD ($) $ in Thousands | Dec. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2016 |
Credit Agreement | |||
Extinguishment of debt | $ 17,411 | ||
Loss on extinguishment of debt | $ 372 | ||
HFS | |||
Credit Agreement | |||
Percentage of capital stock of U.S. based subsidiaries | 65.00% | ||
HFS | LIBOR | |||
Credit Agreement | |||
Debt instrument, basis spread on variable rate (as a percent) | 4.00% | ||
LIBOR floor (as a percent) | 1.00% | ||
HFS | Term Loan | |||
Credit Agreement | |||
Maximum borrowing capacity | $ 25,000 | ||
Additional uncommitted borrowing capacity | 10,000 | ||
Loan balance net of original issue discount | 25,161 | ||
Debt discount and deferred charges | 651 | ||
HFS | Term Loan | April 2015 to December 2017 | |||
Credit Agreement | |||
Principal amount of quarterly installment payments | 312 | ||
HFS | Term Loan | January 2018 to September 2019 | |||
Credit Agreement | |||
Principal amount of quarterly installment payments | 625 | ||
HFS | Term Loan | October 2019 to December 2019 | |||
Credit Agreement | |||
Remaining principal amount to be paid in full | 16,563 | ||
HFS | Revolving Loan | |||
Credit Agreement | |||
Maximum borrowing capacity | $ 15,000 | ||
Amount drawn on credit borrowing | $ 3,000 |
Commitments and Contingencies60
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies | |||
Rent expense | $ 4,217 | $ 3,777 | $ 3,721 |
Future minimum lease payments under non-cancelable operating leases | |||
2,017 | 3,992 | ||
2,018 | 3,720 | ||
2,019 | 2,660 | ||
2,020 | 2,335 | ||
2,021 | 1,140 | ||
Thereafter | 3,174 | ||
Total minimum lease payments | 17,021 | ||
Future minimum lease payments under capital leases | |||
2,017 | 162 | ||
2,018 | 66 | ||
2,019 | 35 | ||
2,020 | 25 | ||
Total minimum lease payments | $ 288 |
Other Charges (Details)
Other Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Charges | |||||||||||
Legal fees | $ 7,177 | $ 5,764 | $ 4,691 | ||||||||
Professional fees | 719 | 50 | 669 | ||||||||
Severance and employee related costs | 645 | 249 | 1,738 | ||||||||
Other costs | 98 | ||||||||||
Total | $ 2,795 | $ 2,397 | $ 1,659 | $ 1,788 | $ 1,601 | $ 1,392 | $ 1,210 | $ 1,860 | $ 8,639 | $ 6,063 | $ 7,098 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures | |||
Common stock, shares authorized | 200,000,000 | 200,000,000 | |
Common stock, shares outstanding | 28,261,503 | 27,277,939 | |
Preferred stock, shares authorized | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
2008 Plan | |||
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures | |||
Common stock available for grant (in shares) | 2,637,019 | ||
Stock options | |||
Number of Shares | |||
Balance at the beginning of the period (in shares) | 3,420,519 | 3,250,852 | 3,135,934 |
Granted (in shares) | 519,770 | 427,786 | 582,012 |
Cancelled (in shares) | (49,709) | (181,777) | (310,303) |
Exercised (in shares) | (322,146) | (76,342) | (156,791) |
Balance at the end of the period (in shares) | 3,568,434 | 3,420,519 | 3,250,852 |
Weighted Average Exercise Price | |||
Balance at the beginning of the period (in dollars per share) | $ 6.69 | $ 6.40 | $ 5.83 |
Granted (in dollars per share) | 13.44 | 10.39 | 8.45 |
Cancelled (in dollars per share) | 9.97 | 11.32 | 6.55 |
Exercised (in dollars per share) | 4.56 | 3.82 | 3.37 |
Balance at the end of the period (in dollars per share) | $ 7.82 | $ 6.69 | $ 6.40 |
Stock options | 2008 Plan | |||
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures | |||
Increase in the number of options available to be granted as a percentage of total number of common shares outstanding | 4.00% | ||
Increase in the number of options available to be granted (in shares) | 1,500,000 | ||
Stock options | 2008 Plan | Maximum | |||
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures | |||
Expiration period | 10 years |
Shareholders' Equity - Outstand
Shareholders' Equity - Outstanding Stock Option (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
$1.93 - $3.17 | |
Summary of total outstanding stock options | |
Range of exercise prices, low end of range (in dollars per share) | $ 1.93 |
Range of exercise prices, high end of range (in dollars per share) | $ 3.17 |
Options Outstanding | |
Number Outstanding (in shares) | shares | 1,076,215 |
Weighted Average Remaining Contractual Life (in Years) | 5 years 6 months 26 days |
Weighted Average Exercise Price (in dollars per share) | $ 2.67 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 1,056,215 |
Weighted Average Remaining Contractual Life (in Years) | 5 years 6 months 22 days |
Weighted Average Exercise Price (in dollars per share) | $ 2.68 |
$3.18 - $6.43 | |
Summary of total outstanding stock options | |
Range of exercise prices, low end of range (in dollars per share) | 3.18 |
Range of exercise prices, high end of range (in dollars per share) | $ 6.43 |
Options Outstanding | |
Number Outstanding (in shares) | shares | 379,454 |
Weighted Average Remaining Contractual Life (in Years) | 4 years 4 days |
Weighted Average Exercise Price (in dollars per share) | $ 4.58 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 375,704 |
Weighted Average Remaining Contractual Life (in Years) | 3 years 11 months 27 days |
Weighted Average Exercise Price (in dollars per share) | $ 4.57 |
$6.44 - $9.87 | |
Summary of total outstanding stock options | |
Range of exercise prices, low end of range (in dollars per share) | 6.44 |
Range of exercise prices, high end of range (in dollars per share) | $ 9.87 |
Options Outstanding | |
Number Outstanding (in shares) | shares | 1,242,539 |
Weighted Average Remaining Contractual Life (in Years) | 5 years 10 months 17 days |
Weighted Average Exercise Price (in dollars per share) | $ 7.92 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 876,341 |
Weighted Average Remaining Contractual Life (in Years) | 4 years 10 months 2 days |
Weighted Average Exercise Price (in dollars per share) | $ 7.44 |
$9.88 - $15.74 | |
Summary of total outstanding stock options | |
Range of exercise prices, low end of range (in dollars per share) | 9.88 |
Range of exercise prices, high end of range (in dollars per share) | $ 15.74 |
Options Outstanding | |
Number Outstanding (in shares) | shares | 399,002 |
Weighted Average Remaining Contractual Life (in Years) | 8 years 2 months 12 days |
Weighted Average Exercise Price (in dollars per share) | $ 10.55 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 174,103 |
Weighted Average Remaining Contractual Life (in Years) | 8 years 1 month 6 days |
Weighted Average Exercise Price (in dollars per share) | $ 10.32 |
$15.75 - $30.00 | |
Summary of total outstanding stock options | |
Range of exercise prices, low end of range (in dollars per share) | 15.75 |
Range of exercise prices, high end of range (in dollars per share) | $ 30 |
Options Outstanding | |
Number Outstanding (in shares) | shares | 456,224 |
Weighted Average Remaining Contractual Life (in Years) | 5 years 10 months 28 days |
Weighted Average Exercise Price (in dollars per share) | $ 19.25 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 228,724 |
Weighted Average Remaining Contractual Life (in Years) | 2 years 1 month 28 days |
Weighted Average Exercise Price (in dollars per share) | $ 20.47 |
$30.01 - $30.98 | |
Summary of total outstanding stock options | |
Range of exercise prices, low end of range (in dollars per share) | 30.01 |
Range of exercise prices, high end of range (in dollars per share) | $ 30.98 |
Options Outstanding | |
Number Outstanding (in shares) | shares | 15,000 |
Weighted Average Remaining Contractual Life (in Years) | 1 year 7 months 17 days |
Weighted Average Exercise Price (in dollars per share) | $ 30.98 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 15,000 |
Weighted Average Remaining Contractual Life (in Years) | 1 year 7 months 17 days |
Weighted Average Exercise Price (in dollars per share) | $ 30.98 |
$1.93 - $30.98 | |
Summary of total outstanding stock options | |
Range of exercise prices, low end of range (in dollars per share) | 1.93 |
Range of exercise prices, high end of range (in dollars per share) | $ 30.98 |
Options Outstanding | |
Number Outstanding (in shares) | shares | 3,568,434 |
Weighted Average Remaining Contractual Life (in Years) | 5 years 9 months 29 days |
Weighted Average Exercise Price (in dollars per share) | $ 7.82 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 2,726,087 |
Weighted Average Remaining Contractual Life (in Years) | 4 years 11 months 19 days |
Weighted Average Exercise Price (in dollars per share) | $ 6.61 |
Shareholders' Equity - Aggregat
Shareholders' Equity - Aggregate Intrinsic Value of Options (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock-based compensation | |||
Aggregate intrinsic value of options outstanding at year-end | $ 52,671 | $ 19,436 | $ 15,258 |
Aggregate intrinsic value of options exercisable at year-end | 43,750 | 16,124 | 9,918 |
Aggregate intrinsic value of options exercised during the year | $ 3,546 | $ 662 | $ 840 |
Weighted average grant date fair value per option | $ 9.47 | $ 6.58 | $ 5 |
Total cash received from the exercise of stock options | $ 1,470 | $ 291 | $ 529 |
Shareholders' Equity - RSUs and
Shareholders' Equity - RSUs and PSUs (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
RSUs | |||
Number of Shares | |||
Balance at the beginning of the year (in shares) | 690,936 | 864,634 | 857,656 |
Granted (in shares) | 225,198 | 328,060 | 292,079 |
Forfeited (in shares) | (11,905) | (50,642) | (89,664) |
Vested (in shares) | (311,880) | (451,116) | (195,437) |
Balance at the end of the year (in shares) | 592,349 | 690,936 | 864,634 |
Weighted Average Grant Date Fair Value | |||
Balance at the beginning of the year (in dollars per shares) | $ 6.85 | $ 4.23 | $ 3.15 |
Granted (in dollars per share) | 11.06 | 9.70 | 8.48 |
Forfeited (in dollars per share) | 9.50 | 6.90 | 3.30 |
Vested (in dollars per share) | 4.08 | 3.89 | 6.27 |
Balance at the end of the year (in dollars per shares) | $ 9.86 | $ 6.85 | $ 4.23 |
PSU | |||
Number of Shares | |||
Balance at the beginning of the year (in shares) | 265,990 | 284,423 | |
Granted (in shares) | 284,423 | ||
Forfeited (in shares) | (18,433) | ||
Vested (in shares) | (132,998) | ||
Balance at the end of the year (in shares) | 132,992 | 265,990 | 284,423 |
Weighted Average Grant Date Fair Value | |||
Balance at the beginning of the year (in dollars per shares) | $ 8.68 | ||
Granted (in dollars per share) | $ 8.68 | ||
Forfeited (in dollars per share) | $ 8.68 | ||
Vested (in dollars per share) | $ 8.68 | ||
Balance at the end of the year (in dollars per shares) | $ 8.68 | $ 8.68 |
Shareholders' Equity - Outsta66
Shareholders' Equity - Outstanding RSUs (Details) - RSUs - $ / shares | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock-based compensation | ||||
RSUs Outstanding (in shares) | 592,349 | 690,936 | 864,634 | 857,656 |
$7.44 - $9.57 | ||||
Stock-based compensation | ||||
RSUs Outstanding (in shares) | 326,207 | |||
$7.44 - $9.57 | Minimum | ||||
Stock-based compensation | ||||
Grant price (in dollars per share) | $ 7.44 | |||
$7.44 - $9.57 | Maximum | ||||
Stock-based compensation | ||||
Grant price (in dollars per share) | $ 9.57 | |||
$9.58 - $15.74 | ||||
Stock-based compensation | ||||
RSUs Outstanding (in shares) | 266,142 | |||
$9.58 - $15.74 | Minimum | ||||
Stock-based compensation | ||||
Grant price (in dollars per share) | $ 9.58 | |||
$9.58 - $15.74 | Maximum | ||||
Stock-based compensation | ||||
Grant price (in dollars per share) | $ 15.74 | |||
$7.44 - $15.74 | ||||
Stock-based compensation | ||||
RSUs Outstanding (in shares) | 592,349 | |||
$7.44 - $15.74 | Minimum | ||||
Stock-based compensation | ||||
Grant price (in dollars per share) | $ 7.44 | |||
$7.44 - $15.74 | Maximum | ||||
Stock-based compensation | ||||
Grant price (in dollars per share) | $ 15.74 |
Shareholders' Equity - PSUs & P
Shareholders' Equity - PSUs & PSOs (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
PSU | |||
Number of Shares | |||
Stock based compensation | $ 444 | $ 711 | $ 0 |
Vested (in dollars per share) | $ 8.68 | ||
PSOs | |||
Number of Shares | |||
Balance at the beginning of the period (in shares) | 200,000 | ||
Granted (in shares) | 200,000 | ||
Options vested (in shares) | 100,000 | ||
Balance at the end of the period (in shares) | 200,000 | 200,000 | |
Stock based compensation | $ 1,297 | $ 0 | $ 0 |
Exercise price (in dollars per share) | $ 18.33 | ||
Vested (in dollars per share) | $ 12.97 | ||
Expected and contractual term | 10 years |
Shareholders' Equity - Stock Op
Shareholders' Equity - Stock Option (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Weighted average assumptions used to estimate the fair value of the stock-based awards | |||
Expected volatility (as a percent) | 64.40% | 66.50% | 62.80% |
Expected term (in years) | 7 years 11 months 16 days | 6 years 8 months 19 days | 6 years 5 months 27 days |
Weighted average risk-free interest rate (as a percent) | 1.61% | 1.68% | 1.85% |
Expected dividends (as a percent) | 0.00% | 0.00% | 0.00% |
Stock options | |||
Weighted average assumptions used to estimate the fair value of the stock-based awards | |||
Future forfeiture rate (as a percent) | 8.57% | ||
RSUs | |||
Weighted average assumptions used to estimate the fair value of the stock-based awards | |||
Future forfeiture rate (as a percent) | 6.43% | ||
PSU | |||
Weighted average assumptions used to estimate the fair value of the stock-based awards | |||
Future forfeiture rate (as a percent) | 0.00% | ||
PSOs | |||
Weighted average assumptions used to estimate the fair value of the stock-based awards | |||
Future forfeiture rate (as a percent) | 0.00% |
Shareholders' Equity - Stock 69
Shareholders' Equity - Stock Option and RSU (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock options | |||
Stock-based compensation | |||
Total compensation cost of options granted but not yet vested | $ 5,858 | $ 3,608 | $ 2,744 |
Weighted average remaining periods over which unrecognized amounts are expected to be recognized | 2 years 10 months 28 days | 2 years 7 months 28 days | 2 years 8 months 5 days |
Unvested awards (in shares) | 842,347 | 837,915 | |
Weighted-average grant-date fair value of unvested awards (in dollars per share) | $ 7.58 | $ 4.82 | |
RSUs | |||
Stock-based compensation | |||
Stock-based compensation expense related to nonvested awards | $ 3,036 | $ 2,869 | $ 1,979 |
Weighted average remaining periods over which unrecognized amounts are expected to be recognized | 1 year 5 months 5 days | 1 year 8 months 9 days | 1 year 6 months |
Unvested awards (in shares) | 592,349 | 690,936 | |
Weighted-average grant-date fair value of unvested awards (in dollars per share) | $ 9.86 | $ 6.85 |
Shareholders' Equity - Employee
Shareholders' Equity - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock-based compensation | ||||
Maximum percentage of compensation that employees may contribute through payroll deductions | 15.00% | |||
Maximum amount that employees may contribute through payroll deductions | $ 21 | |||
Percentage of the fair market price on the first day of the offering period or the market price as on the day of purchase | 85.00% | |||
Common stock purchased (in shares) | 150,888 | |||
Proceeds from the issuance of shares of common stock (in dollars) | $ 1,049 | |||
Increase in number of shares available for grant | 272,779 | |||
Remaining shares available under Plan | 625,176 | |||
Stock compensation expense | $ 520 | $ 420 | $ 408 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Benefit Plan | |||
Employer's matching contribution as a percent of of the first 3% of employees' salary contributed | 100.00% | ||
Percentage of employees' salary contributed matched 100% by employer | 3.00% | ||
Employer's matching contribution as a percent of of the next 2% of employees' salary contributed | 50.00% | ||
Percentage of employees' salary contributed matched 50% by employer | 2.00% | ||
Employer's contribution | $ 2,115 | $ 1,786 | $ 1,483 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net Operating Loss Carryforwards | |||
Release of federal and state valuation allowance | $ 51,630 | ||
Deferred tax assets: | |||
Net operating loss carryforwards | 33,404 | $ 36,149 | |
Research and development and AMT credit carryforwards | 912 | 5,115 | |
Stock option grants | 5,602 | 7,483 | |
Allowance for doubtful accounts | 4,965 | 4,473 | |
Deferred revenue | 885 | 964 | |
Other, net | 1,868 | 1,576 | |
Total deferred tax assets | 47,636 | 55,760 | |
Less valuation allowance | (95) | (49,759) | |
Net deferred tax assets | 47,541 | 6,001 | |
Deferred tax liabilities: | |||
Property, plant and equipment | (3,604) | (3,027) | |
Intangible assets | (7,124) | (4,031) | |
Prepaid insurance | (177) | (176) | |
Total deferred tax liabilities | (10,905) | (7,234) | |
Net deferred tax asset | $ 36,636 | ||
Net deferred tax liability | $ (1,233) | ||
Reconciliation between expected income taxes computed at the federal rate and the (benefit from) provision for income taxes | |||
Federal rate of income tax (as a percent) | 35.00% | 35.00% | 35.00% |
Income tax provision (benefit) at statutory rate | $ 5,520 | $ 2,763 | $ (4,237) |
State income tax, net of federal benefit | 259 | (239) | 4 |
Research and development | 634 | (626) | |
Deferred tax asset adjustments | 4,336 | ||
Unrecognized tax benefit | 3,559 | ||
Other | 289 | 549 | 411 |
(Decrease) increase in valuation allowance | (51,630) | (3,239) | 2,135 |
(Benefit from) provision for income taxes | (37,667) | 468 | (2,313) |
Current: | |||
Federal | 321 | 173 | |
State | 153 | 50 | |
Total provision for income taxes | 474 | 223 | |
Deferred: | |||
Federal | (32,484) | 220 | |
State | (5,657) | 25 | |
Total deferred (benefit from) provision for income taxes | (38,141) | 245 | (2,499) |
(Benefit from) provision for income taxes | (37,667) | 468 | (2,313) |
Tax reserve recorded for tax contingencies | $ 0 | $ 0 | |
Federal | |||
Net Operating Loss Carryforwards | |||
Net operating loss carryforwards | 86,868 | ||
State | |||
Net Operating Loss Carryforwards | |||
Net operating loss carryforwards | $ 43,203 |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Total Uncertain Tax Positions | |
Additions to uncertain tax positions related to prior years | $ 3,899 |
Ending balance | $ 3,899 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment information | |||||||||||
Number of operating segments | segment | 3 | ||||||||||
Revenue | $ 53,957 | $ 53,055 | $ 52,680 | $ 48,640 | $ 46,774 | $ 43,492 | $ 44,812 | $ 43,435 | $ 208,332 | $ 178,513 | $ 166,578 |
Income (loss) before income taxes | 15,770 | 7,896 | (12,106) | ||||||||
Depreciation and amortization | 14,269 | 12,488 | 12,550 | ||||||||
Capital expenditures | 10,899 | 13,600 | 12,781 | ||||||||
Healthcare | |||||||||||
Segment information | |||||||||||
Revenue | 165,664 | 145,963 | 133,178 | ||||||||
Research | |||||||||||
Segment information | |||||||||||
Revenue | 32,565 | 21,853 | 19,744 | ||||||||
Technology | |||||||||||
Segment information | |||||||||||
Revenue | 10,103 | 10,697 | 13,656 | ||||||||
Operating segments | Healthcare | |||||||||||
Segment information | |||||||||||
Revenue | 7 | ||||||||||
Income (loss) before income taxes | 60,362 | 44,559 | 27,792 | ||||||||
Depreciation and amortization | 10,216 | 7,790 | 8,157 | ||||||||
Capital expenditures | 8,885 | 9,155 | 11,488 | ||||||||
Operating segments | Research | |||||||||||
Segment information | |||||||||||
Income (loss) before income taxes | 2,229 | 540 | (701) | ||||||||
Depreciation and amortization | 3,837 | 3,676 | 3,710 | ||||||||
Capital expenditures | 1,941 | 4,373 | 1,077 | ||||||||
Operating segments | Technology | |||||||||||
Segment information | |||||||||||
Revenue | 11,456 | 10,224 | 7,789 | ||||||||
Income (loss) before income taxes | 3,862 | 4,390 | 6,681 | ||||||||
Depreciation and amortization | 517 | 371 | 502 | ||||||||
Capital expenditures | 73 | 72 | 216 | ||||||||
Corporate and Other | |||||||||||
Segment information | |||||||||||
Revenue | (11,456) | (10,231) | (7,789) | ||||||||
Income (loss) before income taxes | (50,683) | (41,593) | (45,878) | ||||||||
Depreciation and amortization | $ (301) | $ 651 | $ 181 |
Legal Proceedings - CardioNet v
Legal Proceedings - CardioNet v. ScottCare Litigation (Details) $ in Thousands | 1 Months Ended | |
May 31, 2012patent | Dec. 31, 2016USD ($) | |
CardioNet v. ScottCare Litigation | ||
Legal proceedings | ||
Number of patents allegedly infringed | patent | 5 | |
CardioNet, Inc. and Braemar Manufacturing, LLC | ||
Legal proceedings | ||
Accrual of contingent liabilities | $ | $ 0 |
Quarterly Financial Data (Una76
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Data (Unaudited) | |||||||||||
Total revenue | $ 53,957 | $ 53,055 | $ 52,680 | $ 48,640 | $ 46,774 | $ 43,492 | $ 44,812 | $ 43,435 | $ 208,332 | $ 178,513 | $ 166,578 |
Gross profit | 33,036 | 32,866 | 32,921 | 30,627 | 28,264 | 26,337 | 26,733 | 25,223 | 129,450 | 106,557 | 93,464 |
Other charges | 2,795 | 2,397 | 1,659 | 1,788 | 1,601 | 1,392 | 1,210 | 1,860 | 8,639 | 6,063 | 7,098 |
Income from operations | 3,391 | 4,966 | 5,121 | 4,534 | 3,458 | 3,006 | 2,585 | 469 | 18,012 | 9,518 | (4,313) |
Net income (loss) | $ 40,448 | $ 4,195 | $ 4,697 | $ 4,097 | $ 2,848 | $ 2,478 | $ 2,171 | $ (69) | $ 53,437 | $ 7,428 | $ (9,793) |
Basic net income (loss) per share | $ 1.43 | $ 0.15 | $ 0.17 | $ 0.15 | $ 0.10 | $ 0.09 | $ 0.08 | $ 0 | $ 1.91 | $ 0.27 | $ (0.37) |
Diluted net income (loss) per share | $ 1.30 | $ 0.14 | $ 0.15 | $ 0.14 | $ 0.10 | $ 0.08 | $ 0.08 | $ 0 | $ 1.75 | $ 0.26 | $ (0.37) |
Schedule II (Details)
Schedule II (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for Doubtful Accounts | |||
Beginning Balance | $ 11,601 | $ 10,662 | $ 7,640 |
Additions Charged to Expense | 9,931 | 8,047 | 9,347 |
Deductions From Reserve | (8,669) | (7,108) | (6,325) |
Ending Balance | $ 12,863 | $ 11,601 | $ 10,662 |