Diplomat Pharmacy (DPLO) 10-Q 9 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 08, 2017
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	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		67,197,543
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and equivalents	$ 16,581	$ 7,953
Accounts receivable, net	255,461	275,568
Inventories	200,286	215,351
Prepaid expenses and other current assets	7,378	6,235
Total current assets	479,706	505,107
Property and equipment, net	19,923	20,372
Capitalized software for internal use, net	46,838	50,247
Goodwill	336,775	316,616
Definite-lived intangible assets, net	197,638	199,862
Deferred income taxes	4,263	6,010
Other noncurrent assets	1,045	1,040
Total assets	1,086,188	1,099,254
Current liabilities:
Accounts payable	301,392	320,684
Borrowings on line of credit	5,718	39,255
Short-term debt, including current portion of long-term debt	9,925	7,500
Accrued expenses:
Compensation and benefits	7,905	5,674
Other	14,279	12,233
Total current liabilities	339,219	385,346
Long-term debt, less current portion	121,514	100,184
Contingent consideration	3,735
Total liabilities	464,468	485,530
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; 67,164,606 and 66,764,999 issued and outstanding at March 31, 2017 and December 31, 2016, respectively)	507,381	503,828
Additional paid-in capital	33,486	33,268
Retained earnings	80,673	76,306
Total Diplomat Pharmacy shareholders' equity	621,540	613,402
Noncontrolling interests	180	322
Total shareholders' equity	621,720	613,724
Total liabilities and shareholders' equity	$ 1,086,188	$ 1,099,254

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
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	67,164,606	66,764,999
Common shares, outstanding shares	67,164,606	66,764,999

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Condensed Consolidated Statements of Operations
Net sales	$ 1,078,740	$ 995,870
Cost of products sold	(993,691)	(916,632)
Gross profit	85,049	79,238
Selling, general, and administrative expenses	(76,501)	(54,194)
Income from operations	8,548	25,044
Other (expense) income:
Interest expense	(2,049)	(1,434)
Other	33	107
Total other expense	(2,016)	(1,327)
Income before income taxes	6,532	23,717
Income tax expense	(2,307)	(8,534)
Net income	4,225	15,183
Less net loss attributable to noncontrolling interest	(142)	(246)
Net income attributable to Diplomat Pharmacy, Inc.	$ 4,367	$ 15,429
Net income per common share:
Basic (in dollars per share)	$ 0.07	$ 0.24
Diluted (in dollars per share)	$ 0.06	$ 0.23
Weighted average common shares outstanding:
Basic (in shares)	66,886,866	64,539,161
Diluted (in shares)	67,780,434	67,844,937

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net income	$ 4,225	$ 15,183
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	15,397	10,119
Net provision for doubtful accounts	2,784	2,246
Deferred income tax expense	1,746	7,633
Share-based compensation expense	972	1,503
Amortization of debt issuance costs	297	285
Change in fair value of contingent consideration		(9,071)
Contingent consideration payment		(400)
Other		1
Changes in operating assets and liabilities, net of business acquisitions:
Accounts receivable	21,406	(15,983)
Inventories	14,819	(14,912)
Accounts payable	(20,640)	(4,881)
Other assets and liabilities	3,289	2,698
Net cash provided by (used in) operating activities	44,295	(5,579)
Cash flows from investing activities:
Payments to acquire businesses, net of cash acquired	(26,532)
Expenditures for capitalized software for internal use	(1,285)	(4,432)
Expenditures for property and equipment	(569)	(1,316)
Other	(43)	1
Net cash used in investing activities	(28,429)	(5,747)
Cash flows from financing activities:
Net payments on line of credit	(33,537)
Proceeds from long-term debt	25,000
Payments on long-term debt	(1,500)	(1,500)
Proceeds from issuance of stock upon stock option exercises	2,799	510
Contingent consideration payments		(600)
Net cash used in financing activities	(7,238)	(1,590)
Net increase (decrease) in cash and equivalents	8,628	(12,916)
Cash and equivalents at beginning of period	7,953	27,600
Cash and equivalents at end of period	16,581	14,684
Supplemental disclosures of cash flow information:
Cash paid for interest	1,710	875
Cash paid for income taxes	$ 117	$ 443

Condensed Consolidated Stateme6

Condensed Consolidated Statement of Changes in Stockholders' Equity - 3 months ended Mar. 31, 2017 - USD ($) $ in Thousands	Common stock	Additional Paid-in Capital	Retained Earnings	Diplomat Pharmacy, Inc. Shareholders' Equity	Noncontrolling Interest	Total
Balance at Dec. 31, 2016	$ 503,828	$ 33,268	$ 76,306	$ 613,402	$ 322	$ 613,724
Balance at the beginning of the period (in shares) at Dec. 31, 2016	66,764,999					66,764,999
Changes in Shareholders' Equity
Net income (loss)			4,367	4,367	(142)	$ 4,225
Stock issued upon stock option exercises	$ 3,553	(754)		2,799		2,799
Stock issued upon stock option exercises (in shares)	391,965
Share-based compensation expense		972		972		972
Restricted stock awards (in shares)	7,642
Balance at Mar. 31, 2017	$ 507,381	$ 33,486	$ 80,673	$ 621,540	$ 180	$ 621,720
Balance at the end of the period (in shares) at Mar. 31, 2017	67,164,606					67,164,606

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	3 Months Ended
	Mar. 31, 2017
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. Disease states covered include oncology, immunology, specialty infusion therapy, hepatitis, multiple sclerosis, and many other serious or long-term conditions. The Company has its corporate headquarters and main distribution facility in Flint, Michigan, and operates 24 other pharmacy locations in Alabama, Arizona, California, Connecticut, Florida, Illinois, Iowa, Kansas, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, New York, North Carolina, Ohio, Pennsylvania, Texas, and Wisconsin. 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.

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2017
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 months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. 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, 2016 included in the Company’s Annual Report on Form 10-K, which was filed with the SEC on March 8, 2017.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2017
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 percent owned subsidiary, formed in August 2014, which the Company controls. An investment in an entity in which the Company owns less than 20 percent and does not have the ability to exercise significant influence is accounted for under the cost method. Noncontrolling 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. Inventories Inventories consist of prescription and over-the-counter medications and are stated at the lower of cost or market. Cost is determined using the first-in, first-out method. Prescription medications are returnable to the Company’s vendors and fully refundable before six months of expiration, and any remaining expired medication is relieved from inventory on a quarterly basis. 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. 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 $1,073,865 and $990,011 for the three months ended March 31, 2017 and 2016, 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 $4,875 and $5,859 for the three months ended March 31, 2017 and 2016, respectively. Accounting Standards Update (“ASU”) Adoption — Balance Sheet Classification of Deferred Taxes In April 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-17 , Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), eliminating the current requirement for companies to present deferred tax assets and liabilities as current and noncurrent. Instead, companies will be required to classify all deferred tax assets and liabilities as noncurrent. This ASU is effective for annual periods beginning on or after December 15, 2016, including interim periods within those annual periods, and can be adopted either prospectively or retrospectively. Effective January 1, 2017, the Company retrospectively adopted the accounting guidance contained within ASU 2015-17. The following December 31, 2016 condensed consolidated balance sheet line items were adjusted due to this adoption: As Previously Reported Adjustment As Adjusted Deferred income taxes (current asset) $ $ ) $ — Total current assets ) Deferred income taxes (noncurrent asset) — Total assets ) Deferred income taxes (noncurrent liability) ) — Total liabilities ) Total liabilities and shareholders’ equity ) ASU Adoption — Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU No. 2017-04 , Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which eliminates Step 2 from the quantitative goodwill impairment test. Instead, an entity should perform its annual, or interim, quantitative goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount (Step 1). An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU is effective for an entity’s annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted. Effective January 1, 2017, the Company adopted the accounting guidance contained within ASU 2017-04. There was no current impact to the Company as a result of this adoption. New Accounting Pronouncements In May 2014, the FASB issued 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, though early adoption is permitted. ASU 2014-09 permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (cumulative catch-up transition method). The Company currently anticipates adopting ASU 2014-09 using the cumulative catch-up transition method. The Company continues to assess the impact that the adoption of ASU 2014-09 will have on its condensed consolidated financial statements and/or notes thereto, although the Company does not expect the impact to be significant. In February 2016, the FASB issued ASU No. 2016-02 , Leases (Topic 842) , requiring lessees to recognize a right-of-use asset and a lease liability for all leases (with the exception of short-term leases) at lease commencement date. This ASU is effective for annual periods beginning on or after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating whether to early adopt and the impact that the adoption of this guidance will have on its condensed consolidated financial statements and/or notes thereto.

BUSINESS ACQUISITIONS

BUSINESS ACQUISITIONS	3 Months Ended
	Mar. 31, 2017
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 asset purchases for income tax purposes and the related goodwill resulting from these business acquisitions is deductible for income tax purposes. The results of operations for acquired businesses are included in the Company’s consolidated financial statements from their respective acquisition dates. The assets acquired and liabilities assumed in the business combinations described below, including identifiable intangible assets, were based on their estimated fair values as of the acquisition date. The excess of purchase price over the estimated fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill. The allocation of the purchase price required management to make significant estimates in determining the fair values of assets acquired and liabilities assumed, especially with respect to identifiable intangible assets. These estimated fair values were based on information obtained from management of the acquired companies and historical experience and, with respect to the long-lived tangible and intangible assets, were made with the assistance of an independent valuation firm. These estimates included, but were not limited to, the cash flows that an asset is expected to generate in the future, and the cost savings expected to be derived from acquiring an asset, discounted at rates commensurate with the risks and uncertainties involved. For acquisitions that involved contingent consideration, the Company recognized a liability equal to the fair value of the contingent consideration obligation as of the acquisition date. The estimate of fair value of a contingent consideration obligation required subjective assumptions regarding future business results, discount rates, and probabilities assigned to various potential business result scenarios. Comfort Infusion, Inc. On March 22, 2017, the Company acquired Comfort Infusion, Inc. (“Comfort Infusion”), a specialty pharmacy and infusion services company based in Birmingham, AL that specializes in intravenous immune globulin therapy to support patients’ immune systems. The following table summarizes the consideration transferred to acquire Comfort Infusion: Cash $ Contingent consideration at fair value $ The purchase price includes a contingent consideration arrangement that requires the Company to pay the former owners additional cash payouts of up to $2,000 per performance period based upon the achievement of a certain gross profit targets in each of the 12-month periods ending March 31, 2018, 2019, and 2020. The maximum payout of contingent consideration is $6,000. Approximately $1,050 of the purchase consideration was deposited into an escrow account to be held for 18 months after the closing date to satisfy any of the Company’s indemnification claims. The Company incurred acquisition-related costs of $133 which were charged to “Selling, general and administrative expenses” during the three months ended March 31, 2017. The following table summarizes the preliminary fair values of identifiable assets acquired and liabilities assumed at the acquisition date: Cash $ Accounts receivable Inventories Prepaid expenses and other current assets Definite-lived intangible assets Accounts payable ) Accrued expenses — other ) Total identifiable net assets Goodwill $ Definite-lived intangible assets that were acquired and their respective useful lives are as follows: Useful Amount Patient relationships 9 years $ Non-compete employment agreements 5 years $ Affinity Biotech, Inc. On February 1, 2017, the Company acquired Affinity Biotech, Inc. (“Affinity”), a specialty pharmacy and infusion services company based in Houston, TX that provides treatments and nursing services for patients with hemophilia. The following table summarizes the consideration transferred to acquire Affinity: Cash $ Contingent consideration at fair value $ The purchase price includes a contingent consideration arrangement that requires the Company to pay the former owners an additional cash payout based upon the achievement of a certain earnings before interest, taxes, depreciation, and amortization target in the 12-month period ending January 31, 2018. The maximum payout of contingent consideration is $4,000. Approximately $2,000 of the purchase consideration was deposited into an escrow account to be held for 18 months after the closing date to satisfy any of the Company’s indemnification claims. The Company incurred acquisition-related costs of $224 which were charged to “Selling, general and administrative expenses” during the three months ended March 31, 2017. The following table summarizes the preliminary fair values of identifiable assets acquired and liabilities assumed at the acquisition date: Cash $ Accounts receivable Inventories Prepaid expenses and other current assets Definite-lived intangible assets Other noncurrent 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 Amount Patient relationships 7 years $ Non-compete employment agreements 5 years $ Valley Campus Pharmacy, Inc. On June 1, 2016, the Company acquired Valley Campus Pharmacy, Inc., doing business as TNH Advanced Specialty Pharmacy (“TNH”). TNH, a specialty pharmacy based in Van Nuys, California, provides medication management programs for individuals with complex chronic diseases, including oncology, hepatitis, and immunology. The Company acquired TNH to expand its existing business, enhance its proprietary technology, and increase its geographic presence, particularly in California and Texas. The following table summarizes the consideration transferred to acquire TNH: Cash $ 324,244 restricted common shares $ The above share consideration at closing is based on 324,244 shares, in accordance with the purchase agreement, multiplied by the per share closing market price of the Company’s common stock as of May 31, 2016 ($32.58), and multiplied by 90 percent to account for the restricted nature of the shares. Approximately $3,800 of the purchase consideration was deposited into an escrow account to be held for one year after the closing date to satisfy any indemnification claims that may be made by the Company. The following table summarizes the preliminary fair values of identifiable assets acquired and liabilities assumed at the acquisition date: Cash $ Accounts receivable Inventories Prepaid expenses and other current assets Property and equipment Capitalized software for internal use Definite-lived intangible assets Other noncurrent 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 Amount Physician relationships 10 years $ Noncompete employment agreements 5 years Trade names and trademarks 1 year $ Pro Forma Operating Results The following 2017 unaudited pro forma summary presents condensed consolidated financial information as if the Affinity and Comfort Infusion acquisitions had occurred on January 1, 2016. The following 2016 unaudited pro forma summary presents condensed consolidated financial information as if the Affinity and Comfort Infusion acquisitions had occurred on January 1, 2016 and the TNH acquisition had occurred on January 1, 2015. 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 the as if dates or of results that may occur in the future. Three Months Ended 2017 2016 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	3 Months Ended
	Mar. 31, 2017
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 March 31, 2017: Asset / Valuation (Liability) Level 3 Technique Contingent consideration $ ) $ ) C The following table sets forth a roll forward of the Level 3 measurements: Contingent Balance at January 1, 2017 $ — Affinity acquisition ) Comfort Infusion acquisition ) Balance at March 31, 2017 $ ) 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.

GOODWILL AND DEFINITE-LIVED INT

GOODWILL AND DEFINITE-LIVED INTANGIBLE ASSETS	3 Months Ended
	Mar. 31, 2017
GOODWILL AND DEFINITE-LIVED INTANGIBLE ASSETS
GOODWILL AND DEFINITE-LIVED INTANGIBLE ASSETS	6. GOODWILL AND DEFINITE-LIVED INTANGIBLE ASSETS The following table sets forth a roll forward of goodwill for the three months ended March 31, 2017: Balance at January 1, 2017 $ Affinity acquisition Comfort Infusion acquisition Balance at March 31, 2017 $ Definite-lived intangible assets consisted of the following: March 31, 2017 December 31, 2016 Gross Accumulated Net Gross Accumulated Net Patient relationships $ $ ) $ $ $ ) $ Non-compete employment agreements ) ) Physician relationships ) ) Trade names and trademarks ) ) $ $ ) $ $ $ ) $

INVESTMENT IN NON-CONSOLIDATED

INVESTMENT IN NON-CONSOLIDATED ENTITY	3 Months Ended
	Mar. 31, 2017
INVESTMENT IN NON-CONSOLIDATED ENTITY
INVESTMENT IN NON-CONSOLIDATED ENTITY	7. INVESTMENT IN NON-CONSOLIDATED ENTITY From October 2011 through January 2017, the Company maintained a 25.0 percent minority interest in Worksmart MD, LLC, also known as Ageology, though it fully impaired its investment during the fourth quarter of 2014. In transactions unrelated to the Company, SkyPoint Ventures LLC (“SkyPoint”), an affiliated entity of the Company’s chief executive officer, loaned $16,000 to Ageology through January 2017. In February 2017, SkyPoint elected to convert its $16,000 in outstanding loans into equity in Ageology, which equated to an approximate ownership of 51.8 percent. Concurrently, the Company converted its $2,500 in outstanding loans (which the Company had written off during the fourth quarter of 2014) into equity in Ageology, thereby increasing the Company’s minority interest to approximately 26.5 percent. Because the Company does not direct the activities that most significantly impact the economic performance of Ageology, management has determined that the Company is not nor ever has been Ageology’s primary beneficiary. Subsequent to the February 2017 concurrent conversion transactions, SkyPoint loaned Ageology $860 during the three months ended March 31, 2017.

DEBT

DEBT	3 Months Ended
	Mar. 31, 2017
DEBT
DEBT	8. DEBT The Company had $109,500 and $111,000 outstanding on Term Loan A as of March 31, 2017 and December 31, 2016, respectively. Unamortized debt issuance costs of $3,061 and $3,316 as of March 31, 2017 and December 31, 2016, respectively, are presented in the condensed consolidated balance sheets as direct deductions from the outstanding debt balances. During the first quarter of 2017, the Company fully drew down its $25,000 deferred draw term loan (“DDTL”), which was outstanding as of March 31, 2017. The Company also had $5,718 and $39,255 outstanding on its line of credit as of March 31, 2017 and December 31, 2016, respectively. The Company had $149,845 and $129,908 available to borrow on its line of credit at March 31, 2017 and December 31, 2016, respectively. The interest rate on the Company’s Term Loan A and DDTL was 3.31 percent and 3.13 percent at March 31, 2017 and December 31, 2016, respectively. The Company’s line of credit interest rate was 4.50 percent at both March 31, 2017 and December 31, 2016. In addition, the Company is charged a monthly unused commitment fee ranging from 0.25 percent to 0.50 percent on its average unused daily balance on its $175,000 line of credit. The Company’s credit facility, consisting of the Term Loan A, DDTL, and line of credit, contains certain financial and non-financial covenants. The Company was in compliance with all such covenants as of March 31, 2017 and December 31, 2016.

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION	3 Months Ended
	Mar. 31, 2017
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION	9. SHARE-BASED COMPENSATION A summary of the Company’s stock option activity as of and for the three months ended March 31, 2017 is as follows: Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic of Options Price Life Value (Years) Outstanding at January 1, 2017 $ $ Granted Exercised ) Expired/cancelled ) Outstanding at March 31, 2017 $ $ Exercisable at March 31, 2017 $ $ The Company recorded share-based compensation expense associated with stock options of $896 and $1,432 for the three months ended March 31, 2017 and 2016, respectively. The Company granted service-based awards of 300,000 options to purchase common stock to key employees under its 2014 Omnibus Incentive Plan during the three months ended March 31, 2017. The options become exercisable in installments of 25 percent 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 300,000 options to purchase common stock that were granted during the three months ended March 31, 2017 have a weighted average grant date fair value of $5.58 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 $ 14.66 - $15.71 Expected volatility 33.82% - 33.93 % Expected dividend yield % Risk-free rate over the estimated expected life 2.11% - 2.32 % Expected life (in years) Estimating grant date fair values for employee stock options requires management to make assumptions regarding expected volatility of value of those underlying 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. Risk-free rate is determined based upon U.S. Treasury rates over the estimated expected option lives. Expected dividend yield is zero as the Company does not anticipate that any dividends will be declared during the expected term of the options. The expected term of options granted is calculated using the simplified method (the midpoint between the end of the vesting period and the end of the maximum term). Restricted Stock Awards The Company issues restricted stock awards to non-employee directors. A summary of the Company’s restricted stock award activity as of and for the three months ended March 31, 2017 is as follows: Number Weighted of Shares Average Subject to Grant Date Restriction Fair Value Nonvested at January 1, 2017 $ Granted Nonvested at March 31, 2017 $ The Company recorded share-based compensation expense associated with restricted stock awards of $76 and $71 for the three months ended March 31, 2017 and 2016, respectively.

CONTINGENCIES

CONTINGENCIES	3 Months Ended
	Mar. 31, 2017
CONTINGENCIES
CONTINGENCIES	10. CONTINGENCIES The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. In addition, on November 10, 2016, a putative class action complaint was filed in the U.S. District Court for the Eastern District of Michigan against Diplomat Pharmacy, Inc. and certain officers of the Company. Following appointment of lead plaintiffs and lead counsel, an amended complaint was filed on April 11, 2017. The amended complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 in connection with public filings made between February 29, 2016 and November 2, 2016 (the “potential class period”). The plaintiff seeks to represent a class of shareholders who purchased stock in the potential class period. The complaint seeks unspecified monetary damages and other relief. The Company believes the complaint and allegations to be without merit and intends to vigorously defend itself against these actions. The Company is unable at this time to determine whether the outcome of the litigation would have a material impact on its results of operations, financial condition, or cash flows. In the opinion of management, the disposition or ultimate resolution of all other currently known claims and lawsuits will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity.

INCOME PER COMMON SHARE

INCOME PER COMMON SHARE	3 Months Ended
	Mar. 31, 2017
INCOME PER COMMON SHARE
INCOME PER COMMON SHARE	11. INCOME PER COMMON SHARE The following table sets forth the computation of basic and diluted income per common share: Three Months Ended March 31, 2017 2016 Numerator: Net income attributable to Diplomat Pharmacy, Inc. $ $ Denominator: Weighted average common shares outstanding, basic Weighted average dilutive effect of stock options and restricted stock awards Weighted average dilutive effect of contingent consideration — Weighted average common shares outstanding, diluted Net income per common share: Basic $ $ Diluted $ $ Stock options to purchase a weighted average of 2,433,510 and 1,369,375 common shares were excluded from the computation of diluted weighted average common shares outstanding for the three months ended March 31, 2017 and 2016, respectively, as inclusion of such options would be anti-dilutive. Performance-based stock options to purchase up to a weighted average of 46,119 common shares were excluded from the computation of diluted weighted average common shares outstanding for the three months ended March 31, 2016 as all performance conditions were not satisfied as of March 31, 2016. Weighted average restricted stock awards of 2,560 common shares were excluded from the computation of diluted weighted average common shares outstanding for the three months ended March 31, 2017 as inclusion of such shares would be anti-dilutive.

SUBSEQUENT EVENT

SUBSEQUENT EVENT	3 Months Ended
	Mar. 31, 2017
SUBSEQUENT EVENT
SUBSEQUENT EVENT	12. SUBSEQUENT EVENT On May 8, 2017, the Company acquired WRB Communications, Inc., a communications and contact center company based in Chantilly, VA that specializes in relationship management programs for leading pharmaceutical manufacturers and service organizations. Under the terms of the agreement, Diplomat transferred cash and stock consideration of approximately $24,500 and $4,500, respectively, with additional cash payouts of up to $500 per performance period based upon the achievement of certain earnings before interest, taxes, depreciation, and amortization targets in the 12-month periods ending April 30, 2018 and 2019. The maximum additional cash payout is $1,000.

SUMMARY OF SIGNIFICANT ACCOUN19

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2017
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 percent owned subsidiary, formed in August 2014, which the Company controls. An investment in an entity in which the Company owns less than 20 percent and does not have the ability to exercise significant influence is accounted for under the cost method. Noncontrolling 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.
Inventories	Inventories Inventories consist of prescription and over-the-counter medications and are stated at the lower of cost or market. Cost is determined using the first-in, first-out method. Prescription medications are returnable to the Company’s vendors and fully refundable before six months of expiration, and any remaining expired medication is relieved from inventory on a quarterly basis.
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. 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 $1,073,865 and $990,011 for the three months ended March 31, 2017 and 2016, 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 $4,875 and $5,859 for the three months ended March 31, 2017 and 2016, respectively.
Accounting Standards Update (ASU) Adoption	Accounting Standards Update (“ASU”) Adoption — Balance Sheet Classification of Deferred Taxes In April 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-17 , Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), eliminating the current requirement for companies to present deferred tax assets and liabilities as current and noncurrent. Instead, companies will be required to classify all deferred tax assets and liabilities as noncurrent. This ASU is effective for annual periods beginning on or after December 15, 2016, including interim periods within those annual periods, and can be adopted either prospectively or retrospectively. Effective January 1, 2017, the Company retrospectively adopted the accounting guidance contained within ASU 2015-17. The following December 31, 2016 condensed consolidated balance sheet line items were adjusted due to this adoption: As Previously Reported Adjustment As Adjusted Deferred income taxes (current asset) $ $ ) $ — Total current assets ) Deferred income taxes (noncurrent asset) — Total assets ) Deferred income taxes (noncurrent liability) ) — Total liabilities ) Total liabilities and shareholders’ equity ) ASU Adoption — Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU No. 2017-04 , Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which eliminates Step 2 from the quantitative goodwill impairment test. Instead, an entity should perform its annual, or interim, quantitative goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount (Step 1). An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU is effective for an entity’s annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted. Effective January 1, 2017, the Company adopted the accounting guidance contained within ASU 2017-04. There was no current impact to the Company as a result of this adoption.
New Accounting Pronouncements	New Accounting Pronouncements In May 2014, the FASB issued 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, though early adoption is permitted. ASU 2014-09 permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (cumulative catch-up transition method). The Company currently anticipates adopting ASU 2014-09 using the cumulative catch-up transition method. The Company continues to assess the impact that the adoption of ASU 2014-09 will have on its condensed consolidated financial statements and/or notes thereto, although the Company does not expect the impact to be significant. In February 2016, the FASB issued ASU No. 2016-02 , Leases (Topic 842) , requiring lessees to recognize a right-of-use asset and a lease liability for all leases (with the exception of short-term leases) at lease commencement date. This ASU is effective for annual periods beginning on or after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating whether to early adopt and the impact that the adoption of this guidance will have on its condensed consolidated financial statements and/or notes thereto.

SUMMARY OF SIGNIFICANT ACCOUN20

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	Mar. 31, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Schedule of consolidated balance sheet line items adjusted due to this adoption	The following December 31, 2016 condensed consolidated balance sheet line items were adjusted due to this adoption: As Previously Reported Adjustment As Adjusted Deferred income taxes (current asset) $ $ ) $ — Total current assets ) Deferred income taxes (noncurrent asset) — Total assets ) Deferred income taxes (noncurrent liability) ) — Total liabilities ) Total liabilities and shareholders’ equity )

BUSINESS ACQUISITION (Tables)

BUSINESS ACQUISITION (Tables)	3 Months Ended
	Mar. 31, 2017
BUSINESS ACQUISITIONS
Schedule of unaudited pro forma results of operations	Three Months Ended 2017 2016 Net sales $ $ Net income attributable to Diplomat Pharmacy, Inc. $ $ Net income per common share — basic $ $ Net income per common share — diluted $ $
Comfort Infusion
BUSINESS ACQUISITIONS
Schedule of consideration transferred	Cash $ Contingent consideration at fair value $
Summary of the fair values of identifiable acquired assets and assumed liabilities	Cash $ Accounts receivable Inventories Prepaid expenses and other current assets Definite-lived intangible assets Accounts payable ) Accrued expenses — other ) Total identifiable net assets Goodwill $
Schedule of definite-lived intangible assets that were acquired and their respective useful lives	Useful Amount Patient relationships 9 years $ Non-compete employment agreements 5 years $
Affinity Biotech, Inc
BUSINESS ACQUISITIONS
Schedule of consideration transferred	Cash $ Contingent consideration at fair value $
Summary of the fair values of identifiable acquired assets and assumed liabilities	Cash $ Accounts receivable Inventories Prepaid expenses and other current assets Definite-lived intangible assets Other noncurrent 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 Amount Patient relationships 7 years $ Non-compete employment agreements 5 years $
Valley Campus Pharmacy, Inc
BUSINESS ACQUISITIONS
Schedule of consideration transferred	Cash $ 324,244 restricted common shares $
Summary of the fair values of identifiable acquired assets and assumed liabilities	Cash $ Accounts receivable Inventories Prepaid expenses and other current assets Property and equipment Capitalized software for internal use Definite-lived intangible assets Other noncurrent 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 Amount Physician relationships 10 years $ Noncompete employment agreements 5 years Trade names and trademarks 1 year $

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	3 Months Ended
	Mar. 31, 2017
FAIR VALUE MEASUREMENTS
Schedule of assets and liabilities measured and disclosed at fair value on a recurring basis	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 March 31, 2017: Asset / Valuation (Liability) Level 3 Technique Contingent consideration $ ) $ ) C
Schedule of a roll forward of the Level 3 measurements	Contingent Balance at January 1, 2017 $ — Affinity acquisition ) Comfort Infusion acquisition ) Balance at March 31, 2017 $ )

GOODWILL AND DEFINITE-LIVED I23

GOODWILL AND DEFINITE-LIVED INTANGIBLE ASSETS (Tables)	3 Months Ended
	Mar. 31, 2017
GOODWILL AND DEFINITE-LIVED INTANGIBLE ASSETS
Schedule of changes in the carrying amount of goodwill	Balance at January 1, 2017 $ Affinity acquisition Comfort Infusion acquisition Balance at March 31, 2017 $
Schedule of definite-lived intangible assets	March 31, 2017 December 31, 2016 Gross Accumulated Net Gross Accumulated Net Patient relationships $ $ ) $ $ $ ) $ Non-compete employment agreements ) ) Physician relationships ) ) Trade names and trademarks ) ) $ $ ) $ $ $ ) $

SHARE-BASED COMPENSATION (Table

SHARE-BASED COMPENSATION (Tables)	3 Months Ended
	Mar. 31, 2017
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 January 1, 2017 $ $ Granted Exercised ) Expired/cancelled ) Outstanding at March 31, 2017 $ $ Exercisable at March 31, 2017 $ $
Schedule of assumptions used to determine the valuation of granted options	Exercise price $ 14.66 - $15.71 Expected volatility 33.82% - 33.93 % Expected dividend yield % Risk-free rate over the estimated expected life 2.11% - 2.32 % Expected life (in years)
Summary of restricted stock award activity	Number Weighted of Shares Average Subject to Grant Date Restriction Fair Value Nonvested at January 1, 2017 $ Granted Nonvested at March 31, 2017 $

INCOME PER COMMON SHARE (Tables

INCOME PER COMMON SHARE (Tables)	3 Months Ended
	Mar. 31, 2017
INCOME PER COMMON SHARE
Schedule of the calculation for basic and diluted income per common share	Three Months Ended March 31, 2017 2016 Numerator: Net income attributable to Diplomat Pharmacy, Inc. $ $ Denominator: Weighted average common shares outstanding, basic Weighted average dilutive effect of stock options and restricted stock awards Weighted average dilutive effect of contingent consideration — Weighted average common shares outstanding, diluted Net income per common share: Basic $ $ Diluted $ $

DESCRIPTION OF BUSINESS - Opera

DESCRIPTION OF BUSINESS - Operations (Details)	3 Months Ended
	Mar. 31, 2017statesegmentlocation
DESCRIPTION OF BUSINESS
Number of pharmacy locations (in locations) | location	24
Number of states with call center locations (in states) | state	50
Number of reportable segments | segment	1

SUMMARY OF SIGNIFICANT ACCOUN27

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Principles of Consolidation thru Inventories (Details)	3 Months Ended
	Mar. 31, 2017
Principles of Consolidation
Percentage of ownership interest in subsidiary that the entity has the ability to control	51.00%
Inventories
Maximum period before expiration within which Inventory is returnable and fully refundable	6 months

SUMMARY OF SIGNIFICANT ACCOUN28

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition thru New Accounting Pronouncements (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Revenue recognition
Revenues from service, data and consulting services	$ 4,875	$ 5,859
Change in Accounting Principle
Total current assets	479,706		$ 505,107
Deferred income taxes (noncurrent asset)	4,263		6,010
Total assets	1,086,188		1,099,254
Total liabilities	464,468		485,530
Total liabilities and shareholders' equity	1,086,188		1,099,254
Prescription Drugs
Revenue recognition
Revenues	$ 1,073,865	$ 990,011
As Previously Reported
Change in Accounting Principle
Deferred income taxes (current asset)			14,703
Total current assets			519,810
Total assets			1,107,947
Deferred income taxes (noncurrent liability)			8,693
Total liabilities			494,223
Total liabilities and shareholders' equity			1,107,947
Adjustment
Change in Accounting Principle
Deferred income taxes (current asset)			(14,703)
Total current assets			(14,703)
Deferred income taxes (noncurrent asset)			6,010
Total assets			(8,693)
Deferred income taxes (noncurrent liability)			(8,693)
Total liabilities			(8,693)
Total liabilities and shareholders' equity			$ (8,693)

BUSINESS ACQUISITIONS - Comfort

BUSINESS ACQUISITIONS - Comfort Infusion, Inc. (Details) - USD ($) $ in Thousands	Mar. 22, 2017	Mar. 31, 2017	Dec. 31, 2016
Summary of the preliminary fair value determination of the acquired assets and liabilities
Goodwill		$ 336,775	$ 316,616
Comfort Infusion
BUSINESS ACQUISITIONS
Cash	$ 10,600
Contingent consideration at fair value	3,700
Total	14,300
Maximum additional cash payouts per performance period	2,000
Maximum payout of contingent consideration	6,000
Purchase consideration deposited into an escrow account	$ 1,050
Deposit term into an escrow account	18 months
Acquisition-related costs charged to Selling, general, and administrative expenses		$ 133
Summary of the preliminary fair value determination of the acquired assets and liabilities
Cash	$ 122
Accounts receivable	546
Inventories	86
Prepaid expenses and other current assets	24
Definite-lived intangible assets	2,360
Accounts payable	(273)
Accrued expenses - other	(207)
Total identifiable net assets	2,658
Goodwill	11,642
Total acquisition price	14,300
Definite-lived intangible assets
Amount	2,360
Patient relationships | Comfort Infusion
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 1,400
Definite-lived intangible assets
Useful Life	9 years
Amount	$ 1,400
Non-compete employment agreements | Comfort Infusion
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 960
Definite-lived intangible assets
Useful Life	5 years
Amount	$ 960

BUSINESS ACQUISITIONS - Affinit

BUSINESS ACQUISITIONS - Affinity Biotech, Inc. (Details) - USD ($) $ in Thousands	Feb. 01, 2017	Mar. 31, 2017	Dec. 31, 2016
Summary of the preliminary fair value determination of the acquired assets and liabilities
Goodwill		$ 336,775	$ 316,616
Affinity Biotech, Inc
BUSINESS ACQUISITIONS
Cash	$ 17,097
Contingent consideration at fair value	35
Total	17,132
Maximum payout of contingent consideration	4,000
Purchase consideration deposited into an escrow account	$ 2,000
Deposit term into an escrow account	18 months
Acquisition-related costs charged to Selling, general, and administrative expenses		$ 224
Summary of the preliminary fair value determination of the acquired assets and liabilities
Cash	$ 1,043
Accounts receivable	3,537
Inventories	79
Prepaid expenses and other current assets	72
Definite-lived intangible assets	5,100
Other noncurrent assets	5
Accounts payable	(1,075)
Accrued expenses - compensation and benefits	(144)
Accrued expenses - other	(2)
Total identifiable net assets	8,615
Goodwill	8,517
Total acquisition price	17,132
Definite-lived intangible assets
Amount	5,100
Patient relationships | Affinity Biotech, Inc
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 4,000
Definite-lived intangible assets
Useful Life	7 years
Amount	$ 4,000
Non-compete employment agreements | Affinity Biotech, Inc
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 1,100
Definite-lived intangible assets
Useful Life	5 years
Amount	$ 1,100

BUSINESS ACQUISITIONS - Valley

BUSINESS ACQUISITIONS - Valley Campus Pharmacy, Inc (Details) - USD ($) $ / shares in Units, $ in Thousands	Jun. 01, 2016	May 31, 2016	Mar. 31, 2017	Dec. 31, 2016
Summary of the preliminary fair value determination of the acquired assets and liabilities
Goodwill			$ 336,775	$ 316,616
Valley Campus Pharmacy, Inc
BUSINESS ACQUISITIONS
Cash	$ 68,915
Restricted common shares	9,507
Total	$ 78,422
Restricted common shares (in shares)	324,244
Market price (in dollars per share)		$ 32.58
Market price multiplier to factor in restricted nature of the shares (as a percent)		90.00%
Purchase consideration deposited into an escrow account	$ 3,800
Deposit term into an escrow account	1 year
Summary of the preliminary fair value determination of the acquired assets and liabilities
Cash	$ 2,114
Accounts receivable	16,271
Inventories	4,740
Prepaid expenses and other current assets	46
Property and equipment	200
Capitalized software for internal use	14,000
Definite-lived intangible assets	13,890
Other noncurrent assets	21
Accounts payable	(29,773)
Accrued expenses - compensation and benefits	(400)
Accrued expenses - other	(1,962)
Total identifiable net assets	19,147
Goodwill	59,275
Total acquisition price	78,422
Definite-lived intangible assets
Amount	13,890
Physician relationships | Valley Campus Pharmacy, Inc
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 7,700
Definite-lived intangible assets
Useful Life	10 years
Amount	$ 7,700
Non-compete employment agreements | Valley Campus Pharmacy, Inc
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 4,490
Definite-lived intangible assets
Useful Life	5 years
Amount	$ 4,490
Trade names and trademarks | Valley Campus Pharmacy, Inc
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 1,700
Definite-lived intangible assets
Useful Life	1 year
Amount	$ 1,700

BUSINESS ACQUISITIONS - Pro For

BUSINESS ACQUISITIONS - Pro Forma Data (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Pro Forma Operating Results
Net sales	$ 1,082,592	$ 1,124,300
Net income attributable to Diplomat Pharmacy, Inc.	$ 3,807	$ 15,985
Net income per common share - basic (in dollars per share)	$ 0.06	$ 0.25
Net income per common share - diluted (in dollars per share)	$ 0.06	$ 0.23

FAIR VALUE MEASUREMENTS - Recur

FAIR VALUE MEASUREMENTS - Recurring Basis (Details) - Recurring - Contingent consideration $ in Thousands	Mar. 31, 2017USD ($)
Fair value measurements
Asset (Liability)	$ (3,735)
Level 3
Fair value measurements
Asset (Liability)	$ (3,735)

FAIR VALUE MEASUREMENTS - Roll

FAIR VALUE MEASUREMENTS - Roll forward of Level 3 Measurements (Details) - Contingent consideration $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)
Level 3 measurements
Balance at end of the period	$ (3,735)
Affinity Biotech, Inc
Level 3 measurements
Acquisition	(35)
Comfort Infusion
Level 3 measurements
Acquisition	$ (3,700)

GOODWILL AND DEFINITE-LIVED I35

GOODWILL AND DEFINITE-LIVED INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Changes in the carrying amount of goodwill
Balance as of beginning of period	$ 316,616
Balance as of end of period	336,775
Gross Carrying Amount	266,749	$ 259,289
Accumulated Amortization	(69,111)	(59,427)
Net Carrying Amount	197,638	199,862
Patient relationships
Changes in the carrying amount of goodwill
Gross Carrying Amount	164,500	159,100
Accumulated Amortization	(35,710)	(31,445)
Net Carrying Amount	128,790	127,655
Non-compete employment agreements
Changes in the carrying amount of goodwill
Gross Carrying Amount	56,749	54,689
Accumulated Amortization	(21,445)	(18,674)
Net Carrying Amount	35,304	36,015
Physician relationships
Changes in the carrying amount of goodwill
Gross Carrying Amount	21,700	21,700
Accumulated Amortization	(3,630)	(2,831)
Net Carrying Amount	18,070	18,869
Trade names and trademarks
Changes in the carrying amount of goodwill
Gross Carrying Amount	23,800	23,800
Accumulated Amortization	(8,326)	(6,477)
Net Carrying Amount	15,474	$ 17,323
Affinity
Changes in the carrying amount of goodwill
Acquired during the period	8,517
Comfort Infusion
Changes in the carrying amount of goodwill
Acquired during the period	$ 11,642

INVESTMENT IN NON-CONSOLIDATE36

INVESTMENT IN NON-CONSOLIDATED ENTITY (Details) - Ageology - USD ($) $ in Thousands	1 Months Ended
	Feb. 28, 2017	Mar. 31, 2017	Jan. 31, 2017
Schedule of Equity Method Investments
Ownership percentage (as a percent)	26.50%		25.00%
Conversion of outstanding loans in to equity	$ 2,500
Affiliated entity | Chief Executive Officer
Schedule of Equity Method Investments
Ownership percentage (as a percent)	51.80%
Amount loaned		$ 860	$ 16,000
Conversion of outstanding loans in to equity	$ 16,000

DEBT (Details)

DEBT (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Debt
Debt issuance costs	$ 3,061	$ 3,316
Term Loan A | GE
Debt
Amount of borrowings outstanding	109,500	111,000
DDTL
Debt
Maximum borrowing capacity	25,000
Line of credit | GE
Debt
Amount of borrowings outstanding	5,718	39,255
Maximum borrowing capacity	175,000
Amount of borrowings available under the credit agreement	$ 149,845	$ 129,908
Interest rate (as a percent)	4.50%	4.50%
Term Loan A and DDTL | GE
Debt
Interest rate (as a percent)	3.31%	3.13%
Minimum | Line of credit | GE
Debt
Monthly unused commitment fee (as a percent)	0.25%
Maximum | Line of credit | GE
Debt
Monthly unused commitment fee (as a percent)	0.50%

SHARE-BASED COMPENSATION - Stoc

SHARE-BASED COMPENSATION - Stock Option Activity (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Number of Options
Outstanding at beginning of period (in shares)	4,413,341
Granted (in shares)	300,000
Exercised (in shares)	(391,965)
Expired/cancelled (in shares)	(532,916)
Outstanding at end of period (in shares)	3,788,460	4,413,341
Exercisable at end of period (in shares)	1,736,876
Weighted Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 19.02
Granted (in dollars per share)	14.86
Exercised (in dollars per share)	7.14
Expired/cancelled (in dollars per share)	27.55
Outstanding at end of period (in dollars per share)	18.73	$ 19.02
Exercisable at end of period (in dollars per share)	$ 12.25
Weighted Average Remaining Contractual Life
Outstanding at beginning of period	6 years 10 months 24 days	7 years
Exercisable at end of period	4 years 3 months 18 days
Aggregate Intrinsic Value
Outstanding at beginning of period	$ 11,558
Outstanding at end of period	10,883	$ 11,558
Exercisable at end of period	$ 10,781

SHARE-BASED COMPENSATION - Info

SHARE-BASED COMPENSATION - Information and Valuation Assumptions (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)$ / sharesshares	Mar. 31, 2016USD ($)
Share-based compensation
Total compensation expense | $	$ 896	$ 1,432
Assumptions used to determine the valuation of granted options
Expected dividend yield (as a percent)	0.00%
Expected life (in years)	6 years 3 months
Maximum
Assumptions used to determine the valuation of granted options
Exercise price	$ 15.71
Expected volatility (as a percent)	33.93%
Risk-free rate over the estimated expected life (as a percent)	2.32%
Minimum
Assumptions used to determine the valuation of granted options
Exercise price	$ 14.66
Expected volatility (as a percent)	33.82%
Risk-free rate over the estimated expected life (as a percent)	2.11%
Stock options
Share-based compensation
Granted (in shares) | shares	300,000
Weighted average grant-date fair value of options granted (in dollars per share)	$ 5.58
Service-based awards | 2014 Plan
Share-based compensation
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
Service-based awards | 2014 Plan | Key employees
Share-based compensation
Number of shares issued during the period (in shares) | shares	300,000

SHARE-BASED COMPENSATION - Rest

SHARE-BASED COMPENSATION - Restricted Stock Awards (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Additional disclosures
Share-based compensation expense	$ 896	$ 1,432
Restricted Stock Awards
Number of Shares Subject to Restriction
Nonvested at the beginning of the period (in shares)	5,765
Granted (in shares)	7,642
Nonvested at the end of the period (in shares)	13,407
Weighted Average Grant Date Fair Value
Nonvested at the beginning of the period (in dollars per share)	$ 32.97
Granted (in dollars per share)	14.01
Nonvested at the end of the period (in dollars per share)	$ 22.16
Additional disclosures
Share-based compensation expense	$ 76	$ 71

INCOME PER COMMON SHARE (Detail

INCOME PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Numerator:
Net income attributable to Diplomat Pharmacy, Inc	$ 4,367	$ 15,429
Denominator:
Weighted average common shares outstanding, basic (in shares)	66,886,866	64,539,161
Weighted average dilutive effect of stock options and restricted stock awards (in shares)	893,568	1,959,494
Weighted average dilutive effect of contingent consideration (in shares)		1,346,282
Weighted average common shares outstanding, diluted (in shares)	67,780,434	67,844,937
Net income per common share:
Basic (in dollars per share)	$ 0.07	$ 0.24
Diluted (in dollars per share)	$ 0.06	$ 0.23
Stock options
Net income per common share:
Anti-dilutive securities excluded (in shares)	2,433,510	1,369,375
Performance-based stock options
Net income per common share:
Anti-dilutive securities excluded (in shares)		46,119
Restricted Stock Awards
Net income per common share:
Anti-dilutive securities excluded (in shares)	2,560

SUBSEQUENT EVENT (Details)

SUBSEQUENT EVENT (Details) - WRB Communications, Inc - Subsequent event $ in Thousands	May 08, 2017USD ($)
SUBSEQUENT EVENT
Cash consideration	$ 24,500
Consideration paid in shares	4,500
Maximum additional cash payouts per performance period during 12-month periods ending April 30, 2018 and 2019	500
Maximum payout of contingent consideration	$ 1,000