Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Dec. 31, 2014 | Feb. 17, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Dec-14 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | CIVI | |
Entity Registrant Name | CIVITAS SOLUTIONS, INC. | |
Entity Central Index Key | 1608638 | |
Current Fiscal Year End Date | -21 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 36,950,000 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $5,183 | $196,147 |
Restricted cash | 2,421 | 1,944 |
Accounts receivable, net of allowances of $12,198 and $11,491 at December 31, 2014 and September 30, 2014 | 146,993 | 141,378 |
Deferred tax assets, net | 18,176 | 18,176 |
Prepaid expenses and other current assets | 21,932 | 16,207 |
Total current assets | 194,705 | 373,852 |
Property and equipment, net | 159,996 | 159,486 |
Intangible assets, net | 328,484 | 327,726 |
Goodwill | 259,731 | 257,632 |
Restricted cash | 50,000 | 50,000 |
Other assets | 39,971 | 39,258 |
Total assets | 1,032,887 | 1,207,954 |
Current liabilities: | ||
Accounts payable | 20,601 | 22,350 |
Accrued payroll and related costs | 75,295 | 84,176 |
Other accrued liabilities | 45,539 | 49,320 |
Obligations under capital lease, current | 462 | 451 |
Current portion of long-term debt | 6,000 | 168,000 |
Total current liabilities | 147,897 | 324,297 |
Other long-term liabilities | 70,225 | 69,314 |
Deferred tax liabilities, net | 58,202 | 57,552 |
Obligations under capital lease, less current portion | 5,938 | 6,058 |
Long-term debt, less current portion | 637,367 | 635,195 |
Commitments and contingencies (Note 14) | ||
Stockholders' Equity | ||
Common stock, $0.01 par value; 350,000,000 shares authorized; and 36,950,000 shares issued and outstanding at December 31, 2014 and September 30, 2014, respectively | 370 | 370 |
Additional paid-in capital | 274,103 | 272,943 |
Accumulated deficit | -161,215 | -157,775 |
Total stockholders' equity | 113,258 | 115,538 |
Total liabilities and stockholders' equity | $1,032,887 | $1,207,954 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Allowances for accounts receivable | $12,198 | $11,491 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 350,000,000 | 350,000,000 |
Common stock, shares issued | 36,950,000 | 36,950,000 |
Common stock, shares outstanding | 36,950,000 | 36,950,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Income Statement [Abstract] | ||
Net revenue | $334,590 | $303,992 |
Cost of revenue (exclusive of depreciation expense shown below) | 257,558 | 238,691 |
Operating expenses: | ||
General and administrative | 40,308 | 36,251 |
Depreciation and amortization | 17,210 | 15,926 |
Total operating expenses | 57,518 | 52,177 |
Income from operations | 19,514 | 13,124 |
Other income (expense): | ||
Management fee of related party | -162 | -345 |
Other income, net | 140 | 387 |
Extinguishment of debt | -14,343 | |
Interest expense | -10,905 | -19,501 |
Loss from continuing operations before income taxes | -5,756 | -6,335 |
Benefit for income taxes | -2,371 | -1,652 |
Loss from continuing operations | -3,385 | -4,683 |
Loss from discontinued operations, net of tax | -55 | -7 |
Net loss | ($3,440) | ($4,690) |
Loss per common share, basic and diluted | ||
Loss from continuing operations | ($0.09) | ($0.19) |
Loss from discontinued operations | $0 | $0 |
Net loss | ($0.09) | ($0.19) |
Weighted average number of common shares outstanding, basic and diluted | 36,950,000 | 25,250,000 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Loss (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Comprehensive Income [Abstract] | ||
Net loss | ($3,440) | ($4,690) |
Other comprehensive income (loss), net of tax: | ||
Gain on derivative instrument classified as cash flow hedge, including a tax effect for the three months ended December 31, 2013 of $310 | 466 | |
Comprehensive loss | ($3,440) | ($4,224) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Comprehensive Loss (Parenthetical) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Statement of Comprehensive Income [Abstract] | |
Tax effects of changes in unrealized gain on derivatives | $310 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Operating activities: | ||
Net loss | ($3,440) | ($4,690) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Accounts receivable allowances | 4,294 | 3,840 |
Depreciation of property and equipment | 7,831 | 6,636 |
Amortization of intangible assets | 9,445 | 9,429 |
Amortization and write-off of original issue discount and initial purchasers discount | 3,672 | 734 |
Amortization and write-off of financing costs | 1,522 | 719 |
Stock-based compensation | 1,160 | 20 |
Deferred income taxes | 650 | -1,238 |
Loss on disposal of assets | 65 | 18 |
Changes in operating assets and liabilities: | ||
Accounts receivable | -9,909 | -2,912 |
Other assets | -7,960 | -5,851 |
Accounts payable | -1,236 | -8,191 |
Accrued payroll and related costs | -8,881 | -2,177 |
Other accrued liabilities | -3,781 | 10,339 |
Other long-term liabilities | 911 | 3,440 |
Net cash (used in) provided by operating activities | -5,657 | 10,116 |
Investing activities: | ||
Cash paid for acquisitions, net of cash received | -12,518 | -1,240 |
Purchases of property and equipment | -8,886 | -6,023 |
Changes in restricted cash | -477 | -468 |
Proceeds from sale of assets | 183 | 390 |
Net cash used in investing activities | -21,698 | -7,341 |
Financing activities: | ||
Repayments of long-term debt | -163,500 | -1,400 |
Proceeds from borrowings under senior revolver | 2,500 | 2,500 |
Repayments of borrowings under senior revolver | -2,500 | -2,500 |
Repayments of capital lease obligations | -109 | -101 |
Net cash used in financing activities | -163,609 | -1,501 |
Net (decrease) increase in cash and cash equivalents | -190,964 | 1,274 |
Cash and cash equivalents at beginning of period | 196,147 | 19,440 |
Cash and cash equivalents at end of period | 5,183 | 20,714 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 10,783 | 10,050 |
Cash paid for income taxes | 113 | 86 |
Supplemental disclosure of non-cash investing activities: | ||
Accrued property and equipment | $451 | $459 |
Business_Overview
Business Overview | 3 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Business Overview | 1. Business Overview |
Civitas Solutions, Inc., through its wholly-owned subsidiaries (collectively, the “Company”), is a leading provider of home- and community-based health and human services to individuals with intellectual and/or developmental disabilities, acquired brain injury and other catastrophic injuries and illnesses; and to youth with emotional, behavioral and/or medically complex challenges. Since the Company’s founding in 1980, the Company’s operations have grown to 35 states. The Company provides residential services to over 12,600 clients and more than 16,900 clients receive periodic services from the Company in non-residential settings. | |
The Company designs customized service plans to meet the unique needs of its clients, which it delivers in home- and community-based settings. Most of the Company’s service plans involve residential support, typically in small group homes, host home settings, or specialized community facilities, designed to improve the clients’ quality of life and to promote their independence and participation in community life. Other services offered include supported living, day and transitional programs, vocational services, case management, family-based and outpatient therapeutic services, post-acute treatment and neurorehabilitation, neurobehavioral rehabilitation and physical, occupational and speech therapies, among others. The Company’s customized service plans offer its clients as well as the payors of these services, an attractive, cost-effective alternative to health and human services provided in large, institutional settings. | |
Civitas Solutions, Inc. (“Civitas”) is a subsidiary of NMH Investment, LLC (“NMH Investment”), which was formed in connection with the acquisition of our business by affiliates of Vestar Capital Partners (“Vestar’’) in 2006. The equity interests of NMH Investment are owned by Vestar and certain of our executive officers and directors and other members of management. On September 22, 2014, Civitas completed an initial public offering (the “IPO”) of its common stock and became a reporting company under the Securities Exchange Act of 1934, as amended. NMH Holdings, LLC is a wholly owned subsidiary of Civitas and National Mentor Holdings, Inc. (“NMHI”) is a wholly owned subsidiary of NMH Holdings, LLC. |
Significant_Accounting_Policie
Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies |
Basis of Presentation | |
The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements herein should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2014, which is on file with the SEC. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal and recurring accruals, necessary to present fairly the financial statements in accordance with GAAP. Intercompany balances and transactions between the Company and its subsidiaries have been eliminated in consolidation. Operating results for the three months ended December 31, 2014 may not necessarily be indicative of results to be expected for any other interim period or for the full year. | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |
Our financial results are affected by the selection and application of accounting policies and methods. There were no material changes in the three months ended December 31, 2014 to the application of significant accounting policies as described in our audited financial statements for the year ended September 30, 2014. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 3 Months Ended |
Dec. 31, 2014 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 3. Recent Accounting Pronouncements |
Reporting Discontinued Operations—In April 2014, the FASB issued Accounting Standards Update No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). ASU 2014-08 changes the definition of a discontinued operation to include only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, and changes the criteria and enhances disclosures for reporting discontinued operations. The pronouncement is applied prospectively, and was effective for the first quarter of our fiscal year ending September 30, 2015. The adoption has not had an impact on the Company’s consolidated financial statements; however, it is expected that it will significantly limit the classification of future disposals of components as discontinued operations. | |
Revenue from Contracts with Customers— In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method. |
LongTerm_Debt
Long-Term Debt | 3 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Long-Term Debt | 4. Long-Term Debt | ||||||||
As of December 31, 2014 and September 30, 2014, the Company’s long-term debt consisted of the following: | |||||||||
(in thousands) | December 31, | September 30, | |||||||
2014 | 2014 | ||||||||
Term loan principal and interest due in quarterly installments through January 31, 2021, subject to acceleration to November 15, 2017 | $ | 595,500 | $ | 597,000 | |||||
Original issue discount on term loan, net of accumulated amortization | (1,136 | ) | (1,235 | ) | |||||
Senior notes, due February 15, 2018; semi-annual cash interest payments due each February 15th and August 15th (interest rate of 12.50%) | 50,000 | 212,000 | |||||||
Original issue discount and initial purchaser discount on senior notes, net of accumulated amortization | (997 | ) | (4,570 | ) | |||||
643,367 | 803,195 | ||||||||
Less current portion | 6,000 | 168,000 | |||||||
Long-term debt | $ | 637,367 | $ | 635,195 | |||||
Senior Secured Credit Facilities | |||||||||
On January 31, 2014, NMHI and NMH Holdings, LLC entered into a new senior credit agreement (the “senior credit agreement”) with Barclays Bank PLC, as administrative agent, and the other agents and lenders named therein, for the new senior secured credit facilities (the “senior secured credit facilities”), consisting of a $600.0 million term loan facility (the “term loan facility”), of which $50.0 million was deposited in a cash collateral account in support of issuance of letters of credit under an institutional letter of credit facility (the “institutional letter of credit facility”), and a $100.0 million senior secured revolving credit facility (the “senior revolver”). | |||||||||
Term loan | |||||||||
As of December 31, 2014 and September 30, 2014, NMHI had $595.5 million and $597.0 million, respectively, of borrowings under the term loan. At December 31, 2014, the variable interest rate on the term loan was 4.25%. At September 30, 2014, the variable interest rate on the term loan was 4.75% | |||||||||
Senior revolver | |||||||||
During the three months ended December 31, 2014, NMHI had borrowings and repayments of $2.5 million on the senior revolver. At December 31, 2014 and September 30, 2014, NMHI had no outstanding borrowings under the senior revolver. | |||||||||
At September 30, 2014, NMHI had $100.0 million of available credit under the senior revolver. On October 21, 2014, NMHI increased the revolving commitment under the senior revolver by $20.0 million, on terms identical to those applicable to the existing senior revolver. At December 31, 2014, NMHI had $119.1 million of available credit under the senior revolver. | |||||||||
NMHI had $48.4 million and $44.3 million of standby letters of credit issued under the institutional letter of credit facility primarily related to the Company’s workers’ compensation insurance coverage at December 31, 2014 and September 30, 2014, respectively. NMHI also issued $0.9 million of standby letters of credit under the senior revolver at December 31, 2014. NMHI’s institutional letter of credit facility provided for the issuance of letters of credit up to the $50.0 million limit, subject to certain maintenance and issuance limitations, and letters of credit in excess of that amount reduced availability under the NMHI’s senior revolver. The interest rate for borrowings under the senior revolver was 5.5 % and 6.0% as of December 31, 2014 and September 30, 2014, respectively. | |||||||||
The senior revolver includes borrowing capacity available for borrowings on same-day notice, referred to as the “swingline loans.” Any swingline loans or other borrowings under the senior revolver would have maturities less than one year, and would be reflected under Current portion of long-term debt on the Company’s consolidated balance sheets. | |||||||||
Senior Notes | |||||||||
In February 2011, NMHI issued $250.0 million of 12.5% senior notes due 2018 (the “senior notes”). As of September 30, 2014, NMHI had $212.0 million of aggregate principal amount of senior notes outstanding. On October 17, 2014, NMHI paid $175.6 million to redeem $162.0 million in aggregate principal of senior notes plus accrued interest of $3.5 million using proceeds from the Company’s initial public offering. In accordance with the provisions of the indenture governing the senior notes, the amount paid included an associated call premium of $10.1 million. As a result of this redemption, the Company expensed deferred financing fees of $0.8 million, original issue discount of $3.4 million, and the call premium of $10.1 million resulting in $14.3 million of expense reflected in extinguishment of debt in the statement of operations. As of December 31, 2014, NMHI had $50.0 million of aggregate principal amount of senior notes outstanding. | |||||||||
On February 2, 2015, NMHI issued a conditional notice of redemption for all of its outstanding senior notes. NMHI intends to refinance the remaining outstanding senior notes as market conditions permit. If the refinancing is successful, the senior notes would be retired on March 4, 2015. | |||||||||
Covenants | |||||||||
The senior credit agreement and the indenture governing the senior notes contain negative financial and non-financial covenants, including, among other things, limitations on the ability of NMHI and its subsidiaries to incur additional debt, create liens on assets, transfer or sell assets, pay dividends, redeem stock or make other distributions or investments, and engage in certain transactions with affiliates. | |||||||||
In addition, the senior credit agreement contains a springing financial covenant. If, at the end of any fiscal quarter, the Company’s usage of the senior revolver exceeds 30% of the commitments thereunder, it is required to maintain at the end of each such fiscal quarter a consolidated first lien leverage ratio of not more than 5.50 to 1.00. This consolidated first lien leverage ratio will step down to 5.00 to 1.00 commencing with the fiscal quarter ending March 31, 2017. The springing financial covenant was not in effect as of December 31, 2014 or September 31, 2014 as NMHI’s usage of the senior revolver did not exceed the threshold for that quarter. | |||||||||
The senior credit agreement also contains a number of covenants that, among other things, restrict, subject to certain exceptions, NMHI’s ability and that of its subsidiaries to: (i) incur additional indebtedness; (ii) create liens on assets; (iii) engage in mergers or consolidations; (iv) sell assets; (v) pay dividends and distributions or repurchase our capital stock; (vi) enter into swap transactions; (vii) make investments, loans or advances; (viii) repay certain junior indebtedness; (ix) engage in certain transactions with affiliates; (x) enter into sale and leaseback transactions; (xi) amend material agreements governing certain of its junior indebtedness; (xii) change its lines of business; (xiii) make certain acquisitions; and (xiv) limitations on the letter of credit cash collateral account. If NMHI withdraws any of the $50.0 million from the cash collateral account supporting the issuance of letters of credit, it must use the cash to either prepay the term loan facility or to secure any other obligations under the senior secured credit facilities in a manner reasonably satisfactory to the administrative agent. The senior credit agreement contains customary affirmative covenants and events of default. | |||||||||
Derivatives | |||||||||
NMHI entered into an interest rate swap in a notional amount of $400.0 million effective March 31, 2011, which expired on September 30, 2014. The Company accounted for the interest rate swap as a cash flow hedge and the effectiveness of the hedge relationship was assessed on a quarterly basis. The fair value of the swap agreement, representing the price that would be paid to transfer the liability in an orderly transaction between market participants, was $2.4 million or $1.5 million after taxes, at December 31, 2013. The fair value was recorded in current liabilities and was determined based on pricing models and independent formulas using current assumptions. The change in fair market value of $0.5 million, including a tax effect of $0.3 million, was recorded in the consolidated statements of comprehensive loss for the three months ended December 31, 2013. | |||||||||
On January 20, 2015, the Company entered into two new interest rate swap agreements in an aggregate notional amount of $375.0 million in order to reduce the variability of cash flows of our variable rate debt. The Company entered into these interest rate swaps to hedge the risk of changes in the floating rate of interest on borrowings under the term loan. Under the terms of the swaps, the Company will receive from the counterparty a quarterly payment based on a rate equal to the greater of 3-month LIBOR or 1.00% per annum, and the Company will make payments to the counterparty based on a fixed rate of 1.795% per annum, in each case on the notional amount of $375.0 million, settled on a net payment basis. |
Stockholders_Equity
Stockholders' Equity | 3 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
Stockholders' Equity | 5. Stockholders’ Equity |
Common Stock | |
The holders of the Company’s common stock are entitled to receive dividends when and as declared by the Company’s Board of Directors. In addition, the holders of common stock are entitled to one vote per share. |
Business_Combinations
Business Combinations | 3 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||
Business Combinations | 6. Business Combinations | ||||||||||||||||
The operating results of the businesses acquired are included in the consolidated statements of operations from the date of acquisition. The Company accounted for the acquisitions under the purchase method of accounting and, as a result, the purchase price was allocated to the assets acquired and liabilities assumed based upon their respective fair values. The excess of the purchase price over the estimated fair value of net tangible assets was allocated to specifically identified intangible assets, with the residual being allocated to goodwill. | |||||||||||||||||
Fiscal 2015 Acquisitions | |||||||||||||||||
During the three months ended December 31, 2014, the Company acquired certain assets of three companies complementary to its business for a total fair value consideration of $12.5 million. | |||||||||||||||||
Capstone Services, LLC (“Capstone”). On October 31, 2014, the Company acquired the assets of Capstone for $4.5 million. Capstone is located in Minnesota and provides residential and home-based supportive living services to individuals with developmental disabilities. As a result of this acquisition, the Company recorded $0.8 million of goodwill in the Human Services segment, which is expected to be deductible for tax purposes. The Company acquired $3.5 million of intangible assets which included $2.6 million of agency contracts with a weighted average useful life of 12 years, $0.8 million of licenses and permits with a weighted average useful life of 10 years, and $0.1 million of non-compete/non-solicit agreement with a useful life of 5 years. In addition, the Company acquired total tangible assets of $0.2 million. | |||||||||||||||||
Lakeview Systems (“Lakeview”). On December 29, 2014, the Company acquired certain assets of Lakeview’s New Hampshire programs for $8.0 million. Lakeview provides community-based, residential services for individuals with brain injuries. Based on the estimated fair values of the net assets acquired at the date of acquisition, the Company recorded $1.3 million of goodwill in the Post-acute Specialty Rehabilitation Services segment, which is expected to be deductible for tax purposes. The Company acquired $6.7 million of intangible assets which included $6.0 million of agency contracts with a weighted average useful life of 12 years, $0.7 million of licenses and permits with a weighted average useful life of 10 years, and $31 thousand of non-compete/non-solicit agreement with a useful life of 5 years. In addition, the Company acquired total tangible assets of $40 thousand. | |||||||||||||||||
Other Acquisitions. During fiscal 2015, the Company acquired the assets of Kessel Group Home, Inc. This acquisition is in the business of providing group home and related services to individuals with developmental disabilities and is included in our Human Services segment. Total cash consideration for this company was $60.6 thousand of which $57.3 thousand was recorded to goodwill and $3.3 thousand was recorded to tangible assets. | |||||||||||||||||
The following table summarizes the recognized amounts of identifiable assets acquired assumed at the date of each acquisition: | |||||||||||||||||
(in thousands) | Identifiable | Property and | Total identifiable | Goodwill | |||||||||||||
intangible | equipment | net assets | |||||||||||||||
assets | |||||||||||||||||
Capstone | $ | 3,539 | $ | 173 | $ | 3,712 | $ | 762 | |||||||||
Lakeview | 6,664 | 40 | 6,704 | 1,280 | |||||||||||||
Other Acquisitions | — | 3 | 3 | 57 | |||||||||||||
Total | $ | 10,203 | $ | 216 | $ | 10,419 | $ | 2,099 | |||||||||
Pro forma Results of Operations | |||||||||||||||||
The following table presents the unaudited pro forma financial results as if the fiscal 2015 acquisitions had occurred on the first day of the period presented. The pro forma information presented below does not intend to indicate what the Company’s results of operations would have been if the acquisitions had in fact occurred at the beginning of the earliest period presented nor does it intend to be a projection of the impact on future results or trends. The Company has determined that the presentation of the results of operations for each of these acquisitions, from the date of acquisition, is impracticable due to the integration of the operations upon acquisition. | |||||||||||||||||
Three Months Ended | |||||||||||||||||
December 31, | |||||||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||||||
Pro forma net revenues | $ | 336,928 | $ | 307,701 | |||||||||||||
Income from operations | 20,087 | 13,945 | |||||||||||||||
Fiscal 2014 Acquisitions | |||||||||||||||||
During the three months ended December 31, 2013, the Company acquired one company complementary to its business in the Human Services segment for a total cash consideration of $1.2 million. | |||||||||||||||||
Show-Me Health Care, Inc. (“Show-Me Health Care”). On November 29, 2013, the Company acquired the assets of Show-Me Health Care for $1.2 million. Show-Me Health Care is located in Missouri and provides community-based supportive living services to individuals with developmental disabilities. As a result of this acquisition, the Company recorded $0.3 million of goodwill in the Human Services segment, which is expected to be deductible for tax purposes. The Company acquired $0.9 million of intangible assets which included $0.7 million of agency contracts with a weighted average useful life of 12 years, $0.2 million of licenses and permits with a weighted average useful life of 10 years, and $14 thousand of non-compete/non-solicit agreement with a useful life of 5 years. | |||||||||||||||||
The following table summarizes the recognized amounts of identifiable assets acquired assumed at the date of the acquisition: | |||||||||||||||||
(in thousands) | Identifiable | Property and | Total identifiable | Goodwill | |||||||||||||
intangible | equipment | net assets | |||||||||||||||
assets | |||||||||||||||||
Show-Me Health Care | $ | 895 | $ | 9 | $ | 904 | $ | 336 | |||||||||
Total | $ | 895 | $ | 9 | $ | 904 | $ | 336 |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 3 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets | ||||||||||||||||
Goodwill | |||||||||||||||||
The changes in goodwill for the three months ended December 31, 2014 are as follows (in thousands): | |||||||||||||||||
Human | Post -Acute | Total | |||||||||||||||
Services | Specialty | ||||||||||||||||
Rehabilitation | |||||||||||||||||
Services | |||||||||||||||||
(in thousands) | |||||||||||||||||
Balance as of September 30, 2014 | $ | 190,658 | $ | 66,974 | $ | 257,632 | |||||||||||
Goodwill acquired through acquisitions | 819 | 1,280 | 2,099 | ||||||||||||||
Balance as of December 31, 2014 | $ | 191,477 | $ | 68,254 | $ | 259,731 | |||||||||||
Intangible Assets | |||||||||||||||||
Intangible assets consist of the following as of December 31, 2014 (in thousands): | |||||||||||||||||
Description | Weighted | Gross | Accumulated | Intangible | |||||||||||||
Average | Carrying | Amortization | Assets, | ||||||||||||||
Remaining Life | Value | Net | |||||||||||||||
Agency contracts | 8 years | $ | 493,598 | $ | 232,109 | $ | 261,489 | ||||||||||
Non-compete/non-solicit | 3 years | 5,881 | 2,711 | 3,170 | |||||||||||||
Relationship with contracted caregivers | 2 years | 10,963 | 9,285 | 1,678 | |||||||||||||
Trade names | 2 years | 4,067 | 3,034 | 1,033 | |||||||||||||
Trade names (indefinite life) | — | 45,800 | — | 45,800 | |||||||||||||
Licenses and permits | 3 years | 49,063 | 33,932 | 15,131 | |||||||||||||
Intellectual property | 1 year | 904 | 721 | 183 | |||||||||||||
$ | 610,276 | $ | 281,792 | $ | 328,484 | ||||||||||||
Intangible assets consist of the following as of September 30, 2014 (in thousands): | |||||||||||||||||
Description | Weighted | Gross | Accumulated | Intangible | |||||||||||||
Average | Carrying | Amortization | Assets, | ||||||||||||||
Remaining Life | Value | Net | |||||||||||||||
Agency contracts | 8 years | $ | 484,994 | $ | 224,566 | $ | 260,428 | ||||||||||
Non-compete/non-solicit | 3 years | 5,716 | 2,448 | 3,268 | |||||||||||||
Relationship with contracted caregivers | 2 years | 10,963 | 9,013 | 1,950 | |||||||||||||
Trade names | 4 years | 7,467 | 2,907 | 4,560 | |||||||||||||
Trade names (indefinite life) | — | 42,400 | — | 42,400 | |||||||||||||
Licenses and permits | 3 years | 47,629 | 32,724 | 14,905 | |||||||||||||
Intellectual property | 2 years | 904 | 689 | 215 | |||||||||||||
$ | 600,073 | $ | 272,347 | $ | 327,726 | ||||||||||||
Amortization expense was $9.4 million for the three months ended December 31, 2014 and 2013. | |||||||||||||||||
The estimated remaining amortization expense related to intangible assets with finite lives for the nine months remaining in fiscal 2015 and each of the four succeeding years and thereafter is as follows: | |||||||||||||||||
(in thousands) | |||||||||||||||||
2015 | $ | 28,822 | |||||||||||||||
2016 | 36,623 | ||||||||||||||||
2017 | 32,571 | ||||||||||||||||
2018 | 31,679 | ||||||||||||||||
2019 | 31,340 | ||||||||||||||||
Thereafter | 121,649 | ||||||||||||||||
Total | $ | 282,684 | |||||||||||||||
Related_Party_Transactions
Related Party Transactions | 3 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 8. Related Party Transactions |
Management Agreement | |
On February 9, 2011, the Company entered into an amended and restated management agreement with Vestar Capital Partners V, L.P. (“Vestar”) relating to certain advisory and consulting services for an annual management fee equal to the greater of (i) $850 thousand or (ii) an amount equal to 1.0% of the Company’s consolidated earnings before interest, taxes, depreciation, amortization and management fee for each fiscal year determined as set forth in the Company’s senior credit agreement. | |
The Company recorded $0.2 million and $0.3 million of management fees and expenses for the three months ended December 31, 2014 and 2013, respectively. The $0.2 million of expense during the three months ended December 31, 2014 relates to reimbursable expenses that were incurred prior to the termination of the management agreement on September 22, 2014. The accrued liability relating to such fees and expenses was $0.6 million at September 30, 2014 and $0.2 million at December 31, 2014. | |
Lease Agreements | |
The Company leases several offices, homes and other facilities from its employees, or from relatives of employees, primarily in the states of Minnesota, Florida, and California. These leases have various expiration dates extending out as far as December 2019. Related party lease expense was $0.2 million for the three months ended December 31, 2014, as compared to $0.3 for the three months ended December 31, 2013. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair Value Measurements | 9. Fair Value Measurements | ||||||||||||||||
The Company measures and reports its financial assets and liabilities on the basis of fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. | |||||||||||||||||
A three-level hierarchy for disclosure has been established to show the extent and level of judgment used to estimate fair value measurements, as follows: | |||||||||||||||||
Level 1: Quoted market prices in active markets for identical assets or liabilities. | |||||||||||||||||
Level 2: Significant other observable inputs (quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability). | |||||||||||||||||
Level 3: Significant unobservable inputs for the asset or liability. These values are generally determined using pricing models which utilize management estimates of market participant assumptions. | |||||||||||||||||
Valuation techniques for assets and liabilities measured using Level 3 inputs may include methodologies such as the market approach, the income approach or the cost approach, and may use unobservable inputs such as projections, estimates and management’s interpretation of current market data. These unobservable inputs are only utilized to the extent that observable inputs are not available or cost-effective to obtain. | |||||||||||||||||
A description of the valuation methodologies used for instruments measured at fair value as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. | |||||||||||||||||
The following table sets forth the Company’s assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2014. | |||||||||||||||||
(in thousands) | Total | Quoted | Significant Other | Significant | |||||||||||||
Market Prices | Observable | Unobservable | |||||||||||||||
(Level 1) | Inputs | Inputs | |||||||||||||||
(Level 2) | (Level 3) | ||||||||||||||||
Liabilities | |||||||||||||||||
Contingent consideration | $ | (2,400 | ) | $ | — | $ | — | $ | (2,400 | ) | |||||||
The following table sets forth the Company’s assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2014. | |||||||||||||||||
(in thousands) | Total | Quoted | Significant Other | Significant | |||||||||||||
Market Prices | Observable | Unobservable | |||||||||||||||
(Level 1) | Inputs | Inputs | |||||||||||||||
(Level 2) | (Level 3) | ||||||||||||||||
Assets | |||||||||||||||||
Money Market Funds | $ | 130,000 | $ | 130,000 | $ | — | $ | — | |||||||||
Liabilities | |||||||||||||||||
Contingent consideration | $ | (2,400 | ) | $ | — | $ | — | $ | (2,400 | ) | |||||||
Money Market Funds. The Company’s money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted prices in active markets for identical instruments. | |||||||||||||||||
Contingent Consideration. In connection with the acquisition of Mass Adult Day Health (“Adult Day Health”), the Company recorded contingent consideration pertaining to the amounts potentially payable to the former owners of Adult Day Health. Such contingent consideration is measured at fair value and is based on significant inputs not observable in the market, which represent Level 3 inputs within the fair value hierarchy. The valuation of contingent consideration uses assumptions the Company believes would be made by a market participant. The Company assesses these estimates on an ongoing basis as additional data impacting the assumptions is obtained. Changes in the fair value of contingent consideration related to updated assumptions and estimates are recognized within the consolidated statements of operations. | |||||||||||||||||
The following table presents a summary of changes in fair value of the Company’s Level 3 liabilities measured on a recurring basis for the three months ended December 31, 2014. | |||||||||||||||||
3 months ended | |||||||||||||||||
December 31, 2014 | |||||||||||||||||
Balance at September 30, 2014 | $ | (2,400 | ) | ||||||||||||||
Change in fair value of contingent consideration liability | — | ||||||||||||||||
Balance at December 31, 2014 | $ | (2,400 | ) | ||||||||||||||
At December 31, 2014 and September 30, 2014, the carrying values of cash, accounts receivable, accounts payable and variable rate debt approximated fair value. The carrying value and fair value of the Company’s fixed rate debt instruments are set forth below: | |||||||||||||||||
December 31, 2014 | September 30, 2014 | ||||||||||||||||
(in thousands) | Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | ||||||||||||||
Senior notes (issued February 9, 2011) | $ | 49,003 | $ | 52,440 | $ | 207,430 | $ | 225,780 | |||||||||
The fair values were estimated using calculations based on quoted market prices when available and company –specific credit risk. If the Company’s long-term debt was measured at fair value, it would have been categorized as Level 2 in the fair value hierarchy. |
Income_Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes |
The Company’s effective income tax rate for the interim periods was based on management’s estimate of the Company’s annual effective tax rate for the applicable year. For the three months ended December 31, 2014 and 2013, the Company’s effective income tax rate was 41.2% and 26.1%, respectively. These rates differ from the federal statutory income tax rate primarily due to state income taxes, nondeductible permanent differences such as meals and nondeductible compensation, and net operating losses not benefited. | |
The Company files a federal consolidated return and files various state income tax returns. The Company files various state income tax returns and, generally, is no longer subject to income tax examinations by the taxing authorities for years prior to September 30, 2011. The Company did not have a reserve for uncertain income tax positions at December 31, 2014 and September 30, 2014. The Company does not expect any significant changes to unrecognized tax benefits within the next twelve months. The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits as charges to income tax expense. |
Segment_Information
Segment Information | 3 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Segment Information | 11. Segment Information | ||||||||||||||||
The Company conducts its business through two reportable business segments: the Human Services Segment and the Post-Acute Specialty Rehabilitation Services (“SRS”) Segment. | |||||||||||||||||
Through the Human Services Segment, the Company primarily provides home and community-based human services to adults and children with intellectual and developmental disabilities (“I/DD”), and to youth with emotional, behavioral and/or medically complex challenges (“ARY”). The operations of the Human Services Segment have been organized by management into three business units largely based upon geography. These business units, which comprise three operating segments, have been aggregated based on the criteria set forth in ASC Topic 280, Segment Reporting. Through the SRS Segment, the Company delivers services to individuals who have suffered acquired brain injury, spinal injuries and other catastrophic injuries and illnesses. The operations of the SRS Segment have been organized by management into two business units, NeuroRestorative and CareMeridian, based upon service type. The NeuroRestorative operating group provides behavioral therapies to brain injured clients in post-acute community settings and the CareMeridian operating group provides a higher level of medical support to traumatically injured clients. These business units, which comprise two operating segments, have been aggregated based on the criteria set forth in ASC Topic 280, Segment Reporting. Each operating segment is aligned with the Company’s reporting structure and has a segment manager that is directly accountable for its operations and regularly reports results to the chief operating decision maker for the purpose of evaluating these results and making decisions regarding resource allocations. | |||||||||||||||||
The Company evaluates performance based on income from operations. Income from operations is revenue less operating expenses and is not affected by other income (expense) or by income taxes. | |||||||||||||||||
Activities classified as “Corporate” in the table below relate primarily to unallocated home office expenses. | |||||||||||||||||
The following table is a financial summary by reportable segments for the periods indicated (in thousands): | |||||||||||||||||
Post-Acute | |||||||||||||||||
Specialty | |||||||||||||||||
Human | Rehabilitation | ||||||||||||||||
For the three months ended December 31, | Services | Services | Corporate | Consolidated | |||||||||||||
2014 | |||||||||||||||||
Net revenue | $ | 271,969 | $ | 62,621 | $ | — | $ | 334,590 | |||||||||
Income (loss) from operations | 31,177 | 6,529 | (18,192 | ) | 19,514 | ||||||||||||
Total assets | 635,759 | 231,224 | 165,904 | 1,032,887 | |||||||||||||
Depreciation and amortization | 11,387 | 5,239 | 584 | 17,210 | |||||||||||||
Purchases of property and equipment | 4,310 | 4,164 | 412 | 8,886 | |||||||||||||
Income (loss) from continuing operations before income taxes | 10,512 | 2,069 | (18,337 | ) | (5,756 | ) | |||||||||||
2013 | |||||||||||||||||
Net revenue | $ | 248,500 | $ | 55,492 | $ | — | $ | 303,992 | |||||||||
Income (loss) from operations | 22,130 | 4,300 | (13,306 | ) | 13,124 | ||||||||||||
Depreciation and amortization | 10,905 | 4,373 | 648 | 15,926 | |||||||||||||
Purchases of property and equipment | 3,060 | 2,227 | 736 | 6,023 | |||||||||||||
Income (loss) from continuing operations before income taxes | 5,944 | 853 | (13,132 | ) | (6,335 | ) | |||||||||||
Revenue derived from contracts with state and local governmental payors in the state of Minnesota, the Company’s largest state, which is included in the Human Services segment, accounted for approximately 15% and 14% of the Company’s net revenue for the three months ended December 31, 2014 and 2013, respectively. |
Net_Loss_Per_Share
Net Loss Per Share | 3 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Net Loss Per Share | 12. Net Loss Per Share | ||||||||
The following table sets forth the computation of basic and diluted earnings per share (“EPS”): | |||||||||
Three months ended December 31, | |||||||||
2014 | 2013 | ||||||||
Numerator | |||||||||
Net income (loss) | $ | (3,440 | ) | $ | (4,690 | ) | |||
Denominator | |||||||||
Weighted average shares outstanding, basic and diluted | 36,950,000 | 25,250,000 | |||||||
Net income (loss) per share, basic and diluted | $ | (0.09 | ) | $ | (0.19 | ) | |||
As we incurred a net loss in each of the periods presented above, all outstanding stock options and restricted stock units have an anti-dilutive effect and therefore are excluded from the computation of diluted weighted average shares outstanding. Accordingly, basic and diluted weighted average shares outstanding are equal for such period. | |||||||||
The following table summarizes our outstanding common stock equivalents that were anti-dilutive due to the net loss attributable to common stockholders during the periods, and therefore excluded from the computation of diluted EPS: | |||||||||
Three months ended December 31, | |||||||||
2014 | 2013 | ||||||||
Stock options | 561,339 | — | |||||||
Restricted stock units | 554,721 | — |
Accruals_for_SelfInsurance
Accruals for Self-Insurance | 3 Months Ended |
Dec. 31, 2014 | |
Text Block [Abstract] | |
Accruals for Self-Insurance | 13. Accruals for Self-Insurance |
The Company maintains insurance for professional and general liability, workers’ compensation liability, automobile liability and health insurance liabilities that includes self-insured retentions. The Company intends to maintain such coverage in the future and is of the opinion that its insurance coverage is adequate to cover potential losses on asserted claims. Employment practices liability is fully self-insured. | |
The Company records expenses related to claims on an incurred basis, which includes estimates of fully developed losses for both reported and unreported claims. The accruals for the health, workers’ compensation, automobile, and professional and general liability programs are based on analyses performed by management and take into account reports by independent third parties. Accruals are periodically reevaluated and increased or decreased based on new information. | |
For professional and general liability, from October 1, 2011 to September 30, 2013, the Company was self-insured for the first $4.0 million of each and every claim with no aggregate limit. Commencing October 1, 2013, the Company is self-insured for $4.0 million per claim and $28.0 million in the aggregate. In connection with the acquisition by Vestar on June 29, 2006 (the “Merger”), the Company purchased additional insurance for certain claims relating to pre-Merger periods subject to $1.0 million per claim and up to $2.0 million in aggregate retentions. | |
For workers’ compensation, the Company has a $350 thousand per claim retention with statutory limits. Automobile liability has a $100 thousand per claim retention, with additional insurance coverage above the retention. The Company purchases specific stop loss insurance as protection against extraordinary claims liability for health insurance claims. Stop loss insurance covers claims that exceed $300 thousand on a per member basis. | |
The Company reports its self-insurance liabilities on a gross basis without giving effect to insurance recoveries. Anticipated insurance recoveries are presented in Prepaid expenses and other current assets and Other assets on the Company’s consolidated balance sheets. Self-insured liabilities are presented in Accrued payroll and related costs, Other accrued liabilities and Other long-term liabilities on its consolidated balance sheets. |
Other_Commitments_and_Continge
Other Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Other Commitments and Contingencies | 14. Other Commitments and Contingencies |
The Company is in the health and human services business and, therefore, has been and continues to be subject to substantial claims alleging that the Company, its employees or its independently contracted host-home caregivers (“Mentors”) failed to provide proper care for a client. The Company is also subject to claims by its clients, its employees, its Mentors or community members against the Company for negligence, intentional misconduct or violation of applicable laws. Included in the Company’s recent claims are claims alleging personal injury, assault, abuse, wrongful death and other charges. Regulatory agencies may initiate administrative proceedings alleging that the Company’s programs, employees or agents violate statutes and regulations and seek to impose monetary penalties on the Company. The Company could be required to incur significant costs to respond to regulatory investigations or defend against civil lawsuits and, if the Company does not prevail, the Company could be required to pay substantial amounts of money in damages, settlement amounts or penalties arising from these legal proceedings. | |
The Company is also subject to potential lawsuits under the False Claims Act and other federal and state whistleblower statutes designed to combat fraud and abuse in the health care industry. These lawsuits can involve significant monetary awards that may incentivize private plaintiffs to bring these suits. If the Company is found to have violated the False Claims Act, it could be excluded from participation in Medicaid and other federal healthcare programs. The Patient Protection and Affordable Care Act provides a mandate for more vigorous and widespread enforcement activity to combat fraud and abuse in the health care industry. | |
The Company is also subject to employee-related claims under state and federal law, including claims for discrimination, wrongful discharge or retaliation; claims for wage and hour violations under the Fair Labor Standards Act or state wage and hour laws. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events |
On January 13, 2015, the Company acquired Cassel & Associates (“Cassel”) within its Post-Acute Specialty Rehabilitation Services business for aggregate consideration of $18.2 million. Cassel provides non-residential therapeutic vocational services to individuals recovering from brain injuries in the state of Michigan. | |
On January 20, 2015, NMHI entered into two new interest rate swap agreements in an aggregate notional amount of $375.0 million in order to reduce the variability of cash flows of our variable rate debt. NMHI entered into these interest rate swaps to hedge the risk of changes in the floating rate of interest on borrowings under the term loan. Under the terms of the swaps, NMHI will receive from the counterparty a quarterly payment based on a rate equal to the greater of 3-month LIBOR or 1.00% per annum, and NMHI will make payments to the counterparty based on a fixed rate of 1.795% per annum, in each case on the notional amount of $375.0 million, settled on a net payment basis. | |
On February 2, 2015, NMHI issued a conditional notice of redemption for all of its outstanding senior notes. NMHI intends to refinance the remaining outstanding senior notes as market conditions permit. If the refinancing is successful, the senior notes would be retired on March 4, 2015. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation |
The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements herein should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2014, which is on file with the SEC. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal and recurring accruals, necessary to present fairly the financial statements in accordance with GAAP. Intercompany balances and transactions between the Company and its subsidiaries have been eliminated in consolidation. Operating results for the three months ended December 31, 2014 may not necessarily be indicative of results to be expected for any other interim period or for the full year. | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |
Our financial results are affected by the selection and application of accounting policies and methods. There were no material changes in the three months ended December 31, 2014 to the application of significant accounting policies as described in our audited financial statements for the year ended September 30, 2014. | |
Reporting Discontinued Operations | Reporting Discontinued Operations—In April 2014, the FASB issued Accounting Standards Update No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). ASU 2014-08 changes the definition of a discontinued operation to include only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, and changes the criteria and enhances disclosures for reporting discontinued operations. The pronouncement is applied prospectively, and was effective for the first quarter of our fiscal year ending September 30, 2015. The adoption has not had an impact on the Company’s consolidated financial statements; however, it is expected that it will significantly limit the classification of future disposals of components as discontinued operations. |
Revenue from Contracts with Customers | Revenue from Contracts with Customers— In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method. |
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 3 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Long-Term Debt | As of December 31, 2014 and September 30, 2014, the Company’s long-term debt consisted of the following: | ||||||||
(in thousands) | December 31, | September 30, | |||||||
2014 | 2014 | ||||||||
Term loan principal and interest due in quarterly installments through January 31, 2021, subject to acceleration to November 15, 2017 | $ | 595,500 | $ | 597,000 | |||||
Original issue discount on term loan, net of accumulated amortization | (1,136 | ) | (1,235 | ) | |||||
Senior notes, due February 15, 2018; semi-annual cash interest payments due each February 15th and August 15th (interest rate of 12.50%) | 50,000 | 212,000 | |||||||
Original issue discount and initial purchaser discount on senior notes, net of accumulated amortization | (997 | ) | (4,570 | ) | |||||
643,367 | 803,195 | ||||||||
Less current portion | 6,000 | 168,000 | |||||||
Long-term debt | $ | 637,367 | $ | 635,195 | |||||
Business_Combinations_Tables
Business Combinations (Tables) | 3 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Schedule of Pro Forma Results of Operations | The Company has determined that the presentation of the results of operations for each of these acquisitions, from the date of acquisition, is impracticable due to the integration of the operations upon acquisition. | ||||||||||||||||
Three Months Ended | |||||||||||||||||
December 31, | |||||||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||||||
Pro forma net revenues | $ | 336,928 | $ | 307,701 | |||||||||||||
Income from operations | 20,087 | 13,945 | |||||||||||||||
Fiscal 2015 Acquisitions [Member] | |||||||||||||||||
Schedule of Recognized Amounts of Identifiable Assets Acquired and Assumed | The following table summarizes the recognized amounts of identifiable assets acquired assumed at the date of each acquisition: | ||||||||||||||||
(in thousands) | Identifiable | Property and | Total identifiable | Goodwill | |||||||||||||
intangible | equipment | net assets | |||||||||||||||
assets | |||||||||||||||||
Capstone | $ | 3,539 | $ | 173 | $ | 3,712 | $ | 762 | |||||||||
Lakeview | 6,664 | 40 | 6,704 | 1,280 | |||||||||||||
Other Acquisitions | — | 3 | 3 | 57 | |||||||||||||
Total | $ | 10,203 | $ | 216 | $ | 10,419 | $ | 2,099 | |||||||||
Fiscal 2014 Acquisitions [Member] | |||||||||||||||||
Schedule of Recognized Amounts of Identifiable Assets Acquired and Assumed | The following table summarizes the recognized amounts of identifiable assets acquired assumed at the date of the acquisition: | ||||||||||||||||
(in thousands) | Identifiable | Property and | Total identifiable | Goodwill | |||||||||||||
intangible | equipment | net assets | |||||||||||||||
assets | |||||||||||||||||
Show-Me Health Care | $ | 895 | $ | 9 | $ | 904 | $ | 336 | |||||||||
Total | $ | 895 | $ | 9 | $ | 904 | $ | 336 |
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 3 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||
Schedule of Changes in Goodwill | The changes in goodwill for the three months ended December 31, 2014 are as follows (in thousands): | ||||||||||||||||
Human | Post -Acute | Total | |||||||||||||||
Services | Specialty | ||||||||||||||||
Rehabilitation | |||||||||||||||||
Services | |||||||||||||||||
(in thousands) | |||||||||||||||||
Balance as of September 30, 2014 | $ | 190,658 | $ | 66,974 | $ | 257,632 | |||||||||||
Goodwill acquired through acquisitions | 819 | 1,280 | 2,099 | ||||||||||||||
Balance as of December 31, 2014 | $ | 191,477 | $ | 68,254 | $ | 259,731 | |||||||||||
Schedule of Intangible Assets | Intangible assets consist of the following as of December 31, 2014 (in thousands): | ||||||||||||||||
Description | Weighted | Gross | Accumulated | Intangible | |||||||||||||
Average | Carrying | Amortization | Assets, | ||||||||||||||
Remaining Life | Value | Net | |||||||||||||||
Agency contracts | 8 years | $ | 493,598 | $ | 232,109 | $ | 261,489 | ||||||||||
Non-compete/non-solicit | 3 years | 5,881 | 2,711 | 3,170 | |||||||||||||
Relationship with contracted caregivers | 2 years | 10,963 | 9,285 | 1,678 | |||||||||||||
Trade names | 2 years | 4,067 | 3,034 | 1,033 | |||||||||||||
Trade names (indefinite life) | — | 45,800 | — | 45,800 | |||||||||||||
Licenses and permits | 3 years | 49,063 | 33,932 | 15,131 | |||||||||||||
Intellectual property | 1 year | 904 | 721 | 183 | |||||||||||||
$ | 610,276 | $ | 281,792 | $ | 328,484 | ||||||||||||
Intangible assets consist of the following as of September 30, 2014 (in thousands): | |||||||||||||||||
Description | Weighted | Gross | Accumulated | Intangible | |||||||||||||
Average | Carrying | Amortization | Assets, | ||||||||||||||
Remaining Life | Value | Net | |||||||||||||||
Agency contracts | 8 years | $ | 484,994 | $ | 224,566 | $ | 260,428 | ||||||||||
Non-compete/non-solicit | 3 years | 5,716 | 2,448 | 3,268 | |||||||||||||
Relationship with contracted caregivers | 2 years | 10,963 | 9,013 | 1,950 | |||||||||||||
Trade names | 4 years | 7,467 | 2,907 | 4,560 | |||||||||||||
Trade names (indefinite life) | — | 42,400 | — | 42,400 | |||||||||||||
Licenses and permits | 3 years | 47,629 | 32,724 | 14,905 | |||||||||||||
Intellectual property | 2 years | 904 | 689 | 215 | |||||||||||||
$ | 600,073 | $ | 272,347 | $ | 327,726 | ||||||||||||
Schedule of Amortization Expense Related to Intangible Assets | The estimated remaining amortization expense related to intangible assets with finite lives for the nine months remaining in fiscal 2015 and each of the four succeeding years and thereafter is as follows: | ||||||||||||||||
(in thousands) | |||||||||||||||||
2015 | $ | 28,822 | |||||||||||||||
2016 | 36,623 | ||||||||||||||||
2017 | 32,571 | ||||||||||||||||
2018 | 31,679 | ||||||||||||||||
2019 | 31,340 | ||||||||||||||||
Thereafter | 121,649 | ||||||||||||||||
Total | $ | 282,684 | |||||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair Value of Assets and Liabilities on a Recurring Basis | The following table sets forth the Company’s assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2014. | ||||||||||||||||
(in thousands) | Total | Quoted | Significant Other | Significant | |||||||||||||
Market Prices | Observable | Unobservable | |||||||||||||||
(Level 1) | Inputs | Inputs | |||||||||||||||
(Level 2) | (Level 3) | ||||||||||||||||
Liabilities | |||||||||||||||||
Contingent consideration | $ | (2,400 | ) | $ | — | $ | — | $ | (2,400 | ) | |||||||
The following table sets forth the Company’s assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2014. | |||||||||||||||||
(in thousands) | Total | Quoted | Significant Other | Significant | |||||||||||||
Market Prices | Observable | Unobservable | |||||||||||||||
(Level 1) | Inputs | Inputs | |||||||||||||||
(Level 2) | (Level 3) | ||||||||||||||||
Assets | |||||||||||||||||
Money Market Funds | $ | 130,000 | $ | 130,000 | $ | — | $ | — | |||||||||
Liabilities | |||||||||||||||||
Contingent consideration | $ | (2,400 | ) | $ | — | $ | — | $ | (2,400 | ) | |||||||
Summary of Changes in Fair Value of Company's Level 3 Liabilities Measured on Recurring Basis | The following table presents a summary of changes in fair value of the Company’s Level 3 liabilities measured on a recurring basis for the three months ended December 31, 2014. | ||||||||||||||||
3 months ended | |||||||||||||||||
December 31, 2014 | |||||||||||||||||
Balance at September 30, 2014 | $ | (2,400 | ) | ||||||||||||||
Change in fair value of contingent consideration liability | — | ||||||||||||||||
Balance at December 31, 2014 | $ | (2,400 | ) | ||||||||||||||
Carrying Value and Fair Value of Debt Instruments | At December 31, 2014 and September 30, 2014, the carrying values of cash, accounts receivable, accounts payable and variable rate debt approximated fair value. The carrying value and fair value of the Company’s fixed rate debt instruments are set forth below: | ||||||||||||||||
December 31, 2014 | September 30, 2014 | ||||||||||||||||
(in thousands) | Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | ||||||||||||||
Senior notes (issued February 9, 2011) | $ | 49,003 | $ | 52,440 | $ | 207,430 | $ | 225,780 |
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Performance of Operating Segments | The following table is a financial summary by reportable segments for the periods indicated (in thousands): | ||||||||||||||||
Post-Acute | |||||||||||||||||
Specialty | |||||||||||||||||
Human | Rehabilitation | ||||||||||||||||
For the three months ended December 31, | Services | Services | Corporate | Consolidated | |||||||||||||
2014 | |||||||||||||||||
Net revenue | $ | 271,969 | $ | 62,621 | $ | — | $ | 334,590 | |||||||||
Income (loss) from operations | 31,177 | 6,529 | (18,192 | ) | 19,514 | ||||||||||||
Total assets | 635,759 | 231,224 | 165,904 | 1,032,887 | |||||||||||||
Depreciation and amortization | 11,387 | 5,239 | 584 | 17,210 | |||||||||||||
Purchases of property and equipment | 4,310 | 4,164 | 412 | 8,886 | |||||||||||||
Income (loss) from continuing operations before income taxes | 10,512 | 2,069 | (18,337 | ) | (5,756 | ) | |||||||||||
2013 | |||||||||||||||||
Net revenue | $ | 248,500 | $ | 55,492 | $ | — | $ | 303,992 | |||||||||
Income (loss) from operations | 22,130 | 4,300 | (13,306 | ) | 13,124 | ||||||||||||
Depreciation and amortization | 10,905 | 4,373 | 648 | 15,926 | |||||||||||||
Purchases of property and equipment | 3,060 | 2,227 | 736 | 6,023 | |||||||||||||
Income (loss) from continuing operations before income taxes | 5,944 | 853 | (13,132 | ) | (6,335 | ) |
Net_Loss_Per_Share_Tables
Net Loss Per Share (Tables) | 3 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Schedule of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share (“EPS”): | ||||||||
Three months ended December 31, | |||||||||
2014 | 2013 | ||||||||
Numerator | |||||||||
Net income (loss) | $ | (3,440 | ) | $ | (4,690 | ) | |||
Denominator | |||||||||
Weighted average shares outstanding, basic and diluted | 36,950,000 | 25,250,000 | |||||||
Net income (loss) per share, basic and diluted | $ | (0.09 | ) | $ | (0.19 | ) | |||
Schedule of Common Stock of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table summarizes our outstanding common stock equivalents that were anti-dilutive due to the net loss attributable to common stockholders during the periods, and therefore excluded from the computation of diluted EPS: | ||||||||
Three months ended December 31, | |||||||||
2014 | 2013 | ||||||||
Stock options | 561,339 | — | |||||||
Restricted stock units | 554,721 | — |
Business_Overview_Additional_I
Business Overview - Additional Information (Detail) | Dec. 31, 2014 |
State | |
Product Information [Line Items] | |
Area of operations, number of states | 35 |
Minimum [Member] | |
Product Information [Line Items] | |
Number of residential clients | 12,600 |
Number of periodic clients | 16,900 |
LongTerm_Debt_LongTerm_Debt_De
Long-Term Debt - Long-Term Debt (Detail) (USD $) | Dec. 31, 2014 | Oct. 17, 2014 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |||
Debt Instrument [Line Items] | |||
Less current portion | $6,000 | $168,000 | |
Long-term debt | 637,367 | 635,195 | |
National Mentor Holdings, Inc [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt current and non current | 643,367 | 803,195 | |
Less current portion | 6,000 | 168,000 | |
Long-term debt | 637,367 | 635,195 | |
Long-term debt current and non current | 643,367 | 803,195 | |
Term Loan [Member] | National Mentor Holdings, Inc [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 595,500 | 597,000 | |
Discount on long-term debt | -1,136 | -1,235 | |
Senior Notes [Member] | National Mentor Holdings, Inc [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 50,000 | 212,000 | |
Discount on long-term debt | ($997) | ($3,400) | ($4,570) |
LongTerm_Debt_LongTerm_Debt_Pa
Long-Term Debt - Long-Term Debt (Parenthetical) (Detail) (National Mentor Holdings, Inc [Member]) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2014 | Sep. 30, 2014 | Feb. 28, 2011 | |
Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, maturity date | 31-Jan-21 | 31-Jan-21 | |
Debt instrument subject to acceleration date | 15-Nov-17 | 15-Nov-17 | |
Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, maturity date | 15-Feb-18 | 15-Feb-18 | |
Debt instrument, interest rate | 12.50% | 12.50% | 12.50% |
LongTerm_Debt_Senior_Secured_C
Long-Term Debt - Senior Secured Credit Facilities - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Oct. 21, 2014 | Jan. 31, 2014 | |
Debt Instrument [Line Items] | |||||
Borrowings under senior revolver | $2,500,000 | $2,500,000 | |||
Repayments of borrowings under senior revolver | 2,500,000 | 2,500,000 | |||
National Mentor Holdings, Inc [Member] | |||||
Debt Instrument [Line Items] | |||||
Deposit in cash collateral | 50,000,000 | ||||
National Mentor Holdings, Inc [Member] | Standby Letters of Credit Senior Revolver [Member] | |||||
Debt Instrument [Line Items] | |||||
Deposit in cash collateral | 100,000,000 | ||||
Borrowings under senior revolver | 2,500,000 | ||||
Letters of credit issued | 0 | 0 | |||
Repayments of borrowings under senior revolver | 2,500,000 | ||||
Availability of borrowings | 119,100,000 | 100,000,000 | |||
Increase in the borrowing capacity | 20,000,000 | ||||
Interest rate for borrowings | 5.50% | 6.00% | |||
National Mentor Holdings, Inc [Member] | Standby Letters of Credit Senior Revolver [Member] | Swingline Loans [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument maturity term | 1 year | ||||
National Mentor Holdings, Inc [Member] | Standby Letters of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Deposit in cash collateral | 50,000,000 | ||||
Letters of credit issued | 48,400,000 | 44,300,000 | |||
Letter of credit borrowing capacity | 50,000,000 | ||||
National Mentor Holdings, Inc [Member] | Standby Letters Of Credit Senior Revolver Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Letters of credit issued | 900,000 | ||||
Term Loan [Member] | National Mentor Holdings, Inc [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | 600,000,000 | ||||
Long term debt | $595,500,000 | $597,000,000 | |||
Interest rate on term loan | 4.25% | 4.75% |
LongTerm_Debt_Senior_Notes_and
Long-Term Debt - Senior Notes and Covenants - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended | |||
Dec. 31, 2014 | Oct. 17, 2014 | Feb. 02, 2015 | Sep. 30, 2014 | Feb. 28, 2011 | |
Debt Instrument [Line Items] | |||||
Extinguishment of debt expense | $14,343,000 | ||||
National Mentor Holdings, Inc [Member] | |||||
Debt Instrument [Line Items] | |||||
Agreement contains a springing financial covenant | The senior credit agreement contains a springing financial covenant. If, at the end of any fiscal quarter, the Company's usage of the senior revolver exceeds 30% of the commitments thereunder, it is required to maintain at the end of each such fiscal quarter a consolidated first lien leverage ratio of not more than 5.50 to 1.00. This consolidated first lien leverage ratio will step down to 5.00 to 1.00 commencing with the fiscal quarter ending March 31, 2017. | ||||
Percentage of revolving commitments | 30.00% | ||||
Consolidated first lien leverage ratio, maximum | 550.00% | ||||
Senior credit agreement description | The senior credit agreement also contains a number of covenants that, among other things, restrict, subject to certain exceptions, NMHIbs ability and that of its subsidiaries to: (i)B incur additional indebtedness; (ii)B create liens on assets; (iii)B engage in mergers or consolidations; (iv)B sell assets; (v)B pay dividends and distributions or repurchase our capital stock; (vi)B enter into swap transactions; (vii)B make investments, loans or advances; (viii)B repay certain junior indebtedness; (ix)B engage in certain transactions with affiliates; (x)B enter into sale and leaseback transactions; (xi)B amend material agreements governing certain of its junior indebtedness; (xii)B change its lines of business; (xiii)B make certain acquisitions; and (xiv)B limitations on the letter of credit cash collateral account. | ||||
Amount deposited in cash collateral account in support of issuance of letters of credit | 50,000,000 | ||||
National Mentor Holdings, Inc [Member] | Quarter Ended March 31, 2017 [Member] | |||||
Debt Instrument [Line Items] | |||||
Consolidated first lien leverage ratio, maximum | 500.00% | ||||
National Mentor Holdings, Inc [Member] | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Long term debt | 50,000,000 | 212,000,000 | |||
Debt instrument, interest rate | 12.50% | 12.50% | 12.50% | ||
Amount paid to redeem aggregate principal of debt | 175,600,000 | ||||
Redemption of aggregate principal of debt | 162,000,000 | ||||
Expense of redemption premium | 10,100,000 | ||||
Accrued and unpaid interest | 3,500,000 | ||||
Debt instrument, face amount | 250,000,000 | ||||
Deferred financing fees | 800,000 | ||||
Debt instrument original issue discount | 997,000 | 3,400,000 | 4,570,000 | ||
Extinguishment of debt expense | $14,300,000 | ||||
National Mentor Holdings, Inc [Member] | Senior Notes [Member] | Subsequent Event [Member] | |||||
Debt Instrument [Line Items] | |||||
Retirement date of Senior Notes | 4-Mar-15 |
LongTerm_Debt_Derivatives_Addi
Long-Term Debt - Derivatives - Additional Information (Detail) (USD $) | 3 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2014 | Jan. 20, 2015 | |
Swap | |||
Debt Instrument [Line Items] | |||
Change in fair value of swap agreement | $466,000 | ||
Tax effects of changes in unrealized gain on derivatives | 310,000 | ||
National Mentor Holdings, Inc [Member] | Interest Rate Swap [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate swap in a notional amount | 400,000,000 | ||
Effective date of derivative instrument | 31-Mar-11 | ||
Expiration date of derivative instrument | 30-Sep-14 | ||
Fair value of swap agreement before tax | 2,400,000 | ||
Fair value of swap agreement after tax | 1,500,000 | ||
Change in fair value of swap agreement | 500,000 | ||
Tax effects of changes in unrealized gain on derivatives | 300,000 | ||
Quarterly payment received from counter party | Equal to the greater of 3-month LIBOR or 1.00% per annum | ||
National Mentor Holdings, Inc [Member] | Interest Rate Swap [Member] | Subsequent Event [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate swap in a notional amount | $375,000,000 | ||
Number of interest rate swap agreements | 2 | ||
Minimum interest received from counter party | 1.00% | ||
Payments on fixed rate | 1.80% |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) | 3 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
Common stock vote per share | One vote per share |
Business_Combinations_Addition
Business Combinations - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Nov. 29, 2013 | Dec. 31, 2014 | |
Company | Company | |||
Business Acquisition [Line Items] | ||||
Number of companies acquired | 3 | 1 | ||
Aggregate consideration for the acquisition | $12,500,000 | $1,200,000 | ||
Goodwill | 2,099,000 | 336,000 | 2,099,000 | |
Property and equipment | 216,000 | 9,000 | 216,000 | |
Show Me Health Care [Member] | ||||
Business Acquisition [Line Items] | ||||
Cost of acquisition | 1,200,000 | |||
Goodwill | 336,000 | |||
Recognized identifiable intangible assets acquired | 900,000 | |||
Property and equipment | 9,000 | |||
Show Me Health Care [Member] | Human Services [Member] | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 300,000 | |||
Show Me Health Care [Member] | Agency Contracts [Member] | ||||
Business Acquisition [Line Items] | ||||
Recognized identifiable intangible assets acquired | 700,000 | |||
Weighted average useful life of intangible asses | 12 years | |||
Show Me Health Care [Member] | Licenses and Permits [Member] | ||||
Business Acquisition [Line Items] | ||||
Recognized identifiable intangible assets acquired | 200,000 | |||
Weighted average useful life of intangible asses | 10 years | |||
Show Me Health Care [Member] | Non-Compete/Non-Solicit [Member] | ||||
Business Acquisition [Line Items] | ||||
Recognized identifiable intangible assets acquired | 14,000 | |||
Weighted average useful life of intangible asses | 5 years | |||
Capstone [Member] | ||||
Business Acquisition [Line Items] | ||||
Business acquisition date | 31-Oct-14 | |||
Cost of acquisition | 4,500,000 | |||
Goodwill | 762,000 | 762,000 | ||
Recognized identifiable intangible assets acquired | 3,539,000 | 3,539,000 | ||
Property and equipment | 173,000 | 173,000 | ||
Capstone [Member] | Human Services [Member] | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 800,000 | 800,000 | ||
Capstone [Member] | Agency Contracts [Member] | ||||
Business Acquisition [Line Items] | ||||
Recognized identifiable intangible assets acquired | 2,600,000 | 2,600,000 | ||
Weighted average useful life of intangible asses | 12 years | |||
Capstone [Member] | Licenses and Permits [Member] | ||||
Business Acquisition [Line Items] | ||||
Recognized identifiable intangible assets acquired | 800,000 | 800,000 | ||
Weighted average useful life of intangible asses | 10 years | |||
Capstone [Member] | Non-Compete/Non-Solicit [Member] | ||||
Business Acquisition [Line Items] | ||||
Recognized identifiable intangible assets acquired | 100,000 | 100,000 | ||
Weighted average useful life of intangible asses | 5 years | |||
Lakeview [Member] | ||||
Business Acquisition [Line Items] | ||||
Business acquisition date | 29-Dec-14 | |||
Cost of acquisition | 8,000,000 | |||
Goodwill | 1,280,000 | 1,280,000 | ||
Recognized identifiable intangible assets acquired | 6,664,000 | 6,664,000 | ||
Property and equipment | 40,000 | 40,000 | ||
Lakeview [Member] | Post-Acute Specialty Rehabilitation Services [Member] | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 1,300,000 | 1,300,000 | ||
Lakeview [Member] | Agency Contracts [Member] | ||||
Business Acquisition [Line Items] | ||||
Recognized identifiable intangible assets acquired | 6,000,000 | 6,000,000 | ||
Weighted average useful life of intangible asses | 12 years | |||
Lakeview [Member] | Licenses and Permits [Member] | ||||
Business Acquisition [Line Items] | ||||
Recognized identifiable intangible assets acquired | 700,000 | 700,000 | ||
Weighted average useful life of intangible asses | 10 years | |||
Lakeview [Member] | Non-Compete/Non-Solicit [Member] | ||||
Business Acquisition [Line Items] | ||||
Recognized identifiable intangible assets acquired | 31,000 | 31,000 | ||
Weighted average useful life of intangible asses | 5 years | |||
Other Acquisitions [Member] | ||||
Business Acquisition [Line Items] | ||||
Cost of acquisition | 60,600 | |||
Goodwill | 57,000 | 57,000 | ||
Property and equipment | $3,000 | $3,000 |
Business_Combinations_Schedule
Business Combinations - Schedule of Recognized Amounts of Identifiable Assets Acquired and Assumed (Detail) (USD $) | Dec. 31, 2014 | Nov. 29, 2013 |
In Thousands, unless otherwise specified | ||
Business Acquisition [Line Items] | ||
Identifiable intangible assets | $10,203 | $895 |
Property and equipment | 216 | 9 |
Total identifiable net assets | 10,419 | 904 |
Goodwill | 2,099 | 336 |
Capstone [Member] | ||
Business Acquisition [Line Items] | ||
Identifiable intangible assets | 3,539 | |
Property and equipment | 173 | |
Total identifiable net assets | 3,712 | |
Goodwill | 762 | |
Lakeview [Member] | ||
Business Acquisition [Line Items] | ||
Identifiable intangible assets | 6,664 | |
Property and equipment | 40 | |
Total identifiable net assets | 6,704 | |
Goodwill | 1,280 | |
Other Acquisitions [Member] | ||
Business Acquisition [Line Items] | ||
Property and equipment | 3 | |
Total identifiable net assets | 3 | |
Goodwill | 57 | |
Show Me Health Care [Member] | ||
Business Acquisition [Line Items] | ||
Identifiable intangible assets | 895 | |
Property and equipment | 9 | |
Total identifiable net assets | 904 | |
Goodwill | $336 |
Business_Combinations_Schedule1
Business Combinations - Schedule of Proforma Results of Operations (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Business Combinations [Abstract] | ||
Pro forma net revenues | $336,928 | $307,701 |
Income from operations | $20,087 | $13,945 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets - Schedule of Changes in Goodwill (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Goodwill [Line Items] | |
Beginning Balance | $257,632 |
Goodwill acquired through acquisitions | 2,099 |
Ending Balance | 259,731 |
Human Services [Member] | |
Goodwill [Line Items] | |
Beginning Balance | 190,658 |
Goodwill acquired through acquisitions | 819 |
Ending Balance | 191,477 |
Post-Acute Specialty Rehabilitation Services [Member] | |
Goodwill [Line Items] | |
Beginning Balance | 66,974 |
Goodwill acquired through acquisitions | 1,280 |
Ending Balance | $68,254 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $610,276 | $600,073 |
Accumulated Amortization | 281,792 | 272,347 |
Intangible Assets, Net | 328,484 | 327,726 |
Agency Contracts [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Life | 8 years | 8 years |
Gross Carrying Value | 493,598 | 484,994 |
Accumulated Amortization | 232,109 | 224,566 |
Intangible Assets, Net | 261,489 | 260,428 |
Non-Compete/Non-Solicit [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Life | 3 years | 3 years |
Gross Carrying Value | 5,881 | 5,716 |
Accumulated Amortization | 2,711 | 2,448 |
Intangible Assets, Net | 3,170 | 3,268 |
Relationship with Contracted Caregivers [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Life | 2 years | 2 years |
Gross Carrying Value | 10,963 | 10,963 |
Accumulated Amortization | 9,285 | 9,013 |
Intangible Assets, Net | 1,678 | 1,950 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Life | 2 years | 4 years |
Gross Carrying Value | 4,067 | 7,467 |
Accumulated Amortization | 3,034 | 2,907 |
Intangible Assets, Net | 1,033 | 4,560 |
Licenses and Permits [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Life | 3 years | 3 years |
Gross Carrying Value | 49,063 | 47,629 |
Accumulated Amortization | 33,932 | 32,724 |
Intangible Assets, Net | 15,131 | 14,905 |
Intellectual Property [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Life | 1 year | 2 years |
Gross Carrying Value | 904 | 904 |
Accumulated Amortization | 721 | 689 |
Intangible Assets, Net | 183 | 215 |
Trade Names (Indefinite Life) [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 45,800 | 42,400 |
Intangible Assets, Net | $45,800 | $42,400 |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $9,445 | $9,429 |
Goodwill_and_Intangible_Assets5
Goodwill and Intangible Assets - Schedule of Amortization Expense Related to Intangible Assets (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2015 | $28,822 |
2016 | 36,623 |
2017 | 32,571 |
2018 | 31,679 |
2019 | 31,340 |
Thereafter | 121,649 |
Total | $282,684 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | ||
Feb. 09, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | |
Related Party Transaction [Line Items] | ||||
Management fees and expenses | $162,000 | $345,000 | ||
Related party lease expense | 200,000 | 300,000 | ||
Vestar [Member] | ||||
Related Party Transaction [Line Items] | ||||
Management fee percentage of consolidated earnings before interest, taxes, depreciation, amortization and management fee | 1.00% | |||
Management fees and expenses | 200,000 | 300,000 | ||
Accrued liability related to management agreement | 200,000 | 600,000 | ||
Vestar [Member] | Minimum [Member] | ||||
Related Party Transaction [Line Items] | ||||
Annual management fee for certain advisory and consulting services payable | 850,000 |
Fair_Value_Measurements_Fair_V
Fair Value Measurements - Fair Value of Assets and Liabilities on a Recurring Basis (Detail) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | ||
Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value asset | $130,000 | |
Contingent Consideration [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value liabilities | -2,400 | -2,400 |
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value asset | 130,000 | |
Fair Value, Inputs, Level 3 [Member] | Contingent Consideration [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value liabilities | ($2,400) | ($2,400) |
Fair_Value_Measurements_Summar
Fair Value Measurements - Summary of Changes in Fair Value of Company's Level 3 Liabilities Measured on Recurring Basis (Detail) (Contingent Consideration [Member], USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Contingent Consideration [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Fair value of liabilities beginning balance | ($2,400) |
Change in fair value of contingent consideration liability | 0 |
Fair value of liabilities ending balance | ($2,400) |
Fair_Value_Measurements_Carryi
Fair Value Measurements - Carrying Value and Fair Value of Debt Instruments (Detail) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | ||
Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior notes (issued February 9, 2011) | $49,003 | $207,430 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior notes (issued February 9, 2011) | $52,440 | $225,780 |
Fair_Value_Measurements_Carryi1
Fair Value Measurements - Carrying Value and Fair Value of Debt Instruments (Parenthetical) (Detail) (Senior Notes [Member]) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2014 | Sep. 30, 2014 | |
Senior Notes [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior notes issuance date | 9-Feb-11 | 9-Feb-11 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate | 41.20% | 26.10% | |
Reserve for uncertain income tax positions | $0 | $0 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 2 | |
Human Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Number of operating segments | 3 | |
Number of business units | 3 | |
Human Services [Member] | Minnesota [Member] | Geographic Concentration Risk [Member] | Sales Revenue, Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Percent of revenue | 15.00% | 14.00% |
Post-Acute Specialty Rehabilitation Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Number of operating segments | 2 | |
Number of business units | 2 |
Segment_Information_Performanc
Segment Information - Performance of Operating Segments (Detail) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 |
Segment Reporting Information [Line Items] | |||
Net revenue | $334,590 | $303,992 | |
Income (loss) from operations | 19,514 | 13,124 | |
Total assets | 1,032,887 | 1,207,954 | |
Depreciation and amortization | 17,210 | 15,926 | |
Purchases of property and equipment | 8,886 | 6,023 | |
Income (loss) from continuing operations before income taxes | -5,756 | -6,335 | |
Operating Segments [Member] | Human Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 271,969 | 248,500 | |
Income (loss) from operations | 31,177 | 22,130 | |
Total assets | 635,759 | ||
Depreciation and amortization | 11,387 | 10,905 | |
Purchases of property and equipment | 4,310 | 3,060 | |
Income (loss) from continuing operations before income taxes | 10,512 | 5,944 | |
Operating Segments [Member] | Post-Acute Specialty Rehabilitation Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 62,621 | 55,492 | |
Income (loss) from operations | 6,529 | 4,300 | |
Total assets | 231,224 | ||
Depreciation and amortization | 5,239 | 4,373 | |
Purchases of property and equipment | 4,164 | 2,227 | |
Income (loss) from continuing operations before income taxes | 2,069 | 853 | |
Corporate [Member] | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | -18,192 | -13,306 | |
Total assets | 165,904 | ||
Depreciation and amortization | 584 | 648 | |
Purchases of property and equipment | 412 | 736 | |
Income (loss) from continuing operations before income taxes | ($18,337) | ($13,132) |
Net_Loss_Per_Share_Schedule_of
Net Loss Per Share - Schedule of Basic and Diluted Earnings Per Share (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Numerator | ||
Net income (loss) | ($3,440) | ($4,690) |
Denominator | ||
Weighted average shares outstanding, basic and diluted | 36,950,000 | 25,250,000 |
Net income (loss) per share, basic and diluted | ($0.09) | ($0.19) |
Net_Loss_Per_Share_Schedule_of1
Net Loss Per Share - Schedule of Common Stock of Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) | 3 Months Ended |
Dec. 31, 2014 | |
Stock Options [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive securities excluded from the computation of diluted EPS | 561,339 |
Restricted Stock Units [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive securities excluded from the computation of diluted EPS | 554,721 |
Accruals_for_SelfInsurance_Add
Accruals for Self-Insurance - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 24 Months Ended | 0 Months Ended |
Oct. 01, 2013 | Dec. 31, 2014 | Sep. 30, 2013 | Jun. 29, 2006 | |
Accruals For Self Insurance And Other Commitments And Contingencies [Line Items] | ||||
Aggregate self-insurance for professional and general liability | $28,000,000 | |||
Insured amount for professional and general liability, per claim | 4,000,000 | 4,000,000 | ||
Claim retention with statutory limit, workers' compensation | 350,000 | |||
Claim retention with statutory limit, automobile liability | 100,000 | |||
Stop loss insurance coverage against extraordinary claims | 300,000 | |||
Vestar [Member] | ||||
Accruals For Self Insurance And Other Commitments And Contingencies [Line Items] | ||||
Aggregate self-insurance for professional and general liability | 2,000,000 | |||
Insured amount for professional and general liability, per claim | $1,000,000 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Feb. 02, 2015 | Jan. 13, 2015 | Jan. 20, 2015 | |
Swap | |||||
Subsequent Event [Line Items] | |||||
Aggregate consideration for the acquisition | $12,500,000 | $1,200,000 | |||
National Mentor Holdings, Inc [Member] | Interest Rate Swap [Member] | |||||
Subsequent Event [Line Items] | |||||
Quarterly payment received from counter party | Equal to the greater of 3-month LIBOR or 1.00% per annum | ||||
Interest rate swap in a notional amount | 400,000,000 | ||||
Subsequent Event [Member] | National Mentor Holdings, Inc [Member] | Interest Rate Swap [Member] | |||||
Subsequent Event [Line Items] | |||||
Minimum interest received from counter party | 1.00% | ||||
Payments on fixed rate | 1.80% | ||||
Interest rate swap in a notional amount | 375,000,000 | ||||
Number of interest rate swap agreements | 2 | ||||
Subsequent Event [Member] | Senior Notes [Member] | National Mentor Holdings, Inc [Member] | |||||
Subsequent Event [Line Items] | |||||
Retirement date of Senior Notes | 4-Mar-15 | ||||
Subsequent Event [Member] | Post-Acute Specialty Rehabilitation Services [Member] | Cassel [Member] | |||||
Subsequent Event [Line Items] | |||||
Aggregate consideration for the acquisition | $18,200,000 |