Diplomat Pharmacy (DPLO) 10-Q 4 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 03, 2015
Document and Entity Information
Entity Registrant Name	Diplomat Pharmacy, Inc.
Entity Central Index Key	1,610,092
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		64,354,867
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and equivalents	$ 15,665	$ 17,957
Accounts receivable, net	258,158	155,273
Inventories	153,293	110,683
Deferred income taxes	2,503	1,813
Prepaid expenses and other current assets	7,551	5,360
Total current assets	437,170	291,086
Property and equipment, net	14,988	13,150
Capitalized software for internal use, net	35,904	13,236
Goodwill	253,426	23,148
Definite-lived intangible assets, net	233,677	44,973
Deferred debt issuance costs	5,312	921
Investment in non-consolidated entity	3,500	3,500
Other noncurrent assets	179	72
Total assets	984,156	390,086
Current liabilities:
Accounts payable	271,988	202,495
Borrowings on line of credit	21,756
Short-term debt, including current portion of long-term debt	6,000
Accrued expenses:
Contingent consideration	44,281	6,282
Compensation and benefits	6,126	2,257
Other	8,372	4,394
Total current liabilities	358,523	215,428
Long-term debt, less current portion	112,500
Contingent consideration, less current portion		5,409
Deferred income taxes	11,128	518
Other noncurrent liabilities		4
Total liabilities	$ 482,151	$ 221,359
Commitments and contingencies
Shareholders' equity:
Preferred stock (10,000,000 shares authorized; none issued and outstanding)
Common stock (no par value; 590,000,000 shares authorized; 64,253,037 and 51,457,023 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively)	$ 448,736	$ 148,901
Additional paid-in capital	21,868	9,893
Retained earnings	27,564	5,354
Total Diplomat Pharmacy shareholders' equity	498,168	164,148
Noncontrolling interests	3,837	4,579
Total shareholders' equity	502,005	168,727
Total liabilities and shareholders' equity	$ 984,156	$ 390,086

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Condensed Consolidated Balance Sheets
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common shares, par value (in dollars per share)	$ 0	$ 0
Common shares, authorized shares	590,000,000	590,000,000
Common shares, issued shares	64,253,037	51,457,023
Common shares, outstanding shares	64,253,037	51,457,023

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Condensed Consolidated Statements of Operations
Net sales	$ 946,913	$ 595,529	$ 2,379,807	$ 1,602,881
Cost of products sold	(871,150)	(555,364)	(2,193,233)	(1,503,639)
Gross profit	75,763	40,165	186,574	99,242
Selling, general and administrative expenses	(48,860)	(34,306)	(147,637)	(85,330)
Income from operations	26,903	5,859	38,937	13,912
Other (expense) income:
Interest expense	(1,542)	(734)	(3,766)	(1,629)
Change in fair value of redeemable common shares		6,916		7,873
Termination of existing stock redemption agreement		(4,842)		(4,842)
Equity loss of non-consolidated entity		(377)		(1,087)
Other	90	146	270	663
Total other (expense) income	(1,452)	1,109	(3,496)	978
Income before income taxes	25,451	6,968	35,441	14,890
Income tax expense	(9,768)	(2,427)	(13,973)	(6,984)
Net income	15,683	4,541	21,468	7,906
Less net loss attributable to noncontrolling interest	(278)		(742)
Net income attributable to Diplomat Pharmacy, Inc.	15,961	4,541	22,210	7,906
Net income allocable to preferred shareholders		745		1,062
Net income allocable to common shareholders	$ 15,961	$ 3,796	$ 22,210	$ 6,844
Net income per common share:
Basic (in dollars per share)	$ 0.25	$ 0.12	$ 0.37	$ 0.22
Diluted (in dollars per share)	$ 0.24	$ 0.11	$ 0.36	$ 0.20
Weighted average common shares outstanding:
Basic (in shares)	63,890,060	31,643,725	59,507,347	31,479,950
Diluted (in shares)	65,513,055	33,670,041	61,758,979	33,955,995

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net income	$ 21,468	$ 7,906
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	20,823	5,331
Change in fair value of contingent consideration	(1,660)	657
Contingent consideration payment	(3,738)
Net provision for doubtful accounts	3,307	3,257
Share-based compensation expense	2,502	1,828
Excess tax benefits related to share-based awards	(14,348)
Deferred tax expense	1,185	3,286
Amortization of debt issuance costs	665	276
Impairment of capitalized software for internal use	150
Loss (gain) on sale or disposal of property and equipment	60	(11)
Change in fair value of redeemable common shares		(7,873)
Termination of existing stock redemption agreement		4,842
Equity loss of non-consolidated entity		1,087
Changes in operating assets and liabilities, net of business acquisitions:
Accounts receivable	(43,513)	(18,563)
Inventories	(28,379)	(6,913)
Accounts payable	18,644	26,192
Other assets and liabilities	25,366	(1,998)
Net cash provided by operating activities	2,532	19,304
Cash flows from investing activities:
Payments to acquire business, net of cash acquired	(299,534)	(51,599)
Expenditures for capitalized software for internal use	(9,145)	(5,758)
Expenditures for property and equipment	(2,374)	(834)
Net proceeds from sales of property and equipment	8	21
Loan to non-consolidated entity		(500)
Net repayment of related parties' notes receivable		150
Net cash used in investing activities	(311,045)	(58,520)
Cash flows from financing activities:
Net borrowings from line of credit	21,756	13,940
Proceeds from long-term debt	120,000
Payments on long-term debt	(1,500)	(5,693)
Proceeds from follow-on public offering, net of transaction costs	187,238
Proceeds from sale of preferred stock, net of transaction costs		101,815
Payments made to repurchase common stock		(53,400)
Payments made to repurchase stock options	(36,298)	(9,400)
Proceeds from issuance of stock upon stock option exercises	8,745
Excess tax benefits related to share-based awards	14,348
Payments of debt issuance costs	(5,056)
Contingent consideration payment	(3,012)
Payments of stock offering costs		(1,368)
Net cash provided by financing activities	306,221	45,894
Net (decrease) increase in cash and equivalents	(2,292)	6,678
Cash and equivalents at beginning of period	17,957	9,109
Cash and equivalents at end of period	15,665	15,787
Supplemental disclosures of cash flow information:
Cash paid for interest	2,730	1,411
Cash paid for income taxes	$ 346	$ 3,426

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Changes in Stockholders' Equity - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands	BioRx, LLCCommon stock	BioRx, LLCDiplomat Pharmacy, Inc. Shareholders' Equity	BioRx, LLC	Burman's Apothecary, LLCCommon stock	Burman's Apothecary, LLCDiplomat Pharmacy, Inc. Shareholders' Equity	Burman's Apothecary, LLC	Common stock	Additional Paid-in Capital	Retained Earnings	Diplomat Pharmacy, Inc. Shareholders' Equity	Noncontrolling Interest	Total
Balance at the beginning of the period at Dec. 31, 2014							$ 148,901	$ 9,893	$ 5,354	$ 164,148	$ 4,579	$ 168,727
Balance at the beginning of the period (in shares) at Dec. 31, 2014							51,457,023					51,457,023
Changes in shareholders' deficit
Net income									22,210	22,210	(742)	$ 21,468
Proceeds from public offering, net of issuance costs							$ 187,238			187,238		187,238
Proceeds from public offering, net of issuance costs (in shares)							6,821,125
Repurchase of stock options							$ (34,194)	(2,104)		(36,298)		(36,298)
Stock issued upon stock option exercises							$ 11,516	(2,771)		8,745		8,745
Stock issued upon stock option exercises (in shares)							1,683,000
Excess tax benefits related to share-based awards								14,348		14,348		14,348
Issuance of common stock as partial consideration in acquisition	$ 125,697	$ 125,697	$ 125,697	$ 9,578	$ 9,578	$ 9,578
Issuance of common stock as partial consideration in acquisition (in shares)	4,038,853			253,036
Share-based compensation expense								2,502		2,502		2,502
Balance at the end of the period at Sep. 30, 2015							$ 448,736	$ 21,868	$ 27,564	$ 498,168	$ 3,837	$ 502,005
Balance at the end of the period (in shares) at Sep. 30, 2015							64,253,037					64,253,037

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	9 Months Ended
	Sep. 30, 2015
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS	1. DESCRIPTION OF BUSINESS Diplomat Pharmacy, Inc. and its consolidated subsidiaries (the “Company”) operate a specialty pharmacy business which stocks, dispenses and distributes prescriptions for various biotechnology and specialty pharmaceutical manufacturers. Its primary focus is on medication management programs for individuals with complex chronic diseases, including oncology, immunology, hepatitis, multiple sclerosis, specialized infusion therapy, HIV and many other serious or long-term conditions. The Company has its corporate headquarters and main distribution facility in Flint, Michigan and maintains 16 other pharmacy locations in Arizona, California, Connecticut, Florida, Illinois, Iowa, Massachusetts, Michigan, Minnesota, North Carolina, Ohio and Pennsylvania. The Company also has centralized call centers to effectively deliver services to customers located in all 50 states in the United States of America (“U.S.”) and U.S. territories. The Company operates as one reportable segment. Initial Public Offering In October 2014, the Company completed its initial public offering (“IPO”) in which 15,333,333 shares of common stock were sold at a public offering price of $13.00 per share. The Company sold 11,000,000 shares of common stock and certain shareholders sold 4,333,333 shares of common stock. The Company did not receive any proceeds from the sale of common stock by the shareholders. The Company received net proceeds of $130,440 after deducting underwriting discounts and commissions of $9,652, and other offering expenses of $2,908. Proceeds of $80,458 were used to repay existing indebtedness to certain current or former shareholders and employees ($19,824), and borrowings under the line of credit ($60,634). The remaining proceeds were used for working capital and other general corporate purposes. Immediately prior to the closing of the IPO, each share of the Company’s then-outstanding capital stock converted into one share of its newly-authorized shares of no par value common stock. Follow-On Public Offering In March 2015, the Company completed a follow-on public offering in which 9,821,125 shares of common stock were sold at a public offering price of $29.00 per share. The Company sold 6,821,125 shares of common stock and certain shareholders sold 3,000,000 shares of common stock. The Company did not receive any proceeds from the sale of common stock by the shareholders. The Company received net proceeds of $187,238 after deducting underwriting discounts and commissions of $9,891, and other offering expenses of $685. The Company used $36,298 of the net proceeds to repurchase options to purchase common stock held by a number of current and former employees, including certain executive officers, with the remainder of the proceeds used to pay a portion of the cash consideration for the BioRx, LLC (“BioRx”) acquisition (Note 4). The purchase price for each stock option repurchased was based on the public offering price per share, net of the underwriting discount and exercise price.

BASIS OF PRESENTATION

BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2015
BASIS OF PRESENTATION
BASIS OF PRESENTATION	2. BASIS OF PRESENTATION Interim Unaudited Condensed Consolidated Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, the interim financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations, cash flows and changes in shareholders’ equity. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K, which was filed with the SEC on March 3, 2015. Stock Split In October 2014, immediately prior to the completion of the IPO, the Board of Directors declared and approved a 8,500-for-one stock split, effected in the form of a stock dividend, on each share of common stock outstanding to the common shareholders of record. Accordingly, all share and per share amounts in these unaudited condensed consolidated financial statements and notes thereto, were adjusted, where applicable, to reflect the stock split on a retroactive basis. Effect of Conversion from S Corporation to C Corporation On January 23, 2014, the Company changed its income tax status from an S corporation to a C corporation. Accordingly, on that date, the Company recorded a net deferred income tax liability of $2,965 and a charge to income tax expense for the same amount. The Company reclassified its accumulated deficit, inclusive of the net deferred tax liability adjustment, into additional paid-in capital on the date of conversion . Reclassifications Certain items in the prior periods’ financial statements have been reclassified to conform to the current presentation.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The condensed consolidated financial statements include the accounts of Diplomat Pharmacy, Inc., its wholly-owned subsidiaries, and a 51%-owned subsidiary, formed in August 2014, which the Company controls (see Note 7). The Company also owns a 25% interest in a non-consolidated entity which is accounted for under the equity method of accounting since the Company does not control the entity but has the ability to exercise significant influence over its operating and financial policies. This equity method investment was fully impaired during the fourth quarter of 2014. An investment in an entity in which the Company owns less than 20% and does not have the ability to exercise significant influence is accounted for under the cost method . N oncontrolling interest in a consolidated subsidiary in the condensed consolidated balance sheets represents the minority shareholders’ proportionate share of the equity in such subsidiary. Consolidated net income (loss) is allocated to the Company and noncontrolling interests (i.e., minority shareholders) in proportion to their percentage ownership. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates. Revenue Recognition The Company recognizes revenue from prescription drug sales for home delivery at the time the drugs are shipped. At the time of shipment, the Company has performed substantially all of its obligations under its payor contracts and does not experience a significant level of returns or reshipments. If the Company administers a drug treatment regimen in a patient’s home, the Company recognizes revenue at the time of administration. Revenues from dispensing specialty prescriptions that are picked up by patients at an open door or retail pharmacy location are recorded at prescription adjudication, which approximates the fill date. Sales taxes are presented on a net basis (excluded from revenues and costs). Revenues generated from prescription drug sales were $941,533 and $592,410 for the three months ended September 30, 2015 and 2014, respectively , and $2,365,860 and $1,594,197 for the nine months ended September 30, 2015 and 2014, respectively. The Company recognizes revenue from service, data and consulting services when the services have been performed and the earnings process is therefore complete. Revenues generated from service, data and consulting services were $5,380 and $3,119 for the three months ended September 30, 2015 and 2014, respectively , and $13,947 and $8,684 for the nine months ended September 30, 2015 and 2014, respectively. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 , Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which will supersede the existing revenue recognition guidance under U.S. GAAP. The new standard focuses on creating a single source of revenue guidance for revenue arising from contracts with customers for all industries. The objective of the new standard is for companies to recognize revenue when it transfers the promised goods or services to its customers at an amount that represents what the company expects to be entitled to in exchange for those goods or services. In July 2015, the FASB issued ASU No. 2015-14 , Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 by one year to annual reporting periods beginning after December 15, 2017 for public entities. ASU 2014-09 may be applied either retrospectively or as a cumulative effect adjustment as of the date of adoption. Early adoption is not permitted. The Company is currently assessing the method under which it will adopt and the potential impact of adopting ASU 2014-09 on its financial position, results of operations, cash flows and/or disclosures. I n June 2014, the FASB issued ASU No. 2014-12 , Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Targets Could Be Achieved after the Requisite Service Period , requiring that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. This ASU is effective within annual periods beginning on or after December 15, 2015, including interim periods within that reporting period. The Company does not expect the adoption of this guidance to have a significant impact on its financial position, results of operations, cash flows or disclosures . In April 2015, the FASB issued ASU No. 2015-03 , Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”), and, in August 2015, the FASB issued ASU No. 2015-15 , Interest — Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (“ASU 2015-15”). ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-15 then clarified that debt issuance costs related to a line-of-credit arrangement can be presented as an asset on the balance sheet, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement . These ASUs are effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years. An entity should apply this new guidance on a retrospective basis and is required to comply with applicable disclosures for a change in an accounting principle. These standards will result in a balance sheet reclassification and require related disclosure revisions in the Company’s financial statements. I n July 2015, the FASB issued ASU No. 2015-11 , Inventory (Topic 330): Simplifying the Measurement of Inventory , requiring that inventory be measured at the lower of cost and net realizable value. Net realizable value is defined as estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This ASU is effective within annual periods beginning on or after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating the impact, if any, that the adoption of this guidance will have on its financial position, results of operations, cash flows and/or disclosures . I n September 2015, the FASB issued ASU No. 2015-16 , Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments , requiring that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. This ASU also requires an entity to present separately on the face of the income statement, or disclose in the notes to the financial statements, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This ASU is effective within annual periods beginning on or after December 15, 2015, including interim periods within that reporting period, and will be applied prospectively to measurement-period adjustments that occur after the effective date of this ASU .

BUSINESS ACQUISITIONS

BUSINESS ACQUISITIONS	9 Months Ended
	Sep. 30, 2015
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS	4. BUSINESS ACQUISITIONS The Company accounts for its business acquisitions using the acquisition method as required by FASB Accounting Standards Codification Topic 805, Business Combinations . The Company ascribes significant value to the synergies and other benefits that do not meet the recognition criteria of acquired identifiable intangible assets. Accordingly, the value of these components is included within goodwill. The Company’s business acquisitions described below were treated as stock purchases for accounting purposes, and — except for one subsidiary of BioRx — the acquisitions were treated as asset purchases for income tax purposes and the related goodwill resulting from these business acquisitions is deductible for tax purposes. The results of operations for acquired businesses are included in the Company’s consolidated financial statements from their respective acquisition dates. Burman’s Apothecary, LLC On June 19, 2015, the Company acquired all of the outstanding equity interests of Burman’s Apothecary, LLC (“Burman’s”). Burman’s, located in the greater Philadelphia, Pennsylvania area, is a provider of individualized patient care with a primary focus on hepatitis C. The Company acquired Burman’s to further expand its existing hepatitis business and to increase its national presence. The following table summarizes the consideration transferred to acquire Burman’s: Cash at closing $ 253,036 restricted common shares Receivable for post-closing adjustment ) $ The above share consideration is based on 253,036 shares, as computed in accordance with the purchase agreement, multiplied by the per share closing market price as of June 18, 2015 ($42.06) and multiplied by 90% to account for the restricted nature of the shares. The Company incurred acquisition-related costs of $532 and $735 which were charged to “Selling, general and administrative expenses” during the three and nine months ended September 30, 2015, respectively. The following table summarizes the preliminary amounts of identifiable assets acquired and liabilities assumed at the acquisition date: Accounts receivable $ Inventories Prepaid expenses and other current assets Property and equipment Capitalized software for internal use Definite-lived intangible assets Accounts payable ) Accrued expenses — compensation and benefits ) Accrued expenses — other ) Total identifiable net assets Goodwill $ Definite-lived intangible assets that were acquired and their respective useful lives are as follows: Useful Life Amount Physician relationships 10 years $ Non-compete employment agreements 5 years Favorable supply agreement 1 year $ The Company has not finalized the purchase price allocation. Accordingly, the purchase price allocation described above could change materially as the Company finalizes its assessment of the allocation and the fair values of the net tangible and intangible assets it acquired. The Company determined the estimated fair values of the identifiable long-lived assets with assistance from an independent valuation firm. BioRx On February 26, 2015, the Company signed a definitive agreement to acquire BioRx. On April 1, 2015, the Company acquired BioRx, a highly specialized pharmacy and infusion services company based in Cincinnati, Ohio that provides treatments for patients with ultra-orphan and rare, chronic diseases. The Company acquired BioRx to further expand its existing specialty infusion business and to increase its national presence. The following table summarizes the consideration transferred to acquire BioRx: Cash $ 4,038,853 restricted common shares Contingent consideration at fair value $ The above share consideration at closing is based on 4,038,853 shares, as computed in accordance with the purchase agreement, multiplied by the per share closing market price as of March 31, 2015 ($34.58) and multiplied by 90% to account for the restricted nature of the shares. The purchase price includes a contingent consideration arrangement that requires the Company to issue up to 1,350,309 shares of its restricted common stock, as computed in accordance with the purchase agreement, to the former holders of BioRx’s equity interests based upon the achievement of a certain earnings before interest, taxes, depreciation and amortization target in the twelve month period ending March 31, 2016. Payment of the contingent consideration is subject to acceleration at the maximum contingent amount in the event of (i) a change in control of the Company or (ii) the termination without cause of either of two principals of BioRx that have continued employment with the Company following the closing, in each case during the 12-month period ending March 31, 2016. The Company incurred acquisition-related costs of $40 and $1,394 which were charged to “Selling, general and administrative expenses” during the three and nine months ended September 30, 2015, respectively. The following table summarizes the preliminary amounts of identifiable assets acquired and liabilities assumed at the acquisition date: Cash and cash equivalents $ Accounts receivable Inventories Deferred income taxes Prepaid expenses and other current assets Property and equipment Definite-lived intangible assets Other noncurrent assets Accounts payable ) Accrued expenses — compensation and benefits ) Accrued expenses — other ) Deferred income taxes ) Total identifiable net assets Goodwill $ Definite-lived intangible assets that were acquired and their respective useful lives are as follows: Useful Life Amount Patient relationships 10 years $ Non-compete employment agreements 5 years Trade names and trademarks 8 years $ The Company has not finalized the purchase price allocation. Accordingly, the purchase price allocation described above could change materially as the Company finalizes its assessment of the allocation and the fair values of the net tangible and intangible assets it acquired. The Company determined the estimated fair values of the identifiable long-lived assets with assistance from an independent valuation firm. The valuation firm also assisted with the Company’s determination of the fair value of the contingent consideration utilizing a Monte Carlo simulation. Based on a decrease in the Company’s stock price since BioRx’s acquisition, the fair value of this contingent consideration liability decreased to $38,000 as of September 30, 2015. MedPro Rx, Inc. On June 27, 2014, the Company acquired all of the authorized, issued and outstanding shares of capital stock of MedPro Rx, Inc. (“MedPro”). MedPro, based in Raleigh, North Carolina, is a specialty pharmacy focused on specialty infusion therapies including hemophilia and immune globulin. The Company acquired MedPro to expand its existing specialty infusion business and to increase its presence in the mid-Atlantic and Southern regions of the U.S. The Company did not acquire MedPro’s affiliate from which MedPro leased certain operating and other facilities. Instead, the Company, commensurate with the acquisition, entered into a five-year external lease agreement for the facilities on similar terms. As the Company does not direct the significant activities of the lessor, it is not consolidated into the Company’s financial statements. The Company incurred acquisition-related costs of $190 and $825 which were charged to “Selling, general and administrative expenses” during the three and nine months ended September 30, 2014. The following table summarizes the consideration transferred to acquire MedPro: Cash $ 716,695 restricted common shares Contingent consideration at fair value $ The purchase price includes a contingent consideration arrangement that requires the Company to pay the former owners an additional payout based upon the achievement of certain revenue and gross profit targets in each of the twelve month periods ending June 30, 2015 and 2016. The maximum payout of contingent consideration is $11,500. Approximately $3,500 of the purchase consideration was deposited into an escrow account to be held for two years after the closing date to satisfy any of the Company’s indemnification claims. The following table summarizes the amounts of identifiable assets acquired and liabilities assumed at the acquisition date: Cash and cash equivalents $ Accounts receivable Inventories Prepaid expenses and other current assets Property and equipment Capitalized software for internal use Definite-lived intangible assets Accounts payable ) Accrued expenses — compensation and benefits ) Accrued expenses — other ) Total identifiable net assets Goodwill $ Definite-lived intangible assets that were acquired and their respective useful lives are as follows: Useful Life Amount Patient relationships 7 years $ Trade names and trademarks 10 years Non-compete employment agreements 5 years $ The Company determined the fair values of the identifiable long-lived assets with assistance from an independent valuation firm. The valuation firm also assisted with the Company’s determination of the fair value of the contingent consideration utilizing historical results, forecasted operating results of MedPro for each of the twelve month periods ending June 30, 2015 and 2016, and the corresponding contractual contingent payouts based on those results discounted at rates commensurate with the uncertainty involved. Based on operating results since MedPro’s acquisition, the Company increased the estimated contingent payment in the fourth quarter of 2014, and, with accreted interest through September 30, 2015, the resulting liability as of September 30, 2015 was $5,316. Based upon MedPro’s actual results for the twelve months ended June 30, 2015, $5,750 was earned and was paid during the third quarter of 2015. Proforma Operating Results The following unaudited pro forma summary presents consolidated financial information as if the Burman’s, BioRx and MedPro acquisitions had occurred on January 1, 2014. The unaudited pro forma results reflect certain adjustments related to the acquisitions, such as amortization expense resulting from intangible assets acquired and adjustments to reflect the Company’s borrowings and tax rates. Accordingly, such pro forma operating results were prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the acquisitions been made as of January 1, 2014 or of results that may occur in the future. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net sales $ $ $ $ Net income attributable to Diplomat Pharmacy, Inc. $ $ $ $ Net income per common share — basic $ $ $ $ Net income per common share — diluted $ $ $ $

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	9 Months Ended
	Sep. 30, 2015
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS	5. FAIR VALUE MEASUREMENTS The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy was established, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. An asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques: A. Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. B. Cost approach: Amount that would be required to replace the service capacity of an asset (replacement cost). C. Income approach: Techniques to convert future amounts to a single present amount based upon market expectations (including present value techniques, option-pricing and excess earnings models). The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured and disclosed at fair value on a recurring basis at September 30, 2015 and December 31, 2014: Asset / Valuation (Liability) Level 3 Technique September 30, 2015: Contingent consideration $ ) $ ) C December 31, 2014: Contingent consideration $ ) $ ) C The following table sets forth a roll forward of the Level 3 measurements: Contingent Consideration Balance at January 1, 2015 $ ) BioRx acquisition ) Changes in fair value Payments Balance at September 30, 2015 $ ) The carrying amounts of the Company’s financial instruments, consisting primarily of cash and cash equivalents, accounts receivable, accounts payable and other liabilities, approximate their estimated fair values due to the relative short-term nature of the amounts. The carrying amount of debt approximates fair value due to variable interest rates at customary terms and rates the Company could obtain in current financing.

INVENTORIES

INVENTORIES	9 Months Ended
	Sep. 30, 2015
INVENTORIES
INVENTORIES	6. INVENTORIES Inventories consist of the following: September 30, December 31, 2015 2014 Prescription medications, over-the-counter medications and medical supplies, and non-medical retail items $ $ Raw materials — Finished goods $ $

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS	9 Months Ended
	Sep. 30, 2015
GOODWILL AND OTHER INTANGIBLE ASSETS
GOODWILL AND OTHER INTANGIBLE ASSETS	7. GOODWILL AND OTHER INTANGIBLE ASSETS The following table sets forth a roll forward of goodwill for the nine months ended September 30, 2015: Balance at January 1, 2015 $ BioRx acquisition Burman’s acquisition Balance at September 30, 2015 $ Definite-lived intangible assets consist of the following: September 30, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patient relationships $ $ ) $ $ $ ) $ Non-compete employment agreements ) ) Trade names and trademarks ) ) Physician relationships ) — — — Software licensing agreement — — Favorable supply agreement ) — — — Intellectual property — — $ $ ) $ $ $ ) $ Amortization expense was $7,908 and $1,725 for the three months ended September 30, 2015 and 2014, respectively, and $16,396 and $2,353 for the nine months ended September 30, 2015 and 2014, respectively. On August 28, 2014, the Company and two unrelated third party entities entered into a contribution agreement to form a new company, Primrose Healthcare, LLC (“Primrose”). Primrose functions as a management company, managing a network of physicians and medical professionals providing continuum care for patients infected with the hepatitis C virus. The Company contributed $5,000 for its 51% interest, of which $2,000 and $3,000 were contributed in 2015 and 2014, respectively. The unrelated third party entities contributed a software licensing agreement valued at $2,647 and intellectual property valued at $2,157. No amortization related to these intangibles has been recorded as the entity has yet to recognize any revenue.

INVESTMENT IN NON-CONSOLIDATED

INVESTMENT IN NON-CONSOLIDATED ENTITIES	9 Months Ended
	Sep. 30, 2015
INVESTMENT IN NON-CONSOLIDATED ENTITIES
INVESTMENT IN NON-CONSOLIDATED ENTITIES	8. INVESTMENT IN NON-CONSOLIDATED ENTITIES In October 2011, the Company purchased a 25% minority interest in WorkSmartMD, L.L.C., also known as Ageology, for $5,000 of cash consideration, which was paid in installments during 2011, 2012 and 2013. During November and December 2013, the Company entered into two $1,000 6% per annum interest-bearing promissory notes receivable from Ageology. During January 2014, the Company entered into a $500, 8% per annum interest bearing secured promissory note receivable from Ageology. The notes are due on demand and secured by all personal property and fixtures owned by Ageology. In addition, in transactions unrelated to the Company, an affiliated entity owned by the Company’s chief executive officer has personally loaned $8,725 to Ageology as of September 30, 2015. During the fourth quarter of 2014, the Company reassessed the recoverability of its investment in Ageology. Based upon this assessment, it was determined that a full impairment was warranted, primarily due to updated projections of continuing losses into the foreseeable future. In December 2014, the Company invested $3,500 in Physician Resource Management, Inc. in exchange for a 15% equity position. The Company is accounting for this investment under the cost method as the Company does not have significant influence over its operations.

DEBT

DEBT	9 Months Ended
	Sep. 30, 2015
DEBT
DEBT	9. DEBT On April 1, 2015, in connection with the BioRx acquisition, the Company entered into a Second Amended and Restated Credit Agreement with General Electric Capital Corporation (“GE”), as agent and as a lender, the other lenders party thereto and the other credit parties party thereto, providing for an increase in the Company’s line of credit to $175,000, a fully drawn Term Loan A for $120,000 and a deferred draw term loan for an additional $25,000 (the “new credit facility”). The new credit facility also extended the maturity date to April 1, 2020. The new credit facility provides for the issuance of letters of credit up to $10,000 and swingline loans up to $15,000, the issuance and incurrence of which will reduce the availability of the line of credit. The new credit facility is guaranteed by substantially all of the Company’s subsidiaries and is collateralized by substantially all of the Company’s and its subsidiaries’ respective assets, with certain exceptions. In addition, t he Company has pledged the equity of substantially all of its subsidiaries as security for the obligations under the new credit facility . The Company is required to maintain a depository bank account where money is collected and swept directly to the line of credit. At September 30, 2015, the Company’s Term Loan A interest rate options were (i) LIBOR (as defined) plus 2.50% or (ii) Base Rate (as defined) plus 1.50%, and the Company’s line of credit and swingline loan interest rate options were (i) LIBOR (as defined) plus 2.00% or (ii) Base Rate (as defined) plus 1.00%. The Company is charged a monthly unused commitment fee ranging from 0.25% to 0.50% on the average unused daily balance. The Company incurred deferred financing costs of $5,056 associated with the new credit facility, which were capitalized in “Deferred debt issuance costs” on the condensed consolidated balance sheet. These costs, along with previously unamortized deferred debt issuance costs, are being amortized to interest expense over the term of the new credit facility. The new credit facility with GE contains certain financial and non-financial covenants. The Company was in compliance with all such covenants as of September 30, 2015. As disclosed in Note 1, using proceeds received from its IPO in October 2014, the Company repaid all outstanding borrowings including existing indebtedness to certain current or former shareholders and employees of $19,824 and borrowings under the line of credit of $60,634.

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION	9 Months Ended
	Sep. 30, 2015
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION	10. SHARE-BASED COMPENSATION A summary of the Company’s stock option activity as of and for the nine months ended September 30, 2015 is as follows: Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic of Options Price Life Value (Years) Outstanding at December 31, 2014 $ $ Granted Repurchased ) Exercised ) Expired/cancelled ) Outstanding at September 30, 2015 $ $ Exercisable at September 30, 2015 $ $ The Company granted service-based awards of 631,396 options to purchase common stock to key employees under its 2014 Omnibus Incentive Plan during the nine months ended September 30, 2015. The options become exercisable in installments of 25% per year, beginning on the first anniversary of the grant date and each of the three anniversaries thereafter, and have a maximum term of ten years. The Company also granted performance-based awards of 391,043 options to purchase common stock to key employees under its 2014 Omnibus Incentive Plan during the nine months ended September 30, 2015. Such options will be earned or forfeited based upon the Company’s performance relative to specified revenue and adjusted earnings before interest, taxes, depreciation and amortization goals for the year ended December 31, 2015. The earned options, if any, will vest in four installments of 25%, with the first installment vesting upon Audit Committee confirmation of the satisfaction of the applicable performance goals, and the remaining installments vesting annually thereafter. These options also have a maximum term of ten years. The 1,022,439 options to purchase common stock that were granted during 2015 and that are described in the above paragraph have a weighted average grant date fair value of $12.72 per option. The grant-date fair values of these stock option awards were estimated using the Black-Scholes-Merton option pricing model using the assumptions set forth in the following table : Exercise price $39.26 - $48.72 Expected volatility 25.82% - 26.70% Expected dividend yield Risk-free rate over the estimated expected life 1.84% - 2.01% Expected life (in years) Estimating grant date fair values for stock options requires management to make assumptions regarding the expected volatility of value of the underlying common shares, the risk-free rate over the expected life of the stock options, and the date on which share-based payments will be settled. Expected volatility is based on an implied volatility for a group of industry-relevant healthcare companies as of the measurement date. Expected dividend yield is zero as the Company does not anticipate that any dividends will be declared during the expected life of the options. Risk-free rate is determined based upon U.S. Treasury rates over the estimated expected stock option lives. Expected life of the stock options is calculated using the simplified method (the midpoint between the end of the vesting period and the end of the maximum term) because the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term due to the limited period of time its awards have been outstanding. If actual results differ significantly from these estimates and assumptions, share-based compensation expense, primarily with respect to future share-based awards, could be materially impacted. In March 2015, the Company repurchased vested stock options to buy 1,641,387 shares of common stock from certain current employees, including certain executive officers, for cash consideration totaling $36,298. All repurchased stock options were granted under the Company’s 2007 Stock Option Plan. No incremental compensation expense was recognized as a result of these repurchases. In April 2014, the Company repurchased vested stock options to buy 183,993 shares of common stock from certain current employees for cash consideration, totaling $2,300. No incremental compensation expense was recognized as a result of these redemptions. In January 2014, the Company repurchased vested stock options to buy 239,768 shares of common stock from certain current employees for cash consideration, totaling $3,100. No incremental compensation expense was recognized as a result of these redemptions. The Company recorded share-based compensation expense associated with stock options of $1,232 and $693 for the three months ended September 30, 2015 and 2014, respectively, and $2,389 and $1,828 for the nine months ended September 30, 2015 and 2014, respectively. Recorded share-based compensation expense for the three and nine months ended September 30, 2015 assumes achievement of certain performance-based goals. During the fourth quarter of 2014, the Company granted 8,277 restricted share awards to its non-employee directors. The Company recorded share-based compensation expense associated with restricted stock awards of $38 and $113 for the three and nine months ended September 30, 2015, respectively. For U.S. GAAP purposes, share-based compensation expense associated with stock options is based upon recognition of the grant date fair value over the vesting period of the option. For income tax purposes, share-based compensation tax deductions associated with stock option exercises and repurchases are based upon the difference between the stock price and the exercise price at time of exercise or repurchase . In instances where share-based compensation expense for tax purposes is in excess of share-based compensation expense for U.S. GAAP purposes, U.S. GAAP requires that the tax benefit associated with this excess expense be recorded to shareholders’ equity to the extent that it reduces cash taxes payable. During the three and nine months ended September 30, 2015, the Company recorded excess tax benefits related to share-based awards of $9,365 and $14,348, respectively. As of September 30, 2015, the Company has approximately $54,000 of excess share-based compensation expense remaining to offset against future taxable income. Therefore, at an estimated effective tax rate of 39.0%, the amount of excess tax benefits yet to be recognized by the Company as a reduction to cash taxes payable is approximately $21,000. U.S. GAAP also requires that excess tax benefits related to share-based awards be reported as a decrease to cash flows from operating activities and as an increase to cash flows from financing activities. Therefore, the Company reported $14,348 of excess tax benefits related to share-based awards as a decrease to cash flows from operating activities and as an increase to cash flows from financing activities for the nine months ended September 30, 2015.

INCOME TAXES

INCOME TAXES	9 Months Ended
	Sep. 30, 2015
INCOME TAXES
INCOME TAXES	11. INCOME TAXES As disclosed in Note 2, the Company changed its income tax status from an S corporation to a C corporation on January 23, 2014. Accordingly, on that date, the Company recorded a net deferred income tax liability of $2,965 and a corresponding charge to deferred income tax expense. This adoption impact, net of the impact of S corporation earnings from January 1, 2014 to January 22, 2014 which were not tax affected, resulted in a 47% effective tax rate for the nine months ended September 30, 2014. The Company’s effective tax rate for the nine months ended September 30, 2015 was 39%.

CONTINGENCIES

CONTINGENCIES	9 Months Ended
	Sep. 30, 2015
CONTINGENCIES
CONTINGENCIES	12. CONTINGENCIES The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. Management believes that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

REDEEMABLE CAPITAL STOCK

REDEEMABLE CAPITAL STOCK	9 Months Ended
	Sep. 30, 2015
REDEEMABLE CAPITAL STOCK
REDEEMABLE CAPITAL STOCK	13. REDEEMABLE CAPITAL STOCK Several years prior to its IPO, the Company issued 11,050,000 shares of common stock to two shareholders that had certain redemption features which provided that upon the death of the shareholder or termination of his employment from the Company, all such outstanding shares owned by such shareholder would immediately be deemed to be offered for sale to the Company at an agreed-upon price meant to represent the then-current fair value of such shares. Due to this repurchase feature, the Company would be required to purchase the shares. Pursuant to this provision, the common shares were deemed to be mandatorily redeemable and, as such, were required to be reflected as a liability at their period end estimated fair value. Fair value was determined based on good faith estimates of the Company’s Board of Directors, in some cases with the assistance of independent third party valuations of the Company. The Company recognized a $6,916 and a $7,873 “Change in fair value of redeemable shares” during the three and nine months ended September 30, 2014, respectively. In January 2014, the Company entered into a Redeemable Series A Preferred Stock Purchase Agreement with certain funds of T. Rowe Price Associates, Inc. (“T. Rowe”) under which the Company issued to T. Rowe 2,986,229 shares of Redeemable Series A Preferred Stock at a purchase price of $16.74 per share. The Company used $20,000 of this $50,000 investment for general corporate purposes inclusive of fees associated with this transaction, and the remaining $30,000 was distributed to holders of common stock ($26,900) and holders of options to acquire common stock ($3,100). In April 2014, the Company entered into a Redeemable Series A Preferred Stock Purchase Agreement with certain funds of Janus Capital Management LLC (“Janus”) under which the Company issued to Janus 3,225,127 shares of Redeemable Series A Preferred Stock at a purchase price of $16.74 per share. The Company used $25,200 of this $54,000 investment for general corporate purposes inclusive of fees associated with this transaction, and the remaining $28,800 was distributed to holders of common stock ($26,500) and holders of options to acquire common stock ($2,300). As disclosed in Note 1, immediately prior to the closing of the IPO, each share of the Company’s then-outstanding capital stock converted into one share of its newly-authorized shares of no par value common stock.

TERMINATION OF EXISTING STOCK R

TERMINATION OF EXISTING STOCK REDEMPTION AGREEMENT	9 Months Ended
	Sep. 30, 2015
TERMINATION OF EXISTING STOCK REDEMPTION AGREEMENT.
TERMINATION OF EXISTING STOCK REDEMPTION AGREEMENT	14. TERMINATION OF EXISTING STOCK REDEMPTION AGREEMENT In August 2014, the Company issued 372,486 shares of common stock to a non-employee relative (and associated trusts) of the Company’s chief executive officer in connection with the termination of an existing stock redemption agreement. The Company recorded a charge of $4,842 during both the three and nine month periods ended September 30, 2014 associated with this transaction. The value of the issued shares was based on the Company’s initial public offering price of $13.00 per share.

INCOME PER COMMON SHARE

INCOME PER COMMON SHARE	9 Months Ended
	Sep. 30, 2015
INCOME PER COMMON SHARE
INCOME PER COMMON SHARE	15. INCOME PER COMMON SHARE F or the period January 23, 2014 through September 30, 2014, the Company computed net income per common share using the two-class method as its Redeemable Series A Preferred Stock met the definition of a participating security and thereby shared in the net income of the Company on a ratable basis with the common shareholders. The preferred stock’s portions of net income for the three and nine months ended September 30, 2014 were 16% and 13%, respectively. The following table sets forth the computation of basic and diluted income per common share: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Numerator: Net income attributable to Diplomat Pharmacy, Inc. $ $ $ $ Less net income allocable to preferred shareholders — — Net income allocable to common shareholders Denominator: Weighted average common shares outstanding, basic Weighted average dilutive effect of stock options and restricted stock awards Weighted average common shares outstanding, diluted Net income per common share: Basic $ $ $ $ Diluted $ $ $ $ Service-based stock options to purchase a weighted average of 615,504 and 270,421 common shares were excluded from the computation of diluted weighted average common shares outstanding for the three and nine months ended September 30, 2015, respectively, as inclusion of such options would be anti-dilutive. Performance-based stock options to purchase up to a weighted average of 678,234 and 550,512 common shares were excluded from the computation of diluted weighted average common shares outstanding for the three and nine months ended September 30, 2015, respectively, as none of the necessary conditions were satisfied as of September 30, 2015. Contingent consideration to issue up to 1,350,309 common shares was excluded from the computation of diluted weighted average common shares outstanding for both the three and nine months ended September 30, 2015 as none of the necessary conditions were satisfied as of September 30, 2015. Service-based stock options to purchase a weighted average of 679,629 and 579,653 common shares were excluded from the computation of diluted weighted average common shares outstanding for the three and nine months ended September 30, 2014, respectively, as inclusion of such options would be anti-dilutive. Performance-based stock options to purchase up to a weighted average of 871,293 and 826,103 common shares were excluded from the computation of diluted weighted average common shares outstanding for the three and nine months ended September 30, 2014, respectively, as none of the necessary conditions were satisfied as of September 30, 2014. The effect of all Redeemable Series A Preferred Stock were excluded from the computation of diluted weighted average common shares outstanding for both the three and nine months ended September 30, 2014 as inclusion would be anti-dilutive.

SUMMARY OF SIGNIFICANT ACCOUN22

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation	Principles of Consolidation The condensed consolidated financial statements include the accounts of Diplomat Pharmacy, Inc., its wholly-owned subsidiaries, and a 51%-owned subsidiary, formed in August 2014, which the Company controls (see Note 7). The Company also owns a 25% interest in a non-consolidated entity which is accounted for under the equity method of accounting since the Company does not control the entity but has the ability to exercise significant influence over its operating and financial policies. This equity method investment was fully impaired during the fourth quarter of 2014. An investment in an entity in which the Company owns less than 20% and does not have the ability to exercise significant influence is accounted for under the cost method . N oncontrolling interest in a consolidated subsidiary in the condensed consolidated balance sheets represents the minority shareholders’ proportionate share of the equity in such subsidiary. Consolidated net income (loss) is allocated to the Company and noncontrolling interests (i.e., minority shareholders) in proportion to their percentage ownership. All intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates.
Revenue Recognition	Revenue Recognition The Company recognizes revenue from prescription drug sales for home delivery at the time the drugs are shipped. At the time of shipment, the Company has performed substantially all of its obligations under its payor contracts and does not experience a significant level of returns or reshipments. If the Company administers a drug treatment regimen in a patient’s home, the Company recognizes revenue at the time of administration. Revenues from dispensing specialty prescriptions that are picked up by patients at an open door or retail pharmacy location are recorded at prescription adjudication, which approximates the fill date. Sales taxes are presented on a net basis (excluded from revenues and costs). Revenues generated from prescription drug sales were $941,533 and $592,410 for the three months ended September 30, 2015 and 2014, respectively , and $2,365,860 and $1,594,197 for the nine months ended September 30, 2015 and 2014, respectively. The Company recognizes revenue from service, data and consulting services when the services have been performed and the earnings process is therefore complete. Revenues generated from service, data and consulting services were $5,380 and $3,119 for the three months ended September 30, 2015 and 2014, respectively , and $13,947 and $8,684 for the nine months ended September 30, 2015 and 2014, respectively.
New Accounting Pronouncements	New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 , Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which will supersede the existing revenue recognition guidance under U.S. GAAP. The new standard focuses on creating a single source of revenue guidance for revenue arising from contracts with customers for all industries. The objective of the new standard is for companies to recognize revenue when it transfers the promised goods or services to its customers at an amount that represents what the company expects to be entitled to in exchange for those goods or services. In July 2015, the FASB issued ASU No. 2015-14 , Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 by one year to annual reporting periods beginning after December 15, 2017 for public entities. ASU 2014-09 may be applied either retrospectively or as a cumulative effect adjustment as of the date of adoption. Early adoption is not permitted. The Company is currently assessing the method under which it will adopt and the potential impact of adopting ASU 2014-09 on its financial position, results of operations, cash flows and/or disclosures. I n June 2014, the FASB issued ASU No. 2014-12 , Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Targets Could Be Achieved after the Requisite Service Period , requiring that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. This ASU is effective within annual periods beginning on or after December 15, 2015, including interim periods within that reporting period. The Company does not expect the adoption of this guidance to have a significant impact on its financial position, results of operations, cash flows or disclosures . In April 2015, the FASB issued ASU No. 2015-03 , Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”), and, in August 2015, the FASB issued ASU No. 2015-15 , Interest — Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (“ASU 2015-15”). ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-15 then clarified that debt issuance costs related to a line-of-credit arrangement can be presented as an asset on the balance sheet, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement . These ASUs are effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years. An entity should apply this new guidance on a retrospective basis and is required to comply with applicable disclosures for a change in an accounting principle. These standards will result in a balance sheet reclassification and require related disclosure revisions in the Company’s financial statements. I n July 2015, the FASB issued ASU No. 2015-11 , Inventory (Topic 330): Simplifying the Measurement of Inventory , requiring that inventory be measured at the lower of cost and net realizable value. Net realizable value is defined as estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This ASU is effective within annual periods beginning on or after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating the impact, if any, that the adoption of this guidance will have on its financial position, results of operations, cash flows and/or disclosures . I n September 2015, the FASB issued ASU No. 2015-16 , Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments , requiring that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. This ASU also requires an entity to present separately on the face of the income statement, or disclose in the notes to the financial statements, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This ASU is effective within annual periods beginning on or after December 15, 2015, including interim periods within that reporting period, and will be applied prospectively to measurement-period adjustments that occur after the effective date of this ASU .

BUSINESS ACQUISITIONS (Tables)

BUSINESS ACQUISITIONS (Tables)	9 Months Ended
	Sep. 30, 2015
Business acquisition
Schedule of unaudited pro forma results of operations	Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net sales $ $ $ $ Net income attributable to Diplomat Pharmacy, Inc. $ $ $ $ Net income per common share — basic $ $ $ $ Net income per common share — diluted $ $ $ $
Burman's Apothecary, LLC
Business acquisition
Schedule of consideration transferred	Cash at closing $ 253,036 restricted common shares Receivable for post-closing adjustment ) $
Summary of the amounts of identifiable acquired assets and assumed liabilities	Accounts receivable $ Inventories Prepaid expenses and other current assets Property and equipment Capitalized software for internal use Definite-lived intangible assets Accounts payable ) Accrued expenses — compensation and benefits ) Accrued expenses — other ) Total identifiable net assets Goodwill $
Schedule of definite-lived intangible assets that were acquired and their respective useful lives	Useful Life Amount Physician relationships 10 years $ Non-compete employment agreements 5 years Favorable supply agreement 1 year $
BioRx, LLC
Business acquisition
Schedule of consideration transferred	Cash $ 4,038,853 restricted common shares Contingent consideration at fair value $
Summary of the amounts of identifiable acquired assets and assumed liabilities	Cash and cash equivalents $ Accounts receivable Inventories Deferred income taxes Prepaid expenses and other current assets Property and equipment Definite-lived intangible assets Other noncurrent assets Accounts payable ) Accrued expenses — compensation and benefits ) Accrued expenses — other ) Deferred income taxes ) Total identifiable net assets Goodwill $
Schedule of definite-lived intangible assets that were acquired and their respective useful lives	Useful Life Amount Patient relationships 10 years $ Non-compete employment agreements 5 years Trade names and trademarks 8 years $
MedPro Rx, Inc.
Business acquisition
Schedule of consideration transferred	Cash $ 716,695 restricted common shares Contingent consideration at fair value $
Summary of the amounts of identifiable acquired assets and assumed liabilities	Cash and cash equivalents $ Accounts receivable Inventories Prepaid expenses and other current assets Property and equipment Capitalized software for internal use Definite-lived intangible assets Accounts payable ) Accrued expenses — compensation and benefits ) Accrued expenses — other ) Total identifiable net assets Goodwill $
Schedule of definite-lived intangible assets that were acquired and their respective useful lives	Useful Life Amount Patient relationships 7 years $ Trade names and trademarks 10 years Non-compete employment agreements 5 years $

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	9 Months Ended
	Sep. 30, 2015
FAIR VALUE MEASUREMENTS
Schedule of assets and liabilities re-measured and disclosed at fair value on a recurring basis	Asset / Valuation (Liability) Level 3 Technique September 30, 2015: Contingent consideration $ ) $ ) C December 31, 2014: Contingent consideration $ ) $ ) C
Schedule of a roll forward of the Level 3 measurements	Contingent Consideration Balance at January 1, 2015 $ ) BioRx acquisition ) Changes in fair value Payments Balance at September 30, 2015 $ )

INVENTORIES (Tables)

INVENTORIES (Tables)	9 Months Ended
	Sep. 30, 2015
INVENTORIES
Schedule of inventories	September 30, December 31, 2015 2014 Prescription medications, over-the-counter medications and medical supplies, and non-medical retail items $ $ Raw materials — Finished goods $ $

GOODWILL AND OTHER INTANGIBLE26

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	9 Months Ended
	Sep. 30, 2015
GOODWILL AND OTHER INTANGIBLE ASSETS
Schedule of changes in the carrying amount of goodwill	Balance at January 1, 2015 $ BioRx acquisition Burman’s acquisition Balance at September 30, 2015 $
Schedule of definite-lived intangible assets	September 30, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patient relationships $ $ ) $ $ $ ) $ Non-compete employment agreements ) ) Trade names and trademarks ) ) Physician relationships ) — — — Software licensing agreement — — Favorable supply agreement ) — — — Intellectual property — — $ $ ) $ $ $ ) $

SHARE-BASED COMPENSATION (Table

SHARE-BASED COMPENSATION (Tables)	9 Months Ended
	Sep. 30, 2015
SHARE-BASED COMPENSATION
Summary of entity's stock option activity	Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic of Options Price Life Value (Years) Outstanding at December 31, 2014 $ $ Granted Repurchased ) Exercised ) Expired/cancelled ) Outstanding at September 30, 2015 $ $ Exercisable at September 30, 2015 $ $
Schedule of assumptions used to determine the valuation of granted options	Exercise price $39.26 - $48.72 Expected volatility 25.82% - 26.70% Expected dividend yield Risk-free rate over the estimated expected life 1.84% - 2.01% Expected life (in years)

INCOME PER COMMON SHARE (Tables

INCOME PER COMMON SHARE (Tables)	9 Months Ended
	Sep. 30, 2015
INCOME PER COMMON SHARE
Schedule of the calculation for basic and diluted income per common share	Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Numerator: Net income attributable to Diplomat Pharmacy, Inc. $ $ $ $ Less net income allocable to preferred shareholders — — Net income allocable to common shareholders Denominator: Weighted average common shares outstanding, basic Weighted average dilutive effect of stock options and restricted stock awards Weighted average common shares outstanding, diluted Net income per common share: Basic $ $ $ $ Diluted $ $ $ $

DESCRIPTION OF BUSINESS (Detail

DESCRIPTION OF BUSINESS (Details) $ / shares in Units, $ in Thousands	1 Months Ended		9 Months Ended
	Mar. 31, 2015USD ($)$ / sharesshares	Oct. 31, 2014USD ($)$ / sharesshares	Sep. 30, 2015USD ($)segmentlocation$ / shares	Sep. 30, 2014USD ($)$ / shares	Dec. 31, 2014$ / shares
DESCRIPTION OF BUSINESS
Number of pharmacy locations | location			16
Number of reportable segments | segment			1
Initial Public Offering [Line Items]
Public offering price (in dollars per share) | $ / shares				$ 13
Proceeds from follow-on public offering, net of transaction costs			$ 187,238
Other offering expenses				$ 1,368
Number of newly authorized shares issued upon conversion (in shares) | shares		1
Common shares, par value (in dollars per share) | $ / shares		$ 0	$ 0		$ 0
Borrowings under the revolving line of credit			$ 21,756
Initial Public Offering
Initial Public Offering [Line Items]
Number of shares of common stock sold (in shares) | shares		15,333,333
Number of shares sold by the Company (in shares) | shares		11,000,000
Number of shares of stock sold by the existing shareholders (in shares) | shares		4,333,333
Public offering price (in dollars per share) | $ / shares		$ 13
Net proceeds from initial public offering		$ 130,440
Underwriting discounts and commissions		9,652
Other offering expenses		2,908
Net proceeds used for debt payments		80,458
Existing indebtedness to certain current or former shareholders and employees		19,824
Amount of borrowings repaid under the revolving line of credit		$ 60,634
Follow-On Public Offering
Initial Public Offering [Line Items]
Number of shares of common stock sold (in shares) | shares	9,821,125
Number of shares sold by the Company (in shares) | shares	6,821,125
Number of shares of stock sold by the existing shareholders (in shares) | shares	3,000,000
Public offering price (in dollars per share) | $ / shares	$ 29
Proceeds from follow-on public offering, net of transaction costs	$ 187,238
Underwriting discounts and commissions	9,891
Other offering expenses	685
Net proceeds used to repurchase stock options	$ 36,298

BASIS OF PRESENTATION (Details)

BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands	1 Months Ended
	Oct. 31, 2014	Jan. 23, 2014
Stock Split
Number of shares issued as stock dividend (in shares)	8,500
Effect of Conversion from S Corporation to C Corporation
Net deferred income tax liability		$ 2,965

SUMMARY OF SIGNIFICANT ACCOUN31

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Aug. 28, 2014
Principles of Consolidation
Percentage of ownership interest in subsidiary that the entity has the ability to control	51.00%
Percentage of interest in a non-consolidated entity	25.00%
Ownership interest (as a percent)	20.00%
Debt Issuance Costs
Net debt issuance costs	$ 5,312	$ 921
Primrose
Principles of Consolidation
Percentage of interest in a non-consolidated entity			51.00%

SUMMARY OF SIGNIFICANT ACCOUN32

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenue recognition
Revenues from service, data and consulting services	$ 5,380	$ 3,119	$ 13,947	$ 8,684
Prescription Drugs
Revenue recognition
Revenues	$ 941,533	$ 592,410	$ 2,365,860	$ 1,594,197

BUSINESS ACQUISITIONS (Details)

BUSINESS ACQUISITIONS (Details) $ / shares in Units, $ in Thousands	Jun. 19, 2015USD ($)shares	Jun. 18, 2015$ / shares	Feb. 26, 2015USD ($)shares	Jun. 27, 2014USD ($)shares	Sep. 30, 2015USD ($)	Mar. 31, 2015$ / shares	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)segment	Sep. 30, 2014USD ($)	Dec. 31, 2014USD ($)
Business acquisition
Number of acquisitions not treated as asset purchase for tax purposes | segment								1
Summary of the preliminary fair value determination of the acquired assets and liabilities
Goodwill					$ 253,426			$ 253,426		$ 23,148
Burman's Apothecary, LLC
Business acquisition
Cash at closing	$ 84,296
Restricted common shares	9,578
Receivable for estimated post-closing adjustment	(6,880)
Total	$ 86,994
Restricted common shares (in shares) | shares	253,036
Market price (in dollars per share) | $ / shares		$ 42.06
Market price multiplier to factor in restricted nature of the shares (as a percent)		90
Acquisition-related costs charged to Selling, general, and administrative expenses					532			735
Summary of the preliminary fair value determination of the acquired assets and liabilities
Accounts receivable, net	$ 17,109
Inventories	8,668
Prepaid expenses and other current assets	7,514
Property and equipment	88
Capitalized software for internal use	17,000
Definite-lived intangible assets	23,400
Accounts payable	(25,761)
Accrued expenses - compensation and benefits	(169)
Accrued expenses - other	(6)
Total identifiable net assets	47,843
Goodwill	39,151
Total acquisition price	86,994
BioRx, LLC
Business acquisition
Cash at closing			$ 217,024
Restricted common shares			125,697
Contingent consideration fair value			41,000
Total			$ 383,721
Restricted common shares (in shares) | shares			4,038,853
Market price (in dollars per share) | $ / shares						$ 34.58
Market price multiplier to factor in restricted nature of the shares (as a percent)						90
Number of additional restricted Company shares to be issued upon achievement of EBITDA-based metric (in shares) | shares			1,350,309
Number of principal employees whose termination will trigger maximum contingent payout			2
Acquisition-related costs charged to Selling, general, and administrative expenses					$ 40			$ 1,394
Summary of the preliminary fair value determination of the acquired assets and liabilities
Cash and cash equivalents			$ 1,786
Accounts receivable, net			38,946
Inventories			5,546
Deferred income taxes			382
Prepaid expenses and other current assets			287
Property and equipment			494
Definite-lived intangible assets			181,700
Other noncurrent assets			163
Accounts payable			(25,088)
Accrued expenses - compensation and benefits			(1,653)
Accrued expenses - other			(852)
Deferred income taxes			(9,117)
Total identifiable net assets			192,594
Goodwill			191,127
Total acquisition price			383,721
BioRx, LLC | Subsidiary
Business acquisition
Number of acquisitions not treated as asset purchase for tax purposes | segment								1
MedPro Rx, Inc.
Business acquisition
Cash at closing				$ 52,267
Restricted common shares				12,000
Contingent consideration fair value				4,270
Total				$ 68,537
Restricted common shares (in shares) | shares				716,695
Acquisition-related costs charged to Selling, general, and administrative expenses							$ 190		$ 825
Maximum payout of contingent consideration				$ 11,500
Purchase consideration deposited into an escrow account				$ 3,500
Deposit term into an escrow account				2 years
External lease term				5 years
Summary of the preliminary fair value determination of the acquired assets and liabilities
Cash and cash equivalents				$ 668
Accounts receivable, net				9,050
Inventories				3,819
Prepaid expenses and other current assets				204
Property and equipment				697
Capitalized software for internal use				25
Definite-lived intangible assets				37,099
Accounts payable				(3,638)
Accrued expenses - compensation and benefits				(157)
Accrued expenses - other				(865)
Total identifiable net assets				46,902
Goodwill				21,635
Total acquisition price				68,537
Trade names and trademarks | BioRx, LLC
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets			12,000
Trade names and trademarks | MedPro Rx, Inc.
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets				8,700
Non-compete employment agreements | Burman's Apothecary, LLC
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 5,700
Non-compete employment agreements | BioRx, LLC
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets			$ 39,700
Non-compete employment agreements | MedPro Rx, Inc.
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets				$ 4,399

BUSINESS ACQUISITIONS (Details

BUSINESS ACQUISITIONS (Details 2) - USD ($) $ in Thousands	Jun. 19, 2015	Feb. 26, 2015	Jun. 27, 2014	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Definite-lived intangible assets
Fair value of this contingent consideration liability change in amount						$ (1,660)	$ 657
Contingent consideration related charges						5,316
Amortization expense				$ 7,908	$ 1,725	16,396	$ 2,353
MedPro Rx, Inc.
Definite-lived intangible assets
Total			$ 37,099
Contingent consideration earned and paid				$ 5,750
MedPro Rx, Inc. | Physician relationships
Definite-lived intangible assets
Useful Life			7 years
Amount			$ 24,000
MedPro Rx, Inc. | Trade names and trademarks
Definite-lived intangible assets
Useful Life			10 years
Amount			$ 8,700
MedPro Rx, Inc. | Non-compete employment agreements
Definite-lived intangible assets
Useful Life			5 years
Amount			$ 4,399
Burman's Apothecary, LLC
Definite-lived intangible assets
Total	$ 23,400
Burman's Apothecary, LLC | Physician relationships
Definite-lived intangible assets
Useful Life	10 years
Amount	$ 15,000
Burman's Apothecary, LLC | Non-compete employment agreements
Definite-lived intangible assets
Useful Life	5 years
Amount	$ 5,700
Burman's Apothecary, LLC | Favorable supply agreement
Definite-lived intangible assets
Useful Life	1 year
Amount	$ 2,700
BioRx, LLC
Definite-lived intangible assets
Total		$ 181,700
Fair value of this contingent consideration liability change in amount						$ (38,000)
BioRx, LLC | Physician relationships
Definite-lived intangible assets
Useful Life		10 years
Amount		$ 130,000
BioRx, LLC | Trade names and trademarks
Definite-lived intangible assets
Useful Life		8 years
Amount		$ 12,000
BioRx, LLC | Non-compete employment agreements
Definite-lived intangible assets
Useful Life		5 years
Amount		$ 39,700

BUSINESS ACQUISITIONS (Detail35

BUSINESS ACQUISITIONS (Details 3) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Pro Forma Operating Results
Net sales	$ 946,913	$ 733,776	$ 2,656,523	$ 2,055,904
Net income attributable to Diplomat Pharmacy, Inc.	$ 11,090	$ 5,536	$ 29,259	$ 11,565
Net income per common share - basic (in dollars per share)	$ 0.17	$ 0.13	$ 0.47	$ 0.27
Net income per common share - diluted (in dollars per share)	$ 0.17	$ 0.12	$ 0.46	$ 0.26

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - Recurring - Contingent consideration - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Fair value measurements
Asset (Liability)	$ (44,281)	$ (11,691)
Level 3
Fair value measurements
Asset (Liability)	$ (44,281)	$ (11,691)

FAIR VALUE MEASUREMENTS (Deta37

FAIR VALUE MEASUREMENTS (Details 2) - Level 3 - Contingent consideration $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)
Level 3 measurements
Balance at beginning of the period	$ (11,691)
BioRx acquisition	(41,000)
Changes in fair value	1,660
Payments	6,750
Balance at end of the period	$ (44,281)

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
INVENTORIES
Prescription medications, over-the-counter medications and medical supplies, and non-medical retail items	$ 153,286	$ 110,464
Raw materials		208
Finished goods	7	11
Total inventories	$ 153,293	$ 110,683

GOODWILL AND OTHER INTANGIBLE39

GOODWILL AND OTHER INTANGIBLE ASSETS (Details) $ in Thousands	Jun. 19, 2015USD ($)	Feb. 26, 2015USD ($)	Aug. 28, 2014USD ($)entity	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Dec. 31, 2014USD ($)
Changes in the carrying amount of goodwill
Balance as of beginning of period						$ 23,148
Balance as of end of period				$ 253,426		253,426		$ 23,148
Gross carrying amount				254,103		254,103		49,003
Accumulated amortization				(20,426)		(20,426)		(4,030)
Net Carrying Amount				233,677		233,677		44,973
Amortization expense				$ 7,908	$ 1,725	$ 16,396	$ 2,353
Ownership percentage				25.00%		25.00%
Aggregate amortization expense for amortizing intangible assets				$ 7,908	$ 1,725	$ 16,396	$ 2,353
BioRx, LLC
Changes in the carrying amount of goodwill
Goodwill acquired during the year						191,127
Balance as of end of period		$ 191,127
Burman's Apothecary, LLC
Changes in the carrying amount of goodwill
Goodwill acquired during the year						39,151
Balance as of end of period	$ 39,151
Primrose
Changes in the carrying amount of goodwill
Amortization expense			$ 0			0
Number of unrelated third party entities (in entities) | entity			2
Committed contribution			$ 5,000
Ownership percentage			51.00%
Amount contributed						2,000		3,000
Aggregate amortization expense for amortizing intangible assets			$ 0			0
Patient relationships
Changes in the carrying amount of goodwill
Gross carrying amount				159,100		159,100		29,100
Accumulated amortization				(11,507)		(11,507)		(2,895)
Net Carrying Amount				147,593		147,593		26,205
Non-compete employment agreements
Changes in the carrying amount of goodwill
Gross carrying amount				50,399		50,399		4,999
Accumulated amortization				(5,612)		(5,612)		(560)
Net Carrying Amount				44,787		44,787		4,439
Non-compete employment agreements | BioRx, LLC
Changes in the carrying amount of goodwill
Weighted average amortization period		5 years
Non-compete employment agreements | Burman's Apothecary, LLC
Changes in the carrying amount of goodwill
Weighted average amortization period	5 years
Trade names and trademarks
Changes in the carrying amount of goodwill
Gross carrying amount				22,100		22,100		10,100
Accumulated amortization				(2,082)		(2,082)		(575)
Net Carrying Amount				20,018		20,018		9,525
Trade names and trademarks | BioRx, LLC
Changes in the carrying amount of goodwill
Weighted average amortization period		8 years
Physician relationships
Changes in the carrying amount of goodwill
Gross carrying amount				15,000		15,000
Accumulated amortization				(438)		(438)
Net Carrying Amount				14,562		14,562
Physician relationships | BioRx, LLC
Changes in the carrying amount of goodwill
Weighted average amortization period		10 years
Physician relationships | Burman's Apothecary, LLC
Changes in the carrying amount of goodwill
Weighted average amortization period	10 years
Software licensing agreement
Changes in the carrying amount of goodwill
Gross carrying amount				2,647		2,647		2,647
Net Carrying Amount				2,647		2,647		2,647
Software licensing agreement | Primrose
Changes in the carrying amount of goodwill
Amount contributed by unrelated third party entities			2,647
Favorable supply agreement
Changes in the carrying amount of goodwill
Gross carrying amount				2,700		2,700
Accumulated amortization				(787)		(787)
Net Carrying Amount				1,913		1,913
Favorable supply agreement | Burman's Apothecary, LLC
Changes in the carrying amount of goodwill
Weighted average amortization period	1 year
Intellectual property
Changes in the carrying amount of goodwill
Gross carrying amount				2,157		2,157		2,157
Net Carrying Amount				$ 2,157		$ 2,157		$ 2,157
Intellectual property | Primrose
Changes in the carrying amount of goodwill
Amount contributed by unrelated third party entities			$ 2,157

INVESTMENT IN NON-CONSOLIDATE40

INVESTMENT IN NON-CONSOLIDATED ENTITY (Details) $ in Thousands	1 Months Ended		2 Months Ended	9 Months Ended
	Jan. 31, 2014USD ($)	Oct. 31, 2011USD ($)	Dec. 31, 2013USD ($)item	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)	Dec. 31, 2014USD ($)
Schedule of Equity Method Investments [Line Items]
Ownership percentage					25.00%
Cash consideration paid in installments				$ 500
Ageology
Schedule of Equity Method Investments [Line Items]
Ownership percentage		25.00%
Cash consideration paid in installments		$ 5,000
Secured promissory notes receivable	$ 500		$ 1,000
Interest rate of secured promissory notes receivable (as a percent)	8.00%		6.00%
Number of promissory notes receivable (in notes) | item			2
Ageology | Affiliated entity | Chief Executive Officer
Schedule of Equity Method Investments [Line Items]
Amount loaned					$ 8,725
Physician Resource Management, Inc.
Schedule of Equity Method Investments [Line Items]
Investment at cost						$ 3,500
Equity position						15.00%

DEBT (Details)

DEBT (Details) - USD ($) $ in Thousands	Apr. 01, 2015	Oct. 31, 2014	Sep. 30, 2015	Jun. 30, 2014
Line of credit | GE
Debt
Maximum borrowing capacity	$ 175,000
Letters of credit | GE
Debt
Maximum borrowing capacity				$ 10,000
Deferred draw term loan | GE
Debt
Maximum borrowing capacity	25,000
Deferred financing costs	5,056
Term Loan A | GE
Debt
Maximum borrowing capacity	$ 120,000
Swing loans | GE
Debt
Maximum borrowing capacity				$ 15,000
Minimum | Line of credit
Debt
Monthly unused commitment fee (as a percent)			0.25%
Maximum | Line of credit
Debt
Monthly unused commitment fee (as a percent)			0.50%
Initial Public Offering
Debt
Existing indebtedness to certain current or former shareholders and employees		$ 19,824
Amount of borrowings repaid under the revolving line of credit		$ 60,634
Base Rate | Line of credit | GE
Debt
Variable rate basis			Base Rate
Interest rate margin (as a percent)			1.50%
Base Rate | Line Of Credit And Swingline Loan | GE
Debt
Variable rate basis			Base Rate
Interest rate margin (as a percent)			1.00%
LIBOR | Line of credit | GE
Debt
Variable rate basis			LIBOR
Interest rate margin (as a percent)			2.50%
LIBOR | Line Of Credit And Swingline Loan | GE
Debt
Variable rate basis			LIBOR
Interest rate margin (as a percent)			2.00%

SHARE-BASED COMPENSATION (Detai

SHARE-BASED COMPENSATION (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Number of Options
Outstanding at beginning of period (in shares)	7,217,331
Granted (in shares)	1,022,439
Repurchased (in shares)	(1,641,387)
Exercised (in shares)	(1,683,000)
Expired/cancelled (in shares)	(787,119)
Outstanding at end of period (in shares)	4,128,264	7,217,331
Exercisable at end of period (in shares)	1,011,545
Weighted Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 7.54
Granted (in dollars per share)	41.65
Repurchased (in dollars per share)	5.44
Exercised (in dollars per share)	5.20
Expired/cancelled (in dollars per share)	16.13
Outstanding at end of period (in dollars per share)	16.15	$ 7.54
Exercisable at end of period (in dollars per share)	$ 4.01
Weighted Average Remaining Contractual Life
Outstanding at beginning of period	7 years 8 months 12 days	6 years 10 months 24 days
Outstanding at end of period	7 years 8 months 12 days	6 years 10 months 24 days
Exercisable at end of period	5 years 2 months 12 days
Aggregate Intrinsic Value
Outstanding at beginning of period	$ 142,262
Outstanding at end of period	65,195	$ 142,262
Exercisable at end of period	$ 25,060

SHARE-BASED COMPENSATION (Det43

SHARE-BASED COMPENSATION (Details 2) $ / shares in Units, $ in Thousands	1 Months Ended			3 Months Ended			9 Months Ended
	Mar. 31, 2015USD ($)	Apr. 30, 2014USD ($)shares	Jan. 31, 2014USD ($)shares	Sep. 30, 2015USD ($)$ / shares	Dec. 31, 2014shares	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)item$ / sharesshares	Sep. 30, 2014USD ($)
Additional disclosures
Cash consideration to repurchase stock options							$ 36,298	$ 9,400
Excess tax benefits related to share-based awards reported as decrease to operating activities							(14,348)
Excess tax benefits related to share-based awards reported as increase to financing activities							$ 14,348
Effective tax rate							39.00%	47.00%
2014 Plan
Assumptions used to determine the valuation of granted options
Expected dividend yield (as a percent)							0.00%
Expected life							6 years 3 months
Maximum | 2014 Plan
Assumptions used to determine the valuation of granted options
Exercise price of options | $ / shares				$ 48.72			$ 48.72
Expected volatility (as a percent)							26.70%
Risk-free interest rate for the estimated expected term (as a percent)							2.01%
Minimum | 2014 Plan
Assumptions used to determine the valuation of granted options
Exercise price of options | $ / shares				$ 39.26			$ 39.26
Expected volatility (as a percent)							25.82%
Risk-free interest rate for the estimated expected term (as a percent)							1.84%
Stock options
Share-based compensation
Granted (in shares) | shares							1,022,439
Granted (in dollars per share) | $ / shares							$ 12.72
Additional disclosures
Total compensation expense				$ 1,232		$ 693	$ 2,389	$ 1,828
Repurchased (in shares)							(1,641,387)
Stock options repurchased to buy shares from certain current and former employees | shares		183,993	239,768
Cash consideration for redeemed stock options		$ 2,300	$ 3,100
Incremental compensation expense		$ 0	$ 0
Excess tax benefits related to share-based awards reported as decrease to operating activities				(9,365)			$ (14,348)
Excess tax benefits related to share-based awards reported as increase to financing activities							14,348
Excess share-based compensation expense remaining to offset against future taxable income							$ 54,000
Effective tax rate							39.00%
Excess tax benefit yet to be recognized				21,000			$ 21,000
Stock options | 2007 Stock Option Plan
Additional disclosures
Repurchased (in shares)	1,641,387
Cash consideration to repurchase stock options	$ 36,298
Incremental compensation expense	$ 0
Performance-based stock options | 2014 Plan
Share-based compensation
Granted (in shares) | shares							391,043
Percentage of options exercisable in installments beginning on the first anniversary of the grant date and each of the three anniversaries thereafter							25.00%
Maximum term of stock option plan							10 years
Number of installments for vesting | item							4
Service-based stock options | 2014 Plan
Share-based compensation
Granted (in shares) | shares							631,396
Percentage of options exercisable in installments beginning on the first anniversary of the grant date and each of the three anniversaries thereafter							25.00%
Number of anniversary dates upon which options become exercisable							3
Maximum term of stock option plan							10 years
Restricted Stock Awards
Additional disclosures
Granted (in shares) | shares					8,277
Total compensation expense				$ 38			$ 113

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Jan. 23, 2014
INCOME TAXES
Net deferred income tax liability			$ 2,965
Effective tax rate	39.00%	47.00%

REDEEMABLE CAPITAL STOCK (Detai

REDEEMABLE CAPITAL STOCK (Details) $ / shares in Units, $ in Thousands	1 Months Ended			3 Months Ended	9 Months Ended
	Oct. 31, 2014$ / sharesshares	Apr. 30, 2014USD ($)$ / sharesshares	Jan. 31, 2014USD ($)$ / sharesshares	Sep. 30, 2014USD ($)$ / shares	Sep. 30, 2015shareholder$ / sharesshares	Sep. 30, 2014USD ($)$ / shares	Dec. 31, 2014$ / sharesshares
Redeemable capital stock
Number of newly authorized shares issued upon conversion (in shares) | shares	1
Common shares, par value (in dollars per share) | $ / shares	$ 0				$ 0		$ 0
Stock issued to shareholders several years prior to IPO (in shares) | shares					64,253,037		51,457,023
Change on fair value of redeemable shares				$ 6,916		$ 7,873
Share price (in dollars per share) | $ / shares				$ 13		$ 13
Amount used for holders of options to acquire common stock						$ 53,400
Two shareholders
Redeemable capital stock
Stock issued to shareholders several years prior to IPO (in shares) | shares					11,050,000
Number of shareholders to whom common stock is issued several years prior to IPO (in shareholders) | shareholder					2
Series A Preferred | T.Rowe Price
Redeemable capital stock
Series A Preferred Stock, issued (in shares) | shares			2,986,229
Share price (in dollars per share) | $ / shares			$ 16.74
Proceeds from issuance of preferred stock			$ 50,000
Amount used for general corporate expenses			20,000
Remaining amount used for distribution to existing holders			30,000
Amount used for distribution to existing holders of common stock			26,900
Amount used for holders of options to acquire common stock			$ 3,100
Series A Preferred | Janus
Redeemable capital stock
Series A Preferred Stock, issued (in shares) | shares		3,225,127
Share price (in dollars per share) | $ / shares		$ 16.74
Proceeds from issuance of preferred stock		$ 54,000
Amount used for general corporate expenses		25,200
Remaining amount used for distribution to existing holders		28,800
Amount used for distribution to existing holders of common stock		26,500
Amount used for holders of options to acquire common stock		$ 2,300

TERMINATION OF EXISTING STOCK46

TERMINATION OF EXISTING STOCK REDEMPTION AGREEMENT (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Aug. 31, 2014
Termination of existing stock redemption agreement	$ 4,842	$ 4,842
Public offering price (in dollars per share)	$ 13	$ 13
Non Employee Relative of CEO
Common stock issued			372,486

INCOME PER COMMON SHARE (Detail

INCOME PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Preferred shares portions of net income (as a percent)		16.00%		13.00%
Net income attributable to Diplomat Pharmacy, Inc.	$ 15,961	$ 4,541	$ 22,210	$ 7,906
Less net income allocable to preferred shareholders		745		1,062
Net income allocable to common shareholders	$ 15,961	$ 3,796	$ 22,210	$ 6,844
Weighted average common shares outstanding, basic (in shares)	63,890,060	31,643,725	59,507,347	31,479,950
Weighted average dilutive effect of stock options and restricted stock awards (in shares)	1,622,995	2,026,316	2,251,632	2,476,045
Weighted average common shares outstanding, diluted (in shares)	65,513,055	33,670,041	61,758,979	33,955,995
Net income per common share:
Basic (in dollars per share)	$ 0.25	$ 0.12	$ 0.37	$ 0.22
Diluted (in dollars per share)	$ 0.24	$ 0.11	$ 0.36	$ 0.20
Contingent consideration
Net income per common share:
Anti-dilutive options excluded (in shares)	1,350,309		1,350,309
Performance-based stock options
Net income per common share:
Anti-dilutive options excluded (in shares)	678,234	871,293	550,512	826,103
Service-based stock options
Net income per common share:
Anti-dilutive options excluded (in shares)	615,504	679,629	270,421	579,653

Uncategorized Items - dplo-2015

Label	Element	Value
Deferred Income Tax Expense (Benefit)	us-gaap_DeferredIncomeTaxExpenseBenefit	$ 2,965