Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 4-May-15 | |
Document and Entity Information | ||
Entity Registrant Name | PRA Health Sciences, Inc. | |
Entity Central Index Key | 1613859 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 59,827,555 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED_CONDENSED_BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $64,003 | $85,192 |
Restricted cash | 6,844 | 6,337 |
Accounts receivable and unbilled services, net | 372,354 | 338,781 |
Other current assets | 61,449 | 58,413 |
Total current assets | 504,650 | 488,723 |
Fixed assets, net | 72,708 | 72,933 |
Goodwill | 1,014,882 | 1,033,999 |
Intangible assets, net | 575,394 | 600,910 |
Other assets | 37,513 | 42,012 |
Total assets | 2,205,147 | 2,238,577 |
Current liabilities: | ||
Accounts payable | 48,545 | 39,100 |
Accrued expenses and other current liabilities | 133,592 | 131,135 |
Advance billings | 291,168 | 296,121 |
Total current liabilities | 473,305 | 466,356 |
Long-term debt, net | 933,848 | 948,537 |
Other long-term liabilities | 149,781 | 146,869 |
Total liabilities | 1,556,934 | 1,561,762 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity: | ||
Common stock, $0.01 par value, 1,000,000,000 authorized shares at March 31, 2015 and December 31, 2014; 59,827,555 and 59,814,444 issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 598 | 598 |
Additional paid-in capital | 822,200 | 821,411 |
Accumulated other comprehensive loss | -116,087 | -69,509 |
Accumulated deficit | -58,498 | -75,685 |
Total stockholders' equity | 648,213 | 676,815 |
Total liabilities and stockholders' equity | $2,205,147 | $2,238,577 |
CONSOLIDATED_CONDENSED_BALANCE1
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
CONSOLIDATED CONDENSED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 59,827,555 | 59,814,444 |
Common stock, shares outstanding | 59,827,555 | 59,814,444 |
CONSOLIDATED_CONDENSED_STATEME
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenue: | ||
Service revenue | $331,968 | $311,352 |
Reimbursement revenue | 56,610 | 43,388 |
Total revenue | 388,578 | 354,740 |
Operating expenses: | ||
Direct costs | 218,961 | 215,151 |
Reimbursable out-of-pocket costs | 56,610 | 43,388 |
Selling, general and administrative | 60,835 | 60,839 |
Depreciation and amortization | 19,235 | 24,638 |
Income from operations | 32,937 | 10,724 |
Interest expense, net | -15,393 | -21,766 |
Loss on modification of debt | -1,384 | |
Foreign currency gains (losses), net | 9,066 | -3,712 |
Other expense, net | -464 | -59 |
Income (loss) before income taxes and equity in losses of unconsolidated joint ventures | 26,146 | -16,197 |
Provision for (benefit from) income taxes | 8,022 | -6,333 |
Income (loss) before equity in losses of unconsolidated joint ventures | 18,124 | -9,864 |
Equity in losses of unconsolidated joint ventures, net of tax | -937 | -177 |
Net income (loss) | $17,187 | ($10,041) |
Net income (loss) per share attributable to common stockholders: | ||
Basic (in dollars per share) | $0.29 | ($0.25) |
Diluted (in dollars per share) | $0.27 | ($0.25) |
Weighted average common shares outstanding: | ||
Basic (in shares) | 59,815 | 40,268 |
Diluted (in shares) | 62,777 | 40,268 |
CONSOLIDATED_CONDENSED_STATEME1
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS | ||
Net income (loss) | $17,187 | ($10,041) |
Other comprehensive (loss) income: | ||
Foreign currency translation adjustments | -40,357 | 1,894 |
Unrealized losses on derivative instruments, net of income taxes of $700 and $2,720 | -6,238 | -4,247 |
Reclassification adjustments: | ||
Losses on derivatives included in net income (loss), net of income taxes of $0 and $0 | 17 | 0 |
Comprehensive loss | ($29,391) | ($12,394) |
CONSOLIDATED_CONDENSED_STATEME2
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS | ||
Unrealized losses on derivative instruments, tax | $700 | $2,720 |
Losses on derivatives included in net income (loss), tax | $0 | $0 |
CONSOLIDATED_CONDENSED_STATEME3
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net income (loss) | $17,187 | ($10,041) |
Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 19,235 | 24,638 |
Amortization of debt issuance costs and discount | 1,649 | 1,434 |
Stock-based compensation | 775 | 892 |
Unrealized foreign currency (gains) losses | -11,375 | 2,644 |
Loss on modification of debt | 1,384 | |
Deferred income taxes | -1,753 | -11,514 |
Other reconciling items | 2,538 | 431 |
Changes in operating assets and liabilities: | ||
Accounts receivable, unbilled services, and advance billings | -49,429 | -66,635 |
Other operating assets and liabilities | 24,579 | 16,440 |
Net cash provided by (used in) operating activities | 3,406 | -40,327 |
Cash flows from investing activities: | ||
Purchase of fixed assets | -7,610 | -5,784 |
Proceeds from RPS working capital settlement | 15,000 | |
Net cash (used in) provided by investing activities | -7,610 | 9,216 |
Cash flows from financing activities: | ||
Repayments of long-term debt | -15,000 | -2,225 |
Borrowings on line of credit | 20,000 | |
Proceeds from stock options exercises | 14 | |
Payments for common stock issuance costs | -525 | |
Net cash (used in) provided by financing activities | -15,511 | 17,775 |
Effects of foreign exchange changes on cash and cash equivalents | -1,474 | -517 |
Change in cash and cash equivalents | -21,189 | -13,853 |
Cash and cash equivalents, beginning of period | 85,192 | 72,155 |
Cash and cash equivalents, end of period | $64,003 | $58,302 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Basis of Presentation | |
Basis of Presentation | |
(1) Basis of Presentation | |
Unaudited Interim Financial Information | |
The interim consolidated condensed financial statements include the accounts of PRA Health Sciences, Inc. and its subsidiaries, or the Company. These financial statements are prepared in conformity with U.S. generally accepted accounting principles, or GAAP, and are unaudited. In the opinion of the Company’s management, all adjustments necessary for a fair presentation have been reflected. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted. The accompanying interim consolidated condensed financial statements and related notes should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, or the Company’s 2014 Annual Report. | |
The preparation of the interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim consolidated financial statements and the reported amounts of revenues and claims and expenses during the reporting period. Actual results could differ from those estimates. | |
The Company | |
PRA Health Sciences, Inc. is a full-service global contract research organization providing a broad range of product development services for pharmaceutical and biotechnology companies around the world. The Company’s integrated services include data management, statistical analysis, clinical trial management, and regulatory and drug development consulting. | |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board, or FASB, issued an Accounting Standards Update, or ASU, No. 2014-09, ‘‘Revenue from Contracts with Customers,’’ to clarify the principles of recognizing revenue and create common revenue recognition guidance between GAAP and International Financial Reporting Standards. ASU No. 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. The Company is currently assessing the potential impact of ASU No. 2014-09 on the Company’s consolidated condensed financial statements. | |
In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements - Going Concern.” ASU No. 2014-15 clarifies management’s responsibility to evaluate whether there is a substantial doubt about the entity’s ability to continue as a going concern and provides guidance for related footnote disclosures. ASU No. 2014-15 will be effective for annual periods ending after December 15, 2016, and interim periods beginning after December 15, 2016. The adoption of ASU No. 2014-15 is not expected to have a material effect on the Company’s consolidated condensed financial statements. | |
In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” ASU No. 2015-03 requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. ASU No. 2015-03 will be effective for annual reporting periods beginning after December 15, 2015, and interim periods within those fiscal years. As of March 31, 2015, the Company had $26.2 million in debt issuance costs in other assets that would be reclassified to long-term debt, net. | |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||
Fair Value Measurements | ||||||||||||||
(2) Fair Value Measurements | ||||||||||||||
The Company records certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy that prioritizes the inputs used to measure fair value is described below. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: | ||||||||||||||
· | Level 1 — Quoted prices in active markets for identical assets or liabilities. | |||||||||||||
· | Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. | |||||||||||||
· | Level 3 — Unobservable inputs that are supported by little or no market activity. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. | |||||||||||||
The carrying amount of financial instruments, including cash and cash equivalents, accounts receivable, unbilled services, accounts payable and advanced billings, approximate fair value due to the short maturities of these instruments. | ||||||||||||||
Recurring Fair Value Measurements | ||||||||||||||
The following table summarizes the fair value of the Company’s financial assets and liabilities that are measured on a recurring basis as of March 31, 2015 (in thousands): | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
Liabilities: | ||||||||||||||
Interest rate contracts | $ | — | $ | 26,929 | $ | — | $ | 26,929 | ||||||
Contingent consideration | — | — | 2,000 | 2,000 | ||||||||||
Total | $ | — | $ | 26,929 | $ | 2,000 | $ | 28,929 | ||||||
The Company values contingent consideration, related to business combinations, using a weighted probability of potential payment scenarios discounted at rates reflective of the weighted average cost of capital for the businesses acquired. Key assumptions used to estimate the fair value of contingent consideration include revenue and operating forecasts and the probability of achieving the specific targets. Interest rate swaps and caps are measured at fair value using a market approach valuation technique. The valuation is based on an estimate of net present value of the expected cash flows using relevant mid-market observable data inputs and based on the assumption of no unusual market conditions or forced liquidation. | ||||||||||||||
The following table summarizes the changes in Level 3 financial assets and liabilities measured on a recurring basis for the three months ended March 31, 2015 (in thousands): | ||||||||||||||
Contingent | ||||||||||||||
Considerations - | ||||||||||||||
Accrued expenses and | ||||||||||||||
other current | ||||||||||||||
liabilities | ||||||||||||||
Balance at December 31, 2014 | $ | 1,911 | ||||||||||||
Revaluations included in earnings | 89 | |||||||||||||
Balance at March 31, 2015 | $ | 2,000 | ||||||||||||
Non-recurring Fair Value Measurements | ||||||||||||||
Certain assets and liabilities are carried on the accompanying consolidated condensed balance sheets at cost and are not remeasured to fair value on a recurring basis. These assets include finite-lived intangible assets which are tested when a triggering event occurs and goodwill and identifiable indefinite-lived intangible assets which are tested for impairment annually on October 1 or when a triggering event occurs. | ||||||||||||||
As of March 31, 2015, assets carried on the balance sheet and not remeasured to fair value on a recurring basis totaling approximately $1,590.3 million were identified as Level 3. These assets are comprised of goodwill of $1,014.9 million and identifiable intangible assets of $575.4 million. | ||||||||||||||
Concentration_of_Credit_Risk
Concentration of Credit Risk | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Concentration of Credit Risk | ||||||
Concentration of Credit Risk | ||||||
(3) Concentration of Credit Risk | ||||||
Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, accounts receivable, and unbilled services. As of March 31, 2015, substantially all of the Company’s cash and cash equivalents were held in or invested with large financial institutions. Accounts receivable include amounts due from pharmaceutical and biotechnology companies. The Company establishes an allowance for potentially uncollectible receivables. In management’s opinion, there is no additional material credit risk beyond amounts provided for such losses. | ||||||
Service revenue from individual customers greater than 10% of consolidated service revenue in the respective periods was as follows: | ||||||
Three Months Ended | ||||||
March 31, | March 31, | |||||
2015 | 2014 | |||||
Customer A | 11.4 | % | — | |||
Accounts receivable and unbilled receivables from individual customers that were equal to or greater than 10% of consolidated accounts receivable and unbilled receivables at the respective dates were as follows: | ||||||
March 31, | December 31, | |||||
2015 | 2014 | |||||
Customer A | 13.2 | % | 14.4 | % | ||
Customer B | — | 10.2 | % | |||
Accounts_Receivable_and_Unbill
Accounts Receivable and Unbilled Services | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Accounts Receivable and Unbilled Services | ||||||||
Accounts Receivable and Unbilled Services | ||||||||
(4) Accounts Receivable and Unbilled Services | ||||||||
Accounts receivable and unbilled services include service revenue, reimbursement revenue, and amounts associated with work performed by investigators. Accounts receivable and unbilled services were as follows (in thousands): | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Accounts receivable | $ | 242,606 | $ | 235,058 | ||||
Unbilled services | 132,832 | 105,542 | ||||||
375,438 | 340,600 | |||||||
Less allowance for doubtful accounts | (3,084 | ) | (1,819 | ) | ||||
Total accounts receivable and unbilled services, net | $ | 372,354 | $ | 338,781 | ||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Goodwill and Intangible Assets | ||||||||
Goodwill and Intangible Assets | ||||||||
(5) Goodwill and Intangible Assets | ||||||||
Goodwill | ||||||||
The changes in the carrying amount of goodwill are as follows (in thousands): | ||||||||
Balance at December 31, 2014 | $ | 1,033,999 | ||||||
Currency translation | (19,117 | ) | ||||||
Balance at March 31, 2015 | $ | 1,014,882 | ||||||
There are no accumulated impairment charges as of March 31, 2015. | ||||||||
Intangible Assets | ||||||||
Intangible assets consist of the following (in thousands): | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Customer relationships | $ | 382,576 | $ | 393,053 | ||||
Customer backlog | 127,905 | 130,833 | ||||||
Trade names (definite-lived) | 25,757 | 25,762 | ||||||
Patient list and other intangibles | 20,900 | 20,900 | ||||||
Non-competition agreements | 2,765 | 2,774 | ||||||
Total finite-lived intangible assets, gross | 559,903 | 573,322 | ||||||
Accumulated amortization | (102,519 | ) | (90,422 | ) | ||||
Total finite-lived intangible assets, net | 457,384 | 482,900 | ||||||
Trade names (indefinite-lived) | 118,010 | 118,010 | ||||||
Total intangible assets, net | $ | 575,394 | $ | 600,910 | ||||
Amortization expense was $14.1 million and $18.7 million during the three months ended March 31, 2015 and 2014, respectively. The estimated future amortization expense of finite-lived intangible assets is expected to be as follows (in thousands): | ||||||||
2015 (remaining) | $ | 41,911 | ||||||
2016 | 45,134 | |||||||
2017 | 35,415 | |||||||
2018 | 31,021 | |||||||
2019 | 25,534 | |||||||
2020 and thereafter | 278,369 | |||||||
Total | $ | 457,384 | ||||||
Based upon the Company’s most recent annual goodwill impairment test that was conducted during the fourth quarter of 2014, the fair value of its Product Registration Services and Strategic Solutions reporting units substantially exceeded their carrying values; the estimated fair value of the Early Development Services, or EDS, reporting unit, however, closely approximated its carrying value. The goodwill of EDS was $123.4 million at March 31, 2015. The EDS reporting unit experienced significant cancellations in the second half of 2014 and was not able to realize synergies from the CRI Lifetree acquisition as quickly as originally forecasted. The Company’s current assumptions include higher revenue during the remainder of 2015, from existing backlog and increased new business awards, as well as making operational improvements to the business. Any negative changes in assumptions on revenue, new business awards, cancellations, or the Company’s ability to improve operations while maintaining a competitive cost structure could adversely affect the fair value of EDS and result in significant goodwill impairment charges in 2015 or later. | ||||||||
LongTerm_Debt
Long-Term Debt | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Long-Term Debt. | ||||||||
Long-Term Debt | ||||||||
(6) Long-Term Debt | ||||||||
Long-term debt consisted of the following (in thousands): | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Term loans, first lien | $ | 714,000 | $ | 729,000 | ||||
Senior notes | 225,000 | 225,000 | ||||||
939,000 | 954,000 | |||||||
Less debt discount | (5,152 | ) | (5,463 | ) | ||||
Total long-term debt, net | $ | 933,848 | $ | 948,537 | ||||
Principal payments on long-term debt are due as follows (in thousands): | ||||||||
2015 (remaining) | $ | — | ||||||
2016 | — | |||||||
2017 | — | |||||||
2018 | — | |||||||
2019 | — | |||||||
2020 and thereafter | 939,000 | |||||||
Total | $ | 939,000 | ||||||
The estimated fair value of long-term debt was $965.6 million and $966.0 million at March 31, 2015 and December 31, 2014, respectively. The fair value of the senior notes was determined based on Level 2 inputs using the market approach, which is primarily based on rates at which the debt is traded among financial institutions. The fair value of the term loans and borrowings under credit facilities was determined based on Level 3 inputs, which is primarily based on rates at which the debt is traded among financial institutions adjusted for the Company’s credit standing. | ||||||||
On March 24, 2014, the Company completed a repricing transaction, or the Repricing, associated with the first lien term loan that reduced the applicable margin from 4.0% to 3.5%. As a result of the Repricing, the Company recognized a loss on modification of debt totaling $1.3 million, which was recorded during the three months ended March 31, 2014. The Company incurred $0.1 million in expenses for the repricing transaction, which were expensed during the three months ended March 31, 2014. | ||||||||
Revolving Credit Facilities | ||||||||
The Company’s revolving credit facilities provides for $125.0 million of potential borrowings and expires on September 23, 2018. The interest rate on the revolving credit facilities is based on the LIBOR plus an applicable rate, based on the leverage ratio of the Company. The Company, at its discretion, may choose interest periods of 1, 2, 3 or 6 months. In addition, the Company is required to pay to the lenders a commitment fee of 0.5% quarterly for unused commitments on the revolver, subject to a step-down to 0.375% based upon achievement of a certain leverage ratio. At March 31, 2015 and December 31, 2014, the Company had no outstanding borrowings under the revolving credit facilities. In addition, at March 31, 2015 and December 31, 2014, the Company had $5.0 million and $5.1 million, respectively, in letters of credit outstanding, which are secured by the revolving credit facilities. | ||||||||
Stockholders_Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2015 | |
Stockholders' Equity | |
Stockholders' Equity | |
(7) Stockholders’ Equity | |
Authorized Shares | |
The Company is authorized to issue up to one billion shares of common stock, with a par value of $0.01. | |
StockBased_Compensation
Stock-Based Compensation | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Stock-Based Compensation | ||||||||
Stock-Based Compensation | ||||||||
(8) Stock-Based Compensation | ||||||||
The Board of Directors granted 385,000 service-based options and 3,624 restricted stock awards, or RSAs, with a total grant date fair value of $3.9 million and $0.1 million, respectively, during the three months ended March 31, 2015. There were no options or RSAs granted during the three months ended March 31, 2014. | ||||||||
Stock-based compensation expense related to employee stock options and RSAs are summarized below (in thousands): | ||||||||
Three Months Ended | ||||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
Direct costs | $ | 175 | $ | 142 | ||||
Selling, general and administrative | 600 | 750 | ||||||
Total stock compensation expense | $ | 775 | $ | 892 | ||||
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Taxes | |
Income Taxes | |
(9) Income Taxes | |
The Company’s effective income tax rate was 30.7% and 39.1% for the three months ended March 31, 2015 and 2014, respectively. The variation between the Company’s effective income tax rate and the U.S. statutory rate of 35% for the three months ended March 31, 2015 is primarily due to (i) income from foreign subsidiaries being taxed at rates lower than the U.S. statutory rate and (ii) the favorable impact of research and development tax credits. | |
U.S. GAAP requires a two-step approach when evaluating uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence demonstrates that it is more likely than not that the position will be sustained upon audit, including resolution of any related appeals or litigation processes. The second step is to quantify the amount of tax benefit to recognize as the amount that is cumulatively more than 50% likely to be realized upon ultimate settlement with the taxing authorities. | |
As of March 31, 2015, the Company’s liability for unrecognized tax benefits was $14.7 million. If any portion of this $14.7 million is recognized that impacts the effective tax rate, the Company will then include that portion in the computation of its effective tax rate. Although the ultimate timing of the resolution of audits is highly uncertain, the Company believes it is reasonably possible that approximately $0.4 million of gross unrecognized tax benefits will change in the next 12 months as a result of pending audit settlements or statute of limitations expirations. | |
The Company files U.S. federal, U.S. state, and foreign tax returns. For U.S. federal purposes, the Company is generally no longer subject to tax examinations for years ended December 31, 2011 and prior. For U.S. state tax returns, the Company is generally no longer subject to tax examinations for years prior to 2011. For foreign purposes, the Company is generally no longer subject to examination for tax periods 2007 and prior. Certain carryforward tax attributes generated in prior years remain subject to examination and adjustment. | |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | |
(10) Commitments and Contingencies | |
Legal Proceedings | |
The Company is involved in legal proceedings from time to time in the ordinary course of its business, including employment claims and claims related to other business transactions. Although the outcome of such claims is uncertain, management believes that these legal proceedings will not have a material adverse effect on the financial condition or results of future operations of the Company. | |
The Company is currently a party to litigation with the City of Sao Paulo, Brazil. The dispute relates to whether the export of services provided by the Company is subject to a local tax on services. The Company has not recorded a liability associated with the claim, which totaled $4.4 million at March 31, 2015, given it is not deemed probable the Company will incur a loss related to this case. However, a deposit totaling $4.4 million has been made to the Brazilian court in order to annul the potential tax obligation and to avoid the accrual of additional interest and penalties. This balance is recorded in other assets on the consolidated condensed balance sheet. The Company expects to recover the full amount of the deposit when the case is settled. | |
Restructuring
Restructuring | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Restructuring | |||||||||||
Restructuring | |||||||||||
(11) Restructuring | |||||||||||
European Restructuring | |||||||||||
During 2012, the Board of Directors of RPS Parent Holding Corp., or RPS, approved a restructuring plan, or European Restructuring Plan, to reduce support costs in its European Operations. RPS offered severance benefits to the terminated employees and eliminated approximately 75 positions. The Company elected to continue the European Restructuring Plan after acquiring RPS in September 2013 and a total of approximately $0.7 million is included in accrued expenses and other current liabilities as of March 31, 2015. This balance relates to outstanding contingency claims for certain former employees that were terminated as part of the European Restructuring Plan. The Company did not incur any additional restructuring expense during the three months ended March 31, 2015. | |||||||||||
The table below outlines the components of the restructuring charges (in thousands): | |||||||||||
Balance at | Foreign | Balance at | |||||||||
December 31, | exchange | March 31, | |||||||||
2014 | adjustment | 2015 | |||||||||
European Restructuring | $ | 753 | $ | (79 | ) | $ | 674 | ||||
Total | $ | 753 | $ | (79 | ) | $ | 674 | ||||
Derivatives
Derivatives | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Derivatives | ||||||||||||||||
Derivatives | ||||||||||||||||
(12) Derivatives | ||||||||||||||||
The Company is exposed to certain risks relating to our ongoing business operations. The primary risk that the Company seeks to manage by using derivative instruments is interest rate risk. Accordingly, the Company has instituted interest rate hedging programs that are accounted for in accordance with ASC 815, “Derivatives and Hedging.” The interest rate hedging program is a cash flow hedge program designed to minimize interest rate volatility. The Company swaps the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal amount, at specified intervals. The Company also employs an interest rate cap that compensates us if variable interest rates rise above a pre-determined rate. The Company’s interest rate contracts are designated as hedging instruments. | ||||||||||||||||
On October 2, 2013, the Company entered into interest rate swap agreements with an aggregate notional principal amount of $620.0 million. The interest rate swaps will begin on September 23, 2015. The interest rate swaps will be used to hedge the Company’s variable rate debt. The interest rate swaps have maturity dates ranging from one to five years. | ||||||||||||||||
In addition, on October 2, 2013 the Company also entered into an interest rate cap with an aggregate notional principal amount of $800.0 million. The interest rate cap began on September 23, 2014 and will expire on September 23, 2015. The interest rate cap is used to hedge the variable rate of the Company’s revolving credit facilities to the extent that the LIBOR rises above 4.0%. | ||||||||||||||||
The following table presents the notional amounts and fair values (determined using level 2 inputs) of our derivatives as of March 31, 2015 and December 31, 2014. All liability amounts are reported in other long-term liabilities (in thousands): | ||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||
Balance Sheet | Notional | Liability | Notional | Liability | ||||||||||||
Classification | amount | amount | ||||||||||||||
Derivatives in a liability position: | ||||||||||||||||
Interest rate contracts | Other long-term liabilities | $ | 1,420,000 | $ | (26,929 | ) | $ | 1,420,000 | $ | (19,446 | ) | |||||
Total designated derivatives | $ | 1,420,000 | $ | (26,929 | ) | $ | 1,420,000 | $ | (19,446 | ) | ||||||
The Company records the effective portion of any change in the fair value of derivatives designated as hedging instruments under ASC 815 to other accumulated comprehensive (loss) income in our consolidated condensed balance sheet, net of deferred taxes, and will later reclassify into earnings when the hedged item affects earnings or is no longer expected to occur. Gains and losses from the ineffective portion of any hedge are recognized in earnings immediately. For other derivative contracts that do not qualify or no longer qualify for hedge accounting, changes in the fair value of the derivatives are recognized in earnings each period. | ||||||||||||||||
During the fourth quarter of 2014, due to the debt repayments made in conjunction with the Company’s initial public offering, or IPO, in November 2014 and related changes to forecasted voluntary debt repayments in future periods, the Company determined interest rate swaps with a notional principal amount of $47.5 million no longer qualify for hedge accounting. The change in estimated debt repayments also resulted in ineffectiveness in interest rate swaps with a notional principal amount of $297.5 million during the fourth quarter of 2014. | ||||||||||||||||
The table below presents the effect of our derivatives on the consolidated condensed statements of operations and comprehensive loss for the three months ended March 31, 2015 and 2014 (in thousands): | ||||||||||||||||
Three Months Ended | ||||||||||||||||
Derivatives in Cash Flow Hedging Relationships (Interest Rate Contracts) | March 31, | March 31, | ||||||||||||||
2015 | 2014 | |||||||||||||||
Amount of loss recognized in other comprehensive loss on derivatives | $ | (6,238 | ) | $ | (4,247 | ) | ||||||||||
Amount of loss recognized in other expense, net on derivatives (ineffective portion) | (56 | ) | — | |||||||||||||
Amount of loss recognized in other expense, net on derivatives (no longer qualify for hedge accounting) | (489 | ) | — | |||||||||||||
Amount of loss reclassified from accumulated other comprehensive loss into interest expense, net on derivatives | (17 | ) | — | |||||||||||||
The Company expects that $0.2 million of unrealized losses will be reclassified out of accumulated other comprehensive loss and into interest expense, net over the next 12 months. | ||||||||||||||||
Related_Party_Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions | |
Related Party Transactions | |
(13) Related Party Transactions | |
At March 31, 2015 and December 31, 2014, Kohlberg Kravis Robert & Co. L.P., or KKR, the majority stockholder of the Company, held $0.8 million in first lien term debt. | |
The Company paid management fees of $0.5 million to KKR pursuant to the terms of the monitoring agreement between the Company and KKR that was in effect prior to the IPO during the three months ended March 31, 2014. The Company did not pay any management fees to KKR during the three months ended March 31, 2015 due to the termination of the monitoring agreement in conjunction with the IPO during the fourth quarter of 2014. | |
Net_Income_Loss_Per_Share
Net Income (Loss) Per Share | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Net Income (Loss) Per Share | ||||||
Net Income (Loss) Per Share | ||||||
(14) Net Income (Loss) Per Share | ||||||
Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the applicable period. Diluted net income (loss) per share is calculated after adjusting the denominator of the basic net income (loss) per share calculation for the effect of all potentially dilutive common shares, which, in the Company’s case, includes shares issuable under the stock option and incentive award plan. | ||||||
The following table reconciles the basic to diluted weighted average shares outstanding (in thousands): | ||||||
Three Months Ended | ||||||
March 31, | March 31, | |||||
2015 | 2014 | |||||
Basic weighted average common shares outstanding | 59,815 | 40,268 | ||||
Effect of dilutive stock options and RSAs | 2,962 | — | ||||
Diluted weighted average common shares outstanding | 62,777 | 40,268 | ||||
Anti-dilutive shares | 20 | 356 | ||||
The dilutive and anti-dilutive shares disclosed above were calculated using the treasury stock method. During the three months ended March 31, 2015, the anti-dilutive shares were due to the assumed exercise price exceeding the average market price of the Company’s common stock during the period. During the three months ended March 31, 2014, the anti-dilutive shares were due to the Company being in a net loss position during the period. | ||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||
Summary of the fair value of financial assets and liabilities measured on a recurring basis | ||||||||||||||
The following table summarizes the fair value of the Company’s financial assets and liabilities that are measured on a recurring basis as of March 31, 2015 (in thousands): | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
Liabilities: | ||||||||||||||
Interest rate contracts | $ | — | $ | 26,929 | $ | — | $ | 26,929 | ||||||
Contingent consideration | — | — | 2,000 | 2,000 | ||||||||||
Total | $ | — | $ | 26,929 | $ | 2,000 | $ | 28,929 | ||||||
Summary of the changes in Level 3 financial assets and liabilities measured on a recurring basis | ||||||||||||||
The following table summarizes the changes in Level 3 financial assets and liabilities measured on a recurring basis for the three months ended March 31, 2015 (in thousands): | ||||||||||||||
Contingent | ||||||||||||||
Considerations - | ||||||||||||||
Accrued expenses and | ||||||||||||||
other current | ||||||||||||||
liabilities | ||||||||||||||
Balance at December 31, 2014 | $ | 1,911 | ||||||||||||
Revaluations included in earnings | 89 | |||||||||||||
Balance at March 31, 2015 | $ | 2,000 | ||||||||||||
Concentration_of_Credit_Risk_T
Concentration of Credit Risk (Tables) (Customer Concentration Risk) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Service revenue | ||||||
Concentration risk | ||||||
Schedule of concentration of risk by risk factor | ||||||
Three Months Ended | ||||||
March 31, | March 31, | |||||
2015 | 2014 | |||||
Customer A | 11.4 | % | — | |||
Accounts receivable and unbilled receivables | ||||||
Concentration risk | ||||||
Schedule of concentration of risk by risk factor | ||||||
March 31, | December 31, | |||||
2015 | 2014 | |||||
Customer A | 13.2 | % | 14.4 | % | ||
Customer B | — | 10.2 | % | |||
Accounts_Receivable_and_Unbill1
Accounts Receivable and Unbilled Services (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Accounts Receivable and Unbilled Services | ||||||||
Schedule of accounts receivable and unbilled services | ||||||||
Accounts receivable and unbilled services include service revenue, reimbursement revenue, and amounts associated with work performed by investigators. Accounts receivable and unbilled services were as follows (in thousands): | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Accounts receivable | $ | 242,606 | $ | 235,058 | ||||
Unbilled services | 132,832 | 105,542 | ||||||
375,438 | 340,600 | |||||||
Less allowance for doubtful accounts | (3,084 | ) | (1,819 | ) | ||||
Total accounts receivable and unbilled services, net | $ | 372,354 | $ | 338,781 | ||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Goodwill and Intangible Assets | ||||||||
Schedule of changes in the carrying amount of goodwill | ||||||||
The changes in the carrying amount of goodwill are as follows (in thousands): | ||||||||
Balance at December 31, 2014 | $ | 1,033,999 | ||||||
Currency translation | (19,117 | ) | ||||||
Balance at March 31, 2015 | $ | 1,014,882 | ||||||
Schedule of intangible assets | ||||||||
Intangible assets consist of the following (in thousands): | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Customer relationships | $ | 382,576 | $ | 393,053 | ||||
Customer backlog | 127,905 | 130,833 | ||||||
Trade names (definite-lived) | 25,757 | 25,762 | ||||||
Patient list and other intangibles | 20,900 | 20,900 | ||||||
Non-competition agreements | 2,765 | 2,774 | ||||||
Total finite-lived intangible assets, gross | 559,903 | 573,322 | ||||||
Accumulated amortization | (102,519 | ) | (90,422 | ) | ||||
Total finite-lived intangible assets, net | 457,384 | 482,900 | ||||||
Trade names (indefinite-lived) | 118,010 | 118,010 | ||||||
Total intangible assets, net | $ | 575,394 | $ | 600,910 | ||||
Schedule of estimated future amortization expense | The estimated future amortization expense of finite-lived intangible assets is expected to be as follows (in thousands): | |||||||
2015 (remaining) | $ | 41,911 | ||||||
2016 | 45,134 | |||||||
2017 | 35,415 | |||||||
2018 | 31,021 | |||||||
2019 | 25,534 | |||||||
2020 and thereafter | 278,369 | |||||||
Total | $ | 457,384 | ||||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Long-Term Debt. | ||||||||
Schedule of long-term debt | ||||||||
Long-term debt consisted of the following (in thousands): | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Term loans, first lien | $ | 714,000 | $ | 729,000 | ||||
Senior notes | 225,000 | 225,000 | ||||||
939,000 | 954,000 | |||||||
Less debt discount | (5,152 | ) | (5,463 | ) | ||||
Total long-term debt, net | $ | 933,848 | $ | 948,537 | ||||
Schedule of principal payments on long-term debt due | ||||||||
Principal payments on long-term debt are due as follows (in thousands): | ||||||||
2015 (remaining) | $ | — | ||||||
2016 | — | |||||||
2017 | — | |||||||
2018 | — | |||||||
2019 | — | |||||||
2020 and thereafter | 939,000 | |||||||
Total | $ | 939,000 | ||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Stock-Based Compensation | ||||||||
Schedule of stock-based compensation expense | ||||||||
Stock-based compensation expense related to employee stock options and RSAs are summarized below (in thousands): | ||||||||
Three Months Ended | ||||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
Direct costs | $ | 175 | $ | 142 | ||||
Selling, general and administrative | 600 | 750 | ||||||
Total stock compensation expense | $ | 775 | $ | 892 | ||||
Restructuring_Tables
Restructuring (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Restructuring | |||||||||||
Schedule of components of restructuring charges | |||||||||||
The table below outlines the components of the restructuring charges (in thousands): | |||||||||||
Balance at | Foreign | Balance at | |||||||||
December 31, | exchange | March 31, | |||||||||
2014 | adjustment | 2015 | |||||||||
European Restructuring | $ | 753 | $ | (79 | ) | $ | 674 | ||||
Total | $ | 753 | $ | (79 | ) | $ | 674 | ||||
Derivatives_Tables
Derivatives (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Derivatives | ||||||||||||||||
Schedule of notional amounts and fair values of derivatives determined using level 2 inputs | ||||||||||||||||
The following table presents the notional amounts and fair values (determined using level 2 inputs) of our derivatives as of March 31, 2015 and December 31, 2014. All liability amounts are reported in other long-term liabilities (in thousands): | ||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||
Balance Sheet | Notional | Liability | Notional | Liability | ||||||||||||
Classification | amount | amount | ||||||||||||||
Derivatives in a liability position: | ||||||||||||||||
Interest rate contracts | Other long-term liabilities | $ | 1,420,000 | $ | (26,929 | ) | $ | 1,420,000 | $ | (19,446 | ) | |||||
Total designated derivatives | $ | 1,420,000 | $ | (26,929 | ) | $ | 1,420,000 | $ | (19,446 | ) | ||||||
Schedule of the effect of derivatives on the condensed consolidated statements of operations and comprehensive (loss) income | ||||||||||||||||
The table below presents the effect of our derivatives on the consolidated condensed statements of operations and comprehensive loss for the three months ended March 31, 2015 and 2014 (in thousands): | ||||||||||||||||
Three Months Ended | ||||||||||||||||
Derivatives in Cash Flow Hedging Relationships (Interest Rate Contracts) | March 31, | March 31, | ||||||||||||||
2015 | 2014 | |||||||||||||||
Amount of loss recognized in other comprehensive loss on derivatives | $ | (6,238 | ) | $ | (4,247 | ) | ||||||||||
Amount of loss recognized in other expense, net on derivatives (ineffective portion) | (56 | ) | — | |||||||||||||
Amount of loss recognized in other expense, net on derivatives (no longer qualify for hedge accounting) | (489 | ) | — | |||||||||||||
Amount of loss reclassified from accumulated other comprehensive loss into interest expense, net on derivatives | (17 | ) | — | |||||||||||||
Net_Income_Loss_Per_Share_Tabl
Net Income (Loss) Per Share (Tables) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Net Income (Loss) Per Share | ||||||
Schedule of weighted average basic and diluted common shares | ||||||
The following table reconciles the basic to diluted weighted average shares outstanding (in thousands): | ||||||
Three Months Ended | ||||||
March 31, | March 31, | |||||
2015 | 2014 | |||||
Basic weighted average common shares outstanding | 59,815 | 40,268 | ||||
Effect of dilutive stock options and RSAs | 2,962 | — | ||||
Diluted weighted average common shares outstanding | 62,777 | 40,268 | ||||
Anti-dilutive shares | 20 | 356 | ||||
Basis_of_Presentation_Details
Basis of Presentation (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Basis of Presentation | |
Debt issuance costs | $26.20 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Recurring, USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Total | |
Liabilities: | |
Total | $28,929 |
Total | Interest rate contracts | |
Liabilities: | |
Total | 26,929 |
Total | Contingent consideration | |
Liabilities: | |
Total | 2,000 |
Level 2 | |
Liabilities: | |
Total | 26,929 |
Level 2 | Interest rate contracts | |
Liabilities: | |
Total | 26,929 |
Level 3 | |
Liabilities: | |
Total | 2,000 |
Level 3 | Contingent consideration | |
Liabilities: | |
Total | $2,000 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (Level 3, USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Nonrecurring | |
Assets fair value measurements | |
Assets fair value | $1,590,300,000 |
Goodwill | 1,014,900,000 |
Identifiable intangible assets | 575,400,000 |
Contingent consideration | Recurring | |
Changes in the fair value of the Company's Level 3 financial liabilities | |
Beginning balance | 1,911,000 |
Revaluations included in earnings | 89,000 |
Ending balance | $2,000,000 |
Concentration_of_Credit_Risk_D
Concentration of Credit Risk (Details) (Customer Concentration Risk) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Service revenue | Customer A | ||
Concentration risk | ||
Concentration risk percentage | 11.40% | |
Accounts receivable and unbilled receivables | Customer A | ||
Concentration risk | ||
Concentration risk percentage | 13.20% | 14.40% |
Accounts receivable and unbilled receivables | Customer B | ||
Concentration risk | ||
Concentration risk percentage | 10.20% |
Accounts_Receivable_and_Unbill2
Accounts Receivable and Unbilled Services (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Accounts Receivable and Unbilled Services | ||
Accounts receivable | $242,606 | $235,058 |
Unbilled services | 132,832 | 105,542 |
Total accounts receivable, gross | 375,438 | 340,600 |
Less allowance for doubtful accounts | -3,084 | -1,819 |
Total accounts receivable and unbilled services, net | $372,354 | $338,781 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Changes in carrying amount of goodwill | |||
Balance at the beginning of the period | $1,033,999,000 | ||
Currency translation | -19,117,000 | ||
Balance at the end of the period | 1,014,882,000 | ||
Accumulated impairment charges | 0 | ||
Intangible Assets | |||
Total finite-lived intangible assets, gross | 559,903,000 | 573,322,000 | |
Accumulated amortization | -102,519,000 | -90,422,000 | |
Total finite-lived intangible assets, net | 457,384,000 | 482,900,000 | |
Trade names (indefinite-lived) | 118,010,000 | 118,010,000 | |
Total intangible assets, net | 575,394,000 | 600,910,000 | |
Amortization expense | 14,100,000 | 18,700,000 | |
2015 (remaining) | 41,911,000 | ||
2016 | 45,134,000 | ||
2017 | 35,415,000 | ||
2018 | 31,021,000 | ||
2019 | 25,534,000 | ||
2020 and thereafter | 278,369,000 | ||
Total finite-lived intangible assets, net | 457,384,000 | 482,900,000 | |
Customer relationships | |||
Intangible Assets | |||
Total finite-lived intangible assets, gross | 382,576,000 | 393,053,000 | |
Customer backlog | |||
Intangible Assets | |||
Total finite-lived intangible assets, gross | 127,905,000 | 130,833,000 | |
Trade names | |||
Intangible Assets | |||
Total finite-lived intangible assets, gross | 25,757,000 | 25,762,000 | |
Patient list and other intangibles | |||
Intangible Assets | |||
Total finite-lived intangible assets, gross | 20,900,000 | 20,900,000 | |
Non-competition agreements | |||
Intangible Assets | |||
Total finite-lived intangible assets, gross | 2,765,000 | 2,774,000 | |
EDS | |||
Changes in carrying amount of goodwill | |||
Balance at the end of the period | $123,400,000 |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 24, 2014 | Mar. 23, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | |
Current borrowings and long-term debt | |||||
Long-term debt, gross | $939,000,000 | $954,000,000 | |||
Less debt discount | -5,152,000 | -5,463,000 | |||
Total long-term debt, net | 933,848,000 | 948,537,000 | |||
Principal payments on long-term debt | |||||
2020 and thereafter | 939,000,000 | ||||
Total | 939,000,000 | 954,000,000 | |||
Estimated fair value of borrowings | 965,600,000 | 966,000,000 | |||
Loss on extinguishment of debt | 1,384,000 | ||||
Term loans, first lien | |||||
Current borrowings and long-term debt | |||||
Long-term debt, gross | 714,000,000 | 729,000,000 | |||
Principal payments on long-term debt | |||||
Total | 714,000,000 | 729,000,000 | |||
Applicable margin on variable rate basis (as a percent) | 3.50% | 4.00% | |||
Loss on extinguishment of debt | 1,300,000 | ||||
Expenses incurred in repricing transaction | 100,000 | ||||
Revolving credit facilities | |||||
Principal payments on long-term debt | |||||
Maximum borrowing capacity | 125,000,000 | ||||
Variable rate basis | LIBOR | ||||
Commitment fee (as a percent) | 0.50% | ||||
Step-down commitment fee based upon achievement of a certain leverage ratio (as a percent) | 0.38% | ||||
Outstanding borrowings | 0 | 0 | |||
Outstanding letters of credit | 5,000,000 | 5,100,000 | |||
Senior notes | |||||
Current borrowings and long-term debt | |||||
Long-term debt, gross | 225,000,000 | 225,000,000 | |||
Principal payments on long-term debt | |||||
Total | $225,000,000 | $225,000,000 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Stockholders' Equity | ||
Authorized shares (in shares) | 1,000,000,000 | 1,000,000,000 |
Par value of share (in dollars per share) | $0.01 | $0.01 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details 1) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Stock Options and Restricted Stock Awards | ||
Stock-based compensation | ||
Total stock-based compensation expense | $775,000 | $892,000 |
Stock options | ||
Stock-based compensation | ||
Stock options granted (in shares) | 385,000 | 0 |
Fair value of stock options at grant date | 3,900,000 | |
Restricted Stock Awards | ||
Stock-based compensation | ||
Restricted stock awards granted (in shares) | 3,624 | 0 |
Fair value of restricted stock awards at grant date | 100,000 | |
Direct costs | Stock Options and Restricted Stock Awards | ||
Stock-based compensation | ||
Total stock-based compensation expense | 175,000 | 142,000 |
Selling, general, and administrative expenses | Stock Options and Restricted Stock Awards | ||
Stock-based compensation | ||
Total stock-based compensation expense | $600,000 | $750,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Taxes | ||
Effective income tax rate (as a percent) | 30.70% | 39.10% |
U.S. statutory rate (as a percent) | 35.00% | |
Liability for unrecognized tax benefits | $14.70 | |
Amount of gross unrecognized tax benefits that will change in the next 12 months as a result of pending audit settlements or statute of limitations expirations | $0.40 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (Tax related claim on export of services provided, USD $) | Mar. 31, 2015 |
In Millions, unless otherwise specified | |
Commitments and Contingencies | |
Amount of tax claimed to be due in litigation | $4.40 |
Other assets | |
Commitments and Contingencies | |
Deposit made to Brazilian court in tax litigation | $4.40 |
Restructuring_Details
Restructuring (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2012 | |
employee | ||
Components of the restructuring charges | ||
Balance at the beginning of the period | $753,000 | |
Foreign exchange adjustment | -79,000 | |
Balance at the end of the period | 674,000 | |
European Restructuring | ||
Restructuring | ||
Number of employees terminated | 75 | |
Components of the restructuring charges | ||
Balance at the beginning of the period | 753,000 | |
Foreign exchange adjustment | -79,000 | |
Balance at the end of the period | 674,000 | |
European Restructuring | Accrued expenses | ||
Restructuring | ||
Total cost incurred | $700,000 |
Derivatives_Details
Derivatives (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Oct. 02, 2013 | |
Interest rate contracts | ||||
Derivative Gain (Loss) | ||||
Amount of loss recognized in other comprehensive loss income on derivatives | ($6,238,000) | ($4,247,000) | ||
Amount of loss recognized in other expense, net on derivatives (ineffective portion) | -56,000 | |||
Amount of loss recognized in other expense, net on derivatives (no longer qualify for hedge accounting) | -489,000 | |||
Amount of loss reclassified from accumulated other comprehensive loss into interest expense, net on derivatives | -17,000 | |||
Unrealized losses expected to be reclassified out of accumulated other comprehensive (loss) income into interest expense | 200,000 | |||
Estimated period for the anticipated transfer of (loss) income from accumulated other comprehensive income into earnings | 12 months | |||
Interest rate contracts | Designated as hedging instruments | ||||
Derivatives in a liability position: | ||||
Notional amount | 1,420,000,000 | 1,420,000,000 | ||
Liability | -26,929,000 | -19,446,000 | ||
Interest rate contracts | Designated as hedging instruments | Other long-term liabilities | ||||
Derivatives in a liability position: | ||||
Notional amount | 1,420,000,000 | 1,420,000,000 | ||
Liability | -26,929,000 | -19,446,000 | ||
Interest Rate Swap | ||||
Derivatives | ||||
Notional amount | 620,000,000 | |||
Interest rate swap maturity, low end of range | 1 year | |||
Interest rate swap maturity, high end of range | 5 years | |||
Derivatives in a liability position: | ||||
Notional amount of ineffective portion | 297,500,000 | |||
Interest Rate Swap | No longer designated as hedging instrument | ||||
Derivatives | ||||
Notional amount | 47,500,000 | |||
Interest Rate Cap | ||||
Derivatives | ||||
Notional amount | $800,000,000 | |||
Variable rate basis | LIBOR | |||
Interest rate cap | 4.00% |
Related_Party_Transactions_Det
Related Party Transactions (Details) (KKR, USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 |
Related Party Transactions | |||
Management fees paid | $0.50 | ||
First lien term debt | |||
Related Party Transactions | |||
First lien term debt held by related parties | $0.80 | $0.80 |
Net_Income_Loss_Per_Share_Deta
Net Income (Loss) Per Share (Details) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Reconciliation of basic to diluted weighted average shares outstanding | ||
Basic weighted average common shares outstanding | 59,815 | 40,268 |
Effect of dilutive stock options and RSAs | 2,962 | |
Diluted weighted average common shares outstanding | 62,777 | 40,268 |
Anti-dilutive shares | 20 | 356 |