Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 24, 2015 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | DIGIRAD CORP | |
Entity Central Index Key | 707388 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | FALSE | |
Entity Common Stock, Shares Outstanding | 19,243,445 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements Of Comprehensive Income (Loss) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues: | ||
Diagnostic Services | $10,563 | $9,555 |
Diagnostic Imaging | 3,276 | 3,442 |
Total revenues | 13,839 | 12,997 |
Cost of revenues: | ||
Diagnostic Services | 8,505 | 7,534 |
Diagnostic Imaging | 1,686 | 2,021 |
Total cost of revenues | 10,191 | 9,555 |
Gross profit | 3,648 | 3,442 |
Operating expenses: | ||
Marketing and sales | 1,210 | 1,095 |
General and administrative | 2,168 | 1,995 |
Amortization of intangible assets | 105 | 66 |
Restructuring charges | 0 | 441 |
Total operating expenses | 3,483 | 3,597 |
Income (loss) from operations | 165 | -155 |
Interest and other income, net | ||
Interest and other income, net | 11 | 17 |
Interest expense | -11 | -8 |
Total other income | 0 | 9 |
Income (loss) before income taxes | 165 | -146 |
Income tax benefit (expense) | 580 | -2 |
Net income (loss) | 745 | -148 |
Net income (loss) per share - basic (in dollars per share) | $0.04 | ($0.01) |
Net income (loss) per share - diluted (in dollars per share | $0.04 | ($0.01) |
Weighted average shares outstanding – basic | 18,803 | 18,518 |
Weighted average shares outstanding – diluted | 19,291 | 18,518 |
Dividends declared per common share (in US$ per share) | $0.05 | $0.05 |
Other comprehensive income (loss): | ||
Unrealized gain (loss) on marketable securities | 14 | -18 |
Total other comprehensive income (loss) | 14 | -18 |
Comprehensive income (loss) | $759 | ($166) |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | |
In Thousands, unless otherwise specified | |||
Current assets: | |||
Cash and cash equivalents | $13,876 | $14,051 | |
Securities available-for-sale | 7,048 | 7,935 | |
Accounts receivable, net | 7,060 | 5,989 | |
Inventories, net | 3,657 | 3,644 | |
Other current assets | 898 | 856 | |
Restricted cash | 477 | 477 | |
Total current assets | 33,016 | 32,952 | |
Property and equipment, net | 5,197 | 4,766 | |
Intangible assets, net | 3,479 | 2,577 | |
Goodwill | 2,889 | [1],[2] | 1,337 |
Other assets | 289 | 269 | |
Total assets | 44,870 | 41,901 | |
Liabilities and stockholders’ equity | |||
Accounts payable | 2,242 | 1,423 | |
Accrued compensation | 2,587 | 3,261 | |
Accrued warranty | 159 | 176 | |
Deferred revenue | 1,481 | 1,644 | |
Other accrued liabilities | 2,086 | 1,789 | |
Total current liabilities | 8,555 | 8,293 | |
Other liabilities | 966 | 963 | |
Total liabilities | 9,521 | 9,256 | |
Commitments and contingencies | |||
Stockholders’ equity: | |||
Preferred stock, $0.0001 par value: 10,000,000 shares authorized; no shares issued or outstanding | 0 | 0 | |
Common stock, $0.0001 par value: 80,000,000 shares authorized; 19,240,945 and 18,615,945 shares issued and outstanding (net of treasury shares) at March 31, 2015 and December 31, 2014, respectively | 2 | 2 | |
Treasury stock, at cost; 2,588,484 shares at March 31, 2015 and December 31, 2014 | -5,728 | -5,728 | |
Additional paid-in capital | 155,714 | 153,769 | |
Accumulated other comprehensive loss | -5 | -19 | |
Accumulated deficit | -114,634 | -115,379 | |
Total stockholders’ equity | 35,349 | 32,645 | |
Total liabilities and stockholders’ equity | $44,870 | $41,901 | |
[1] | mortization expense for intangible assets, net was $0.1 million for the three months ended March 31, 2015 and 2014. Estimated amortization expense for intangible assets for the remainder of 2015 is $0.4 million, for 2016 is $0.5 million, for 2017 is $0.5 million, for 2018 is $0.5 million, for 2019 is $0.4 million, for 2020 is $0.4 million, and thereafter is $0.8 million. | ||
[2] | . |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 19,240,945 | 18,615,945 |
Common stock, shares outstanding | 19,240,945 | 18,615,945 |
Treasury stock, shares | 2,558,484 | 2,588,484 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements Of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating activities | ||
Net income (loss) | $745 | ($148) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation | 383 | 387 |
Amortization of intangible assets | 105 | 66 |
Provision for bad debt | 37 | 21 |
Stock-based compensation | 144 | 50 |
(Gain) loss on sale of assets | -17 | 5 |
Amortization of premiums on investments | 36 | 51 |
Changes in operating assets and liabilities: | ||
Accounts receivable | -665 | -1,699 |
Inventories | -13 | 293 |
Other assets | -6 | 70 |
Accounts payable | 670 | 449 |
Accrued compensation | -755 | -1,019 |
Deferred revenue | -163 | -250 |
Other liabilities | -379 | 168 |
Restricted cash | 0 | -233 |
Net cash provided by (used in) operating activities | 122 | -1,789 |
Investing activities | ||
Purchases of property and equipment | -211 | -571 |
Net proceeds from sale of assets | 17 | 0 |
Purchases of securities available-for-sale | 0 | -2,617 |
Maturities of securities available-for-sale | 865 | 350 |
Net cash received from (paid for) acquisition | 3 | -3,470 |
Net cash provided by (used in) investing activities | 674 | -6,308 |
Financing activities | ||
Issuances of common stock | 48 | 0 |
Dividends paid | -931 | -925 |
Repayment of long-term debt | 0 | -131 |
Repayment of obligations under capital leases | -88 | -42 |
Net cash used in financing activities | -971 | -1,098 |
Net decrease in cash and cash equivalents | -175 | -9,195 |
Cash and cash equivalents at beginning of period | 14,051 | 18,744 |
Cash and cash equivalents at end of period | 13,876 | 9,549 |
Noncash or Part Noncash Acquisition, Fixed Assets Acquired | 122 | 54 |
Stock Issued During Period, Value, Acquisitions | $2,684 | $0 |
The_Company
The Company | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | The Company |
Digirad Corporation ("Digirad"), a Delaware corporation, is one of the largest national providers of in-office nuclear cardiology imaging and ultrasound services, and also provides cardiac event monitoring services. These services are provided to physician practices, hospitals, and imaging centers through our Diagnostic Services reportable segment. Digirad also sells solid-state gamma cameras for nuclear cardiology and general nuclear medicine applications, as well as provides service on the products sold, through our Diagnostic Imaging reportable segment. These two reportable segments, Diagnostic Services and Diagnostic Imaging, are collectively referred to herein as the “Company.” | |
The accompanying condensed consolidated financial statements include the operations of both segments. Intercompany accounts and transactions are accounted for at cost and have been eliminated in consolidation. All our long-lived assets are located in the United States and substantially all of our revenues arise from sales activity in the United States. | |
Basis of Presentation | |
The unaudited condensed consolidated financial statements included in this Form 10-Q have been prepared in accordance with the U.S. Securities and Exchange Commission (SEC) instructions for Quarterly Reports on Form 10-Q. Accordingly, the condensed consolidated financial statements are unaudited and do not contain all the information required by U.S. generally accepted accounting principles (GAAP) to be included in a full set of financial statements. The unaudited condensed consolidated balance sheet at December 31, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for a complete set of financial statements. The audited consolidated financial statements for our fiscal year ended December 31, 2014, filed with the SEC on Form 10-K on March 6, 2015, include a summary of our significant accounting policies and should be read in conjunction with this Form 10-Q. In the opinion of management, all material adjustments necessary to present fairly the results of operations, cash flows, and balance sheets for such periods have been included in this Form 10-Q. All such adjustments are of a normal recurring nature. The results of operations for interim periods are not necessarily indicative of the results of operations for the entire year. | |
Preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results could differ from management’s estimates. | |
The financial results for the three months ended March 31, 2015 include the financial results of MD Office Solutions and Telerhythmics, LLC. See Note 3 to the unaudited condensed consolidated financial statements for more information related to the acquisition of MD Office Solutions and Telerhythmics, LLC. | |
Recent Accounting Pronouncement | |
In May 2014, the FASB issued guidance that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers which supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance provides that an entity recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. The guidance allows for either full retrospective or modified retrospective adoption and is currently scheduled to become effective for us in the first quarter of 2017. On April 1, 2015, the FASB voted to propose a one-year deferral to the effective date, but to permit entities to adopt one year earlier if they choose (i.e., the original effective date). We are currently evaluating the alternative transition methods and the potential effects of the adoption of this guidance on our financial statements. |
Basic_and_Diluted_Net_Income_L
Basic and Diluted Net Income (Loss) Per Share | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Earnings Per Share, Basic and Diluted [Abstract] | ||||||
Basic and Diluted Net Income (Loss) Per Share | Basic and Diluted Net Income (Loss) Per Share | |||||
For the three months ended March 31, 2015 and 2014, basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares and vested restricted stock units outstanding during the period. Diluted net income (loss) per common share is calculated to give effect to all dilutive securities, if applicable, using the treasury stock method. | ||||||
The following table sets forth the reconciliation of shares used to compute basic and diluted net income (loss) per share for the periods indicated: | ||||||
Three Months Ended March 31, | ||||||
(shares in thousands) | 2015 | 2014 | ||||
Weighted average shares outstanding - basic | 18,803 | 18,518 | ||||
Dilutive potential common stock outstanding: | ||||||
Stock options | 474 | — | ||||
Restricted stock units | 14 | — | ||||
Weighted average shares outstanding - diluted | 19,291 | 18,518 | ||||
The following weighted average outstanding common stock equivalents were not included in the calculation of diluted net income (loss) per share because their effect was anti-dilutive: | ||||||
Three Months Ended March 31, | ||||||
(shares in thousands) | 2015 | 2014 | ||||
Stock options | 3 | 373 | ||||
Restricted stock units | — | — | ||||
Total | 3 | 373 | ||||
Acquisitions
Acquisitions | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Business Combinations [Abstract] | |||||||||
Acquisitions | Acquisitions | ||||||||
MD Office Solutions (2015) | |||||||||
On March 5, 2015, we entered into an Agreement of Merger and Plan of Reorganization (the Merger Agreement) to acquire MD Office Solutions (MD Office). MD office is a provider of in-office nuclear cardiology imaging in the northern and central California regions. The acquisition expands the geographical region in which we are able to provide our in-office nuclear cardiology imaging services. | |||||||||
Total consideration related to the Merger Agreement paid to the sellers was 610,000 shares of common stock of Digirad Corporation, with a total value at closing of $2,684,000, as well as settlement of a $15,000 accounts receivable balance owed to the Company. The Company issued new shares for the consideration. In addition, there is an earn-out opportunity of up to $400,000 in cash over approximately three years based on the MD Office business meeting certain earnings before interest, taxes, depreciation, and amortization (EBITDA) milestones. The sellers will receive fifty percent of the EBITDA generated by the MD Office business in excess of the EBITDA milestone amounts, which are $650,000 for each of the annual periods ending December 31, 2015, 2016, and 2017, with the target for 2015 being prorated based on the close date. | |||||||||
At March 31, 2015, we have estimated the fair value of the contingent earn-out opportunity to be $6,000. The earn-out opportunity is estimated based on the expected performance of the business over the period from the acquisition date through December 31, 2017, utilizing an income approach. It is reasonably possible that our estimate of the earn-out potential could change in the near term. Any adjustment in the estimated earn-out opportunity until settled will be recorded as a gain or loss to current operations in the period the estimate changes. | |||||||||
The Merger Agreement is also subject to a post-closing purchase price adjustment based on the final working capital balance, as defined in the Merger Agreement, as well as a Registration Rights Agreement related to the common shares provided to the sellers as part of the consideration. | |||||||||
The following table summarizes the preliminary purchase price allocation recognized as of the close date of March 5, 2015: | |||||||||
(in thousands) | Allocation of purchase price | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 3 | |||||||
Accounts receivable, net | 457 | ||||||||
Other current assets | 32 | ||||||||
Total current assets | 492 | ||||||||
Property and equipment, net | 481 | ||||||||
Intangible assets, net | 1,007 | ||||||||
Goodwill | 1,552 | ||||||||
Other assets | 24 | ||||||||
Total assets | $ | 3,556 | |||||||
Liabilities | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 149 | |||||||
Accrued compensation | 81 | ||||||||
Other accrued liabilities | 33 | ||||||||
Total current liabilities | 263 | ||||||||
Deferred tax liability | 588 | ||||||||
Other liabilities | 6 | ||||||||
Total liabilities | $ | 857 | |||||||
The goodwill recognized as part of the transaction primarily represents synergies between Digirad and MD Office that were not separately identified as part of the acquisition valuation process. MD Office activities are included within the Diagnostic Services reportable segment. The resulting goodwill from the acquisition is not deductible for federal and state tax reporting purposes. | |||||||||
The following table summarizes the fair value of acquired identifiable intangible assets as of the acquisition date: | |||||||||
(in thousands) | Weighted Average Useful Lives (in years) | Fair Value | |||||||
Customer relationships | 7 | $ | 639 | ||||||
Trademarks | 5 | 187 | |||||||
Covenants not to compete | 5 | 181 | |||||||
Total intangible assets acquired, excluding goodwill | $ | 1,007 | |||||||
As of March 31, 2015, the final working capital adjustment has not been completed, and therefore the accounting for the acquisition is incomplete. We have estimated the working capital adjustment at March 5, 2015 at approximately $7,000 due to the sellers, which is included in the estimated consideration above. It is reasonably possible this estimated working capital adjustment could change based on the final agreed upon amount pursuant to the Merger Agreement. Any adjustment to this amount will affect the purchase consideration, and therefore the allocation of the purchase price, with the majority of any such adjustment likely affecting the recorded goodwill amount. We anticipate closing the measurement period by June 30, 2015. | |||||||||
The below tables display estimated proforma results had the business acquisition been completed as of January 1, 2014. In deriving the proforma results, we utilized the historical operating results of MD Office and adjusted for the impact of the purchase accounting and transaction costs as if the acquisition occurred on January 1, 2014. | |||||||||
Three Months Ended March 31, | |||||||||
(in thousands) | 2015 | 2014 | |||||||
Revenues | $ | 14,406 | $ | 13,751 | |||||
Net income (loss) | $ | 895 | $ | (324 | ) | ||||
Included within our consolidated operating results for the period ending March 31, 2015 are MD Office operations for the period March 6, 2015 through March 31, 2015 as follows: | |||||||||
March 6, 2015 - March 31, 2015 | |||||||||
Revenues | $ | 216 | |||||||
Net loss | $ | (106 | ) | ||||||
Included within the results for MD Office is approximately $136,000 of transaction costs related to the acquisition. These costs are classified as general and administrative expenses in the consolidated statements of comprehensive income (loss). | |||||||||
Telerhythmics, LLC (2014) | |||||||||
On March 13, 2014, we acquired 100% of the membership interest of Telerhythmics, LLC (Telerhythmics), a provider of 24-hour cardiac monitoring services. Telerhythmics and Digirad each have a very similar customer base, yet with only minor overlaps in current customers. We believe this similar customer base will allow us to leverage each company’s strengths to grow sales and also diversify Digirad's service offerings. | |||||||||
We paid to the sellers of the membership interest (the Sellers) aggregate up-front consideration of $3.4 million and assumed approximately $131,000 in debt. In addition, there is an aggregate earn-out opportunity of up to $501,000 from the period March 14, 2014 through December 31, 2016 based on the Telerhythmics business meeting certain earnings before interest, taxes, depreciation and amortization (EBITDA) milestones. The Sellers will receive fifty percent (50%) of the EBITDA generated by the Telerhythmics business in excess of the EBITDA milestone amounts, which are as follows: | |||||||||
• | $415,000 of EBITDA for the period from the closing date through December 31, 2014; | ||||||||
• | $825,000 of EBITDA for the period from January 1, 2015 through December 31, 2015; and | ||||||||
• | $825,000 of EBITDA for the period from January 1, 2016 through December 31, 2016. | ||||||||
At March 31, 2015, we have estimated the fair value of the contingent earn-out opportunity to be $229,000. The earn-out opportunity is estimated based on the expected performance of the business over the period from January 1, 2015 through December 31, 2016, utilizing an income approach. No earn-out consideration was earned by the Sellers for the period from the closing date through December 31, 2014. It is reasonably possible that our estimate of the earn-out potential could change in the near term. Any adjustment in the estimated earn-out opportunity until settled will be recorded as a gain or loss to current operations in the period the estimate changes. | |||||||||
The allocation of the purchase price to the assets acquired and liabilities assumed on the acquisition date was as follows: | |||||||||
(in thousands) | Allocation of purchase price | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Accounts receivable, net | $ | 256 | |||||||
Other current assets | 34 | ||||||||
Total current assets | 290 | ||||||||
Property and equipment, net | 290 | ||||||||
Intangible assets, net | 2,580 | ||||||||
Goodwill | 1,153 | ||||||||
Total assets | $ | 4,313 | |||||||
Liabilities | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 36 | |||||||
Accrued compensation | 169 | ||||||||
Other accrued liabilities | 356 | ||||||||
Current portion of long-term debt | 131 | ||||||||
Total current liabilities | 692 | ||||||||
Other liabilities | 174 | ||||||||
Total liabilities | $ | 866 | |||||||
The long-term debt was subsequently paid in full on March 28, 2014. | |||||||||
The goodwill recognized as part of the transaction primarily represents synergies between Digirad and Telerhythmics that were not separately identified as part of the acquisition valuation process. Telerhythmics activities are considered their own operating segment, which is aggregated into our Diagnostic Services reportable segment. The resulting goodwill from the acquisition is expected to be deductible for federal and state tax reporting purposes. | |||||||||
The below tables display estimated proforma results had the business acquisition been completed as of January 1, 2013. In deriving the proforma results, we utilized the historical operating results of Telerhythmics and adjusted for the impact of the purchase accounting and transaction costs as if the acquisition occurred on January 1, 2013. | |||||||||
Three Months Ended March 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Revenues | $ | 14,152 | $ | 12,959 | |||||
Net income (loss) | $ | 26 | $ | (2,534 | ) | ||||
Inventories
Inventories | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Inventories | Inventories | |||||||
Our inventories are stated at the lower of cost (first-in, first-out) or market (net realizable value) and we review inventory balances for excess and obsolete inventory levels on a quarterly basis. | ||||||||
(in thousands) | March 31, | December 31, | ||||||
2015 | 2014 | |||||||
Inventories: | ||||||||
Raw materials | $ | 2,385 | $ | 2,439 | ||||
Work-in-process | 1,784 | 2,560 | ||||||
Finished goods | 1,203 | 558 | ||||||
Total inventories | 5,372 | 5,557 | ||||||
Less reserve for excess and obsolete inventories | (1,715 | ) | (1,913 | ) | ||||
Total inventories, net | $ | 3,657 | $ | 3,644 | ||||
Property_and_Equipment
Property and Equipment | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Property and Equipment | Property and Equipment | |||||||
(in thousands) | March 31, | December 31, | ||||||
2015 | 2014 | |||||||
Property and equipment: | ||||||||
Machinery and equipment | $ | 23,962 | $ | 23,412 | ||||
Computer hardware and software | 3,079 | 2,917 | ||||||
Leasehold improvements | 583 | 571 | ||||||
Total property and equipment | 27,624 | 26,900 | ||||||
Less accumulated depreciation | (22,427 | ) | (22,134 | ) | ||||
Total property and equipment, net | $ | 5,197 | $ | 4,766 | ||||
Intangibles_and_Goodwill
Intangibles and Goodwill | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||
Intangibles and Goodwill | Intangibles and Goodwill | ||||||||||||||
March 31, 2015 | |||||||||||||||
(in thousands) | Weighted Average Useful Life (years) | Gross Carrying Amount | Accumulated Amortization | Intangible Assets, Net (1) | |||||||||||
Intangible assets with indefinite useful lives: | |||||||||||||||
Goodwill (2) | Indefinite | $ | 2,889 | $ | — | $ | 2,889 | ||||||||
Intangible assets with finite useful lives: | |||||||||||||||
Customer relationships (2) | 8.2 | $ | 5,489 | $ | (2,982 | ) | $ | 2,507 | |||||||
Trademarks (2) | 8 | 787 | (72 | ) | 715 | ||||||||||
Patents | 13.4 | 141 | (118 | ) | 23 | ||||||||||
Covenants not to compete (2) | 5 | 251 | (17 | ) | 234 | ||||||||||
Total intangible assets, net | $ | 6,668 | $ | (3,189 | ) | $ | 3,479 | ||||||||
December 31, 2014 | |||||||||||||||
Weighted Average Useful Life (years) | Gross Carrying Amount | Accumulated Amortization | Intangible Assets, Net (1) | ||||||||||||
Intangible assets with infinite useful lives: | |||||||||||||||
Goodwill | Indefinite | $ | 1,337 | $ | — | $ | 1,337 | ||||||||
Intangible assets with finite useful lives: | |||||||||||||||
Customer relationships | 8.6 | $ | 4,850 | $ | (2,904 | ) | $ | 1,946 | |||||||
Trademarks | 9 | 600 | (53 | ) | 547 | ||||||||||
Patents | 13.2 | 141 | (116 | ) | 25 | ||||||||||
Covenants not to compete | 5 | 70 | (11 | ) | 59 | ||||||||||
Total intangible assets, net | $ | 5,661 | $ | (3,084 | ) | $ | 2,577 | ||||||||
-1 | Amortization expense for intangible assets, net was $0.1 million for the three months ended March 31, 2015 and 2014. Estimated amortization expense for intangible assets for the remainder of 2015 is $0.4 million, for 2016 is $0.5 million, for 2017 is $0.5 million, for 2018 is $0.5 million, for 2019 is $0.4 million, for 2020 is $0.4 million, and thereafter is $0.8 million. | ||||||||||||||
-2 | As a result of our acquisition of MD Office on March 5, 2015, we recorded certain intangible assets (See Note 3). |
Restructuring_Charges
Restructuring Charges | 3 Months Ended |
Mar. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges |
Facilities restructuring initiative | |
On January 27, 2014, we announced a plan to exit our 47,000 square foot former headquarters facility in Poway, California (the Facilities restructuring initiative). This action was undertaken as the facility had excess space and capacity given our current operating plan. We entered into a termination agreement to end the lease on the facility as of April 30, 2014. The original term of the lease would have continued through February 29, 2016. Concurrently with the termination of the lease for the 47,000 square foot Poway, California facility, we entered into a new lease agreement on January 23, 2014 for a separate 21,300 square foot facility in Poway, California to house our Diagnostic Imaging operations. | |
As a result of the Facilities restructuring initiative, we incurred a total of $0.7 million in restructuring charges which occurred solely during fiscal year 2014. Facilities restructuring charges of $0.4 million were incurred during the three months ended March 31, 2014. No Facilities restructuring charges were incurred during the three months ended March 31, 2015. The charges were comprised of lease termination, moving, and other related costs. All Facilities restructuring charges were included in the Diagnostic Imaging segment. Restructuring liabilities and associated charges were measured at fair value as incurred. |
Financial_Instruments
Financial Instruments | 3 Months Ended | |||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||
Financial Instruments | Financial Instruments | |||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis. The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques we utilize to determine such fair value at March 31, 2015 and December 31, 2014. | ||||||||||||||||||
Fair Value as of March 31, 2015 | ||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets: | ||||||||||||||||||
Corporate debt securities | $ | — | $ | 7,048 | $ | — | $ | 7,048 | ||||||||||
Liabilities: | ||||||||||||||||||
Acquisition related contingent consideration | $ | — | $ | — | $ | 235 | $ | 235 | ||||||||||
Fair Value as of December 31, 2014 | ||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets: | ||||||||||||||||||
Corporate debt securities | $ | — | $ | 7,935 | $ | — | $ | 7,935 | ||||||||||
Liabilities: | ||||||||||||||||||
Acquisition related contingent consideration | $ | — | $ | — | $ | 229 | $ | 229 | ||||||||||
The fair value of our corporate debt securities is determined using proprietary valuation models and analytical tools. These valuation models and analytical tools use market pricing or prices for similar instruments that are both objective and publicly available, including matrix pricing or reported trades, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, and/or offers. We did not reclassify any investments between levels in the fair value hierarchy during the three months ended March 31, 2015. | ||||||||||||||||||
The acquisition related contingent consideration is related to our acquisition of Telerhythmics on March 13, 2014 and acquisition of MD Office on March 5, 2015 (See Note 3). We reassess the fair value of the contingent consideration to be settled in cash related to our acquisitions of Telerhythmics and MD Office on a quarterly basis using the income approach, which is a Level 3 measurement. There was no change to the fair value of the acquisition related contingent consideration during the three months ended March 31, 2015, other than the addition of $6,000 of contingent consideration related to the MD Office acquisition. Significant assumptions used in the measurement include probabilities of achieving the EBITDA milestones. | ||||||||||||||||||
Securities Available-for-Sale | ||||||||||||||||||
Securities available-for-sale primarily consist of investment grade corporate debt securities. We classify all securities as available-for-sale and as current assets, as the sale of such securities may be required prior to maturity to execute management strategies. These securities are carried at fair value, with the unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders' equity until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis. A decline in the market value of any available-for-sale security below cost that is determined to be other than temporary will result in an impairment charge to earnings and a new cost basis for the security is established. No such impairment charges were recorded for any period presented. It is not more likely than not that we will be required to sell investments before recovery of their amortized costs. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the straight-line method and included in interest income. Interest income is recognized when earned. Realized gains and losses on investments in securities are included in other income (expense) within the condensed consolidated statements of comprehensive income (loss). The realized gains and losses on these sales were minimal for the three months ended March 31, 2015 and 2014. | ||||||||||||||||||
The following table sets forth the composition of securities available-for-sale as of March 31, 2015 and December 31, 2014. | ||||||||||||||||||
Maturity in | Amortized Cost | Unrealized | Fair Value | |||||||||||||||
As of March 31, 2015 (in thousands) | Years | Gains | Losses | |||||||||||||||
Corporate debt securities | Less than 1 year | $ | 4,489 | $ | 1 | $ | (2 | ) | $ | 4,488 | ||||||||
Corporate debt securities | 1-3 years | 2,564 | 1 | (5 | ) | 2,560 | ||||||||||||
$ | 7,053 | $ | 2 | $ | (7 | ) | $ | 7,048 | ||||||||||
Maturity in | Amortized Cost | Unrealized | Fair Value | |||||||||||||||
As of December 31, 2014 (in thousands) | Years | Gains | Losses | |||||||||||||||
Corporate debt securities | Less than 1 year | $ | 4,650 | $ | — | $ | (5 | ) | $ | 4,645 | ||||||||
Corporate debt securities | 1-3 years | 3,304 | — | (14 | ) | 3,290 | ||||||||||||
$ | 7,954 | $ | — | $ | (19 | ) | $ | 7,935 | ||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies |
Other matters. In the normal course of business, we have been, and will likely continue to be, subject to litigation or administrative proceedings incidental to our business, such as claims related to customer disputes, employment practices, wage and hour disputes, product liability, professional liability, commercial disputes, licensure restrictions or denials, and warranty or patent infringement. Responding to litigation or administrative proceedings, regardless of whether they have merit, can be expensive and disruptive to normal business operations. We are not able to predict the timing or outcome of these matters. |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes |
For the quarter ended March 31, 2015, we recorded an income tax benefit of approximately $0.6 million related to the release of valuation allowance associated with the acquisition of MD Office. The valuation allowance release occurred when we recorded an increase to our deferred tax liability balance as a result of book and tax basis differences in acquired fixed, intangible and other assets of MD Office. | |
As of December 31, 2014, we had unrecognized tax benefits of approximately $1.6 million. Included in the unrecognized tax benefits were $1.3 million of tax benefits that, if recognized, would reduce our annual effective tax rate, subject to the valuation allowance. | |
We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was our cumulative profitability over the three-year period ended March 31, 2015. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future income. On the basis of this evaluation, as of March 31, 2015, a valuation allowance has been recorded as we cannot conclude that it is more likely than not that the existing deferred tax assets will be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projected future income. | |
We file income tax returns in the U.S. and in various state jurisdictions with varying statutes of limitations. We are no longer subject to income tax examination by tax authorities for years prior to 2009; however, our net operating loss and research credit carry-forwards arising prior to that year are subject to adjustment. It is our policy to recognize interest expense and penalties related to income tax matters as a component of income tax expense. |
Segments
Segments | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Segment Reporting [Abstract] | ||||||||
Segments | Segments | |||||||
Our reporting segments have been determined based on the nature of the products and/or services offered to customers or the nature of their function in the organization. We evaluate performance based on the operating income (loss) contributed by each segment. | ||||||||
On March 5, 2015, we acquired MD Office (See Note 3). As part of the acquisition, we evaluated MD Office's business operations, both on a quantitative and qualitative basis, and determined its business operations appropriately met the criteria to be aggregated with our Diagnostic Services business in accordance with the authoritative accounting guidance for segment reporting. | ||||||||
The financial results below for the three months ended March 31, 2015 include the financial results of MD Office for the period since the acquisition date of March 5, 2015. | ||||||||
Three Months Ended March 31, | ||||||||
(in thousands) | 2015 | 2014 | ||||||
Gross profit by segment: | ||||||||
Diagnostic Services | $ | 2,058 | $ | 2,021 | ||||
Diagnostic Imaging | 1,590 | 1,421 | ||||||
Condensed consolidated gross profit | $ | 3,648 | $ | 3,442 | ||||
Income (loss) from operations by segment: | ||||||||
Diagnostic Services | $ | (537 | ) | $ | (333 | ) | ||
Diagnostic Imaging (1) | 702 | 178 | ||||||
Condensed consolidated income (loss) from operations | $ | 165 | $ | (155 | ) | |||
Depreciation and amortization: | ||||||||
Diagnostic Services | $ | 417 | $ | 375 | ||||
Diagnostic Imaging | 71 | 78 | ||||||
Condensed consolidated depreciation and amortization | $ | 488 | $ | 453 | ||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | ||||||
Identifiable assets by segment: | ||||||||
Diagnostic Services | $ | 21,596 | $ | 18,724 | ||||
Diagnostic Imaging | 23,274 | 23,177 | ||||||
Condensed consolidated assets | $ | 44,870 | $ | 41,901 | ||||
(1) Included in the Diagnostic Imaging income from operations for the three months ended March 31, 2014, are approximately $0.4 million of charges associated with our Facilities restructuring initiative (See Note 7). |
Subsequent_Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Events |
On April 30, 2015, the Company announced a cash dividend of $0.05 per share payable on May 27, 2015 to shareholders of record on May 13, 2015. |
Financial_Instruments_policies
Financial Instruments (policies) | 3 Months Ended |
Mar. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments, Policy | The fair value of our corporate debt securities is determined using proprietary valuation models and analytical tools. These valuation models and analytical tools use market pricing or prices for similar instruments that are both objective and publicly available, including matrix pricing or reported trades, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, and/or offers. |
Securities Available-for-sale, Policy | Securities Available-for-Sale |
Securities available-for-sale primarily consist of investment grade corporate debt securities. We classify all securities as available-for-sale and as current assets, as the sale of such securities may be required prior to maturity to execute management strategies. These securities are carried at fair value, with the unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders' equity until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis. A decline in the market value of any available-for-sale security below cost that is determined to be other than temporary will result in an impairment charge to earnings and a new cost basis for the security is established. No such impairment charges were recorded for any period presented. It is not more likely than not that we will be required to sell investments before recovery of their amortized costs. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the straight-line method and included in interest income. Interest income is recognized when earned. Realized gains and losses on investments in securities are included in other income (expense) within the condensed consolidated statements of comprehensive income (loss). |
Schedule_of_Earnings_Per_Share
Schedule of Earnings Per Share, Basic and Diluted (Tables) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Earnings Per Share, Basic and Diluted [Abstract] | ||||||
Schedule of Earnings (Loss) Per Share, Basic and Diluted | The following table sets forth the reconciliation of shares used to compute basic and diluted net income (loss) per share for the periods indicated: | |||||
Three Months Ended March 31, | ||||||
(shares in thousands) | 2015 | 2014 | ||||
Weighted average shares outstanding - basic | 18,803 | 18,518 | ||||
Dilutive potential common stock outstanding: | ||||||
Stock options | 474 | — | ||||
Restricted stock units | 14 | — | ||||
Weighted average shares outstanding - diluted | 19,291 | 18,518 | ||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings (Loss) Per Share | The following weighted average outstanding common stock equivalents were not included in the calculation of diluted net income (loss) per share because their effect was anti-dilutive: | |||||
Three Months Ended March 31, | ||||||
(shares in thousands) | 2015 | 2014 | ||||
Stock options | 3 | 373 | ||||
Restricted stock units | — | — | ||||
Total | 3 | 373 | ||||
Acquisitions_Tables
Acquisitions (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
MD Office [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Schedule of Preliminary Allocation of Purchase Price | The following table summarizes the preliminary purchase price allocation recognized as of the close date of March 5, 2015: | ||||||||
(in thousands) | Allocation of purchase price | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 3 | |||||||
Accounts receivable, net | 457 | ||||||||
Other current assets | 32 | ||||||||
Total current assets | 492 | ||||||||
Property and equipment, net | 481 | ||||||||
Intangible assets, net | 1,007 | ||||||||
Goodwill | 1,552 | ||||||||
Other assets | 24 | ||||||||
Total assets | $ | 3,556 | |||||||
Liabilities | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 149 | |||||||
Accrued compensation | 81 | ||||||||
Other accrued liabilities | 33 | ||||||||
Total current liabilities | 263 | ||||||||
Deferred tax liability | 588 | ||||||||
Other liabilities | 6 | ||||||||
Total liabilities | $ | 857 | |||||||
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The following table summarizes the fair value of acquired identifiable intangible assets as of the acquisition date: | ||||||||
(in thousands) | Weighted Average Useful Lives (in years) | Fair Value | |||||||
Customer relationships | 7 | $ | 639 | ||||||
Trademarks | 5 | 187 | |||||||
Covenants not to compete | 5 | 181 | |||||||
Total intangible assets acquired, excluding goodwill | $ | 1,007 | |||||||
Schedule of Estimated Proforma Results | The below tables display estimated proforma results had the business acquisition been completed as of January 1, 2014. In deriving the proforma results, we utilized the historical operating results of MD Office and adjusted for the impact of the purchase accounting and transaction costs as if the acquisition occurred on January 1, 2014. | ||||||||
Three Months Ended March 31, | |||||||||
(in thousands) | 2015 | 2014 | |||||||
Revenues | $ | 14,406 | $ | 13,751 | |||||
Net income (loss) | $ | 895 | $ | (324 | ) | ||||
Consolidated Operating Results of Acquired Entity | Included within our consolidated operating results for the period ending March 31, 2015 are MD Office operations for the period March 6, 2015 through March 31, 2015 as follows: | ||||||||
March 6, 2015 - March 31, 2015 | |||||||||
Revenues | $ | 216 | |||||||
Net loss | $ | (106 | ) | ||||||
Telerhythmics [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Schedule of Preliminary Allocation of Purchase Price | he allocation of the purchase price to the assets acquired and liabilities assumed on the acquisition date was as follows: | ||||||||
(in thousands) | Allocation of purchase price | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Accounts receivable, net | $ | 256 | |||||||
Other current assets | 34 | ||||||||
Total current assets | 290 | ||||||||
Property and equipment, net | 290 | ||||||||
Intangible assets, net | 2,580 | ||||||||
Goodwill | 1,153 | ||||||||
Total assets | $ | 4,313 | |||||||
Liabilities | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 36 | |||||||
Accrued compensation | 169 | ||||||||
Other accrued liabilities | 356 | ||||||||
Current portion of long-term debt | 131 | ||||||||
Total current liabilities | 692 | ||||||||
Other liabilities | 174 | ||||||||
Total liabilities | $ | 866 | |||||||
Schedule of Estimated Proforma Results | The below tables display estimated proforma results had the business acquisition been completed as of January 1, 2013. In deriving the proforma results, we utilized the historical operating results of Telerhythmics and adjusted for the impact of the purchase accounting and transaction costs as if the acquisition occurred on January 1, 2013. | ||||||||
Three Months Ended March 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Revenues | $ | 14,152 | $ | 12,959 | |||||
Net income (loss) | $ | 26 | $ | (2,534 | ) | ||||
Inventories_Tables
Inventories (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Schedule of Inventory | Our inventories are stated at the lower of cost (first-in, first-out) or market (net realizable value) and we review inventory balances for excess and obsolete inventory levels on a quarterly basis. | |||||||
(in thousands) | March 31, | December 31, | ||||||
2015 | 2014 | |||||||
Inventories: | ||||||||
Raw materials | $ | 2,385 | $ | 2,439 | ||||
Work-in-process | 1,784 | 2,560 | ||||||
Finished goods | 1,203 | 558 | ||||||
Total inventories | 5,372 | 5,557 | ||||||
Less reserve for excess and obsolete inventories | (1,715 | ) | (1,913 | ) | ||||
Total inventories, net | $ | 3,657 | $ | 3,644 | ||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Property and Equipment | Property and Equipment | |||||||
(in thousands) | March 31, | December 31, | ||||||
2015 | 2014 | |||||||
Property and equipment: | ||||||||
Machinery and equipment | $ | 23,962 | $ | 23,412 | ||||
Computer hardware and software | 3,079 | 2,917 | ||||||
Leasehold improvements | 583 | 571 | ||||||
Total property and equipment | 27,624 | 26,900 | ||||||
Less accumulated depreciation | (22,427 | ) | (22,134 | ) | ||||
Total property and equipment, net | $ | 5,197 | $ | 4,766 | ||||
Intangibles_and_Goodwill_Table
Intangibles and Goodwill (Tables) | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||
Schedule of Intangible Assets and Goodwill | |||||||||||||||
March 31, 2015 | |||||||||||||||
(in thousands) | Weighted Average Useful Life (years) | Gross Carrying Amount | Accumulated Amortization | Intangible Assets, Net (1) | |||||||||||
Intangible assets with indefinite useful lives: | |||||||||||||||
Goodwill (2) | Indefinite | $ | 2,889 | $ | — | $ | 2,889 | ||||||||
Intangible assets with finite useful lives: | |||||||||||||||
Customer relationships (2) | 8.2 | $ | 5,489 | $ | (2,982 | ) | $ | 2,507 | |||||||
Trademarks (2) | 8 | 787 | (72 | ) | 715 | ||||||||||
Patents | 13.4 | 141 | (118 | ) | 23 | ||||||||||
Covenants not to compete (2) | 5 | 251 | (17 | ) | 234 | ||||||||||
Total intangible assets, net | $ | 6,668 | $ | (3,189 | ) | $ | 3,479 | ||||||||
December 31, 2014 | |||||||||||||||
Weighted Average Useful Life (years) | Gross Carrying Amount | Accumulated Amortization | Intangible Assets, Net (1) | ||||||||||||
Intangible assets with infinite useful lives: | |||||||||||||||
Goodwill | Indefinite | $ | 1,337 | $ | — | $ | 1,337 | ||||||||
Intangible assets with finite useful lives: | |||||||||||||||
Customer relationships | 8.6 | $ | 4,850 | $ | (2,904 | ) | $ | 1,946 | |||||||
Trademarks | 9 | 600 | (53 | ) | 547 | ||||||||||
Patents | 13.2 | 141 | (116 | ) | 25 | ||||||||||
Covenants not to compete | 5 | 70 | (11 | ) | 59 | ||||||||||
Total intangible assets, net | $ | 5,661 | $ | (3,084 | ) | $ | 2,577 | ||||||||
-1 | Amortization expense for intangible assets, net was $0.1 million for the three months ended March 31, 2015 and 2014. Estimated amortization expense for intangible assets for the remainder of 2015 is $0.4 million, for 2016 is $0.5 million, for 2017 is $0.5 million, for 2018 is $0.5 million, for 2019 is $0.4 million, for 2020 is $0.4 million, and thereafter is $0.8 million. | ||||||||||||||
-2 | As a result of our acquisition of MD Office on March 5, 2015, we recorded certain intangible assets |
Financial_Instruments_Tables
Financial Instruments (Tables) | 3 Months Ended | |||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques | The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques we utilize to determine such fair value at March 31, 2015 and December 31, 2014. | |||||||||||||||||
Fair Value as of March 31, 2015 | ||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets: | ||||||||||||||||||
Corporate debt securities | $ | — | $ | 7,048 | $ | — | $ | 7,048 | ||||||||||
Liabilities: | ||||||||||||||||||
Acquisition related contingent consideration | $ | — | $ | — | $ | 235 | $ | 235 | ||||||||||
Fair Value as of December 31, 2014 | ||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets: | ||||||||||||||||||
Corporate debt securities | $ | — | $ | 7,935 | $ | — | $ | 7,935 | ||||||||||
Liabilities: | ||||||||||||||||||
Acquisition related contingent consideration | $ | — | $ | — | $ | 229 | $ | 229 | ||||||||||
Available-for-sale Securities | The following table sets forth the composition of securities available-for-sale as of March 31, 2015 and December 31, 2014. | |||||||||||||||||
Maturity in | Amortized Cost | Unrealized | Fair Value | |||||||||||||||
As of March 31, 2015 (in thousands) | Years | Gains | Losses | |||||||||||||||
Corporate debt securities | Less than 1 year | $ | 4,489 | $ | 1 | $ | (2 | ) | $ | 4,488 | ||||||||
Corporate debt securities | 1-3 years | 2,564 | 1 | (5 | ) | 2,560 | ||||||||||||
$ | 7,053 | $ | 2 | $ | (7 | ) | $ | 7,048 | ||||||||||
Maturity in | Amortized Cost | Unrealized | Fair Value | |||||||||||||||
As of December 31, 2014 (in thousands) | Years | Gains | Losses | |||||||||||||||
Corporate debt securities | Less than 1 year | $ | 4,650 | $ | — | $ | (5 | ) | $ | 4,645 | ||||||||
Corporate debt securities | 1-3 years | 3,304 | — | (14 | ) | 3,290 | ||||||||||||
$ | 7,954 | $ | — | $ | (19 | ) | $ | 7,935 | ||||||||||
Segments_Tables
Segments (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Segment Reporting [Abstract] | ||||||||
Schedule of Segment Reporting Information, by Segment | The financial results below for the three months ended March 31, 2015 include the financial results of MD Office for the period since the acquisition date of March 5, 2015. | |||||||
Three Months Ended March 31, | ||||||||
(in thousands) | 2015 | 2014 | ||||||
Gross profit by segment: | ||||||||
Diagnostic Services | $ | 2,058 | $ | 2,021 | ||||
Diagnostic Imaging | 1,590 | 1,421 | ||||||
Condensed consolidated gross profit | $ | 3,648 | $ | 3,442 | ||||
Income (loss) from operations by segment: | ||||||||
Diagnostic Services | $ | (537 | ) | $ | (333 | ) | ||
Diagnostic Imaging (1) | 702 | 178 | ||||||
Condensed consolidated income (loss) from operations | $ | 165 | $ | (155 | ) | |||
Depreciation and amortization: | ||||||||
Diagnostic Services | $ | 417 | $ | 375 | ||||
Diagnostic Imaging | 71 | 78 | ||||||
Condensed consolidated depreciation and amortization | $ | 488 | $ | 453 | ||||
Reconciliation of Assets from Segment to Consolidated | ||||||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | ||||||
Identifiable assets by segment: | ||||||||
Diagnostic Services | $ | 21,596 | $ | 18,724 | ||||
Diagnostic Imaging | 23,274 | 23,177 | ||||||
Condensed consolidated assets | $ | 44,870 | $ | 41,901 | ||||
(1) Included in the Diagnostic Imaging income from operations for the three months ended March 31, 2014, are approximately $0.4 million of charges associated with our Facilities restructuring initiative (See Note 7). |
The_Company_Details
The Company (Details) | 3 Months Ended |
Mar. 31, 2015 | |
segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Basic_and_Diluted_Net_Income_L1
Basic and Diluted Net Income (Loss) Per Share (Details) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Earnings Per Share, Basic and Diluted [Abstract] | ||
Weighted average shares outstanding – basic | 18,803 | 18,518 |
Dilutive potential common stock outstanding: | ||
Stock options | 474 | 0 |
Restricted stock units | 14 | 0 |
Weighted average shares outstanding – diluted | 19,291 | 18,518 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average outstanding securities excluded from computation of diluted net income (loss) per share | 3 | 373 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average outstanding securities excluded from computation of diluted net income (loss) per share | 3 | 373 |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average outstanding securities excluded from computation of diluted net income (loss) per share | 0 | 0 |
Acquisitions_Details
Acquisitions (Details) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | |||
Share data in Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 05, 2015 | Mar. 31, 2015 | Mar. 13, 2014 | Dec. 31, 2014 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Stock Issued During Period, Value, Acquisitions | $2,684,000 | $0 | ||||||
Net loss | 745,000 | -148,000 | ||||||
Finite-lived Intangible Assets Acquired | 3,479,000 | [1] | 3,479,000 | [1] | 2,577,000 | |||
MD Office [Member] | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Stock Issued During Period, Shares, Acquisitions | 610 | |||||||
Stock Issued During Period, Value, Acquisitions | 2,684,000 | |||||||
business combination, settlement of accounts receivable owed to the Company | 15,000 | |||||||
Aggregate earn-out opportunity | 400,000 | |||||||
Percentage of EBITDA to be received by sellers (percent) | 50.00% | |||||||
Estimated fair value of contingent earn-out opportunity | 6,000 | 6,000 | ||||||
Cash and cash equivalents | 3,000 | |||||||
Accounts receivable, net | 457,000 | |||||||
Other current assets | 32,000 | |||||||
Total current assets | 492,000 | |||||||
Property and equipment, net | 481,000 | |||||||
Intangible assets, net | 1,007,000 | |||||||
Goodwill | 1,552,000 | |||||||
Other assets | 24,000 | |||||||
Total assets | 3,556,000 | |||||||
Accounts payable | 149,000 | |||||||
Accrued compensation | 81,000 | |||||||
Other accrued liabilities | 33,000 | |||||||
Total current liabilities | 263,000 | |||||||
Deferred tax liability | 588,000 | |||||||
Other liabilities | 6,000 | |||||||
Total liabilities | 857,000 | |||||||
Revenues | 14,406,000 | 13,751,000 | ||||||
Net income (loss) | 895,000 | -324,000 | ||||||
Net loss | -106,000 | |||||||
Finite-lived Intangible Assets Acquired | 1,007,000 | |||||||
Business Acquisition, Expected Working Capital Adjustment | 7,000 | 7,000 | ||||||
Revenue, Net | 216,000 | |||||||
Transaction costs included within results for Telerhythmics | 136,000 | 136,000 | ||||||
Telerhythmics [Member] | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Aggregate earn-out opportunity | 501,000 | |||||||
Percentage of EBITDA to be received by sellers (percent) | 50.00% | |||||||
Estimated fair value of contingent earn-out opportunity | 229,000 | 229,000 | ||||||
Accounts receivable, net | 256,000 | 256,000 | ||||||
Other current assets | 34,000 | 34,000 | ||||||
Total current assets | 290,000 | 290,000 | ||||||
Property and equipment, net | 290,000 | 290,000 | ||||||
Intangible assets, net | 2,580,000 | 2,580,000 | ||||||
Goodwill | 1,153,000 | 1,153,000 | ||||||
Total assets | 4,313,000 | 4,313,000 | ||||||
Accounts payable | 36,000 | 36,000 | ||||||
Accrued compensation | 169,000 | 169,000 | ||||||
Other accrued liabilities | 356,000 | 356,000 | ||||||
Total current liabilities | 692,000 | 692,000 | ||||||
Other liabilities | 174,000 | 174,000 | ||||||
Total liabilities | 866,000 | 866,000 | ||||||
Revenues | 14,152,000 | 12,959,000 | ||||||
Net income (loss) | 26,000 | -2,534,000 | ||||||
Membership interest acquired in business acquisition (percent) | 100.00% | |||||||
Aggregate upfront consideration paid | 3,400,000 | |||||||
Debt assumed in business acquisition | 131,000 | 131,000 | 131,000 | |||||
Year one to Year three [Member] | MD Office [Member] | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Aggregate earn-out opportunity | 650,000 | |||||||
Year one [Member] | Telerhythmics [Member] | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Aggregate earn-out opportunity | 415,000 | |||||||
Year two [Member] | Telerhythmics [Member] | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Aggregate earn-out opportunity | 825,000 | |||||||
Year three [Member] | Telerhythmics [Member] | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Aggregate earn-out opportunity | 825,000 | |||||||
Customer Relationships [Member] | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Finite-Lived Intangible Asset, Useful Life | 8 years 2 months 12 days | [2] | 8 years 7 months 6 days | |||||
Finite-lived Intangible Assets Acquired | 2,507,000 | [1],[2] | 2,507,000 | [1],[2] | 1,946,000 | |||
Customer Relationships [Member] | MD Office [Member] | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Finite-Lived Intangible Asset, Useful Life | 7 years | |||||||
Finite-lived Intangible Assets Acquired | 639,000 | |||||||
Trademarks [Member] | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Finite-Lived Intangible Asset, Useful Life | 7 years 11 months 19 days | [2] | 9 years | |||||
Finite-lived Intangible Assets Acquired | 715,000 | [1],[2] | 715,000 | [1],[2] | 547,000 | |||
Trademarks [Member] | MD Office [Member] | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Finite-Lived Intangible Asset, Useful Life | 5 years | |||||||
Finite-lived Intangible Assets Acquired | 187,000 | |||||||
Noncompete Agreements [Member] | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Finite-Lived Intangible Asset, Useful Life | 5 years | [2] | 5 years | |||||
Finite-lived Intangible Assets Acquired | 234,000 | [1],[2] | 234,000 | [1],[2] | 59,000 | |||
Noncompete Agreements [Member] | MD Office [Member] | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Finite-Lived Intangible Asset, Useful Life | 5 years | |||||||
Finite-lived Intangible Assets Acquired | $181,000 | |||||||
[1] | mortization expense for intangible assets, net was $0.1 million for the three months ended March 31, 2015 and 2014. Estimated amortization expense for intangible assets for the remainder of 2015 is $0.4 million, for 2016 is $0.5 million, for 2017 is $0.5 million, for 2018 is $0.5 million, for 2019 is $0.4 million, for 2020 is $0.4 million, and thereafter is $0.8 million. | |||||||
[2] | . |
Inventories_Details
Inventories (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Raw materials | $2,385 | $2,439 |
Work-in-process | 1,784 | 2,560 |
Finished goods | 1,203 | 558 |
Total inventories | 5,372 | 5,557 |
Less reserve for excess and obsolete inventories | -1,715 | -1,913 |
Total inventories, net | $3,657 | $3,644 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Property, and equipment, gross | $27,624 | $26,900 |
Less accumulated depreciation | -22,427 | -22,134 |
Total property and equipment, net | 5,197 | 4,766 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, and equipment, gross | 23,962 | 23,412 |
Computer hardware and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, and equipment, gross | 3,079 | 2,917 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, and equipment, gross | $583 | $571 |
Intangibles_and_Goodwill_Detai
Intangibles and Goodwill (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | ||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill, Gross | $2,889,000 | [1] | $1,337,000 | |
Goodwill | 2,889,000 | [1],[2] | 1,337,000 | |
Finite-Lived Intangible Assets, Gross | 6,668,000 | 5,661,000 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | -3,189,000 | -3,084,000 | ||
Finite-Lived Intangible Assets, Net | 3,479,000 | [2] | 2,577,000 | |
Amortization of intangible assets | 105,000 | 66,000 | ||
Finite-Lived Intangible Assets, Amortization Expense, 2015 | 400,000 | |||
Finite-Lived Intangible Assets, Amortization Expense, 2016 | 500,000 | |||
Finite-Lived Intangible Assets, Amortization Expense, 2017 | 500,000 | |||
Finite-Lived Intangible Assets, Amortization Expense, 2018 | 500,000 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 400,000 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 400,000 | |||
Finite-Lived Intangible Assets, Amortization Expense, 2019 and thereafter | 800,000 | |||
Customer Relationships [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 8 years 2 months 12 days | [1] | 8 years 7 months 6 days | |
Finite-Lived Intangible Assets, Gross | 5,489,000 | [1] | 4,850,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | -2,982,000 | [1] | -2,904,000 | |
Finite-Lived Intangible Assets, Net | 2,507,000 | [1],[2] | 1,946,000 | |
Trademarks [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 7 years 11 months 19 days | [1] | 9 years | |
Finite-Lived Intangible Assets, Gross | 787,000 | [1] | 600,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | -72,000 | [1] | -53,000 | |
Finite-Lived Intangible Assets, Net | 715,000 | [1],[2] | 547,000 | |
Patents [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 13 years 5 months 8 days | 13 years 2 months 12 days | ||
Finite-Lived Intangible Assets, Gross | 141,000 | 141,000 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | -118,000 | -116,000 | ||
Finite-Lived Intangible Assets, Net | 23,000 | [2] | 25,000 | |
Noncompete Agreements [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 5 years | [1] | 5 years | |
Finite-Lived Intangible Assets, Gross | 251,000 | [1] | 70,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | -17,000 | [1] | -11,000 | |
Finite-Lived Intangible Assets, Net | $234,000 | [1],[2] | $59,000 | |
[1] | . | |||
[2] | mortization expense for intangible assets, net was $0.1 million for the three months ended March 31, 2015 and 2014. Estimated amortization expense for intangible assets for the remainder of 2015 is $0.4 million, for 2016 is $0.5 million, for 2017 is $0.5 million, for 2018 is $0.5 million, for 2019 is $0.4 million, for 2020 is $0.4 million, and thereafter is $0.8 million. |
Restructuring_Charges_Faciliti
Restructuring Charges - Facilities Restructuring Initiative (Details) (Facilities Restructuring Initiative [Member], USD $) | 3 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2014 | Jan. 27, 2014 | Jan. 23, 2014 |
sqft | sqft | |||
Facilities Restructuring Initiative [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Area of Real Estate Property | 47,000 | 21,300 | ||
Restructuring and Related Cost, Incurred Cost | $0.40 | $0.70 |
Financial_Instruments_Assets_a
Financial Instruments Assets and Liabilities at Fair Value on a Recurring Basis (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Estimate of Fair Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, Fair Value Disclosure | $235 | $229 |
Corporate Debt Securities [Member] | Estimate of Fair Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate debt securities | 7,048 | 7,935 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, Fair Value Disclosure | 0 | 0 |
Level 1 [Member] | Corporate Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate debt securities | 0 | 0 |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, Fair Value Disclosure | 0 | 0 |
Level 2 [Member] | Corporate Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate debt securities | 7,048 | 7,935 |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, Fair Value Disclosure | 235 | 229 |
Level 3 [Member] | Corporate Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate debt securities | $0 | $0 |
Financial_Instruments_Securiti
Financial Instruments Securities Available for Sale (Details) (Corporate Debt Securities [Member], USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $7,053 | $7,954 |
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax | 2 | 0 |
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax | -7 | -19 |
Fair Value | 7,048 | 7,935 |
Less than 1 year [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 4,489 | 4,650 |
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax | 1 | 0 |
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax | -2 | -5 |
Fair Value | 4,488 | 4,645 |
1-3 years [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,564 | 3,304 |
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax | 1 | 0 |
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax | -5 | -14 |
Fair Value | $2,560 | $3,290 |
Income_Tax_Details
Income Tax (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit | $580,000 | ($2,000) | |
Unrecognized tax benefits | 1,600,000 | ||
Unrecognized tax benefits that would impact effective tax rate | $1,300,000 |
Segments_Details
Segments (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Segment Reporting Information [Line Items] | ||||
Gross profit by segment | $3,648 | $3,442 | ||
Income (loss) from operations by segment | 165 | -155 | ||
Depreciation and amortization | 488 | 453 | ||
Restructuring charges | 0 | 441 | ||
Diagnostic Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Gross profit by segment | 2,058 | 2,021 | ||
Income (loss) from operations by segment | -537 | -333 | ||
Depreciation and amortization | 417 | 375 | ||
Diagnostic Imaging [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Gross profit by segment | 1,590 | 1,421 | ||
Income (loss) from operations by segment | 702 | [1] | 178 | [1] |
Depreciation and amortization | $71 | $78 | ||
[1] | Included in the Diagnostic Imaging income from operations for the three months ended March 31, 2014, are approximately $0.4 million of charges associated with our Facilities restructuring initiative (See Note 7). |
Segments_Asset_by_Segment_Deta
Segments Asset by Segment Detail (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets by segment | $44,870 | $41,901 |
Diagnostic Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets by segment | 21,596 | 18,724 |
Diagnostic Imaging [Member] | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets by segment | $23,274 | $23,177 |
Subsequent_Event_Detail_Detail
Subsequent Event Detail (Details) (USD $) | 3 Months Ended | 0 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Apr. 30, 2015 | |
Subsequent Event [Line Items] | |||
Dividends declared per common share (in US$ per share) | $0.05 | $0.05 | |
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Dividends declared per common share (in US$ per share) | $0.05 |