Proforma Results of Operations | Business Combinations The operating results of the businesses acquired are included in the consolidated statements of income from the date of acquisition. The Company accounted for these acquisitions under the acquisition method 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 2017 Acquisitions During the year ended September 30, 2017 , the Company acquired the assets or equity interests of 11 companies for total cash consideration of $82.1 million , net of $0.5 million of cash acquired. The following table summarizes the recognized amounts of identifiable net assets acquired at the date of each acquisition: (in thousands) Identifiable Intangible Assets Other Assets, Net Total Identifiable Assets Goodwill Purchase Consideration Loma Linda $ 2,225 $ 33 $ 2,258 $ 483 $ 2,741 Rainbow ADH 13,260 1,497 14,757 9,852 24,609 JLH 1,301 60 1,361 136 1,497 Mi Casa 2,960 59 3,019 1,921 4,940 Harbor Rehab 1,642 — 1,642 461 2,103 Brockton Stoughton ADH 4,000 195 4,195 2,055 6,250 Country Life 6,177 72 6,249 3,156 9,405 HSI 18,860 1,539 20,399 9,569 29,968 Other acquisitions 432 138 570 8 578 Total $ 50,857 $ 3,593 $ 54,450 $ 27,641 $ 82,091 Loma Linda Management Company, Inc. ("Loma Linda") . On January 31, 2017 , the Company acquired the assets of Loma Linda for $2.7 million . Loma Linda is located in California and provides adult day health and community integration services to individuals with developmental disabilities and other special needs. The Company acquired $2.2 million of identifiable intangible assets which included approximately $1.7 million of agency contracts with a weighted average useful life of 12 years. As a result of the acquisition, the Company recorded $0.5 million of goodwill in the I/DD segment, which is expected to be deductible for tax purposes. Rainbow Adult Day Health ("Rainbow ADH") . On March 1, 2017 , the Company acquired the assets of Rainbow ADH for $24.6 million . Rainbow ADH is located in Maryland and provides adult day health services. The Company acquired $13.3 million of identifiable intangible assets which included $11.3 million of agency contracts with a weighted average useful life of 12 years, $2.0 million of licenses and permits with a weighted average useful life of 10 years. In addition, the Company acquired total tangible assets of $1.5 million , consisting primarily of vehicles. As a result of this acquisition, the Company recorded $9.9 million of goodwill in the Corporate and other segment, which is expected to be deductible for tax purposes. JLH Enterprises, Chippewa Valley, Inc ("JLH") . On June 1, 2017 , the Company acquired the assets of JLH for $1.5 million . JLH is located in Wisconsin and is engaged in the business of providing residential services, supported living services, day program services and similar services to individuals with developmental disabilities and similar conditions. The Company acquired $1.3 million of identifiable intangible assets, all of which were agency contracts with a weighted average useful life of 12 years. As a result of this acquisition, the Company recorded $0.1 million of goodwill in the I/DD segment, which is expected to be deductible for tax purposes. Mi Casa es Su Casa, Inc. ("Mi Casa") . On June 9, 2017 , the Company acquired the assets of Mi Casa for $4.9 million . Mi Casa is located in New Jersey and provides adult day health services. The Company acquired $3.0 million of identifiable intangible assets which included $2.5 million of agency contracts with a weighted average useful life of 12 years . As a result of this acquisition, the Company recorded $1.9 million of goodwill in the Corporate and other segment, which is expected to be deductible for tax purposes. Harbor Rehabilitation, LLC ("Harbor Rehab") . On June 12, 2017 , the Company acquired the assets of Harbor Rehab for $2.1 million . Harbor Rehab is located in Michigan and provides physical therapy, rehabilitation and related services to individuals with injuries or impairments. The Company acquired $1.6 million of identifiable intangible assets which included $1.1 million of agency contracts with a weighted average useful life of 12 years. As a result of this acquisition, the Company recorded $0.5 million of goodwill in the SRS segment, which is expected to be deductible for tax purposes. Brockton and Stoughton Adult Medical Day Care Center, Inc. ("Brockton Stoughton ADH") . On June 26, 2017 , the Company acquired the assets of Brockton Stoughton ADH for $6.3 million . Brockton Stoughton ADH is located in Massachusetts and provides adult day health services. The Company acquired $4.0 million of identifiable intangible assets which included $3.4 million of agency contracts with a weighted average useful life of 12 years. As a result of this acquisition, the Company recorded $2.1 million of goodwill in the Corporate and other segment, which is expected to be deductible for tax purposes. Country Life Care Centers, Inc. ("Country Life") . On July 1, 2017 , the Company acquired the assets of Country Life for $9.4 million . Country Life is located in Utah and is engaged in the business of operating a rehabilitation and sub-acute care facility that provides short-term and long-term medical care for people after a catastrophic injury or illness or with chronic medical conditions. The Company acquired $6.2 million of identifiable intangible assets which included $4.8 million of agency contracts with a weighted average useful life of 11 years. As a result of this acquisition, the Company recorded $3.2 million of goodwill in the SRS segment, which is expected to be deductible for tax purposes. Habilitative Services, Inc. ("HSI"). On September 29, 2017 , the Company acquired all of the outstanding capital stock of HSI and two related companies for $30.0 million . HSI is located in Minnesota and is engaged in the business of providing residential or supported living services and other services to individuals with developmental disabilities, traumatic brain injuries or mental illness. The Company acquired $18.9 million of identifiable intangible assets which included $14.7 million of agency contracts with a weighted average useful life of 12 years, and $4.1 million of licenses and permits with a weighted average useful life of 10 years. The Company also acquired $1.5 million of other assets, net of liabilities, consisting primarily of accounts receivable and fixed assets. The estimated fair values of the intangible assets acquired at the date of acquisition were determined based on a preliminary valuation that has yet to be finalized. As a result of this acquisition, the Company recorded $9.6 million of goodwill in the I/DD segment, which is not expected to be deductible for tax purposes. Other Acquisitions. During fiscal 2017, the Company acquired the assets of Hope Homes, Inc. ("Hope Homes"), Res-Care Wisconsin, Inc. ("RC"), and Micki's Creative Option, Inc. ("Micki's"). Hope Homes provides residential and day program services for individuals with developmental disabilities in Ohio, RC provides adult family home residential services to elderly individuals in Wisconsin, and Micki's provides group home services, supported living services and related services to individuals with intellectual and developmental disabilities in Ohio. These acquisitions are included in our I/DD segment. Total cash consideration for these companies was $0.6 million . The Company's consolidated statement of income for the year ended September 30, 2017 included revenue totaling approximately $18.2 million from the acquisition date of each respective acquisition. The Company has not disclosed income from operations because it is immaterial. Fiscal 2016 Acquisitions During the fiscal year ended September 30, 2016 , the Company acquired certain assets of 12 companies for total cash consideration of $45.2 million . The following table summarizes the recognized amounts of identifiable assets acquired at the date of each acquisition: (in thousands) Identifiable Intangible Assets Tangible Assets Total Identifiable Assets Goodwill Purchase Consideration Mother's Touch $ 2,741 $ 9 $ 2,750 $ 650 $ 3,400 Winways 619 29 648 108 756 Triumph 2,335 — 2,335 265 2,600 Brighton Worcester ADH 10,600 363 10,963 2,677 13,640 TLC Duluth 7,132 26 7,158 1,342 8,500 Maryland ADH 7,680 769 8,449 3,835 12,284 Eagle Crest 1,698 — 1,698 302 2,000 CRM 934 87 1,021 119 1,140 RHD 18 43 61 — 61 Learning Services 100 — 100 — 100 Pine Grove 407 — 407 93 500 Milne 210 5 215 — 215 Total $ 34,474 $ 1,331 $ 35,805 $ 9,391 $ 45,196 Mother's Touch, LLC ("Mother's Touch") . On November 30, 2015 , the Company acquired the assets of Mother's Touch for $3.4 million . Mother's Touch is located in Indiana and provides residential and community-based services to individuals with developmental disabilities. The Company acquired $2.7 million of identifiable intangible assets which included approximately $2.7 million of agency contracts with a weighted average useful life of 12 years. As a result of the acquisition, the Company recorded $0.7 million of goodwill in the I/DD segment, which is expected to be deductible for tax purposes. Winways, LLC ("Winways") . On December 31, 2015 , the Company acquired the assets of Winways for $0.8 million . Winways is located in California and provides residential and day treatment services to individuals with traumatic brain injuries, neurological illnesses and similar conditions. The Company acquired $0.6 million of identified intangible assets which included $0.5 million of agency contracts with a weighted average useful life of 12 years. As a result of this acquisition, the Company recorded $0.1 million of goodwill in the SRS segment, which is expected to be deductible for tax purposes. Triumph Rehabilitation, LLC ("Triumph") . On February 1, 2016 , the Company acquired the assets of Triumph for $2.6 million . Triumph is located in Michigan and provides physical therapy, rehabilitation and related services to individuals with traumatic brain injuries, neurological illnesses, and similar conditions. The Company acquired $2.3 million of identifiable intangible assets which included $2.2 million of agency contracts with a weighted average useful life of 12 years . As a result of this acquisition, the Company recorded $0.3 million of goodwill in the SRS segment, which is expected to be deductible for tax purposes. Brighton Worcester Massachusetts Adult Day Health, Inc. ("Brighton Worcester ADH"). On February 1, 2016 the Company acquired the assets of Brighton Worcester ADH for $13.6 million . Brighton Worcester ADH is located in Massachusetts and provides nursing and health oversight, medication management, therapy services, nutritional and dietary services, counseling and case management to elders. The Company acquired $10.6 million of identifiable intangible assets which included $9.9 million of agency contracts with a weighted average useful life of 12 years and $0.7 million of tradenames with a weighted average useful life of 5 years . As a result of this acquisition, the Company recorded $2.7 million of goodwill in the Corporate and other segment, which is expected to be deductible for tax purposes. Tender Loving Care Duluth, LLC ("TLC Duluth") . On February 29, 2016 , the Company acquired the assets of TLC Duluth for $8.5 million . TLC Duluth is located in Minnesota and provides full-time services in the community residential setting for individuals with developmental disabilities, traumatic brain injuries or mental illness. The Company acquired $7.1 million of identifiable intangible assets which included $6.2 million of agency contracts with a weighted average useful life of 12 years and $0.9 million of licenses and permits with a weighted average useful life of 10 years . As a result of this acquisition, the Company recorded $1.3 million of goodwill in the I/DD segment, which is expected to be deductible for tax purposes. Maryland Adult Day Health, Inc. ("Maryland ADH"). On March 14, 2016 , the Company acquired the assets of Maryland ADH for $12.3 million . Maryland ADH is located in Maryland and provides adult day health care services to the Medicaid eligible elderly population. The Company acquired $7.7 million of identifiable intangible assets which included $6.7 million of agency contracts with a weighted average useful life of 12 years and $1.0 million of tradenames with a weighted average useful life of 5 years . In addition, the Company acquired total tangible assets, consisting primarily of vehicles, of $0.8 million . As a result of this acquisition, the Company recorded $3.8 million of goodwill in the Corporate and other segment, which is expected to be deductible for tax purposes. Eagle Crest Center, LLC ("Eagle Crest"). On March 15, 2016 , the Company acquired the assets of Eagle Crest for $2.0 million . Eagle Crest is located in California and provides skilled nursing services and related services to individuals with traumatic brain injuries, spinal cord injuries, neuro-muscular or congenital anomalies, and similar conditions. The Company acquired $1.7 million of identifiable intangible assets which included $1.4 million of agency contracts with a weighted average useful life of 12 years . As a result of this acquisition, the Company recorded $0.3 million of goodwill in the SRS segment, which is expected to be deductible for tax purposes. CRM Habilitative Services, Inc. ("CRM"). On March 31, 2016 , the Company acquired the assets of CRM for $1.1 million . CRM is located in Pennsylvania and provides group home services and day program services and related services to individuals with intellectual and developmental disabilities. The Company acquired $0.9 million of identifiable intangible assets which included $0.8 million of agency contracts with a weighted average useful life of 12 years . As a result of this acquisition, the Company recorded $0.1 million of goodwill in the I/DD segment, which is expected to be deductible for tax purposes. Other acquisitions. During fiscal 2016, the Company acquired the assets of Resources for Human Development ("RHD"), Learning Services, Inc. ("Learning Services"), Pine Grove Habilitation Center ("Pine Grove"), and Alexander Milne Developmental Services ("Milne"). RHD, Pine Grove and Milne are in the business of providing residential group home services to individuals with developmental disabilities and similar conditions and is included in our I/DD segment. Learning Services is engaged in the business of providing supported living and rehabilitation services for individuals with acquired brain injuries and similar conditions and is included in our SRS segment. Total cash consideration for these companies was $0.9 million . The Company's consolidated statement of income for the year ended September 30, 2016 included revenue totaling approximately $27.6 million . The Company has not disclosed income from operations because it is immaterial. Fiscal 2015 Acquisitions During the fiscal year ended September 30, 2015, the Company acquired certain assets of 10 companies for total fair value consideration of $44.8 million , including $6.1 million of contingent consideration. The following table summarizes the recognized amounts of identifiable assets acquired assumed at the date of the acquisition: (in thousands) Identifiable Tangible Assets Total Identifiable Goodwill Purchase Consideration Capstone $ 3,539 $ 178 $ 3,717 $ 758 $ 4,475 Lakeview 6,664 48 6,712 1,272 7,984 Cassell 11,600 37 11,637 12,633 24,270 CPS 876 19 895 355 1,250 Snug Harbor 938 28 966 34 1,000 Heritage 1,252 — 1,252 945 2,197 Visions of N.E.W. 2,240 122 2,362 663 3,025 Other acquisitions 361 48 409 228 637 Total $ 27,470 $ 480 $ 27,950 $ 16,888 $ 44,838 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. The Company acquired $3.5 million of identifiable 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 for a non-compete/non-solicit agreement with a useful life of 5 years . In addition, the Company acquired total tangible assets of $0.2 million . As a result of this acquisition, the Company recorded $0.8 million of goodwill in the I/DD segment, which is expected to be deductible for tax purposes. 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. The Company acquired $6.7 million of identifiable 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 for a non-compete/non-solicit agreement with a useful life of 5 years . In addition, the Company acquired total tangible assets of $48 thousand . As a result of this acquisition, the Company recorded $1.3 million of goodwill in the SRS segment, which is expected to be deductible for tax purposes. Cassell & Associates LLC ("Cassell"). On January 13, 2015 , the Company acquired the assets of Cassell's Michigan programs for $24.3 million , including $6.1 million of contingent consideration. The terms of the acquisition agreement require the Company to pay an earn-out upon successfully meeting certain revenue and EBITDA targets through February 2017. The earn-out obligation was settled through two payments of $4.7 million and $2.3 million during the years ended September 30, 2017 and 2016, respectively. Cassell provides non-residential therapeutic vocational services to individuals recovering from brain injuries in the state of Michigan. The Company acquired $11.6 million of identifiable intangible assets which included $10.3 million of agency contracts with a weighted average useful life of 12 years , $0.2 million of non-compete/non-solicit agreement with a useful life of 5 years , and $1.1 million of trade names with a useful life of 5 years . In addition, the Company acquired total tangible assets of $37 thousand . As a result of this acquisition, the Company recorded $12.6 million of goodwill in the SRS segment, which is expected to be deductible for tax purposes. Comprehensive Professional Services ("CPS"). On March 23, 2015 , the Company acquired the assets of CPS's Michigan programs for $1.3 million . CPS provides community-based, residential services for individuals with brain injuries. The Company acquired $0.9 million of identifiable 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 , $5 thousand for a non-compete/non-solicit agreement with a useful life of 5 years . In addition, the Company acquired total tangible assets of $19 thousand . As a result of this acquisition, the Company recorded $0.4 million of goodwill in the SRS segment, which is expected to be deductible for tax purposes. Snug Harbor Home Health, Inc. ("Snug Harbor"). On April 1, 2015 , the Company acquired the assets of Snug Harbor for $1.0 million . Snug Harbor provides home and community-based services to individuals with intellectual and/or developmental disabilities. The Company acquired $0.9 million of agency contracts with a weighted average useful life of 12 years . In addition, the Company acquired total tangible assets of $28 thousand . As a result of this acquisition, the Company recorded $34 thousand of goodwill in the I/DD segment, which is expected to be deductible for tax purposes. Heritage Residential Services, Inc. ("Heritage"). On April 30, 2015 , the Company acquired the assets of Heritage for $2.2 million . Heritage provides residential and related services to individuals with intellectual and/or developmental disabilities. The Company acquired $1.3 million of identifiable intangible assets which included $1.1 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 $22 thousand of trade names with a useful life of 1 year . As a result of this acquisition, the Company recorded $0.9 million of goodwill in the I/DD segment, which is expected to be deductible for tax purposes. Visions of N.E.W., LLC ("Visions of N.E.W."). On April 30, 2015 , the Company acquired the assets of Visions of N.E.W. for $3.0 million . Visions of N.E.W. provides residential, transportation, job coaching, supportive care and similar services to individuals with developmental disabilities. The Company acquired $2.2 million of identifiable intangible assets which included $1.8 million of agency contracts with a weighted average useful life of 12 years , and $0.4 million of licenses and permits with a weighted average useful life of 10 years . In addition, the Company acquired total tangible assets of $0.1 million . As a result of this acquisition, the Company recorded $0.7 million of goodwill in the I/DD segment, which is expected to be deductible for tax purposes. Other Acquisitions. During fiscal 2015, the Company acquired the assets of Kessel Group Home, Inc ("Kessel"), Individual Expressions, Inc ("Individual Expressions"), and Georgia Rehabilitation Institute, Inc at Harison Heights ("Harison Heights"). Kessel and Individual Expressions are in the business of providing group home and related services to individuals with developmental disabilities and are included in our I/DD segment. Harison Heights is engaged in the business of providing assisted living, supported living or transitional living services to individuals with brain injuries, neuromuscular disorders, spinal cord injuries and similar conditions and is included in our SRS segment. Total cash consideration for these companies was $0.6 million of which $0.4 million was recorded for identifiable intangible assets, $0.2 million was recorded for goodwill and $48 thousand was recorded for tangible assets. The Company's consolidated statement of income for the year ended September 30, 2015 included revenue totaling $25.2 million related to these businesses. The Company has not disclosed income from operations because it is immaterial. Proforma Results of Operations (unaudited) The following table reflects the unaudited pro forma results of operations for fiscal 2017 , 2016 , and 2015 assuming that the acquisitions made during fiscal 2017 , 2016 , and 2015 had occurred on October 1, 2015, 2014 and 2013, respectively. (in thousands) Year Ended Year ended September 30, 2016 Year ended September 30, 2015 Net revenue $ 1,534,532 $ 1,507,342 $ 1,429,166 Net income 12,058 19,254 9,779 The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of the actual results that would have been achieved had the acquisitions occurred as of October 1, 2015, 2014 and 2013, or the results that may be achieved in future periods. |