Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 07, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | Press Ganey Holdings, Inc. | |
Entity Central Index Key | 1,633,142 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 52,604,844 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $ 19,922 | $ 6,962 |
Accounts receivable, net of allowances of $736 and $531 at June 30, 2015 and December 31, 2014, respectively | 47,631 | 44,444 |
Other receivables | 2,324 | 1,782 |
Prepaid expenses and other assets | 5,652 | 2,741 |
Income taxes receivable | 6,053 | 2,916 |
Total current assets | 81,582 | 58,845 |
Property and equipment, net | 60,430 | 59,610 |
Deferred financing fees, net | 1,036 | 1,787 |
Intangible assets, net | 367,117 | 375,391 |
Goodwill | 402,934 | 402,934 |
Assets, Total | 913,099 | 898,567 |
Current liabilities: | ||
Current portion of long‑term debt | 4,279 | 4,279 |
Current portion of capital lease obligations | 3,661 | 4,373 |
Accounts payable | 9,434 | 13,232 |
Accrued payroll and related liabilities | 8,071 | 11,704 |
Accrued expenses and other liabilities | 1,617 | 1,581 |
Deferred income taxes | 1,661 | 712 |
Deferred revenue | 36,797 | 26,208 |
Total current liabilities | 65,520 | 62,089 |
Long‑term debt, less current portion | 178,916 | 403,865 |
Capital lease obligations, less current portion | 7,123 | 6,779 |
Equity‑based compensation liability | 19,423 | |
Deferred income taxes | 119,905 | 125,767 |
Total liabilities | 371,464 | 617,923 |
SHAREHOLDER’S EQUITY | ||
Common stock, $0.01 par value; 350,000,000 and 44,800,000 shares authorized, and 52,558,546 and 43,313,200 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively | 526 | 433 |
Additional paid‑in capital | 588,819 | 270,847 |
Retained earnings (accumulated deficit) | (47,710) | 9,364 |
Total shareholder’s equity | 541,635 | 280,644 |
Total liabilities and shareholder’s equity | $ 913,099 | $ 898,567 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowances (in dollars) | $ 736 | $ 531 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 350,000,000 | 44,800,000 |
Common stock, shares issued | 52,558,546 | 43,313,200 |
Common stock, shares outstanding | 52,558,546 | 43,313,200 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Condensed Consolidated Statements of Income | ||||
Revenue | $ 77,458 | $ 68,365 | $ 152,349 | $ 133,769 |
Operating expenses: | ||||
Cost of revenue, excluding depreciation and amortization | 43,112 | 28,964 | 74,539 | 56,724 |
General and administrative | 79,102 | 17,791 | 97,403 | 34,388 |
Depreciation and amortization | 10,237 | 8,478 | 20,096 | 17,046 |
Loss (gain) on disposal of property and equipment | 15 | 485 | (31) | 1,091 |
Total operating expenses | 132,466 | 55,718 | 192,007 | 109,249 |
Income (loss) from operations | (55,008) | 12,647 | (39,658) | 24,520 |
Other income (expense): | ||||
Interest expense, net | (3,775) | (4,966) | (8,354) | (10,430) |
Extinguishment of debt | (638) | (2,886) | (638) | (2,886) |
Management fee of related party | (267) | (230) | (553) | (460) |
Total other income (expense), net | (4,680) | (8,082) | (9,545) | (13,776) |
Income (loss) before income taxes | (59,688) | 4,565 | (49,203) | 10,744 |
Provision for (benefit from) income taxes | (5,871) | 2,128 | (1,360) | 5,011 |
Net income (loss) | $ (53,817) | $ 2,437 | $ (47,843) | $ 5,733 |
Earnings (net loss) per share: | ||||
Basic (in dollars per share) | $ (1.15) | $ 0.06 | $ (1.06) | $ 0.13 |
Diluted (in dollars per share) | $ (1.15) | $ 0.06 | $ (1.06) | $ 0.13 |
Weighted average shares of common stock outstanding: | ||||
Basic (in dollars per share) | 46,803 | 43,313 | 45,058 | 43,313 |
Diluted (in dollars per share) | 46,963 | 43,313 | 45,218 | 43,313 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Shareholder’s Equity - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Total |
Balance at beginning of period at Dec. 31, 2014 | $ 433 | $ 270,847 | $ 9,364 | $ 280,644 |
Balance at beginning of period (in shares) at Dec. 31, 2014 | 43,313,200 | 43,313,200 | ||
Change in Stockholders' Equity | ||||
Sales of equity interests | 100 | $ 100 | ||
Purchase of equity interests | (731) | (731) | ||
Equity-based compensation | 73,263 | 73,263 | ||
Impact of liquidation of PG Holdco, LLC | $ (10) | 10 | ||
Impact of liquidation of PG Holdco, LLC (in shares) | (1,028,122) | |||
Conversion of equity-based compensation liability | 21,008 | 21,008 | ||
Vesting of restricted stock | $ 1 | 1 | ||
Vesting of restricted stock (in shares) | 48,901 | |||
Taxes paid for net settlements of restricted stock vesting | 10,858 | 10,858 | ||
Taxes paid for net settlements of restricted stock (in shares) | (10,433) | |||
Distribution payments | (8,500) | (8,500) | ||
Initial public offering of common stock, net of issuance costs | $ 102 | 234,449 | 234,551 | |
Initial public offering of common stock, net of issuance costs (in shares) | 10,235,000 | |||
Net loss | (47,843) | (47,843) | ||
Balance at end of period at Jun. 30, 2015 | $ 526 | $ 588,819 | $ (47,710) | $ 541,635 |
Balance at end of period (in shares) at Jun. 30, 2015 | 52,558,546 | 52,558,546 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Operating activities | ||
Net income (loss) | $ (47,843) | $ 5,733 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 20,096 | 17,046 |
Amortization of deferred financing costs and debt discount | 354 | 507 |
Equity‑based compensation | 74,997 | 4,907 |
Extinguishment of debt | 638 | 2,886 |
Provision for doubtful accounts | 321 | 219 |
Loss (gain) on disposal of property and equipment | (31) | 1,091 |
Deferred income taxes | (4,913) | (511) |
Changes in assets and liabilities: | ||
Accounts receivable | (3,508) | 897 |
Other receivables | (542) | (552) |
Prepaid expenses and other assets | (2,911) | (1,119) |
Accounts payable | (2,834) | (3,585) |
Accrued payroll and related liabilities | (3,781) | (2,659) |
Accrued expenses and other liabilities | 36 | 113 |
Deferred revenue | 10,589 | 3,514 |
Income taxes receivable | (3,137) | (1,356) |
Net cash provided by operating activities | 37,531 | 27,131 |
Investing activities | ||
Acquisitions of businesses, net of cash acquired | (27,824) | |
Purchases of property and equipment | (15,179) | (4,552) |
Net cash used in investing activities | (15,179) | (32,376) |
Financing activities | ||
Proceeds from the issuance of long‑term debt | 38,825 | |
Payments on long‑term debt | (225,140) | (58,514) |
Deferred financing payments | (50) | (500) |
Payments on capital lease obligations | (2,190) | (812) |
Proceeds from sale of equity interests | 100 | 250 |
Purchases of equity interests | (731) | (2,745) |
Taxes paid for net settlements of restricted stock vesting | (10,858) | |
Distribution payments | (8,500) | |
Proceeds from the issuance of common stock in initial public offering, net of fees | 237,977 | |
Net cash used in financing activities | (9,392) | (23,496) |
Net increase (decrease) in cash | 12,960 | (28,741) |
Cash at beginning of period | 6,962 | 32,635 |
Cash at end of period | 19,922 | 3,894 |
Supplemental disclosure of cash flow information | ||
Disposal of property and equipment acquired through capital leases | 283 | |
Property and equipment acquired through capital leases | 2,156 | |
Purchase of property and equipment in accounts payable | 2,069 | $ 983 |
IPO related costs in accounts payable | $ 3,426 |
Basis of Presentation of Interi
Basis of Presentation of Interim Financial Information | 6 Months Ended |
Jun. 30, 2015 | |
Basis of Presentation of Interim Financial Information | |
Basis of Presentation | 1. Basis of Presentation of Interim Financial Information The accompanying unaudited condensed consolidated financial statements of Press Ganey Holdings, Inc. and subsidiaries (the “Company”, “we”, “us” or “our”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal and recurring accruals necessary to present fairly the financial statements in accordance with GAAP. Operating results for the three and six months ended June 30, 2015 and 2014 are not necessarily indicative of results to be expected for any other interim period or for the full year. The preparation of the consolidated financial statements in accordance with U.S. generally accepted accounting principles requires management to make certain estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. Actual results could materially differ from those estimates. Description of Business Press Ganey Holdings, Inc. is a leading provider of performance measurement, analysis, benchmarking, and quality improvement services primarily to the United States healthcare industry. The consolidated financial statements include the financial statements of Press Ganey Holdings, Inc. and its wholly owned subsidiary, Press Ganey Associates (“Associates”), and Associates’ wholly owned subsidiaries, PatientImpact LLC; Data Advantage LLC; Center for Performance Services, Inc.; Morehead Associates, Inc.; On The Spot Systems, Inc.; and Dynamic Clinical Systems, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. Prior to the initial public offering (discussed below), the Company was a wholly owned subsidiary of PG Holdco, LLC (the “Parent”). Effective May 8, 2015, the name of the Company was changed from PGA Holdings, Inc. to Press Ganey Holdings, Inc. Initial Public Offering In May 2015, the Company completed its initial public offering (the “IPO”) of 8,900,000 shares of common stock and, upon the underwriters’ exercise of their option to purchase additional shares, issued an additional 1,335,000 shares for a total of 10,235,000 shares issued at an offering price of $25.00 per share. Proceeds from the IPO were approximately $234.6 million, net of underwriting discounts and commissions and offering-related transaction costs incurred, which included $3.4 million of offering-related transaction costs incurred but not yet paid as of June 30, 2015. In connection with the IPO: (i) PG Holdco, LLC was liquidated and its sole asset, the shares of the Company’s common stock, was distributed to the equity holders based on their relative rights under the limited liability company agreement, (ii) the Company recognized $70.4 million of equity-based compensation expense for the modification of certain units of PG Holdco, LLC, (iii) the Company paid a one-time transaction advisory fee of $8.5 million to Vestar, and (iv) the Company recognized a loss on extinguishment of debt of $638 thousand related to the write-off of deferred financing fees, loss on original issue discount and lender fees as a result of the partial repayment of its term loan facility with the net proceeds of the IPO. Stock Split On May 8, 2015, the Company’s common stock was split at a 2,800 -for-one ratio. The authorized shares were increased to 350.0 million. Accordingly, all references to numbers of common shares and per-share data in the accompanying unaudited condensed consolidated financial statements have been adjusted to reflect the stock split on a retroactive basis. Preferred Stock On May 27, 2015, the Company amended and restated its certificate of incorporation to, among other things, authorize 50.0 million shares of preferred stock with a par value of $0.01 . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies A complete listing of the Company’s significant accounting policies is discussed in Note 2 – Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements included in the Company’s prospectus filed with the SEC on May 22, 2015 pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014 ‑09, “Revenue from Contracts with Customers (Topic 606)”. This ASU requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. On July 9, 2015, the FASB deferred the effective date by one year to December 15, 2017 for annual and interim reporting periods beginning after that date. The FASB also proposed permitting early adoption of the standard, but not before the original effective date of December 15, 2016. An entity may choose to adopt this ASU either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the standard. The Company is currently in the process of evaluating the impact that this new guidance will have on its consolidated financial statements and our method of adoption. In April 2015, the FASB issued ASU 2015 ‑03, “Simplifying the Presentation of Debt Issuance Costs”. This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This standard is effective for annual and interim periods beginning after December 15, 2015, but early adoption is permitted. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2015 | |
Property and Equipment | |
Property and Equipment | 3. Property and Equipment Property and equipment, net consist of the following: June 30, December 31, 2015 2014 Furniture, fixtures, and leasehold improvements $ $ Office equipment Office equipment held under capital lease Computer equipment and software Construction in progress Accumulated amortization on office equipment held under capital leases Accumulated depreciation $ $ Depreciation and amortization of property and equipment was $6.1 million and $4.6 million for the three months ended June 30, 2015 and 2014, respectively, and $11.8 million and $9.4 million for the six months ended June 30, 2015 and 2014 , respectively. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | 4. Fair Value Measurements The Company measures and reports its financial assets and liabilities on the basis of fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three ‑level hierarchy for disclosure has been established to show the extent and level of judgment used to estimate fair value measurements, as follows: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Significant other observable inputs (quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability). Level 3: Significant unobservable inputs for the asset or liability. These values are generally determined using pricing models which utilize management estimates of market participant assumptions. Valuation techniques for assets and liabilities measured using Level 3 inputs may include methodologies such as the market approach, the income approach or the cost approach, and may use unobservable inputs such as projections, estimates and management’s interpretation of current market data. These unobservable inputs are only utilized to the extent that observable inputs are not available or cost ‑effective to obtain. The Company had no Level 3 assets or liabilities at June 30, 2015 and December 31, 2014 . Other Fair Value Measures The recorded value of accounts receivable, other receivables, accounts payable, accrued expenses, and other liabilities approximates fair value because of the short maturity of these financial instruments. The recorded values of the variable rate First Lien and Second Lien Term Loans approximate fair value because the interest rates fluctuate with market rates. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets Goodwill Goodwill represents the excess of costs over fair value of net assets of businesses acquired. Goodwill and intangible assets acquired in connection with business combinations accounted for as a purchase and determined to have indefinite lives are not amortized, but are instead tested for impairment at least annually. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives and reviewed for impairment when impairment indicators are present. The Company believes that no such impairment indicators existed during the three and six months ended June 30, 2015 and 2014 . Intangible Assets Intangible assets consist of the following: June 30, 2015 December 31, 2014 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Trade name (indefinite life) $ $ — $ $ $ — $ Trade names (finite life) Customer relationships Proprietary technology Other $ $ $ $ $ $ Intangible asset amortization expense for the three months ended June 30, 2015 and 2014 was $4.1 million and $3.9 million, respectively. Intangible asset amortization expense for the six months ended June 30, 2015 and 2014 was $8.3 million and $7.6 million, respectively. The Company cannot reliably determine the pattern for which it consumes the benefit of its customer relationship intangible assets. As such, the Company amortizes its customer relationship intangible assets using the straight ‑line method over the estimated lives based upon the Company’s historical customer retention and recurring revenue base. The remaining estimated intangible asset amortization expense is $8.2 million in 2015, $16.1 million in 2016, $15.2 million in 2017, $13.6 million in 2018, $13.0 million in 2019 and $101.0 million thereafter. These amounts are based upon intangible assets recorded as of June 30, 2015 and actual amortization expense could differ from these estimates as a result of future acquisitions and other factors. |
Revolving Line of Credit and Lo
Revolving Line of Credit and Long Term Debt | 6 Months Ended |
Jun. 30, 2015 | |
Revolving Line of Credit and Long Term Debt | |
Revolving Line of Credit and Long Term Debt | 6. Revolving Line of Credit and Long ‑Term Debt As of June 30, 2015 and December 31, 2014 , the Company’s long ‑ term debt consisted of the following: June 30, December 31, 2015 2014 First Lien Term Loan $ $ Original issue discount, net of accumulated amortization Less current portion Long-term debt $ $ First and Second Lien Credit Agreements On April 20, 2012, the Company entered into a First Lien Credit Agreement (the “First Lien Agreement”) and Second Lien Credit Agreement (the “Second Lien Agreement”). The First Lien Agreement consists of a six -year $30 million revolving credit facility (the “Revolving Credit Facility”) and a six ‑year, $345 million term loan facility (the “First Lien Term Loan”), which was issued at an original issue discount of $3.5 million that is being recognized in interest expense over the term of the debt using the effective interest method. The Second Lien Agreement consisted of a six ‑and ‑a ‑half ‑year , $95 million term loan facility (the “Second Lien Term Loan”), which was issued at an original issue discount of $950 thousand that was recognized in interest expense over the term of the debt using the effective interest method. The First Lien Agreement and the Second Lien Agreement are both secured by substantially all of the assets of the Company. On May 9, 2013, the Company amended the First Lien Agreement to borrow an additional $50 million, lower interest rates, and adjust certain financial covenants. Proceeds from the additional borrowings were used to pay down the principal balance of the Second Lien Term Loan. On May 9, 2014, the Company amended the First Lien Agreement to borrow an additional $35 million in the form of an incremental term loan increase. Proceeds from the additional borrowings and $10 million of cash were used to pay off the remaining balance of the Second Lien Term Loan. The transactions resulted in a loss on extinguishment of debt of $2.9 million, consisting of unamortized deferred financing fees of $1.5 million, payments of fees to lenders of $0.5 million and loss on original issue discount of $0.9 million, which are recorded as extinguishment of debt in other expense, net, in the consolidated statement of operations for the quarter ended June 30, 2014. During the second quarter of 2015, the Company used proceeds from the IPO to pay down $223.0 million of the principal balance of the First Lien Term Loan. The transactions resulted in a loss on extinguishment of debt of $638 thousand, consisting of unamortized deferred financing fees of $489 thousand and loss on original issue discount of $149 thousand, which are recorded as extinguishment of debt in other expense, net, in the consolidated statement of operations for the quarter ended June 30, 2015. At the discretion of the Company, interest accrues on borrowings on the Revolving Credit Facility at either the London Interbank Offered Rate (“LIBOR” or “Eurodollar Rate”) plus an applicable margin or the adjusted base rate (“ABR”) plus an applicable margin, as defined in the First Lien Agreement. There were no borrowings outstanding under the Revolving Credit Facility at both June 30, 2015 or December 31, 2014 ; however, the Company had letters of credit outstanding of approximately $100 thousand at June 30, 2015 and December 31, 2014 , which reduced the borrowing capacity of the Revolving Credit Facility to $29.9 million. The Company is charged a loan commitment fee of 0.50% for unused amounts on the Revolving Credit Facility. After the May 9, 2013, amendment, at the discretion of the Company, interest accrues on outstanding borrowings under the First Lien Term Loan at either the ABR, as defined in the First Lien Agreement, plus an applicable margin, currently 2.25% , or the Eurodollar Rate with a floor of 1.00% plus an applicable margin, currently 3.25% . The Company elected to use the Eurodollar Rate during the six months ended June 30, 2015 , and the interest rate at June 30, 2015 , was 4.25% . The Company was required to make quarterly principal payments of $863 thousand from June 2012 through March 31, 2013, payments of $979 thousand from June 30, 2013 through March 31, 2014, and $1.1 million from June 30, 2014 through April 20, 2018, when the First Lien Agreement matures, and to make interest payments. The remaining principal balance of the First Lien Term Loan is due at maturity on April 20, 2018. The Company is required to make additional annual principal payments on the First Lien Term Loan equal to 25% or 50% (determined based on the senior leverage ratio at year ‑end) of the excess cash flow generated, if any. There was no Excess Cash Flow payment required for the year ended December 31, 2014 . The First Lien Agreement contains certain restrictive and financial covenants with which the Company must comply on a quarterly basis, including a maximum net leverage ratio and a minimum interest coverage ratio, as defined. The Company is also limited in its ability to incur additional indebtedness or liens; pay dividends or make certain other restricted payments and enter into certain transactions with affiliates; merge or consolidate with another entity; or sell, assign, transfer, convey, or otherwise dispose of all or substantially all of its assets. The Company was in compliance with these restrictive and financial covenants as of June 30, 2015 and December 31, 2014 . |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Taxes | |
Income Taxes | 7 . Income Taxes For the three months ended June 30, 2015 , the Company recorded an income tax benefit of $5.9 million compared to expense of $2.1 million for the three months ended June 30, 2014 . The Company’s effective tax rate was a benefit of 9.8% for the three months ended June 30, 2015. The Company’s effective tax rate was 46.6% for the three months ended June 30, 2014. The lower effective tax rate for the three months ended June 30, 2015 was primarily due to the impact of nondeductible equity-based compensation. For the six months ended June 30, 2015, the Company recorded an income tax benefit of $1.4 million compared to expense of $5.0 million for the six months ended June 30, 2014. The Company’s effective tax rate was a benefit of 2.8% for the six months ended June 30, 2015. The Company’s effective tax rate was 46.6% for the six months ended June 30, 2014. The lower effective tax rate for the six months ended June 30, 2015 was primarily due to the impact of nondeductible equity-based compensation. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2015 | |
Segment Information | |
Segment Information | 8. Segment Information An operating segment is a component of an enterprise that engages in business activities and has discrete financial information that is regularly reviewed by the enterprise’s chief operating decision maker to assess performance of the individual component and make decisions about allocating resources to the component. The Company produces one set of financial information at the enterprise level that is regularly reviewed by the Company’s chief operating decision maker. Discrete financial information is not produced or reviewed by the Company’s chief operating decision maker at a level lower than the enterprise level. As such, the Company has one operating segment as of June 30, 2015 and 2014 . The Company’s identifiable assets are located in the United States and over 99% of the Company’s revenues are located in the United States. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions | |
Related Party Transactions | 9. Related Party Transactions The Company was charged an annual management fee that is payable quarterly, to its majority shareholder, Vestar Capital Partners, LLC (“Vestar”). The Company incurred management fees of $267 thousand and $230 thousand for the three months ended June 30, 2015 and 2014, respectively, and $553 thousand and $460 thousand for the six months ended June 30, 2015 and 2014 , respectively. The annual management fee is no longer required after the effective date of the IPO. In connection with the IPO, the Company paid a one-time transaction advisory fee to Vestar of $8.5 million. This fee was reflected as a distribution payment on the condensed consolidated statement of cash flows for the six months ended June 30, 2015, and reduced retained earnings on the condensed consolidated balance sheet as of June 30, 2015. |
Equity-Based Compensation
Equity-Based Compensation | 6 Months Ended |
Jun. 30, 2015 | |
Equity-Based Compensation | |
Equity-Based Compensation | 10. Equity-Based Compensation The Company measures its stock-based compensation costs based on the grant date fair value of the awards and recognizes these costs in the consolidated financial statements over the requisite service or performance vesting period. Total equity-based compensation expense recorded in the condensed consolidated statements of operations for the periods indicated is as follows: Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Cost of revenue , excluding depreciation and amortization $ $ $ $ General and administrative Total equity-based compensation expense $ $ $ $ Parent Equity-Based Compensation Plan Our former parent company, PG Holdco, LLC, had adopted an equity-based compensation plan (the “Parent Plan”), which authorized the granting of various equity awards of the Parent’s Preferred units, Class A common units, Class B common units, and Class C common units to employees and directors of the Company. The awards of the Parent were recorded as compensation expense in the accounts of the Company because the recipients are employees of the Company. In connection with the closing of the IPO, the Parent was liquidated and its sole asset, shares of the Company’s common stock, were distributed to its equity holders based on their relative rights under its limited liability agreement. The equity holders of the Parent received the number of shares of the Company’s common stock in the liquidation of the Parent that they would have held in the Company’s common stock directly immediately before the distribution, with no issuance of additional shares by the Company. Vested units of the Parent converted to shares of the Company’s common stock in the distribution. Unvested common units of the Parent that were subject to time-vesting conditions were converted to 1,028,122 unvested restricted shares of the Company’s common stock in the distribution and will continue to vest based on the amended vesting schedule of the respective unit class. The liquidation and distribution of the Parent resulted in $70.4 million of equity-based compensation expense for the three and six months ended June 30, 2015 due to the following outstanding award modifications: · Performance-based Class A and Class C common units of the Parent – vesting of $40.4 million triggered by achievement of performance threshold as a result of the IPO · Class A common units of the Parent – modification of $19.4 million due to change from cliff-vesting awards to quarterly-vesting awards with resulting change from liability treatment to equity treatment · Preferred, Class A and Class B common units purchased with loans – modification of $9.1 million due to repayment of the loan which was a cancellation of option treatment and replacement with new awards with resulting change from liability treatment to equity treatment · Loan forgiveness – modification of $1.5 million due to forgiveness of loans used to purchase units with resulting change from liability treatment to equity treatment The total liability outstanding associated with the Parent Plan equity-based compensation awards not classified in equity but as liabilities was $0 and $19.4 million at June 30, 2015 and December 31, 2014, respectively. 2015 Incentive Award Plan The Company’s 2015 Incentive Award Plan (the “2015 Plan”) provides for the grant of stock options, restricted stock, dividend equivalents, stock payments, restricted stock units, stock appreciation rights, and other stock or cash based awards. The 2015 Plan authorized 7,120,000 shares of common stock for issuance pursuant to awards under the plan. On May 21, 2015, the Company granted shares of restricted stock with vesting terms summarized as follows: 4-year service vesting ( 20% for years 1 -2, 30% for years 3 -4) 3-year performance vesting (cliff) 2-year service vesting (quarterly) 1-year service vesting During the six months ended June 30, 2015, the Company granted the following restricted stock with various performance and time vesting conditions: Weighted Average Fair Value at Grant Shares Date Nonvested at January 1, 2015 — $ — Converted from liquidation of Parent Granted Vested Forfeited — — Nonvested at June 30, 2015 $ As of June 30, 2015, $56.6 million of total unrecognized compensation costs related to outstanding nonvested restricted stock was expected to be recognized over a weighted average period of 2.9 years. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events | |
Subsequent Events | 11. Subsequent Events On July 31, 2015, the Company completed the refinancing of its First Lien Term Loan and Revolving Credit Facility under a new credit agreement (“2015 Credit Agreement”). In connection with the refinancing, the Company repaid in full, the then outstanding First Lien Term Loan balance of $183.2 million and entered into a new term loan (“Term Loan”) in the amount of $185.0 million. Also in connection with this refinancing, the Company increased the borrowing capacity from its Revolving Credit Facility of $30.0 million to a new revolving line of credit (“Revolver”) of $75.0 million. The subsequent refinancing resulted in a loss on extinguishment of debt of $1.1 million, consisting of unamortized deferred financing fees of $1.0 million and a loss on original issue discount of $0.1 million. The 2015 Credit Agreement consists of a five year $185.0 million Term Loan and a five year $75.0 million Revolver. The outstanding principal amount of the Term Loan will be payable in equal quarterly amounts of $2.3 million, commencing on December 31, 2015 , with the remaining balance due upon maturity. Outstanding balances on the Revolver will be due upon maturity. The agreement is secured by substantially all of the assets of the Company. Under the 2015 Credit Agreement, interest accrues on outstanding borrowings on the Term Loan and Revolver at the Companys’s option of either the (i) LIBOR plus an applicable margin, ranging from 1.50% to 2.25% , or (ii) ABR plus an applicable margin, ranging from 0.50% to 1.25% . The applicable margins for both LIBOR and ABR are variable based upon stipulated ranges of the secured net leverage ratio, as defined in the agreement. The 2015 Credit Agreement contains certain restrictive and financial covenants with which the Company must comply on a quarterly basis, including a maximum secured net leverage ratio, as defined. The Company is also limited in its ability to incur additional indebtedness or liens; pay dividends or make certain other restricted payments and enter into certain transactions with affiliates; merge or consolidate with another entitiy; or sell, assign, transfer, convey, or otherwise dispose of all or substantially all of its assets. |
Basis of Presentation of Inte18
Basis of Presentation of Interim Financial Information (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Basis of Presentation of Interim Financial Information | |
Basis of Presentation of Interim Financial Information | Basis of Presentation of Interim Financial Information The accompanying unaudited condensed consolidated financial statements of Press Ganey Holdings, Inc. and subsidiaries (the “Company”, “we”, “us” or “our”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal and recurring accruals necessary to present fairly the financial statements in accordance with GAAP. Operating results for the three and six months ended June 30, 2015 and 2014 are not necessarily indicative of results to be expected for any other interim period or for the full year. The preparation of the consolidated financial statements in accordance with U.S. generally accepted accounting principles requires management to make certain estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. Actual results could materially differ from those estimates. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014 ‑09, “Revenue from Contracts with Customers (Topic 606)”. This ASU requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. On July 9, 2015, the FASB deferred the effective date by one year to December 15, 2017 for annual and interim reporting periods beginning after that date. The FASB also proposed permitting early adoption of the standard, but not before the original effective date of December 15, 2016. An entity may choose to adopt this ASU either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the standard. The Company is currently in the process of evaluating the impact that this new guidance will have on its consolidated financial statements and our method of adoption. In April 2015, the FASB issued ASU 2015 ‑03, “Simplifying the Presentation of Debt Issuance Costs”. This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This standard is effective for annual and interim periods beginning after December 15, 2015, but early adoption is permitted. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Property and Equipment | |
Schedule of Property and equipment, net | June 30, December 31, 2015 2014 Furniture, fixtures, and leasehold improvements $ $ Office equipment Office equipment held under capital lease Computer equipment and software Construction in progress Accumulated amortization on office equipment held under capital leases Accumulated depreciation $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets | |
Schedule of intangible assets | June 30, 2015 December 31, 2014 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Trade name (indefinite life) $ $ — $ $ $ — $ Trade names (finite life) Customer relationships Proprietary technology Other $ $ $ $ $ $ |
Revolving Line of Credit and 22
Revolving Line of Credit and Long Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Revolving Line of Credit and Long Term Debt | |
Schedule of long-term debt | As of June 30, 2015 and December 31, 2014 , the Company’s long ‑ term debt consisted of the following: June 30, December 31, 2015 2014 First Lien Term Loan $ $ Original issue discount, net of accumulated amortization Less current portion Long-term debt $ $ |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Equity-Based Compensation | |
Schedule of equity-based compensation expense in condensed consolidated statements of operations | Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Cost of revenue , excluding depreciation and amortization $ $ $ $ General and administrative Total equity-based compensation expense $ $ $ $ |
Schedule of restricted stock with vesting terms | 4-year service vesting ( 20% for years 1 -2, 30% for years 3 -4) 3-year performance vesting (cliff) 2-year service vesting (quarterly) 1-year service vesting |
Schedule of changes in nonvested restricted stock | Weighted Average Fair Value at Grant Shares Date Nonvested at January 1, 2015 — $ — Converted from liquidation of Parent Granted Vested Forfeited — — Nonvested at June 30, 2015 $ |
Basis of Presentation of Inte24
Basis of Presentation of Interim Financial Information - Initial Public Offering (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
May. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Initial Public Offering | |||||
IPO related costs incurred but not yet paid | $ 3,426 | ||||
Equity‑based compensation | 74,997 | $ 4,907 | |||
Transaction advisory fee | 8,500 | ||||
Extinguishment of debt | $ 638 | $ 2,886 | 638 | $ 2,886 | |
Transaction Advisory Fee | Vestar | |||||
Initial Public Offering | |||||
Transaction advisory fee | $ 8,500 | ||||
IPO | |||||
Initial Public Offering | |||||
Equity‑based compensation | $ 70,400 | ||||
IPO | Term Loan | |||||
Initial Public Offering | |||||
Extinguishment of debt | 638 | ||||
IPO | Transaction Advisory Fee | Vestar | |||||
Initial Public Offering | |||||
Transaction advisory fee | $ 8,500 | ||||
IPO | Common | |||||
Initial Public Offering | |||||
Shares issued in offering | 10,235 | ||||
Share price (in dollars per share) | $ 25 | ||||
Proceeds from the issuance of common stock in initial public offering, net of fees | $ 234,600 | ||||
IPO related costs incurred but not yet paid | $ 3,400 | ||||
IPO, excluding Underwriters' Option | Common | |||||
Initial Public Offering | |||||
Shares issued in offering | 8,900 | ||||
Underwriters' Option | Common | |||||
Initial Public Offering | |||||
Shares issued in offering | 1,335 |
Basis of Presentation of Inte25
Basis of Presentation of Interim Financial Information - Stock Split and Preferred Stock (Details) | May. 08, 2015shares | Jun. 30, 2015shares | May. 27, 2015$ / sharesshares | Dec. 31, 2014shares |
Stock split | ||||
Common stock, shares authorized | 350,000,000 | 44,800,000 | ||
Preferred Stock | ||||
Preferred, shares authorized | 50,000,000 | |||
Preferred, par value (in dollars per share) | $ / shares | $ 0.01 | |||
Common | ||||
Stock split | ||||
Stock split, conversion ratio | 2,800 | |||
Common stock, shares authorized | 350,000,000 |
Property and Equipment - Compon
Property and Equipment - Components (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Property and equipment, net | ||
Property and equipment, gross | $ 125,612 | $ 119,011 |
Accumulated amortization on office equipment held under capital leases | (7,826) | (6,244) |
Accumulated depreciation | (57,356) | (53,157) |
Property and equipment, net | 60,430 | 59,610 |
Furniture, fixtures, and leasehold improvements | ||
Property and equipment, net | ||
Property and equipment, gross | 9,016 | 6,249 |
Office equipment | ||
Property and equipment, net | ||
Property and equipment, gross | 18,092 | 15,214 |
Office equipment held under capital lease | ||
Property and equipment, net | ||
Property and equipment, gross | 19,715 | 18,531 |
Computer equipment and software | ||
Property and equipment, net | ||
Property and equipment, gross | 62,734 | 57,389 |
Construction in progress | ||
Property and equipment, net | ||
Property and equipment, gross | $ 16,055 | $ 21,628 |
Property and Equipment - Deprec
Property and Equipment - Depreciation (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Depreciation and amortization | ||||
Depreciation and amortization | $ 6.1 | $ 4.6 | $ 11.8 | $ 9.4 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Fair Value Measurements | ||
Level 3 assets | $ 0 | $ 0 |
Level 3 liabilities | $ 0 | $ 0 |
Goodwill and Intangible Asset29
Goodwill and Intangible Assets - Goodwill and Intangibles, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets, Net | ||
Accumulated Amortization | $ (104,643) | $ (96,369) |
Intangible Assets, Net (Excluding Goodwill) | ||
Gross Carrying Value | 471,760 | 471,760 |
Accumulated Amortization | (104,643) | (96,369) |
Intangible assets, net | 367,117 | 375,391 |
Trade names | ||
Finite-Lived Intangible Assets, Net | ||
Gross Carrying Value (finite life) | 2,130 | 2,130 |
Accumulated Amortization | (1,357) | (1,167) |
Intangible Assets, Net (finite life) | 773 | 963 |
Intangible Assets, Net (Excluding Goodwill) | ||
Accumulated Amortization | (1,357) | (1,167) |
Customer relationships | ||
Finite-Lived Intangible Assets, Net | ||
Gross Carrying Value (finite life) | 235,300 | 235,300 |
Accumulated Amortization | (88,396) | (82,010) |
Intangible Assets, Net (finite life) | 146,904 | 153,290 |
Intangible Assets, Net (Excluding Goodwill) | ||
Accumulated Amortization | (88,396) | (82,010) |
Proprietary technology | ||
Finite-Lived Intangible Assets, Net | ||
Gross Carrying Value (finite life) | 32,240 | 32,240 |
Accumulated Amortization | (13,247) | (11,645) |
Intangible Assets, Net (finite life) | 18,993 | 20,595 |
Intangible Assets, Net (Excluding Goodwill) | ||
Accumulated Amortization | (13,247) | (11,645) |
Other | ||
Finite-Lived Intangible Assets, Net | ||
Gross Carrying Value (finite life) | 2,090 | 2,090 |
Accumulated Amortization | (1,643) | (1,547) |
Intangible Assets, Net (finite life) | 447 | 543 |
Intangible Assets, Net (Excluding Goodwill) | ||
Accumulated Amortization | (1,643) | (1,547) |
Trade names | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | ||
Indefinite-lived intangible assets | $ 200,000 | $ 200,000 |
Goodwill and Intangible Asset30
Goodwill and Intangible Assets - Amortization (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Amortization expense | ||||
Amortization expense | $ 4.1 | $ 3.9 | $ 8.3 | $ 7.6 |
Estimated remaining amortization expense | ||||
2,015 | 8.2 | 8.2 | ||
2,016 | 16.1 | 16.1 | ||
2,017 | 15.2 | 15.2 | ||
2,018 | 13.6 | 13.6 | ||
2,019 | 13 | 13 | ||
Thereafter | $ 101 | $ 101 |
Revolving Line of Credit and 31
Revolving Line of Credit and Long Term Debt - Components (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Apr. 20, 2012 |
Long-term debt | |||
Less current portion | $ (4,279) | $ (4,279) | |
Long-term debt | 178,916 | 403,865 | |
First Lien Credit Agreement | Term Loan | |||
Long-term debt | |||
Long‑term debt, gross | 183,316 | 408,456 | |
Original issue discount, net of accumulated amortization | (121) | (312) | $ (3,500) |
Long-term Debt | 183,195 | 408,144 | |
Less current portion | (4,279) | (4,279) | |
Long-term debt | $ 178,916 | $ 403,865 |
Revolving Line of Credit and 32
Revolving Line of Credit and Long Term Debt - Terms (Details) - USD ($) | May. 09, 2015 | May. 09, 2014 | Apr. 20, 2012 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | May. 09, 2013 |
Long-term debt | ||||||||||||||
Loss on extinguishment of debt | $ 638,000 | $ 2,886,000 | $ 638,000 | $ 2,886,000 | ||||||||||
First Lien Credit Agreement May 2013 Amendment | ||||||||||||||
Long-term debt | ||||||||||||||
Increase in borrowing capacity | $ 50,000,000 | |||||||||||||
Revolving Credit Facility | First Lien Credit Agreement | ||||||||||||||
Long-term debt | ||||||||||||||
Term of debt instrument | 6 years | |||||||||||||
Maximum borrowing capacity | $ 30,000,000 | |||||||||||||
Long-term debt, amount outstanding | 0 | 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||
Letters of credit outstanding | 100,000 | 100,000 | 100,000 | 100,000 | 100,000 | 100,000 | ||||||||
Available borrowing capacity | 29,900,000 | $ 29,900,000 | 29,900,000 | 29,900,000 | 29,900,000 | 29,900,000 | ||||||||
Commitment fee, unused amounts (as a percent) | 0.50% | |||||||||||||
Term Loan | First Lien Credit Agreement | ||||||||||||||
Long-term debt | ||||||||||||||
Term of debt instrument | 6 years | |||||||||||||
Face amount of debt | $ 345,000,000 | |||||||||||||
Original issue discount | $ 3,500,000 | 121,000 | $ 121,000 | 121,000 | 121,000 | 121,000 | 312,000 | |||||||
Payments on debt | 223,000,000 | |||||||||||||
Loss on extinguishment of debt | 638,000 | |||||||||||||
Write-off of deferred financing fees, loss on original issue discount and lender fees excluded from pro forma earnings per share | 489,000 | |||||||||||||
Loss on original issue discount | 149,000 | |||||||||||||
Long-term debt, amount outstanding | $ 183,316,000 | $ 183,316,000 | $ 183,316,000 | $ 183,316,000 | $ 183,316,000 | $ 408,456,000 | ||||||||
Term Loan | First Lien Credit Agreement | Minimum | ||||||||||||||
Long-term debt | ||||||||||||||
Excess Cash Flow payment, percentage | 25.00% | |||||||||||||
Term Loan | First Lien Credit Agreement | Maximum | ||||||||||||||
Long-term debt | ||||||||||||||
Excess Cash Flow payment, percentage | 50.00% | |||||||||||||
Term Loan | First Lien Credit Agreement | June 2012 through March 31, 2013 | ||||||||||||||
Long-term debt | ||||||||||||||
Periodic payment required | $ 863,000 | |||||||||||||
Term Loan | First Lien Credit Agreement | June 30, 2013 through March 31, 2014 | ||||||||||||||
Long-term debt | ||||||||||||||
Periodic payment required | $ 979,000 | |||||||||||||
Term Loan | First Lien Credit Agreement | June 30, 2014 through April 20, 2018 | ||||||||||||||
Long-term debt | ||||||||||||||
Frequency of periodic payment | quarterly | |||||||||||||
Term Loan | First Lien Credit Agreement May 2013 Amendment | Adjusted Base Rate (ABR) | Minimum | ||||||||||||||
Long-term debt | ||||||||||||||
Variable rate, basis spread (as a percent) | 2.25% | |||||||||||||
Term Loan | First Lien Credit Agreement May 2013 Amendment | LIBOR - Eurodollar Rate | ||||||||||||||
Long-term debt | ||||||||||||||
Variable rate, basis spread (as a percent) | 3.25% | |||||||||||||
Variable rate basis, floor (as a percent) | 1.00% | |||||||||||||
Variable rate (as a percent) | 4.25% | 4.25% | 4.25% | 4.25% | 4.25% | |||||||||
Term Loan | First Lien Credit Agreement May 2014 Amendment | ||||||||||||||
Long-term debt | ||||||||||||||
Increase in borrowing capacity | $ 35,000,000 | |||||||||||||
Term Loan | First Lien Credit Agreement May 2014 Amendment | June 30, 2014 through April 20, 2018 | ||||||||||||||
Long-term debt | ||||||||||||||
Periodic payment required | $ 1,100,000 | |||||||||||||
Term Loan | Second Lien Credit Agreement | ||||||||||||||
Long-term debt | ||||||||||||||
Term of debt instrument | 6 years 6 months | |||||||||||||
Face amount of debt | $ 95,000,000 | |||||||||||||
Original issue discount | $ 950,000 | |||||||||||||
Payments on debt | $ 10,000,000 | |||||||||||||
Loss on extinguishment of debt | $ 2,900,000 | |||||||||||||
Write-off of deferred financing fees, loss on original issue discount and lender fees excluded from pro forma earnings per share | 1,500,000 | |||||||||||||
Lenders fees for extinguishment of debt | 500,000 | |||||||||||||
Loss on original issue discount | $ 900,000 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income tax expense | ||||
Income tax expense (benefit) | $ (5,871) | $ 2,128 | $ (1,360) | $ 5,011 |
Effective income tax reconciliation | ||||
Effective income tax rate, expense (benefit) | (9.80%) | 46.60% | (2.80%) | 46.60% |
Segment Information (Details)
Segment Information (Details) - Operating - segment | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Information | ||
Number of operating segments | 1 | 1 |
Revenues | Geographic Concentration Risk | US | ||
Segment Information | ||
Revenues by location, as a percent | 99.00% | 99.00% |
Related Party Transactions - Ma
Related Party Transactions - Management Fees (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Related Party Transactions | ||||
Related party expenses | $ 267 | $ 230 | $ 553 | $ 460 |
Transaction advisory fee | 8,500 | |||
Vestar | Management Fees | ||||
Related Party Transactions | ||||
Related party expenses | $ 267 | $ 230 | 553 | $ 460 |
Vestar | Transaction Advisory Fee | ||||
Related Party Transactions | ||||
Transaction advisory fee | $ 8,500 |
Equity-Based Compensation - All
Equity-Based Compensation - Allocated Equity-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Equity-based compensation expense | ||||
Total equity-based compensation expense | $ 73,033 | $ 2,582 | $ 74,997 | $ 4,907 |
Cost of revenue, excluding depreciation and amortization | ||||
Equity-based compensation expense | ||||
Total equity-based compensation expense | 10,643 | 728 | 11,355 | 1,363 |
General and administrative | ||||
Equity-based compensation expense | ||||
Total equity-based compensation expense | $ 62,390 | $ 1,854 | $ 63,642 | $ 3,544 |
Equity-Based Compensation - Par
Equity-Based Compensation - Parent Equity-Based Compensation Plan (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
May. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Equity-based compensation | |||||
Equity‑based compensation | $ 74,997 | $ 4,907 | |||
Equity‑based compensation liability | $ 19,423 | ||||
Parent Plan | |||||
Equity-based compensation | |||||
Equity‑based compensation | $ 70,400 | 70,400 | |||
Equity‑based compensation liability | 0 | 0 | $ 19,400 | ||
Award Modification, Principal Forgiveness | Parent Plan | |||||
Equity-based compensation | |||||
Equity‑based compensation | 1,500 | 1,500 | |||
Common Units | Performance-based Class A and Class C common units | Parent Plan | |||||
Equity-based compensation | |||||
Equity‑based compensation | 40,400 | 40,400 | |||
Common Units | Cliff-vesting awards | Parent Plan | |||||
Equity-based compensation | |||||
Equity‑based compensation | 19,400 | 19,400 | |||
Preferred, Class A and Class B Common Units | Award Modification, Preferred and Common Units Purchased with Loans | Parent Plan | |||||
Equity-based compensation | |||||
Equity‑based compensation | $ 9,100 | $ 9,100 | |||
PG Holdco, LLC | Common Units | Time-vesting conditions | Parent Plan | |||||
Equity-based compensation | |||||
Unvested common units converted upon dissolution | 1,028,122 |
Equity-Based Compensation - 201
Equity-Based Compensation - 2015 Incentive Award Plan (Details) - Restricted stock - 2015 Plan - $ / shares | May. 21, 2015 | Jun. 30, 2015 |
Equity-based compensation | ||
Shares authorized for issuance | 7,120,000 | |
Nonvested awards | ||
Nonvested at beginning of period (in shares) | 0 | |
Converted from Parent Plan (in shares) | 1,028,122 | |
Granted (in shares) | 1,754,000 | 1,754,000 |
Vested (in shares) | (48,901) | |
Nonvested at end of period (in shares) | 2,733,221 | |
Weighted Average Fair Value at Grant Date | ||
Nonvested at beginning of period (in dollars per share) | $ 0 | |
Converted from Parent Plan (in dollars per share) | 25 | |
Granted (in dollars per share) | 25 | |
Vested (in dollars per share) | (25) | |
Nonvested at beginning of period (in dollars per share) | $ 25 | |
4-year service vesting | ||
Nonvested awards | ||
Granted (in shares) | 807,000 | |
Service vesting, year 1 | ||
Vesting terms | ||
Vesting percentage | 20.00% | |
Service vesting, year 2 | ||
Vesting terms | ||
Vesting percentage | 20.00% | |
Service vesting, year 3 | ||
Vesting terms | ||
Vesting percentage | 30.00% | |
Service vesting, year 4 | ||
Vesting terms | ||
Vesting percentage | 30.00% | |
3-year performance vesting (cliff) | ||
Nonvested awards | ||
Granted (in shares) | 807,000 | |
2-year performance vesting (quarterly) | ||
Nonvested awards | ||
Granted (in shares) | 120,000 | |
1-year service vesting | ||
Nonvested awards | ||
Granted (in shares) | 20,000 |
Equity-Based Compensation - Unr
Equity-Based Compensation - Unrecognized Compensation Costs (Details) - Jun. 30, 2015 - Restricted stock - USD ($) $ in Millions | Total |
Unrecognized compensation | |
Unrecognized compensation costs | $ 56.6 |
Unrecognized compensation costs, weighted average period for recognition | 2 years 10 months 24 days |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jul. 31, 2015 | Apr. 20, 2012 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 |
Debt refinancing | ||||||
Extinguishment of debt | $ 638,000 | $ 2,886,000 | $ 638,000 | $ 2,886,000 | ||
First Lien Credit Agreement | Subsequent Event | ||||||
Debt refinancing | ||||||
Extinguishment of debt | $ 1,100,000 | |||||
Write-off of unamortized deferred financing fees | 1,000,000 | |||||
Loss on original issue discount | 100,000 | |||||
Term Loan | First Lien Credit Agreement | ||||||
Debt refinancing | ||||||
Payments on debt | 223,000,000 | |||||
Face amount of debt | $ 345,000,000 | |||||
Extinguishment of debt | 638,000 | |||||
Write-off of unamortized deferred financing fees | 489,000 | |||||
Loss on original issue discount | $ 149,000 | |||||
Term of debt instrument | 6 years | |||||
Term Loan | First Lien Credit Agreement | Subsequent Event | ||||||
Debt refinancing | ||||||
Payments on debt | 183,200,000 | |||||
Term Loan | 2015 Credit Agreement | Subsequent Event | ||||||
Debt refinancing | ||||||
Face amount of debt | $ 185,000,000 | |||||
Term of debt instrument | 5 years | |||||
Frequency of periodic payment | quarterly | |||||
Periodic payment required | $ 2,300,000 | |||||
Commencement date of payments | Dec. 31, 2015 | |||||
Revolving Credit Facility | First Lien Credit Agreement | ||||||
Debt refinancing | ||||||
Maximum borrowing capacity | $ 30,000,000 | |||||
Term of debt instrument | 6 years | |||||
Revolving Credit Facility | First Lien Credit Agreement | Subsequent Event | ||||||
Debt refinancing | ||||||
Maximum borrowing capacity | $ 30,000,000 | |||||
Revolving Credit Facility | 2015 Credit Agreement | Subsequent Event | ||||||
Debt refinancing | ||||||
Maximum borrowing capacity | $ 75,000,000 | |||||
Term of debt instrument | 5 years | |||||
Revolving Credit Facility | 2015 Credit Agreement | Subsequent Event | LIBOR | Minimum | ||||||
Debt refinancing | ||||||
Variable rate, basis spread (as a percent) | 1.50% | |||||
Revolving Credit Facility | 2015 Credit Agreement | Subsequent Event | LIBOR | Maximum | ||||||
Debt refinancing | ||||||
Variable rate, basis spread (as a percent) | 2.25% | |||||
Revolving Credit Facility | 2015 Credit Agreement | Subsequent Event | Adjusted Base Rate (ABR) | Minimum | ||||||
Debt refinancing | ||||||
Variable rate, basis spread (as a percent) | 0.50% | |||||
Revolving Credit Facility | 2015 Credit Agreement | Subsequent Event | Adjusted Base Rate (ABR) | Maximum | ||||||
Debt refinancing | ||||||
Variable rate, basis spread (as a percent) | 1.25% |