Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 24, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | PRA Health Sciences, Inc. | |
Entity Central Index Key | 1,613,859 | |
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 | 62,471,714 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 123,465 | $ 144,623 |
Restricted cash | 1,608 | 4,715 |
Accounts receivable and unbilled services, net | 497,128 | 439,053 |
Other current assets | 40,831 | 36,346 |
Total current assets | 663,032 | 624,737 |
Fixed assets, net | 88,894 | 87,577 |
Goodwill | 976,907 | 971,980 |
Intangible assets, net | 467,853 | 473,976 |
Other assets | 32,581 | 32,121 |
Total assets | 2,229,267 | 2,190,391 |
Current liabilities: | ||
Current portion of long-term debt | 35,156 | 31,250 |
Accounts payable | 53,388 | 51,335 |
Accrued expenses and other current liabilities | 156,930 | 149,113 |
Advanced billings | 326,830 | 332,501 |
Total current liabilities | 572,304 | 564,199 |
Long-term debt, net | 785,726 | 797,052 |
Other long-term liabilities | 96,454 | 99,888 |
Total liabilities | 1,454,484 | 1,461,139 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 100,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | ||
Common stock, $0.01 par value, 1,000,000,000 authorized shares at March 31, 2017 and December 31, 2016; 62,253,243 and 61,597,705 issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 623 | 616 |
Additional paid-in capital | 882,039 | 879,067 |
Accumulated other comprehensive loss | (207,358) | (224,686) |
Retained earnings | 99,479 | 74,255 |
Total stockholders' equity | 774,783 | 729,252 |
Total liabilities and stockholders' equity | $ 2,229,267 | $ 2,190,391 |
CONSOLIDATED CONDENSED BALANCE3
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
CONSOLIDATED CONDENSED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
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 | 62,253,243 | 61,597,705 |
Common stock, shares outstanding | 62,253,243 | 61,597,705 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue: | ||
Service revenue | $ 427,080 | $ 372,320 |
Reimbursement revenue | 60,680 | 57,903 |
Total revenue | 487,760 | 430,223 |
Operating expenses: | ||
Direct costs | 287,512 | 243,487 |
Reimbursable out-of-pocket costs | 60,680 | 57,903 |
Selling, general and administrative | 74,268 | 63,990 |
Transaction-related costs | 28,916 | |
Depreciation and amortization | 15,192 | 16,953 |
Loss on disposal of fixed assets, net | 82 | 28 |
Income from operations | 50,026 | 18,946 |
Interest expense, net | (9,527) | (15,366) |
Loss on extinguishment of debt | (21,485) | |
Foreign currency losses, net | (7,254) | (2,790) |
Other expense, net | (180) | |
Income (loss) before income taxes and equity in income (loss) of unconsolidated joint ventures | 33,065 | (20,695) |
Provision for (benefit from) income taxes | 7,883 | (5,264) |
Income (loss) before equity in income (loss) of unconsolidated joint ventures | 25,182 | (15,431) |
Equity in income (loss) of unconsolidated joint ventures, net of tax | 42 | (538) |
Net income (loss) | $ 25,224 | $ (15,969) |
Net income (loss) per share attributable to common stockholders: | ||
Basic (in dollars per share) | $ 0.41 | $ (0.27) |
Diluted (in dollars per share) | $ 0.39 | $ (0.27) |
Weighted average common shares outstanding: | ||
Basic (in shares) | 61,578 | 60,199 |
Diluted (in shares) | 65,439 | 60,199 |
CONSOLIDATED CONDENSED STATEME5
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Net income (loss) | $ 25,224 | $ (15,969) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 15,459 | (5,539) |
Unrealized gains (losses) on derivative instruments, net of income tax expense (benefit) of $0 and $0 | 178 | (1,642) |
Reclassification adjustments: | ||
Losses on derivatives included in net income, net of income taxes of $0, and $0 | 1,691 | 899 |
Comprehensive (loss) income | $ 42,552 | $ (22,251) |
CONSOLIDATED CONDENSED STATEME6
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Unrealized gains (losses) on derivative instruments, tax | $ 0 | $ 0 |
Losses on derivatives included in net income, tax | $ 0 | $ 0 |
CONSOLIDATED CONDENSED STATEME7
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 25,224 | $ (15,969) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 15,192 | 16,953 |
Amortization of debt issuance costs and discount | 482 | 1,195 |
Amortization of terminated interest rate swaps | 1,528 | 899 |
Stock-based compensation | 1,930 | 1,504 |
Non-cash transaction-related costs | 26,827 | |
Unrealized foreign currency losses | 6,067 | 3,888 |
Loss on extinguishment of debt | 21,485 | |
Deferred income taxes | (3,614) | (13,820) |
Other reconciling items | 562 | 567 |
Changes in operating assets and liabilities: | ||
Accounts receivable, unbilled services, and advance billings | (63,659) | (17,384) |
Other operating assets and liabilities | 5,492 | (5,746) |
Net cash (used in) provided by operating activities | (10,796) | 20,399 |
Cash flows from investing activities: | ||
Purchase of fixed assets | (7,972) | (8,138) |
Cash paid for interest on interest rate swap | (341) | (302) |
Proceeds from the sale of fixed assets | 24 | |
Acquisition of Nextrials, Inc., net of cash acquired | (4,147) | |
Net cash used in investing activities | (8,289) | (12,587) |
Cash flows from financing activities: | ||
Proceeds from accounts receivable financing activities | 120,000 | |
Repayment of long-term debt | (7,813) | (133,559) |
Borrowings on line of credit | 110,000 | |
Repayments of line of credit | (110,000) | |
Payment of debt prepayment and debt extinguishment costs | (17,824) | |
Proceeds from stock option exercises | 1,049 | 40 |
Net cash used in financing activities | (6,764) | (31,343) |
Effects of foreign exchange changes on cash, cash equivalents, and restricted cash | 1,584 | 482 |
Change in cash, cash equivalents, and restricted cash | (24,265) | (23,049) |
Cash, cash equivalents, and restricted cash, beginning of period | 149,338 | 126,125 |
Cash, cash equivalents, and restricted cash, end of period | $ 125,073 | $ 103,076 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Basis of Presentation | |
Basis of Presentation | PRA HEALTH SCIENCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS March 31, 2017 (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 of a normal recurring nature 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, 2016. The preparation of the interim consolidated condensed 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 condensed 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 The Company 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. Recently Implemented Accounting Pronouncements In March 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This update includes provisions intended to simplify various aspects of accounting for share-based compensation. In addition, ASU No. 2016-09 went into effect for public companies for annual periods beginning after December 15, 2016. The Company adopted this ASU beginning with the first quarter of 2017. The adoption of this ASU had the following effects on the consolidated condensed financial statements: Income taxes - The standard requires excess tax benefits and tax deficiencies to be recorded as income tax benefit or expense in the statement of operations. The Company applied the modified retrospective adoption approach beginning in 2017 and recorded a cumulative-effect adjustment to retained earnings and reduced its deferred tax liabilities by $12.7 million with an offsetting increase to the valuation allowance of $12.7 million. As such, the net impact to retained earnings was zero. The Company continuously evaluates its need for a valuation allowance on its net deferred tax assets based upon the weight of available evidence. If the Company is able to support the recognition of certain net deferred tax assets in the future, it is noted that an additional tax benefit from the release of this additional valuation could occur at that time. This adjustment relates to tax assets that had previously arisen from tax deductions for equity compensation expenses that were greater than the compensation recognized for financial reporting. Forfeitures – The standard provides an accounting policy election to account for forfeitures as they occur. The Company made this accounting policy election and the modified retrospective adoption for this component of the standard did not have a material impact on its financial statements. Statements of Cash Flows - Cash flows related to excess tax benefits are no longer separately classified as a financing activity apart from other income tax cash flows. The Company adopted this component of the standard on a prospective basis. Earnings Per Share - The Company uses the treasury stock method to compute diluted earnings per share, unless the effect would be anti-dilutive. Under this method, the Company is no longer required to estimate the tax rate and apply it to the dilutive share calculation for determining the dilutive earnings per share. The Company adopted this component of the standard on a prospective basis. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows Classification of Certain Cash Receipts and Cash Payments,” which clarifies existing guidance related to accounting for cash receipts and cash payments and classification on the statement of cash flows. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” which requires restricted cash be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. The guidance for both standards requires application using a retrospective transition method. The Company early adopted both ASUs during the fourth quarter of 2016. As a result of the retrospective application of ASU No. 2016-15, $17.8 million of payments of debt prepayment and debt extinguishment costs originally recorded as operating cash outflows were reclassified to financing outflows in the consolidated condensed statement of cash flows for the three months ended March 31, 2016. The retrospective application of ASU No. 2016-18 resulted in restricted cash being reclassified as a component of cash, cash equivalents, and restricted cash in the consolidated condensed statement of cash flows for all periods presented. Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers.” The new revenue standard establishes a single revenue recognition model for recognizing contracts from customers. Under the new standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has issued several amendments to the standard, including clarification on principal versus agent considerations, identifying performance obligations, and accounting for licenses of intellectual property. The new standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The standard permits the use of either the retrospective or modified retrospective (cumulative effect) transition method. The Company plans to adopt the new revenue guidance as of January 1, 2018 and is currently evaluating the transition methods and the potential impact to the its consolidated financial statements. The Company has established an implementation team that consists of both internal resources and external advisors to assist with the adoption of the new standard. During the first quarter of 2017, the Company completed its preliminary review of a representative sample of contracts from its contract portfolio and is currently evaluating and documenting the key qualitative judgments associated with the adoption of the new revenue standard. The evaluation and implementation process is ongoing and is expected to continue throughout 2017 as the Company performs an analysis on its contract portfolio to identify potential differences from its current accounting policies, and as it reviews the business processes, systems and controls required to support recognition and disclosure under the new standard. In February 2016, the FASB issued ASU No. 2016-02, “Leases,” which revises the accounting related to lessee accounting. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases with terms greater than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. The provisions of ASU No. 2016-02 are effective for fiscal years beginning after December 15, 2018 and should be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company is currently assessing the potential impact of ASU No. 2016-02 on the its consolidated financial statements. Restricted cash The Company receives cash advances from its customers to be used for the payment of investigator fees and other pass‑through expenses. The terms of certain customer contracts require that such advances be maintained in separate escrow accounts; these accounts are not commingled with the Company’s cash and cash equivalents and are presented separately in the consolidated condensed balance sheets as restricted cash. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated condensed balance sheets that sum to the total of the same amounts shown in the consolidated condensed statements of cash flows: March 31, December 31, 2017 2016 2016 2015 Cash and cash equivalents $ $ $ $ Restricted cash Total cash, cash equivalents, and restricted cash $ $ $ $ |
Business Combination
Business Combination | 3 Months Ended |
Mar. 31, 2017 | |
Business Combination | |
Business Combination | (2) Business Combination On March 18, 2016, the Company acquired all of the outstanding shares of Nextrials, Inc., or Nextrials, a developer of web-based software which integrates electronic health records with clinical trials , for $4.8 million in cash and contingent consideration in the form of potential earn-out payments of up to $3.0 million. Earn-out payments totaling $2.0 million and $1.0 million are contingent upon the achievement of project milestones and certain external software sales targets, respectively, during the 30-month period following closing. The Company recognized a liability of approximately $2.3 million as the estimated acquisition date fair value of the earn-out; the fair value was based on significant inputs not observed in the market and thus represented a Level 3 measurement. Changes in the fair value of the contingent consideration subsequent to the acquisition date are recognized in earnings in the period of the change. The fair value of the contingent consideration increased by $0.1 million for the three months ended March 31, 2017. As of March 31, 2017, the earn-out liability totaled $1.8 million; $0.8 million is included in accrued expenses and other current liabilities and $1.0 million is included in other long-term liabilities in the consolidated condensed balance sheet. With this acquisition, the Company expects to enhance its ability to serve customers throughout the clinical research process with technologies that include improved efficiencies by reducing study durations and costs through integrated operational management. The acquisition of Nextrials was accounted for as a business combination and, accordingly, the assets acquired and the liabilities assumed have been recorded at their respective fair values as of the acquisition date. In connection with the acquisition, the Company recorded approximately $4.3 million of goodwill, which is not deductible for income tax purposes. The goodwill is attributable to the workforce of the acquired business and expected synergies with the Company’s existing information technology operations. The Company’s purchase price allocation is as follows (in thousands): Purchase Weighted Price Amortization Allocation Period Cash and cash equivalents $ 94 Accounts receivable 211 Other current assets 96 Property, plant and equipment 111 Software intangible 5,574 5 years Accounts payable and accrued expenses (1,585) Other long-term liabilities (1,663) Estimated fair value of net assets acquired 2,838 Purchase price, including contingent consideration and net of working capital settlement 7,145 Total goodwill $ 4,307 The Company has not disclosed fiscal year 2016 or pro-forma revenue and earnings attributable to Nextrials as they are immaterial. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | (3) 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, 2017 (in thousands): Level 1 Level 2 Level 3 Total Assets: Marketable securities $ 593 $ — $ — $ 593 Total $ 593 $ — $ — $ 593 Liabilities: Interest rate swap $ — $ 100 $ — $ 100 Contingent consideration — — 2,794 2,794 Total $ — $ 100 $ 2,794 $ 2,894 The Company's marketable securities are included in other current assets in the consolidated condensed balance sheet. These marketable securities are recorded at fair value using quoted prices in an active market. The interest rate swap is 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 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 operational milestones and the probability of achieving the specific milestones. The following table summarizes the changes in Level 3 financial liabilities measured on a recurring basis for the three months ended March 31, 2017 (in thousands): Contingent Consideration - Accrued expenses and other long-term liabilities Balance at December 31, 2016 $ 2,754 Revaluations included in earnings 40 Balance at March 31, 2017 $ 2,794 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, 2017, assets carried on the balance sheet and not remeasured to fair value on a recurring basis totaling approximately $1,444.8 million were identified as Level 3. These assets are comprised of goodwill of $976.9 million and identifiable intangible assets, net of $467.9 million. Refer to Note 7, Long-Term Debt, for additional information regarding the fair value of long-term debt balances. |
Concentration of Credit Risk
Concentration of Credit Risk | 3 Months Ended |
Mar. 31, 2017 | |
Concentration of Credit Risk | |
Concentration of Credit Risk | (4) 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, 2017, 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, 2017 2016 Customer A — 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, 2017 2016 Customer A |
Accounts Receivable and Unbille
Accounts Receivable and Unbilled Services | 3 Months Ended |
Mar. 31, 2017 | |
Accounts Receivable and Unbilled Services | |
Accounts Receivable and Unbilled Services | (5) 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, 2017 2016 Accounts receivable $ 340,491 $ 284,647 Unbilled services 158,064 155,609 498,555 440,256 Less allowance for doubtful accounts (1,427) (1,203) Total accounts receivable and unbilled services, net $ 497,128 $ 439,053 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | (6) Goodwill and Intangible Assets Goodwill The changes in the carrying amount of goodwill are as follows (in thousands): Balance at December 31, 2016 $ 971,980 Currency translation 4,927 Balance at March 31, 2017 $ 976,907 There are no accumulated impairment charges as of March 31, 2017 and December 31, 2016. Intangible Assets Intangible assets consist of the following (in thousands): March 31, December 31, 2017 2016 Customer relationships $ 363,319 $ 360,328 Customer backlog 119,982 119,223 Trade names (definite-lived) 25,765 25,740 Patient list and other intangibles 28,974 28,974 Non-competition agreements 2,779 2,737 Total finite-lived intangible assets, gross 540,819 537,002 Accumulated amortization (190,976) (181,036) Total finite-lived intangible assets, net 349,843 355,966 Trade names (indefinite-lived) 118,010 118,010 Total intangible assets, net $ 467,853 $ 473,976 Amortization expense was $8.8 million and $11.3 million for the three months ended March 31, 2017 and 2016, respectively. The estimated future amortization expense of finite-lived intangible assets is expected to be as follows (in thousands): 2017 (remaining) $ 26,578 2018 31,304 2019 26,026 2020 24,776 2021 22,666 2022 and thereafter 218,493 Total $ 349,843 The estimated fair value of the Early Development Services, or EDS, reporting unit closely approximated its carrying value when the Company performed its annual goodwill impairment test during the fourth quarter of 2014. The Company made operational improvements during 2015 and 2016 in order to improve the profitability of the EDS reporting unit. As a result of these changes, EDS saw growth in both backlog and new business awards that contributed to its improved financial performance during both years and led the Company to update its forecast for future periods. The Company considered all of these factors when it performed its most recent goodwill impairment test during the fourth quarter of 2016 and it was concluded that the estimated fair value of the EDS reporting unit exceeded its carrying value by approximately $70.0 million or 33%. 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 2017 or later. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2017 | |
Long-Term Debt | |
Long-Term Debt | (7) Long-Term Debt Long-term debt consists of the following (in thousands): March 31, December 31, 2017 2016 Term loans, first lien $ 617,187 $ 625,000 Senior notes 91,441 91,441 Accounts receivable financing agreement 120,000 120,000 828,628 836,441 Less debt issuances costs and discount (7,746) (8,139) 820,882 828,302 Less current portion (35,156) (31,250) Total long-term debt, net $ 785,726 $ 797,052 Principal payments on long-term debt are due as follows (in thousands): 2017 (remaining) $ 23,437 2018 46,875 2019 166,875 2020 62,500 2021 437,500 2022 and thereafter 91,441 Total $ 828,628 2016 Credit Facilities As collateral for borrowings under the senior secured credit facilities, or 2016 Credit Facilities, the Company granted a pledge on primarily all of its assets, and the stock of wholly‑owned U.S. restricted subsidiaries. The Company is subject to certain financial covenants, which require the Company to maintain certain debt‑to‑EBITDA and interest expense-to-EBITDA ratios. The 2016 Credit Facilities also contain covenants that, among other things, restrict the Company’s ability to create any liens, make investments and acquisitions, incur or guarantee additional indebtness, enter into mergers or consolidations and other fundamental changes, conduct sales and other dispositions of property or assets, enter into sale-leaseback transactions or hedge agreements, prepay subordinated debt, pay dividends or make other payments in respect of capital stock, change the line of business, enter into transactions with affiliates, enter into burdensome agreements with negative pledge clauses and clauses restriction, and make subsidiary distributions. After giving effect to the applicable restrictions on the payment of dividends under the 2016 Credit Facilities, subject to compliance with applicable law, as of March 31, 2017 and December 31, 2016, all amounts in retained earnings were free of restriction and were available for the payment of dividends. The Company does not expect to pay dividends in the foreseeable future. The Company does not expect these covenants to restrict its liquidity, financial condition or access to capital resources in the foreseeable future. The 2016 Credit Facilities also contains customary representations, warranties, affirmative covenants, and events of default. For the three months ended March 31, 2017, the weighted average interest rate on the first lien term loan was 2.75%. Revolving Credit Facilities The Company’s revolving credit facilities provide for $125.0 million of potential borrowings and expire on December 6, 2021. The interest rate on the revolving credit facilities is based on the LIBOR with a 0% LIBOR floor or ABR rate, at the election of the Company, plus an applicable margin, based on the leverage ratio of the Company. The Company, at its discretion, may elect interest periods of 1, 2, 3 or 6 months. The Company is required to pay to the lenders a commitment fee ranging from 0.2% to 0.4% based on the Company’s debt-to-EBITDA ratio. At March 31, 2017 and December 31, 2016, the Company had no outstanding borrowings under the revolving credit facilities. In addition, at March 31, 2017 and December 31, 2016, the Company had $3.7 million and $7.0 million, respectively, in letters of credit outstanding, which are secured by the revolving credit facilities. Senior Notes On March 17, 2016, the Company repaid $133.6 million aggregate principal amount of its 9.5% senior notes due 2023, or Senior Notes, as part of a cash tender offer. In accordance with the guidance in the FASB’s Accounting Standards Codification, or ASC, 470-50, "Debt—Modifications and Extinguishments," the debt repayment was accounted for as a partial debt extinguishment. The repayment resulted in a $21.5 million loss on extinguishment of debt, which consists of a $17.4 million early tender premium, a $3.7 million write-off of unamortized debt issuance costs and $0.4 million of fees associated with the transaction for the three months ended March 31, 2016. The Senior Notes agreement contains certain provisions that restrict the payment of dividends from the Company’s subsidiaries to the parent company. As a result, there are no material balances present within the parent company that are available for the payment of dividends as the parent company did not have any net income during 2016 or the three months ended March 31, 2017, that was free of restrictions. The Company does not expect to pay dividends in the foreseeable future. Accounts Receivable Financing Agreement In March 2016, the Company entered into a $140.0 million accounts receivable financing agreement, of which $120.0 million was outstanding as of March 31, 2017 and December 31, 2016. The borrowings were used to repay amounts outstanding on the Company’s revolving credit facility that were used to fund the cash tender offer for the Senior Notes. Loans under the accounts receivable financing agreement accrue interest at either a reserve-adjusted LIBOR or a base rate, plus 1.6%. The Company may prepay loans upon one business day prior notice and may terminate the accounts receivable financing agreement with 15 days’ prior notice. For the three months ended March 31, 2017, the weighted average interest rate on the accounts receivable financing agreement was 2.60%. The accounts receivable financing agreement contains various customary representations and warranties and covenants, and default provisions which provide for the termination and acceleration of the commitments and loans under the agreement in circumstances including, but not limited to, failure to make payments when due, breach of representations, warranties or covenants, certain insolvency events or failure to maintain the security interest in the trade receivables, and defaults under other material indebtedness. The accounts receivable financing agreement terminates on March 22, 2019, unless terminated earlier pursuant to its terms. At March 31, 2017 and December 31, 2016, there was $20.0 million of remaining capacity available under the accounts receivable financing agreement. Fair Value of Debt The estimated fair value of the Company’s debt was $837.7 million and $844.2 million at March 31, 2017 and December 31, 2016, respectively. The fair value of the Senior Notes, which totaled $100.5 million and $99.2 million at March 31, 2017 and December 31, 2016, respectively, 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, borrowings under credit facilities, and accounts receivable financing agreement which totaled $737.2 million and $745.0 million at March 31, 2017 and December 31, 2016, respectively, 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. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | (8) 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. The Company is authorized to issue up to one hundred million shares of preferred stock, with a par value of $0.01. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Stock-Based Compensation | |
Stock-Based Compensation | (9) Stock-Based Compensation The Company granted 81,000 service-based options and 96,500 restricted stock awards and units, or RSAs/RSUs , with a total grant date fair value of $1.6 million and $5.7 million, respectively, during the three months ended March 31, 2017. Aggregated information regarding the Company’s option plans is summarized below: Wtd. Average Remaining Wtd. Average Contractual Life Intrinsic Value Options Exercise Price (in years) (millions) Outstanding at December 31, 2016 5,507,347 $ 15.38 6.7 $ 218.9 Granted 81,000 58.92 Exercised (641,301) 8.74 Expired or forfeited (40,957) 29.26 Outstanding at March 31, 2017 4,906,089 $ 16.85 6.8 $ 237.4 Exercisable at March 31, 2017 3,097,488 $ 11.51 6.2 $ 166.4 The Company’s RSAs/RSUs activity in 2017 is as follows: Wtd. Average Grant-Date Intrinsic Value Awards Fair Value (millions) Unvested at December 31, 2016 188,590 $ 32.63 $ 10.4 Granted 96,500 58.95 Vested (1,812) 27.60 Unvested at March 31, 2017 283,278 $ 41.64 $ 18.5 Stock-based compensation expense related to employee stock options and RSAs/RSUs is summarized below (in thousands): Three Months Ended March 31, 2017 2016 Direct costs $ 547 $ 428 Selling, general and administrative 1,383 1,076 Transaction-related costs — 26,827 Total stock-based compensation expense $ 1,930 $ 28,331 All stock options granted under the 2013 Stock Incentive Plan for Key Employees of PRA Health Sciences, Inc. and its Subsidiaries, or the Plan, are subject to transfer restrictions of the stock option's underlying shares once vested and exercised. This lack of marketability was included as a discount when calculating the grant date value of these options. In conjunction with the March 2016 secondary offering, the transfer restrictions on a portion of such shares issuable upon exercise of vested options granted under the Plan were released. The release of the transfer restrictions is considered a modification under ASC Topic 718, “Stock Compensation.” As a result of these modifications, the Company incurred approximately $3.0 million of incremental compensation expense associated with service-based options during the three months ended March 31, 2016, which is included in transaction-related costs in the accompanying consolidated condensed statement of operations. In December 2013, the Company granted certain employees market-based options under the Plan that vest only upon the achievement of a specified internal rate of return from a liquidity event (“2.0x Options”). At the time of grant, no compensation expense was recorded as the 2.0x Options vest upon a liquidity event, which is not considered probable until the date it occurs. On January 20, 2016, the Compensation Committee of the Board of Directors adopted a resolution to adjust the vesting criteria for all 2.0x Options granted and still outstanding on such date. Under the revised vesting criteria, the 2.0x Options vest upon the announcement of a secondary offering. This modification resulted in Type IV Improbable-to-Improbable modification. Since the secondary offering was deemed improbable due to the fact that it is outside of the Company’s control and cannot be considered probable until the date it occurs, no compensation expense was recognized on the January 20, 2016 modification date. On March 2, 2016, the Company announced a secondary offering of shares by KKR and certain management stockholders, and it became probable that the 2.0x Options would vest. In total, 835,551 2.0x Options held by current employees were modified. As a result of this modification, and the modification associated with the transfer restrictions releases noted above, the Company incurred approximately $23.8 million of incremental compensation expense associated with the 2.0x Options during the three months ended March 31, 2016, which is included in transaction-related costs in the accompanying consolidated condensed statement of operations. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Taxes | |
Income Taxes | (10) Income Taxes The Company’s effective income tax rate was 23.8% and 25.4% for the three months ended March 31, 2017 and 2016, 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, 2017 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. 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, 2017, the Company’s liability for unrecognized tax benefits was $12.5 million. If any portion of this $12.5 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 $3.9 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, 2012 and prior. For U.S. state tax returns, the Company is generally no longer subject to tax examinations for years prior to 2012. For foreign purposes, the Company is generally no longer subject to examination for tax periods 2009 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, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | (11) 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 $5.2 million at March 31, 2017, given that it is not deemed probable the Company will incur a loss related to this case. However, a deposit totaling $5.2 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. In June 2015, the Judiciary Court of Justice of the State of Sao Paulo ruled in the favor of the Company, however, the judgment was appealed by the City of Sao Paulo. The Company expects to recover the full amount of the deposit when the case is settled. |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2017 | |
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’s interest rate contracts are designated as hedging instruments. The following table presents the notional amounts and fair values (determined using Level 2 inputs) of the Company’s derivatives as of March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 December 31, 2016 Balance Sheet Classification Notional Asset/ Notional Asset/ Derivatives in a liability position: Interest rate swap Other long-term liabilities 250,000 (100) 250,000 (590) 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 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. The table below presents the effect of our derivatives on the consolidated condensed statements of operations and comprehensive income (loss) for the three months ended March 31, 2017 and 2016 (in thousands): Three Months Ended March 31, Derivatives in Cash Flow Hedging Relationships (Interest Rate Contracts) 2017 2016 Amount of pre-tax gain (loss) recognized in other comprehensive income (loss) on derivatives $ 178 $ (1,642) Amount of loss recognized in other income (expense), net on derivatives (ineffective portion) (1) — Amount of loss reclassified from accumulated other comprehensive loss into interest expense, net on derivatives (1,691) (899) The Company expects that $6.7 million of unrealized losses will be reclassified out of accumulated other comprehensive loss and into interest expense, net over the next 12 months. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2017 | |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Loss | (13) Accumulated Other Comprehensive Loss Below is a summary of the components of accumulated other comprehensive loss (in thousands): Foreign Derivative Total Balance at December 31, 2016 $ (201,091) $ (23,595) $ (224,686) Other comprehensive income before reclassifications, net of tax 15,459 178 15,637 Reclassification adjustments, net of tax — 1,691 1,691 Balance at March 31, 2017 $ (185,632) $ (21,726) $ (207,358) The change in our foreign currency translation adjustment was due primarily to the movements in the British Pound exchange rates against the U.S. dollar. The U.S. dollar weakened by 1.6% versus the British Pound between December 31, 2016 and March 31, 2017. The movement in the British Pound represented $7.8 million out of the $15.5 million foreign currency translation adjustment during the three months ended March 31, 2017. The remaining foreign currency translation adjustment is primarily attributable to the U.S. dollar’s depreciation against other major world-wide currencies, including the Euro and Russian Ruble. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Net Income Per Share | |
Net Income Per Share | (14) Net Income 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, 2017 2016 Basic weighted average common shares outstanding 61,578 60,199 Effect of dilutive stock options and RSAs/RSUs 3,861 — Diluted weighted average common shares outstanding 65,439 60,199 The following common stock equivalents were excluded from the earnings (loss) per share computation as their inclusion would have been anti-dilutive (in thousands): Three Months Ended March 31, 2017 2016 Weighted average number of stock options and RSAs/RSUs calculated using the treasury stock method that were excluded due to the exercise price exceeding the average market price of our common stock during the period 248 236 Weighted average number of stock options and RSAs/RSUs calculated using the treasury stock method that were excluded due to the reporting of a net loss for the period — 3,669 Total common stock equivalents excluded from diluted net income (loss) per share computation 248 3,905 |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Basis of Presentation | |
Schedule of cash, cash equivalents, and restricted cash | March 31, December 31, 2017 2016 2016 2015 Cash and cash equivalents $ $ $ $ Restricted cash Total cash, cash equivalents, and restricted cash $ $ $ $ |
Business Combination (Tables)
Business Combination (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Nextrials | |
Business Combination | |
Schedule of purchase price allocation | The Company’s purchase price allocation is as follows (in thousands): Purchase Weighted Price Amortization Allocation Period Cash and cash equivalents $ 94 Accounts receivable 211 Other current assets 96 Property, plant and equipment 111 Software intangible 5,574 5 years Accounts payable and accrued expenses (1,585) Other long-term liabilities (1,663) Estimated fair value of net assets acquired 2,838 Purchase price, including contingent consideration and net of working capital settlement 7,145 Total goodwill $ 4,307 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements | |
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, 2017 (in thousands): Level 1 Level 2 Level 3 Total Assets: Marketable securities $ 593 $ — $ — $ 593 Total $ 593 $ — $ — $ 593 Liabilities: Interest rate swap $ — $ 100 $ — $ 100 Contingent consideration — — 2,794 2,794 Total $ — $ 100 $ 2,794 $ 2,894 |
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 liabilities measured on a recurring basis for the three months ended March 31, 2017 (in thousands): Contingent Consideration - Accrued expenses and other long-term liabilities Balance at December 31, 2016 $ 2,754 Revaluations included in earnings 40 Balance at March 31, 2017 $ 2,794 |
Concentration of Credit Risk (T
Concentration of Credit Risk (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Service revenue | |
Concentration risk | |
Schedule of concentration of risk by risk factor | Three Months Ended March 31, 2017 2016 Customer A — |
Accounts receivable and unbilled receivables | |
Concentration risk | |
Schedule of concentration of risk by risk factor | March 31, December 31, 2017 2016 Customer A |
Accounts Receivable and Unbil26
Accounts Receivable and Unbilled Services (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accounts Receivable and Unbilled Services | |
Schedule of accounts receivable and unbilled services | Accounts receivable and unbilled services were as follows (in thousands): March 31, December 31, 2017 2016 Accounts receivable $ 340,491 $ 284,647 Unbilled services 158,064 155,609 498,555 440,256 Less allowance for doubtful accounts (1,427) (1,203) Total accounts receivable and unbilled services, net $ 497,128 $ 439,053 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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, 2016 $ 971,980 Currency translation 4,927 Balance at March 31, 2017 $ 976,907 |
Schedule of intangible assets | Intangible assets consist of the following (in thousands): March 31, December 31, 2017 2016 Customer relationships $ 363,319 $ 360,328 Customer backlog 119,982 119,223 Trade names (definite-lived) 25,765 25,740 Patient list and other intangibles 28,974 28,974 Non-competition agreements 2,779 2,737 Total finite-lived intangible assets, gross 540,819 537,002 Accumulated amortization (190,976) (181,036) Total finite-lived intangible assets, net 349,843 355,966 Trade names (indefinite-lived) 118,010 118,010 Total intangible assets, net $ 467,853 $ 473,976 |
Schedule of estimated future amortization expense | The estimated future amortization expense of finite-lived intangible assets is expected to be as follows (in thousands): 2017 (remaining) $ 26,578 2018 31,304 2019 26,026 2020 24,776 2021 22,666 2022 and thereafter 218,493 Total $ 349,843 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Long-Term Debt | |
Schedule of long-term debt | Long-term debt consists of the following (in thousands): March 31, December 31, 2017 2016 Term loans, first lien $ 617,187 $ 625,000 Senior notes 91,441 91,441 Accounts receivable financing agreement 120,000 120,000 828,628 836,441 Less debt issuances costs and discount (7,746) (8,139) 820,882 828,302 Less current portion (35,156) (31,250) Total long-term debt, net $ 785,726 $ 797,052 |
Schedule of principal payments on long-term debt due | Principal payments on long-term debt are due as follows (in thousands): 2017 (remaining) $ 23,437 2018 46,875 2019 166,875 2020 62,500 2021 437,500 2022 and thereafter 91,441 Total $ 828,628 2016 Credit Facilities |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stock-Based Compensation | |
Summary of stock option activity | Wtd. Average Remaining Wtd. Average Contractual Life Intrinsic Value Options Exercise Price (in years) (millions) Outstanding at December 31, 2016 5,507,347 $ 15.38 6.7 $ 218.9 Granted 81,000 58.92 Exercised (641,301) 8.74 Expired or forfeited (40,957) 29.26 Outstanding at March 31, 2017 4,906,089 $ 16.85 6.8 $ 237.4 Exercisable at March 31, 2017 3,097,488 $ 11.51 6.2 $ 166.4 |
Schedule of RSA/RSU activity | Wtd. Average Grant-Date Intrinsic Value Awards Fair Value (millions) Unvested at December 31, 2016 188,590 $ 32.63 $ 10.4 Granted 96,500 58.95 Vested (1,812) 27.60 Unvested at March 31, 2017 283,278 $ 41.64 $ 18.5 |
Schedule of stock-based compensation expense | Stock-based compensation expense related to employee stock options and RSAs/RSUs is summarized below (in thousands): Three Months Ended March 31, 2017 2016 Direct costs $ 547 $ 428 Selling, general and administrative 1,383 1,076 Transaction-related costs — 26,827 Total stock-based compensation expense $ 1,930 $ 28,331 |
Derivatives (Tables)
Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Derivatives | |
Schedule of notional amounts and fair values (determined using level 2 inputs) of derivatives | The following table presents the notional amounts and fair values (determined using Level 2 inputs) of the Company’s derivatives as of March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 December 31, 2016 Balance Sheet Classification Notional Asset/ Notional Asset/ Derivatives in a liability position: Interest rate swap Other long-term liabilities 250,000 (100) 250,000 (590) |
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 income (loss) for the three months ended March 31, 2017 and 2016 (in thousands): Three Months Ended March 31, Derivatives in Cash Flow Hedging Relationships (Interest Rate Contracts) 2017 2016 Amount of pre-tax gain (loss) recognized in other comprehensive income (loss) on derivatives $ 178 $ (1,642) Amount of loss recognized in other income (expense), net on derivatives (ineffective portion) (1) — Amount of loss reclassified from accumulated other comprehensive loss into interest expense, net on derivatives (1,691) (899) |
Accumulated Other Comprehensi31
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accumulated Other Comprehensive Loss | |
Summary of components of accumulated other comprehensive loss | Below is a summary of the components of accumulated other comprehensive loss (in thousands): Foreign Derivative Total Balance at December 31, 2016 $ (201,091) $ (23,595) $ (224,686) Other comprehensive income before reclassifications, net of tax 15,459 178 15,637 Reclassification adjustments, net of tax — 1,691 1,691 Balance at March 31, 2017 $ (185,632) $ (21,726) $ (207,358) |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Net Income 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, 2017 2016 Basic weighted average common shares outstanding 61,578 60,199 Effect of dilutive stock options and RSAs/RSUs 3,861 — Diluted weighted average common shares outstanding 65,439 60,199 |
Schedule of common stock equivalents excluded from earnings (loss) per share computation | Three Months Ended March 31, 2017 2016 Weighted average number of stock options and RSAs/RSUs calculated using the treasury stock method that were excluded due to the exercise price exceeding the average market price of our common stock during the period 248 236 Weighted average number of stock options and RSAs/RSUs calculated using the treasury stock method that were excluded due to the reporting of a net loss for the period — 3,669 Total common stock equivalents excluded from diluted net income (loss) per share computation 248 3,905 |
Basis of Presentation - Recentl
Basis of Presentation - Recently Implemented Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Recently Implemented Accounting Pronouncements | |||
Retained earnings | $ 99,479 | $ 74,255 | |
Operating cash flows | (10,796) | $ 20,399 | |
Financing cash flows | (6,764) | (31,343) | |
Accounting Standards Update 2016-09 | |||
Recently Implemented Accounting Pronouncements | |||
Retained earnings | 0 | ||
Scenario, Adjustment | Accounting Standards Update 2016-09 | |||
Recently Implemented Accounting Pronouncements | |||
Deferred tax liabilities | (12,700) | ||
Valuation allowance | $ 12,700 | ||
New Accounting Pronouncement, Early Adoption, Effect | Accounting Standards Update 2016-15 | |||
Recently Implemented Accounting Pronouncements | |||
Operating cash flows | 17,800 | ||
Financing cash flows | $ (17,800) |
Basis of Presentation - Restric
Basis of Presentation - Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Cash, cash equivalents, and restricted cash | ||||
Cash and cash equivalents | $ 123,465 | $ 144,623 | $ 97,644 | $ 121,065 |
Restricted cash | 1,608 | 4,715 | 5,432 | 5,060 |
Total cash, cash equivalents, and restricted cash | $ 125,073 | $ 149,338 | $ 103,076 | $ 126,125 |
Business Combination (Details)
Business Combination (Details) - USD ($) $ in Thousands | Mar. 18, 2016 | Mar. 31, 2017 | Dec. 31, 2016 |
Preliminary estimate of purchase price allocation | |||
Total goodwill | $ 976,907 | $ 971,980 | |
Nextrials | |||
Business Combination | |||
Total consideration | $ 4,800 | ||
Goodwill not deductible for tax purposes | 4,300 | ||
Preliminary estimate of purchase price allocation | |||
Cash and cash equivalents | 94 | ||
Accounts receivable | 211 | ||
Other current assets | 96 | ||
Property, plant and equipment | 111 | ||
Accounts payable and accrued expenses | (1,585) | ||
Other long-term liabilities | (1,663) | ||
Estimated fair value of net assets acquired | 2,838 | ||
Purchase price, including contingent consideration and net of working capital adjustment | 7,145 | ||
Total goodwill | 4,307 | ||
Nextrials | Software intangible | |||
Preliminary estimate of purchase price allocation | |||
Software intangible | $ 5,574 | ||
Weighted amortization period | 5 years | ||
Contingent Earn-out Payments | Nextrials | |||
Business Combination | |||
Potential contingent earn-out payments | $ 3,000 | ||
Earn-out period for contingent consideration | 30 months | ||
Contingent liability recognized | 1,800 | ||
Increase in fair value of contingent consideration | 100 | ||
Contingent Earn-out Payments | Nextrials | Accrued expenses and other current liabilities | |||
Business Combination | |||
Contingent liability, current | 800 | ||
Contingent Earn-out Payments | Nextrials | Other long-term liabilities | |||
Business Combination | |||
Contingent liability, noncurrent | $ 1,000 | ||
Contingent Earn-out Payments | Nextrials | Level 3 | |||
Business Combination | |||
Contingent liability recognized | $ 2,300 | ||
Contingent Earn-out Payments - Milestones | Nextrials | |||
Business Combination | |||
Potential contingent earn-out payments | 2,000 | ||
Contingent Earn-out Payments - Sales Targets | Nextrials | |||
Business Combination | |||
Potential contingent earn-out payments | $ 1,000 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets and Liabilities Measured on a Recurring Basis (Details) - Recurring $ in Thousands | Mar. 31, 2017USD ($) |
Assets: | |
Assets fair value | $ 593 |
Liabilities: | |
Liabilities fair value | 2,894 |
Interest rate swaps | |
Liabilities: | |
Liabilities fair value | 100 |
Contingent consideration | |
Liabilities: | |
Liabilities fair value | 2,794 |
Marketable securities | |
Assets: | |
Assets fair value | 593 |
Level 1 | |
Assets: | |
Assets fair value | 593 |
Level 1 | Marketable securities | |
Assets: | |
Assets fair value | 593 |
Level 2 | |
Liabilities: | |
Liabilities fair value | 100 |
Level 2 | Interest rate swaps | |
Liabilities: | |
Liabilities fair value | 100 |
Level 3 | |
Liabilities: | |
Liabilities fair value | 2,794 |
Level 3 | Contingent consideration | |
Liabilities: | |
Liabilities fair value | $ 2,794 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 (Details) - Recurring - Level 3 - Contingent consideration $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Changes in the fair value of the Company's Level 3 financial liabilities | |
Beginning balance | $ 2,754 |
Revaluations included in earnings | 40 |
Ending balance | $ 2,794 |
Fair Value Measurements - Non-r
Fair Value Measurements - Non-recurring Fair Value Measurements (Details) - Nonrecurring - Level 3 $ in Millions | Mar. 31, 2017USD ($) |
Assets fair value measurements | |
Assets fair value | $ 1,444.8 |
Goodwill | 976.9 |
Identifiable intangible assets | $ 467.9 |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) - Customer Concentration Risk - Customer A | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Service revenue | ||
Concentration risk | ||
Concentration risk percentage | 11.30% | |
Accounts receivable and unbilled receivables | ||
Concentration risk | ||
Concentration risk percentage | 12.70% | 12.00% |
Accounts Receivable and Unbil40
Accounts Receivable and Unbilled Services (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Accounts Receivable and Unbilled Services | ||
Accounts receivable | $ 340,491 | $ 284,647 |
Unbilled services | 158,064 | 155,609 |
Total accounts receivable, gross | 498,555 | 440,256 |
Less allowance for doubtful accounts | (1,427) | (1,203) |
Total accounts receivable and unbilled services, net | $ 497,128 | $ 439,053 |
Goodwill and Intangible Asset41
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in carrying amount of goodwill | ||||
Balance at the beginning of the period | $ 971,980 | |||
Currency translation | 4,927 | |||
Balance at the end of the period | 976,907 | |||
Accumulated impairment charges | 0 | $ 0 | ||
Intangible Assets | ||||
Total finite-lived intangible assets, gross | 540,819 | 537,002 | ||
Accumulated amortization | (190,976) | (181,036) | ||
Total finite-lived intangible assets, net | 349,843 | 355,966 | ||
Trade names (indefinite-lived) | 118,010 | 118,010 | ||
Total intangible assets, net | 467,853 | 473,976 | ||
Amortization expense | 8,800 | $ 11,300 | ||
Estimated future amortization expense: | ||||
2017 (remaining) | 26,578 | |||
2,018 | 31,304 | |||
2,019 | 26,026 | |||
2,020 | 24,776 | |||
2,021 | 22,666 | |||
2022 and thereafter | 218,493 | |||
Total finite-lived intangible assets, net | 349,843 | 355,966 | ||
Customer relationships | ||||
Intangible Assets | ||||
Total finite-lived intangible assets, gross | 363,319 | 360,328 | ||
Customer backlog | ||||
Intangible Assets | ||||
Total finite-lived intangible assets, gross | 119,982 | 119,223 | ||
Trade names (definite-lived) | ||||
Intangible Assets | ||||
Total finite-lived intangible assets, gross | 25,765 | 25,740 | ||
Patient list and other intangibles | ||||
Intangible Assets | ||||
Total finite-lived intangible assets, gross | 28,974 | 28,974 | ||
Non-competition agreements | ||||
Intangible Assets | ||||
Total finite-lived intangible assets, gross | $ 2,779 | $ 2,737 | ||
EDS | ||||
Goodwill Impairment Testing | ||||
Fair value of reporting unit in excess of carrying amount | $ 70,000 | |||
Percent of fair value of reporting unit in excess of carrying amount | 33.00% |
Long-Term Debt - Summary (Detai
Long-Term Debt - Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Long-term debt | ||
Long-term debt, gross | $ 828,628 | $ 836,441 |
Less debt issuance costs and discount | (7,746) | (8,139) |
Total | 820,882 | 828,302 |
Less current portion | (35,156) | (31,250) |
Total long-term debt, net | 785,726 | 797,052 |
First Lien Term Loan | ||
Long-term debt | ||
Long-term debt, gross | 617,187 | 625,000 |
Senior Notes | ||
Long-term debt | ||
Long-term debt, gross | 91,441 | 91,441 |
Accounts Receivable Financing Agreement | ||
Long-term debt | ||
Long-term debt, gross | $ 120,000 | $ 120,000 |
Long-Term Debt - Future Princip
Long-Term Debt - Future Principal Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Principal payments on long-term debt | ||
2017 (remaining) | $ 23,437 | |
2,018 | 46,875 | |
2,019 | 166,875 | |
2,020 | 62,500 | |
2,021 | 437,500 | |
2022 and thereafter | 91,441 | |
Total | $ 828,628 | $ 836,441 |
Long-Term Debt - Credit Facilit
Long-Term Debt - Credit Facilities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
First Lien Term Loan | ||
Long-term debt | ||
Weighted average interest rate (as a percent) | 2.75% | |
2016 Credit Facilities | Revolving Credit Facility | ||
Long-term debt | ||
Maximum borrowing capacity | $ 125 | |
Interest period, option one | 1 month | |
Interest period, option two | 2 months | |
Interest period, option three | 3 months | |
Interest period, option four | 6 months | |
Outstanding borrowings | $ 0 | $ 0 |
Outstanding letters of credit | $ 3.7 | $ 7 |
2016 Credit Facilities | Revolving Credit Facility | Minimum | ||
Long-term debt | ||
Commitment fee (as a percent) | 0.20% | |
2016 Credit Facilities | Revolving Credit Facility | Maximum | ||
Long-term debt | ||
Commitment fee (as a percent) | 0.40% | |
2016 Credit Facilities | Revolving Credit Facility | LIBOR | ||
Long-term debt | ||
Variable rate basis | LIBOR | |
2016 Credit Facilities | Revolving Credit Facility | LIBOR | Minimum | ||
Long-term debt | ||
Variable base rate minimum floor (as a percent) | 0.00% | |
2016 Credit Facilities | Revolving Credit Facility | ABR | ||
Long-term debt | ||
Variable rate basis | ABR |
Long-Term Debt - Senior Notes a
Long-Term Debt - Senior Notes and A/R Financing Agreement (Details) - USD ($) $ in Thousands | Mar. 17, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Long-term debt | ||||
Long-term debt, gross | $ 828,628 | $ 836,441 | ||
Loss on extinguishment of debt | $ 21,485 | |||
Fair Value of Debt | ||||
Estimated fair value of long-term debt | 837,700 | 844,200 | ||
Senior Notes | ||||
Long-term debt | ||||
Long-term debt, gross | 91,441 | 91,441 | ||
Interest rate (as a percent) | 9.50% | |||
Repayment of principal | $ 133,600 | |||
Prepayment penalty | 17,400 | |||
Write-off of unamortized debt issuance costs | 3,700 | |||
Fees associated with extinguishment of debt | 400 | |||
Loss on extinguishment of debt | 21,500 | |||
Accounts Receivable Financing Agreement | ||||
Long-term debt | ||||
Long-term debt, gross | 120,000 | 120,000 | ||
Maximum borrowing capacity | $ 140,000 | |||
Outstanding borrowings | $ 120,000 | |||
Notice period for prepayment of loans | 1 day | |||
Notice period required for termination of agreement | 15 days | |||
Weighted average interest rate (as a percent) | 2.60% | |||
Remaining borrowing capacity | $ 20,000 | 20,000 | ||
LIBOR | Accounts Receivable Financing Agreement | ||||
Long-term debt | ||||
Variable rate basis | LIBOR | |||
Applicable margin on variable rate basis (as a percent) | 1.60% | |||
ABR | Accounts Receivable Financing Agreement | ||||
Long-term debt | ||||
Variable rate basis | base rate | |||
Applicable margin on variable rate basis (as a percent) | 1.60% | |||
Level 2 | Senior Notes | ||||
Fair Value of Debt | ||||
Fair value of Senior Notes | $ 100,500 | 99,200 | ||
Level 3 | ||||
Fair Value of Debt | ||||
Fair value of the term loans, borrowings under credit facilities, and accounts receivable financing agreement | $ 737,200 | $ 745,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Stockholders' Equity | ||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Restricted Stock Awards (RSAs) | ||
Stock-Based Compensation | ||
Restricted stock awards granted in period | 96,500 | |
Total grant date fair value of awards granted | $ 5.7 | |
Employee stock options | ||
Stock-Based Compensation | ||
Total grant date fair value of awards granted | $ 1.6 | |
Options | ||
Outstanding at beginning of period (in shares) | 5,507,347 | |
Granted (in shares) | 81,000 | |
Exercised (in shares) | (641,301) | |
Expired or forfeited (in shares) | (40,957) | |
Outstanding at end of period (in shares) | 4,906,089 | 5,507,347 |
Exercisable (in shares) | 3,097,488 | |
Weighted Average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ 15.38 | |
Granted (in dollars per share) | 58.92 | |
Exercised (in dollars per share) | 8.74 | |
Expired or forfeited (in dollars per share) | 29.26 | |
Outstanding at end of period (in dollars per share) | 16.85 | $ 15.38 |
Exercisable (in dollars per share) | $ 11.51 | |
Other disclosures: | ||
Weighted average remaining contractual life, Outstanding | 6 years 9 months 18 days | 6 years 8 months 12 days |
Weighted average remaining contractual life, Exercisable | 6 years 2 months 12 days | |
Intrinsic value, Outstanding | $ 237.4 | $ 218.9 |
Intrinsic value, Exercisable | $ 166.4 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Awards and Units (Details) - RSAs and RSUs - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Stock-Based Compensation | ||
Outstanding at beginning of period (in shares) | 188,590 | |
Granted (in shares) | 96,500 | |
Vested (in shares) | (1,812) | |
Outstanding at end of period (in shares) | 283,278 | |
Weighted Average Grant-Date Fair Value | ||
Outstanding at beginning of period (in dollars per share) | $ 32.63 | |
Granted (in dollars per share) | 58.95 | |
Vested (in dollars per share) | 27.60 | |
Outstanding at end of period (in dollars per share) | $ 41.64 | |
Intrinsic Value | ||
Outstanding at end of period | $ 18.5 | $ 10.4 |
Stock-Based Compensation - St49
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | Mar. 02, 2016 | Jan. 20, 2016 | Dec. 31, 2013 | Mar. 31, 2017 | Mar. 31, 2016 |
Stock options, RSAs and RSUs | |||||
Stock-based compensation | |||||
Compensation expense | $ 1,930 | $ 28,331 | |||
Stock options, RSAs and RSUs | Direct costs | |||||
Stock-based compensation | |||||
Compensation expense | 547 | 428 | |||
Stock options, RSAs and RSUs | Selling, general, and administrative expenses | |||||
Stock-based compensation | |||||
Compensation expense | 1,383 | 1,076 | |||
Stock options, RSAs and RSUs | Transaction-related costs | |||||
Stock-based compensation | |||||
Compensation expense | $ 26,827 | ||||
2013 Plan | Stock options, RSAs and RSUs | Transaction-related costs | |||||
Stock-based compensation | |||||
Compensation expense | 3,000 | ||||
2013 Plan | Employee stock options | 2.0x Options | |||||
Stock-based compensation | |||||
Compensation expense | $ 0 | $ 0 | |||
Number of stock options modified | 835,551 | ||||
2013 Plan | Employee stock options | 2.0x Options | Transaction-related costs | |||||
Stock-based compensation | |||||
Incremental compensation expense | $ 23,800 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Taxes | ||
Effective income tax rate (as a percent) | 23.80% | 25.40% |
U.S. statutory rate (as a percent) | 35.00% | |
Liability for unrecognized tax benefits | $ 12.5 | |
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 | $ 3.9 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Tax related claim on export of services provided $ in Millions | Mar. 31, 2017USD ($) |
Commitments and Contingencies | |
Amount of tax claimed to be due in litigation | $ 5.2 |
Other assets | |
Commitments and Contingencies | |
Deposit made to Brazilian court in tax litigation | $ 5.2 |
Derivatives - Hedging Instrumen
Derivatives - Hedging Instruments (Details) - Interest rate swaps - Designated as hedging instruments - Level 2 - Other long-term liabilities - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Derivatives in a liability position: | ||
Notional amount | $ 250,000 | $ 250,000 |
Liability | $ (100) | $ (590) |
Derivatives - Cash Flow Hedging
Derivatives - Cash Flow Hedging Instruments (Details) - Cash flow hedging - Interest rate contracts - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Effect of derivatives on the consolidated statements of operations and comprehensive income (loss) | ||
Amount of pre-tax gain (loss) recognized in other comprehensive income (loss) on derivatives | $ 178 | $ (1,642) |
Amount of loss recognized in other income (expense), net on derivatives (ineffective portion) | (1) | |
Amount of loss reclassified from accumulated other comprehensive loss into interest expense, net on derivatives | $ (1,691) | $ (899) |
Accumulated Other Comprehensi54
Accumulated Other Comprehensive Loss - Components (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Summary of components of accumulated other comprehensive loss | |
Beginning balance | $ (224,686) |
End balance | (207,358) |
Foreign Currency Translation | |
Summary of components of accumulated other comprehensive loss | |
Beginning balance | (201,091) |
Other comprehensive income before reclassifications, net of tax | 15,459 |
End balance | (185,632) |
Foreign Currency Translation | British Pound (GBP) | |
Summary of components of accumulated other comprehensive loss | |
Other comprehensive income before reclassifications, net of tax | $ 7,800 |
Change in valuation of U.S. Dollar during the period (as a percent) | (1.60%) |
Derivative Instruments | |
Summary of components of accumulated other comprehensive loss | |
Beginning balance | $ (23,595) |
Other comprehensive income before reclassifications, net of tax | 178 |
Reclassification adjustments, net of tax | 1,691 |
End balance | (21,726) |
Accumulated Other Comprehensive (Loss) Income | |
Summary of components of accumulated other comprehensive loss | |
Beginning balance | (224,686) |
Other comprehensive income before reclassifications, net of tax | 15,637 |
Reclassification adjustments, net of tax | 1,691 |
End balance | $ (207,358) |
Net Income Per Share (Details)
Net Income Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net Income Per Share | ||
Weighted average number of stock options and RSAs/RSUs calculated using the treasury stock method that were excluded due to the exercise price exceeding the average market price of our common stock during the period | 248 | 236 |
Weighted average number of stock options and RSAs/RSUs calculated using the treasury stock method that were excluded due to the reporting of a net loss for the period | 3,669 | |
Total common stock equivalents excluded from diluted net (loss) income per share computation | 248 | 3,905 |
Reconciliation of basic to diluted weighted average shares outstanding | ||
Basic weighted average common shares outstanding | 61,578 | 60,199 |
Effect of dilutive stock options and RSAs/RSUs | 3,861 | |
Diluted weighted average common shares outstanding | 65,439 | 60,199 |