Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2014 | May 01, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | HANGER, INC. | ||
Entity Central Index Key | 722,723 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2014 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 263.4 | ||
Entity Common Stock, Shares Outstanding | 36,193,611 | ||
Document Fiscal Year Focus | 2,014 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | Dec. 31, 2011 |
Current assets: | |||||||||||
Cash and cash equivalents | $ 11,699 | $ 1,565 | $ 1,630 | $ 45,836 | $ 1,613 | $ 1,246 | $ 2,858 | $ 6,273 | $ 13,130 | $ 13,130 | $ 43,323 |
Accounts receivable, net of allowance for doubtful accounts of $9,944 and $6,472 in 2014 and 2013, respectively | 174,248 | 165,787 | 159,471 | 146,060 | 154,739 | 149,952 | 150,276 | 139,756 | |||
Inventories | 70,517 | 86,155 | 90,506 | 85,783 | 82,257 | 83,293 | 81,214 | 79,575 | |||
Other current assets | 21,356 | 46,604 | 33,097 | 27,466 | 21,606 | 22,861 | 28,937 | 29,313 | |||
Deferred income taxes | 109,252 | 70,333 | 70,789 | 71,569 | 75,616 | 64,209 | 64,153 | 61,055 | |||
Assets held for sale | 8,215 | ||||||||||
Total current assets | 395,287 | 370,444 | 355,493 | 376,714 | 335,831 | 321,561 | 327,438 | 315,972 | |||
Non-current assets: | |||||||||||
Property, plant and equipment, net | 112,350 | 114,223 | 119,677 | 120,225 | 116,289 | 113,144 | 109,475 | 106,249 | |||
Goodwill | 710,053 | 716,571 | 715,010 | 702,769 | 682,628 | 679,721 | 678,748 | 675,451 | 675,468 | ||
Other intangible assets, net | 58,515 | 60,553 | 62,600 | 60,352 | 56,240 | 56,906 | 58,520 | 59,311 | |||
Debt issuance costs, net | 6,648 | 7,110 | 7,572 | 8,034 | 8,496 | 8,958 | 9,420 | 13,169 | |||
Other assets | 19,452 | 20,055 | 18,384 | 17,826 | 15,504 | 16,305 | 15,872 | 16,064 | |||
Total assets | 1,302,305 | 1,288,956 | 1,278,736 | 1,285,920 | 1,214,988 | 1,196,595 | 1,199,473 | 1,186,216 | 1,201,288 | ||
Current liabilities: | |||||||||||
Current portion of long-term debt | 26,852 | 25,677 | 24,505 | 21,906 | 17,728 | 15,437 | 15,652 | 13,229 | |||
Accounts payable | 48,554 | 49,658 | 45,642 | 43,964 | 44,519 | 44,921 | 47,798 | 36,189 | |||
Accrued expenses and other current liabilities | 91,778 | 68,118 | 47,436 | 44,508 | 44,433 | 41,043 | 41,605 | 40,096 | |||
Accrued interest payable | 2,366 | 5,950 | 2,274 | 5,646 | 2,019 | 5,934 | 2,351 | 6,645 | |||
Accrued compensation related costs | 41,288 | 35,656 | 24,664 | 21,417 | 38,606 | 35,304 | 25,914 | 22,084 | |||
Total current liabilities | 210,838 | 185,059 | 144,521 | 137,441 | 147,305 | 142,639 | 133,320 | 118,243 | |||
Long-term liabilities: | |||||||||||
Long-term debt, less current portion | 502,132 | 511,698 | 535,093 | 559,096 | 469,818 | 474,068 | 505,751 | 522,189 | |||
Deferred income taxes | 59,924 | 62,786 | 62,338 | 61,640 | 65,329 | 65,906 | 65,935 | 66,489 | |||
Other liabilities | 45,875 | 44,150 | 44,734 | 42,120 | 41,223 | 39,256 | 37,744 | 37,257 | |||
Total liabilities | 818,769 | 803,693 | 786,686 | 800,297 | 723,675 | 721,869 | 742,750 | 744,178 | |||
Commitments and contingent liabilities (Note Q) | |||||||||||
Shareholders' Equity: | |||||||||||
Common stock, $.01 par value; 60,000,000 shares authorized, 35,540,630 shares issued and 35,399,476 shares outstanding and 35,158,196 shares issued and 35,017,042 shares outstanding in 2014 and 2013. respectively | 355 | 355 | 355 | 355 | 351 | 352 | 352 | 350 | |||
Additional paid-in capital | 307,166 | 304,596 | 302,581 | 299,384 | 295,113 | 291,455 | 288,971 | 285,486 | |||
Accumulated other comprehensive loss | (1,888) | (1,020) | (1,020) | (1,020) | (1,020) | (1,919) | (1,919) | (1,919) | |||
Retained earnings | 178,559 | 181,988 | 190,790 | 187,560 | 197,525 | 185,494 | 169,975 | 158,777 | 157,014 | 108,990 | |
Shareholders' equity, excluding treasury stock | 484,192 | 485,919 | 492,706 | 486,279 | 491,969 | 475,382 | 457,379 | 442,694 | |||
Treasury stock, at cost 141,154 shares at 2014 and 2013, respectively | (656) | (656) | (656) | (656) | (656) | (656) | (656) | (656) | |||
Total shareholders' equity | 483,536 | 485,263 | 492,050 | 485,623 | 491,313 | 474,726 | 456,723 | 442,038 | $ 437,055 | $ 378,031 | |
Total liabilities and shareholders' equity | $ 1,302,305 | $ 1,288,956 | $ 1,278,736 | $ 1,285,920 | $ 1,214,988 | $ 1,196,595 | $ 1,199,473 | $ 1,186,216 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED BALANCE SHEETS | ||||||||||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 9,944 | $ 10,197 | $ 9,078 | $ 7,920 | $ 6,472 | $ 5,837 | $ 4,971 | $ 4,941 | $ 4,928 | $ 3,844 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | ||
Common stock, shares issued | 35,540,630 | 35,537,528 | 35,527,002 | 35,486,033 | 35,158,196 | 35,062,367 | 35,062,931 | 34,953,812 | ||
Common stock, shares outstanding | 35,399,476 | 35,396,374 | 35,385,848 | 35,344,879 | 35,017,042 | 34,921,213 | 34,921,777 | 34,812,658 | ||
Treasury stock, shares | 141,154 | 141,154 | 141,154 | 141,154 | 141,154 | 141,154 | 141,154 | 141,154 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME | |||||||||||||||
Net revenue | $ 278,910 | $ 261,699 | $ 255,574 | $ 215,917 | $ 255,048 | $ 253,217 | $ 253,667 | $ 213,837 | $ 471,491 | $ 467,504 | $ 733,190 | $ 720,721 | $ 1,012,100 | $ 975,769 | $ 923,521 |
Material costs | 86,365 | 86,238 | 81,109 | 70,572 | 77,831 | 78,933 | 77,273 | 67,966 | 151,681 | 145,239 | 237,919 | 224,172 | 324,284 | 302,003 | 285,873 |
Personnel costs | 93,516 | 89,104 | 88,738 | 82,228 | 83,742 | 82,071 | 82,836 | 77,131 | 170,966 | 159,967 | 260,070 | 242,038 | 353,586 | 325,780 | 299,004 |
Other operating costs | 35,636 | 34,621 | 34,291 | 32,337 | 27,398 | 28,526 | 28,620 | 31,223 | 66,628 | 59,843 | 101,249 | 88,369 | 136,885 | 115,767 | 110,881 |
General and administrative expenses | 22,383 | 21,794 | 22,545 | 19,616 | 21,841 | 19,137 | 21,204 | 16,476 | 42,161 | 37,680 | 63,955 | 56,817 | 86,338 | 78,658 | 81,182 |
Professional accounting and legal fees | 19,768 | 20,973 | 2,600 | 1,457 | 1,205 | 1,715 | 1,501 | 1,400 | 4,057 | 2,901 | 25,030 | 4,616 | 44,798 | 5,821 | 4,907 |
Depreciation and amortization | 9,978 | 9,818 | 9,826 | 9,307 | 8,487 | 8,526 | 8,805 | 8,367 | 19,133 | 17,172 | 28,951 | 25,698 | 38,929 | 34,185 | 32,589 |
Income from operations | 11,264 | (849) | 16,465 | 400 | 34,544 | 34,309 | 33,428 | 11,274 | 16,865 | 44,702 | 16,016 | 79,011 | 27,280 | 113,555 | 109,085 |
Interest expense, net | 7,191 | 7,255 | 7,063 | 6,768 | 6,372 | 6,942 | 8,616 | 8,646 | 13,831 | 17,262 | 21,086 | 24,204 | 28,277 | 30,576 | 34,620 |
Extinguishment of debt | 6,645 | 6,645 | 6,645 | 6,645 | |||||||||||
(Loss) income from continuing operations before income taxes | 4,073 | (8,104) | 9,402 | (6,368) | 28,172 | 27,367 | 18,167 | 2,628 | 3,034 | 20,795 | (5,070) | 48,162 | (997) | 76,334 | 74,465 |
Provision for income taxes | 1,267 | (10,054) | 10,832 | (22) | 13,077 | 9,815 | 6,688 | 875 | 10,810 | 7,563 | 756 | 17,378 | 2,023 | 30,455 | 26,206 |
(Loss) income from continuing operations | 2,806 | 1,950 | (1,430) | (6,346) | 15,095 | 17,552 | 11,479 | 1,753 | (7,776) | 13,232 | (5,826) | 30,784 | (3,020) | 45,879 | 48,259 |
Loss from discontinued operations, net of income taxes | (6,235) | (10,751) | 4,661 | (3,621) | (3,063) | (2,034) | (282) | 11 | 1,040 | (271) | (9,711) | (2,305) | (15,946) | (5,368) | (235) |
Net (loss) income | (3,429) | (8,801) | 3,231 | (9,967) | 12,032 | 15,518 | 11,197 | 1,764 | (6,736) | 12,961 | (15,537) | 28,479 | (18,966) | 40,511 | 48,024 |
Other comprehensive (loss) income: | |||||||||||||||
Unrealized (loss) gain on SERP, net of income tax (benefit) provision of $(525), $531 and $(439) for 2014, 2013 and 2012, respectively | (868) | 899 | (868) | 899 | (734) | ||||||||||
Total other comprehensive (loss) income | (868) | 899 | (868) | 899 | (734) | ||||||||||
Comprehensive (loss) income | $ (4,297) | $ (8,801) | $ 3,231 | $ (9,967) | $ 12,931 | $ 15,518 | $ 11,197 | $ 1,764 | $ (6,736) | $ 12,961 | $ (15,537) | $ 28,479 | $ (19,834) | $ 41,410 | $ 47,290 |
Basic Per Common Share Data | |||||||||||||||
(Loss) income from continuing operations | $ 0.08 | $ 0.05 | $ (0.04) | $ (0.18) | $ 0.43 | $ 0.50 | $ 0.33 | $ 0.05 | $ (0.22) | $ 0.38 | $ (0.17) | $ 0.89 | $ (0.09) | $ 1.32 | $ 1.41 |
Loss from discontinued operations, net of income taxes | (0.18) | (0.30) | 0.13 | (0.10) | (0.09) | (0.06) | (0.01) | 0.03 | (0.01) | (0.27) | (0.07) | (0.45) | (0.16) | (0.01) | |
Basic (loss) income per share (in dollars per share) | $ (0.10) | $ (0.25) | $ 0.09 | $ (0.28) | $ 0.34 | $ 0.44 | $ 0.32 | $ 0.05 | $ (0.19) | $ 0.37 | $ (0.44) | $ 0.82 | $ (0.54) | $ 1.16 | $ 1.40 |
Shares used to compute basic per common share amounts (in shares) | 35,397,195 | 35,388,862 | 35,377,939 | 35,056,902 | 34,945,120 | 34,927,373 | 34,872,430 | 34,570,836 | 35,209,849 | 34,710,269 | 35,275,046 | 34,782,207 | 35,309,478 | 34,825,867 | 34,273,621 |
Diluted Per Common Share Data | |||||||||||||||
(Loss) income from continuing operations | $ 0.08 | $ 0.05 | $ (0.04) | $ (0.18) | $ 0.43 | $ 0.50 | $ 0.33 | $ 0.05 | $ (0.22) | $ 0.38 | $ (0.17) | $ 0.88 | $ (0.09) | $ 1.30 | $ 1.39 |
Loss from discontinued operations, net of income taxes | (0.18) | (0.30) | 0.13 | (0.10) | (0.09) | (0.06) | (0.01) | 0.03 | (0.01) | (0.27) | (0.07) | (0.45) | (0.15) | (0.01) | |
Diluted (loss) income per share (in dollars per share) | $ (0.10) | $ (0.25) | $ 0.09 | $ (0.28) | $ 0.34 | $ 0.44 | $ 0.32 | $ 0.05 | $ (0.19) | $ 0.37 | $ (0.44) | $ 0.81 | $ (0.54) | $ 1.15 | $ 1.38 |
Shares used to compute diluted per common share amounts (in shares) | 35,615,092 | 35,571,188 | 35,377,939 | 35,056,902 | 35,364,729 | 35,298,046 | 35,211,878 | 35,062,115 | 35,209,849 | 35,124,223 | 35,275,046 | 35,180,990 | 35,309,478 | 35,208,754 | 34,737,420 |
CONSOLIDATED STATEMENTS OF OPE5
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME | |||||
Unrealized (loss) gain on SERP, tax (benefit) provision | $ 525 | $ 531 | $ (525) | $ 531 | $ (439) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Total |
Balance (As Previously Reported) at Dec. 31, 2010 | $ 351 | $ 268,535 | $ (1,185) | $ 161,537 | $ (656) | $ 428,582 |
Balance (in shares) (As Previously Reported) at Dec. 31, 2010 | 35,127,000 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Cumulative restatement adjustments (in shares) | Restatement Adjustments | (1,161,000) | |||||
Balance at Dec. 31, 2011 | $ 340 | 270,542 | (1,185) | 108,990 | (656) | 378,031 |
Balance (in shares) at Dec. 31, 2011 | 33,966,000 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Cumulative restatement adjustments | Restatement Adjustments | $ (11) | 2,007 | (52,547) | (50,551) | ||
Net (loss) income | As Previously Reported | 63,692 | |||||
Net (loss) income | Restatement Adjustments | (15,668) | |||||
Net (loss) income | 48,024 | 48,024 | ||||
Issuance of common stock upon vesting of restricted stock units | $ 4 | (4) | ||||
Issuance of common stock upon vesting of restricted stock units (in shares) | 377,000 | |||||
Issuance of common stock in connection with the exercise of stock options | $ 3 | 3,557 | 3,560 | |||
Issuance of common stock in connection with the exercise of stock options (in shares) | 239,000 | |||||
Purchase and retirement of common stock | $ (1) | (1,349) | (1,350) | |||
Purchase and retirement of common stock (in shares) | (49,000) | |||||
Stock-based compensation expense | 8,256 | 8,256 | ||||
Tax benefit associated with vesting of restricted stock units | 1,268 | 1,268 | ||||
Tax benefit on unrealized gain (loss) on SERP | 439 | 439 | ||||
Other comprehensive (loss) | (1,173) | (1,173) | ||||
Balance at Dec. 31, 2012 | $ 346 | 282,270 | (1,919) | 157,014 | (656) | 437,055 |
Balance (in shares) at Dec. 31, 2012 | 34,533,000 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) income | As Previously Reported | 9,490 | |||||
Net (loss) income | Restatement Adjustments | (7,726) | |||||
Net (loss) income | 1,764 | |||||
Balance (As Previously Reported) at Mar. 31, 2013 | 515,632 | |||||
Balance (Restatement Adjustments) | (73,594) | |||||
Balance at Mar. 31, 2013 | $ 442,038 | |||||
Balance (in shares) at Mar. 31, 2013 | 34,812,658 | |||||
Balance at Dec. 31, 2012 | $ 346 | 282,270 | (1,919) | 157,014 | (656) | $ 437,055 |
Balance (in shares) at Dec. 31, 2012 | 34,533,000 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) income | As Previously Reported | 23,569 | |||||
Net (loss) income | Restatement Adjustments | (10,608) | |||||
Net (loss) income | 12,961 | |||||
Balance (As Previously Reported) at Jun. 30, 2013 | 533,048 | |||||
Balance (Restatement Adjustments) | (76,325) | |||||
Balance at Jun. 30, 2013 | $ 456,723 | |||||
Balance (in shares) at Jun. 30, 2013 | 34,921,777 | |||||
Balance at Dec. 31, 2012 | $ 346 | 282,270 | (1,919) | 157,014 | (656) | $ 437,055 |
Balance (in shares) at Dec. 31, 2012 | 34,533,000 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) income | As Previously Reported | 45,228 | |||||
Net (loss) income | Restatement Adjustments | (16,749) | |||||
Net (loss) income | 28,479 | |||||
Balance (As Previously Reported) at Sep. 30, 2013 | 557,100 | |||||
Balance (Restatement Adjustments) | (82,374) | |||||
Balance at Sep. 30, 2013 | $ 474,726 | |||||
Balance (in shares) at Sep. 30, 2013 | 34,921,213 | |||||
Balance at Dec. 31, 2012 | $ 346 | 282,270 | (1,919) | 157,014 | (656) | $ 437,055 |
Balance (in shares) at Dec. 31, 2012 | 34,533,000 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) income | As Previously Reported | 63,584 | |||||
Net (loss) income | Restatement Adjustments | (23,073) | |||||
Net (loss) income | 40,511 | 40,511 | ||||
Issuance of common stock upon vesting of restricted stock units | $ 3 | (3) | ||||
Issuance of common stock upon vesting of restricted stock units (in shares) | 348,000 | |||||
Issuance of common stock in connection with the exercise of stock options | $ 2 | 2,435 | 2,437 | |||
Issuance of common stock in connection with the exercise of stock options (in shares) | 205,000 | |||||
Purchase and retirement of common stock | (2,374) | (2,374) | ||||
Purchase and retirement of common stock (in shares) | (69,000) | |||||
Stock-based compensation expense | 9,437 | 9,437 | ||||
Tax benefit associated with vesting of restricted stock units | 3,348 | 3,348 | ||||
Tax benefit on unrealized gain (loss) on SERP | (531) | (531) | ||||
Other comprehensive (loss) | 1,430 | 1,430 | ||||
Balance (As Previously Reported) at Dec. 31, 2013 | 580,220 | |||||
Balance (Restatement Adjustments) | (88,907) | |||||
Balance at Dec. 31, 2013 | $ 351 | 295,113 | (1,020) | 197,525 | (656) | $ 491,313 |
Balance (in shares) at Dec. 31, 2013 | 35,017,000 | 35,017,042 | ||||
Balance (As Previously Reported) at Mar. 31, 2013 | $ 515,632 | |||||
Balance (Restatement Adjustments) | (73,594) | |||||
Balance at Mar. 31, 2013 | $ 442,038 | |||||
Balance (in shares) at Mar. 31, 2013 | 34,812,658 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) income | As Previously Reported | $ 14,079 | |||||
Net (loss) income | 11,197 | |||||
Balance (As Previously Reported) at Jun. 30, 2013 | 533,048 | |||||
Balance (Restatement Adjustments) | (76,325) | |||||
Balance at Jun. 30, 2013 | $ 456,723 | |||||
Balance (in shares) at Jun. 30, 2013 | 34,921,777 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) income | As Previously Reported | $ 21,659 | |||||
Net (loss) income | 15,518 | |||||
Balance (As Previously Reported) at Sep. 30, 2013 | 557,100 | |||||
Balance (Restatement Adjustments) | (82,374) | |||||
Balance at Sep. 30, 2013 | $ 474,726 | |||||
Balance (in shares) at Sep. 30, 2013 | 34,921,213 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) income | As Previously Reported | $ 18,356 | |||||
Net (loss) income | 12,032 | |||||
Tax benefit on unrealized gain (loss) on SERP | (531) | |||||
Balance (As Previously Reported) at Dec. 31, 2013 | 580,220 | |||||
Balance (Restatement Adjustments) | (88,907) | |||||
Balance at Dec. 31, 2013 | $ 351 | 295,113 | (1,020) | 197,525 | (656) | $ 491,313 |
Balance (in shares) at Dec. 31, 2013 | 35,017,000 | 35,017,042 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) income | As Previously Reported | $ 5,997 | |||||
Net (loss) income | Restatement Adjustments | (15,964) | |||||
Net (loss) income | (9,967) | |||||
Balance (As Previously Reported) at Mar. 31, 2014 | 590,502 | |||||
Balance (Restatement Adjustments) | (104,879) | |||||
Balance at Mar. 31, 2014 | $ 485,623 | |||||
Balance (in shares) at Mar. 31, 2014 | 35,344,879 | |||||
Balance (As Previously Reported) at Dec. 31, 2013 | $ 580,220 | |||||
Balance (Restatement Adjustments) | (88,907) | |||||
Balance at Dec. 31, 2013 | $ 351 | 295,113 | (1,020) | 197,525 | (656) | $ 491,313 |
Balance (in shares) at Dec. 31, 2013 | 35,017,000 | 35,017,042 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) income | As Previously Reported | $ 18,616 | |||||
Net (loss) income | Restatement Adjustments | (25,352) | |||||
Net (loss) income | (6,736) | |||||
Balance (As Previously Reported) at Jun. 30, 2014 | 606,043 | |||||
Balance (Restatement Adjustments) | (113,993) | |||||
Balance at Jun. 30, 2014 | $ 492,050 | |||||
Balance (in shares) at Jun. 30, 2014 | 35,385,848 | |||||
Balance (As Previously Reported) at Dec. 31, 2013 | $ 580,220 | |||||
Balance (Restatement Adjustments) | (88,907) | |||||
Balance at Dec. 31, 2013 | $ 351 | 295,113 | (1,020) | 197,525 | (656) | $ 491,313 |
Balance (in shares) at Dec. 31, 2013 | 35,017,000 | 35,017,042 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) income | $ (15,537) | |||||
Balance at Sep. 30, 2014 | $ 485,263 | |||||
Balance (in shares) at Sep. 30, 2014 | 35,396,374 | |||||
Balance (As Previously Reported) at Dec. 31, 2013 | $ 580,220 | |||||
Balance (Restatement Adjustments) | (88,907) | |||||
Balance at Dec. 31, 2013 | $ 351 | 295,113 | (1,020) | 197,525 | (656) | $ 491,313 |
Balance (in shares) at Dec. 31, 2013 | 35,017,000 | 35,017,042 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) income | (18,966) | $ (18,966) | ||||
Issuance of common stock upon vesting of restricted stock units | $ 4 | (4) | ||||
Issuance of common stock upon vesting of restricted stock units (in shares) | 377,000 | |||||
Issuance of common stock in connection with the exercise of stock options | 87 | 87 | ||||
Issuance of common stock in connection with the exercise of stock options (in shares) | 5,000 | |||||
Stock-based compensation expense | 9,773 | 9,773 | ||||
Tax benefit associated with vesting of restricted stock units | 2,197 | 2,197 | ||||
Tax benefit on unrealized gain (loss) on SERP | 525 | 525 | ||||
Other comprehensive (loss) | (1,393) | (1,393) | ||||
Balance at Dec. 31, 2014 | $ 355 | 307,166 | (1,888) | 178,559 | (656) | $ 483,536 |
Balance (in shares) at Dec. 31, 2014 | 35,399,000 | 35,399,476 | ||||
Balance (As Previously Reported) at Mar. 31, 2014 | $ 590,502 | |||||
Balance (Restatement Adjustments) | (104,879) | |||||
Balance at Mar. 31, 2014 | $ 485,623 | |||||
Balance (in shares) at Mar. 31, 2014 | 35,344,879 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) income | As Previously Reported | $ 12,619 | |||||
Net (loss) income | 3,231 | |||||
Balance (As Previously Reported) at Jun. 30, 2014 | 606,043 | |||||
Balance (Restatement Adjustments) | (113,993) | |||||
Balance at Jun. 30, 2014 | $ 492,050 | |||||
Balance (in shares) at Jun. 30, 2014 | 35,385,848 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) income | $ (8,801) | |||||
Balance at Sep. 30, 2014 | $ 485,263 | |||||
Balance (in shares) at Sep. 30, 2014 | 35,396,374 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) income | $ (3,429) | |||||
Tax benefit on unrealized gain (loss) on SERP | (525) | |||||
Balance at Dec. 31, 2014 | $ 355 | $ 307,166 | $ (1,888) | $ 178,559 | $ (656) | $ 483,536 |
Balance (in shares) at Dec. 31, 2014 | 35,399,000 | 35,399,476 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Mar. 31, 2014 | Mar. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities: | |||||||||
Net (loss) income | $ (9,967) | $ 1,764 | $ (6,736) | $ 12,961 | $ (15,537) | $ 28,479 | $ (18,966) | $ 40,511 | $ 48,024 |
Loss from discontinued operations, net of income taxes | (3,621) | 11 | 1,040 | (271) | (9,711) | (2,305) | (15,946) | (5,368) | (235) |
(Loss) income from continuing operations | (6,346) | 1,753 | (7,776) | 13,232 | (5,826) | 30,784 | (3,020) | 45,879 | 48,259 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 9,307 | 8,367 | 19,133 | 17,172 | 28,951 | 25,698 | 38,929 | 34,185 | 32,589 |
Provision for doubtful accounts | 1,989 | 474 | 4,463 | 1,705 | 9,094 | 3,441 | 11,639 | 5,053 | 4,423 |
Impairment of long-lived assets and intangible assets | 1,503 | 2,425 | |||||||
Compensation expense on restricted stock units | 2,356 | 2,093 | 5,152 | 4,599 | 7,138 | 7,004 | 9,642 | 9,346 | 8,213 |
Benefit from deferred income taxes | 358 | 1,836 | (2,564) | 2,535 | (2,564) | (39,214) | (14,499) | (13,812) | |
Amortization of debt issuance costs | 617 | 1,038 | 1,306 | 1,975 | 1,987 | 2,607 | 2,663 | 3,218 | 3,891 |
Loss on extinguishment of debt | 6,645 | 6,645 | 6,645 | ||||||
Gain on sale of property, plant and equipment | (553) | (277) | (620) | (900) | (1,412) | (6,369) | (293) | (6,258) | (2,019) |
Contingent consideration gains | (57) | (49) | (702) | (85) | (1,461) | (1,388) | |||
Changes in operating assets and liabilities, net of effects of acquired companies: | |||||||||
Net accounts receivable | 9,521 | 9,332 | (5,076) | 747 | (16,599) | 791 | (28,797) | (8,855) | (15,534) |
Inventories | (2,293) | (1,449) | (5,897) | (2,258) | (2,212) | (3,740) | 6,917 | (3,493) | 322 |
Other current assets and income taxes | (3,966) | (2,845) | (8,560) | (953) | (21,566) | 2,130 | 9,351 | 7,009 | 1,498 |
Accounts payable | (4,335) | (639) | (2,971) | 11,141 | (751) | 5,940 | (777) | 5,096 | 1,264 |
Accrued expenses, other current liabilities and accrued interest payable | 2,117 | 3,990 | 1,172 | (269) | 25,499 | 3,158 | 40,186 | 687 | 3,451 |
Accrued compensation related costs | (17,779) | (23,186) | (15,050) | (18,900) | (3,618) | (9,952) | (483) | (6,566) | 2,807 |
Other liabilities | (144) | 198 | 1,511 | 572 | (750) | 1,969 | 978 | 4,148 | (169) |
Net cash provided by operating activities - continuing operations | (9,151) | (1,151) | (11,377) | 31,887 | 23,924 | 66,840 | 50,061 | 80,134 | 73,795 |
Net cash used in operating activities - discontinued operations | (1,479) | 109 | 3,482 | (2,227) | (1,774) | (2,261) | (442) | (3,102) | (3,037) |
Net cash provided by operating activities | (10,630) | (1,042) | (7,895) | 29,660 | 22,150 | 64,579 | 49,619 | 77,032 | 70,758 |
Cash flows from investing activities: | |||||||||
Purchase of property, plant and equipment, net of acquisitions | (8,526) | (3,450) | (14,805) | (13,741) | (18,924) | (19,174) | (27,096) | (25,907) | (24,503) |
Purchase of equipment leased to third parties under operating leases | (564) | (660) | (1,663) | (1,849) | (2,609) | (2,889) | (4,012) | (4,103) | (2,763) |
Acquisitions, net of cash acquired | (19,142) | (65) | (33,934) | (5,776) | (36,784) | (6,621) | (38,097) | (10,295) | (61,401) |
Change in restricted cash associated with workers' compensation program | 3,120 | 3,120 | (3,120) | ||||||
Purchase of company-owned life insurance investment | (2,294) | (2,294) | (2,294) | (2,294) | (2,000) | ||||
Proceeds from sale of property, plant and equipment | 595 | 663 | 1,674 | 1,644 | 2,331 | 4,717 | 2,518 | 9,066 | 3,231 |
Net cash used in investing activities - continuing operations | (29,931) | (3,512) | (51,022) | (19,722) | (58,280) | (20,847) | (68,981) | (28,119) | (90,556) |
Net cash provided by (used in) investing activities - discontinued operations | (265) | (256) | (464) | (604) | (532) | (944) | 2,507 | (1,438) | (1,118) |
Net cash used in investing activities | (30,196) | (3,768) | (51,486) | (20,326) | (58,812) | (21,791) | (66,474) | (29,557) | (91,674) |
Cash flows from financing activities: | |||||||||
Borrowings under term loan | 225,000 | 225,000 | 225,000 | ||||||
Repayment of term loan | (1,406) | (750) | (2,813) | (293,300) | (5,625) | (294,706) | (8,438) | (296,113) | (3,700) |
Borrowings under revolving credit agreement | 125,000 | 50,000 | 228,000 | 120,000 | 252,000 | 163,000 | 331,000 | 249,000 | |
Repayments under revolving credit agreement | (38,000) | (50,000) | (163,000) | (65,000) | (203,000) | (137,000) | (286,000) | (224,000) | |
Payment of seller notes | (1,631) | (1,411) | (3,569) | (3,117) | (6,845) | (6,449) | (9,435) | (8,656) | (4,904) |
Payment of contingent consideration | (375) | (675) | (626) | (925) | (700) | (1,965) | (825) | (2,590) | (2,915) |
Payment of financing obligations | (426) | (324) | (866) | (658) | (1,491) | (997) | (1,687) | (1,367) | (1,104) |
Payment of fees associated with debt modifications and extinguishments | (3,665) | (3,665) | (3,665) | ||||||
Excess tax benefit from stock-based compensation | 1,803 | 1,054 | 2,191 | 2,005 | 2,197 | 2,058 | 2,249 | 3,348 | 1,489 |
Proceeds from issuance of common stock | 87 | 62 | 87 | 1,628 | 87 | 1,629 | 87 | 2,437 | 3,560 |
Purchase and retirement of common stock | (1,567) | (1,567) | (2,374) | (1,350) | |||||
Net cash provided by (used in) financing activities - continuing operations | 85,052 | (2,044) | 59,404 | (19,599) | 36,623 | (54,662) | 26,951 | (58,980) | (8,924) |
Net cash used in financing activities - discontinued operations | (3) | (3) | (6) | (7) | (9) | (10) | (10) | (12) | (353) |
Net cash provided by (used in) financing activities | 85,049 | (2,047) | 59,398 | (19,606) | 36,614 | (54,672) | 26,941 | (58,992) | (9,277) |
Increase (decrease) in cash and cash equivalents | 44,223 | (6,857) | 17 | (10,272) | (48) | (11,884) | 10,086 | (11,517) | (30,193) |
Cash and cash equivalents, at beginning of year | 1,613 | 13,130 | 1,613 | 13,130 | 1,613 | 13,130 | 1,613 | 13,130 | 43,323 |
Cash and cash equivalents, at end of year | $ 45,836 | $ 6,273 | $ 1,630 | $ 2,858 | $ 1,565 | $ 1,246 | $ 11,699 | $ 1,613 | $ 13,130 |
THE COMPANY
THE COMPANY | 12 Months Ended |
Dec. 31, 2014 | |
THE COMPANY | |
THE COMPANY | NOTE A - THE COMPANY Hanger, Inc. (“the Company,” “we,” “our,” or “us”) is a leading national provider of products and services that assist in enhancing or restoring the physical capabilities of patients with disabilities or injuries. We provide orthotic and prosthetic (“O&P”) services, distribute O&P devices and components, manage O&P networks and provide therapeutic solutions to patients and businesses in acute, post-acute and clinic settings. We operate through two segments, Patient Care and Products & Services. Our Patient Care segment is comprised of Hanger Clinic, CARES, Dosteon, and Linkia, our contracting payor network providing contracting services to other O&P providers. Hanger Clinic specializes in the design, fabrication and delivery of custom O&P devices through 767 patient care clinics and 120 satellite locations in 45 states and the District of Columbia as of December 31, 2014. Our Products & Services segment is comprised of our distribution and rehabilitative solutions businesses. As a leading provider of O&P products in the United States, we coordinate through our distribution business the procurement and distribution of a broad catalog of O&P parts, componentry and devices to independent O&P providers nationwide. The other business in our Product & Services segment is our rehabilitative solutions business, which develops specialized rehabilitation technologies and provides evidence-based clinical programs for post-acute rehabilitation to patients at approximately 5,000 skilled nursing, long-term care and other sub-acute rehabilitation facilities throughout the United States. |
RESTATEMENT OF PREVIOUSLY ISSUE
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS | 12 Months Ended |
Dec. 31, 2014 | |
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS | |
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS | NOTE B - RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS This Annual Report on Form 10-K for the year ended December 31, 2014 includes audited consolidated financial statements for the years ended December 31, 2014, 2013 and 2012. The consolidated balance sheet as of December 31, 2013 and the consolidated statements of operations and comprehensive income for the years ended December 31, 2013 and 2012 have been restated. The consolidated statements of changes in shareholders’ equity and the consolidated statements of cash flows for the years ended December 31, 2013 and 2012 have also been restated primarily to reflect the correction of misstatements to the consolidated balance sheets and consolidated statements of operations and comprehensive income. The Company has also corrected certain disclosures within the consolidated financial statements. Restatement Background During and subsequent to the preparation of our Quarterly Report on Form 10-Q for the third quarter of 2014 (which was not filed), misstatements were identified in our previously issued consolidated financial statements. In response, an extensive accounting review was initiated by the Company, which included an investigation conducted by the Audit Committee of the Board of Directors into the circumstances surrounding the misstatements. This investigation concluded that, based on evidence uncovered in the investigation, it is more likely than not that certain former employees and officers, including in some instances the former Chief Financial Officer and former Chief Accounting Officer, engaged in inappropriate historical accounting practices relating to management estimates and certain accruals. Additionally, in connection with the accounting review, the Company identified numerous material weaknesses in its internal control over financial reporting, described in further detail in Item 9A, “Controls and Procedures,” contained in this Annual Report on Form 10-K. As a result of these misstatements, the Company has restated its consolidated financial statements for the following periods in accordance with ASC 250, Accounting Changes and Error Corrections (the “restated consolidated financial statements”): · As of and for the three months ended March 31, 2014 and as of and for the three and six months ended June 30, 2014 (unaudited); · As of and for the year ended December 31, 2013; as well as all interim periods for the year ended December 31, 2013 (unaudited); and · For the year ended December 31, 2012; The restated interim financial information is included in Note W - “Quarterly Financial Information (Unaudited).” Summary impact of restatement adjustments to previously reported financial information The following tables summarize the cumulative impacts of the primary restatement adjustments on previously reported retained earnings as of December 31, 2013, 2012, and 2011. We have also presented their impact to the restated consolidated income from operations before income taxes for the years ended December 31, 2013 and 2012. After the descriptions of the restatement adjustments, full consolidated financial statement tables separately present the impact of the restatement adjustments, the reclassification of certain expenses, and the recognition of discontinued operations to the previously reported consolidated financial statements. Additionally, a separate set of tables present the individual impact of the more prominent cumulative restatement adjustments to the previously reported consolidated statements of operations and comprehensive income for the years ended December 31, 2013 and 2012. As of December 31, (in thousands) 2013 2012 2011 As previously reported - Retained Earnings $ $ $ Inventory valuation ) ) ) Allowance for disallowed revenue and doubtful accounts ) ) ) Property, plant and equipment, net ) ) ) Real property leases ) ) ) All other restatement adjustments ) ) ) Total restatement adjustments ) ) ) Tax effect of restatement adjustments As restated - Retained Earnings $ $ $ As of December 31, (in thousands) 2013 2012 As previously reported - Income before Income Taxes $ $ Inventory valuation ) ) Allowance for disallowed revenue and doubtful accounts ) ) Property, plant and equipment, net ) ) Real property leases ) ) All other restatement adjustments ) ) Total restatement adjustments ) ) Restated Income before Income Taxes Adjustment for loss from discontinued operations As restated - Income from Continuing Operations before Income Taxes $ $ Descriptions of Restatement Adjustments The categories of misstatements and their impact on previously reported consolidated financial statements for 2013 and 2012 annual periods are described below. a. Inventory Valuation - The Company has identified misstatements in its historical inventory valuations. The misstatements related primarily to the valuation of work-in-process inventory (“WIP”), and included intentional misstatements that had the effect of overstating the number of items in WIP, the relative stages of completion of WIP and the overall valuation of WIP. The Company’s valuation of WIP requires the use of various estimates. Other misstatements included not reducing raw materials and WIP for vendor rebates and not ensuring inventory is recorded at the lower of cost or market. Refer to further discussions regarding inventory valuation in Note C - “Significant Accounting Policies.” The misstatements overstated previously reported income from operations before taxes by approximately $10.0 million and $11.4 million for the years ended December 31, 2013 and 2012, respectively. The cumulative pre-tax misstatement was a decrease to retained earnings of $61.3 million as of December 31, 2013. b. Allowance for Disallowed Revenue and Doubtful Accounts - The historical estimates of allowances for disallowed revenue and doubtful accounts did not sufficiently consider changes to the Company’s collection experience or differentiate between payor types. When preparing its estimates, the Company inappropriately relied upon aggregate averages of prior periods’ collections experience from varying numbers of older historical periods. The Company did not timely recognize adverse changes in its collection experience, and did not consider likely write-offs of residual receivable balances, as well as consider differences in collection patterns between payor types and aging categories. Additionally, misstatements in the classification of bad debt expense have been corrected and are presented as disallowed revenue. Refer to further discussion regarding allowances for disallowed revenue and doubtful accounts in Note E - “Accounts Receivable, Net” The misstatements overstated previously reported income from operations before taxes by approximately $13.3 million and $2.0 million for the years ended December 31, 2013 and 2012, respectively. The cumulative pre-tax misstatement was a decrease to retained earnings of $28.3 million as of December 31, 2013. c. Property, Plant and Equipment, net - During the periods covered by the restated consolidated financial statements, misstatements occurred in the Company’s accounting for property, plant and equipment. These misstatements included improper capitalization of certain labor associated with internal-use software and improper capitalization into property, plant and equipment costs that should have been expensed. The Company also found misstatements in the commencement of depreciation of its fixed assets and not recording disposals on a timely basis. Misstatements regarding leasehold improvement related items, which are recorded in property, plant and equipment in the financial statements, are included in the real property lease adjustment below. The misstatements overstated previously reported income from operations before taxes by approximately $0.8 million and $2.3 million for the years ended December 31, 2013 and 2012, respectively. The cumulative pre-tax misstatement was a decrease to retained earnings of $11.3 million as of December 31, 2013. d. Real Property Leases - The Company did not properly apply real property lease accounting standards. The Company identified misstatements with respect to the determination of the proper term of its leases, establishment of proper balances for deferred rent and tenant improvement allowances, determining depreciable lives of leasehold improvements, consideration of lessee involvement in the construction of leased assets (resulting in not properly identifying certain build-to-suit arrangements, which are accounted for as financings after evaluating sale-leaseback accounting), and proper evaluation of capital lease obligations. Additionally, the Company did not properly establish and account for asset retirement obligations. The misstatements overstated previously reported income from operations before taxes of approximately $0.9 million and $1.7 million for the years ended December 31, 2013 and 2012, respectively. The cumulative pre-tax misstatement was a decrease to retained earnings of $7.5 million as of December 31, 2013. All Other Restatement Adjustments e. Certain Revenue Adjustments - The Company determined that it had not properly established a liability to reserve for revenue collected from third-party payors and patients that was subject to refund in subsequent periods resulting in misstatements of net revenue. Additionally, the Company recorded purchase commissions as revenue rather than a reduction of cost of materials. The misstatements overstated previously reported income from operations before taxes by approximately $3.7 million for the year ended December 31, 2013. The cumulative pre-tax misstatement was a decrease to retained earnings of $3.1 million as of December 31, 2013. f. Revenue Accrual - The Company often invoices patients or payors after a device is delivered. To account for this delay, the Company records an estimated revenue accrual for devices delivered but not yet invoiced at period end. The Company’s historical revenue accrual estimation model did not reasonably estimate the proper cut-off related to goods delivered but not yet invoiced, resulting in misstatements of both net revenue and accounts receivable. The misstatements overstated previously reported income from operations before taxes by approximately $1.3 million and $1.5 million for the years ended December 31, 2013 and 2012, respectively. The cumulative pre-tax misstatement was a decrease to retained earnings of $3.3 million as of December 31, 2013. g. Method of Accrual for Accounts Payable - The Company recorded an accrual for estimated accounts payable which utilized average accounts payable levels from historical periods. This model was prepared based upon when invoices were received, not when goods or services were received. This accrual method overstated the estimated amount of accounts payables outstanding at December 31, 2013 and understated the estimated amount of accounts payables outstanding at December 31, 2012. The misstatement understated previously reported income from operations before taxes by approximately $0.2 million for the year-ended December 31, 2013 and overstated previously reported income from operations before taxes by approximately $1.5 million for the year ended December 31, 2012. The cumulative pre-tax misstatement was a decrease to retained earnings of $3.4 million as of December 31, 2013. h. Other Profit & Loss Restatement Adjustments - There are other misstatements not otherwise described in items (a) through (g) of this Note, which are individually insignificant to previously reported income from operations before income taxes for the years ended December 31, 2013 and December 31, 2012. The other misstatements overstated previously reported income from operations before taxes by approximately $3.2 million and $3.7 million for the years ended December 31, 2013 and 2012, respectively. The cumulative pre-tax misstatement was a decrease to retained earnings of $22.3 million as of December 31, 2013. i. Cash and Cash Equivalents - The Company identified balance sheet classification misstatements in which cash balances were overstated due to certain outstanding checks not being recognized as a reduction of cash in the period in which they were issued, which also understated other current assets. Additionally, certain cash receipts were not recorded as an increase to cash and a decrease to accounts receivable in a timely manner. Lastly, the Company misclassified restricted cash as cash and cash equivalents; restricted cash is now classified as “Other current assets.” For additional disclosure information, see Note C - “Significant Accounting Policies.” These corrections, along with the correction of other misstatements included within item (h) above, resulted in a net reduction to previously reported cash and cash equivalents of approximately $8.2 million as of December 31, 2013. j. Common Stock and APIC - The Company identified misstatements related to the incorrect application of stock compensation accounting standards. Restricted stock units with a performance condition were not expensed using the graded-vesting methodology. In addition, modifications to certain outstanding units were not recorded correctly. Restricted stock units were incorrectly recorded as share issuances on their grant date, rather than an issuance of shares on their vesting date. The cumulative misstatements understated additional paid-in capital and income from operations before taxes for multiple years by approximately $2.4 million as of December 31, 2013. k. Income Taxes - The Company has identified certain errors in its historical accounting for income taxes, primarily related to uncertain tax positions and reconciliation of deferred tax balances. In addition, the more significant adjustments primarily relate to the income tax effects of other restatement adjustments noted above. Other adjustments to previously reported financial information The Company has also made certain reclassification adjustments to the previously reported consolidated financial statements. These adjustments do not relate to the correction of misstatements and are discussed in more detail below. aa. Reclassification of Expenses - Due to increases and the resultant materiality of certain expenses in 2014, and to enable the presentation of the consolidated statements of operations and comprehensive (loss) income to be more comparable with other health care services companies, the Company concluded that certain expenses should be reported separately in 2014. The Company reclassified prior year balances to conform to the current year presentation. For additional disclosure information, see Note C - “Significant Accounting Policies.” bb. Discontinued Operations - On November 5, 2014, the Audit Committee of the Board of Directors approved a plan to sell and/or otherwise dispose of the Company’s Dosteon distribution product group (“Dosteon”), part of its Patient Care operating segment. Dosteon is presented in accompanying consolidated financial statements as a discontinued operation in accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations , ASC 360-10 Property, Plant and Equipment - Overall, and ASC 350-20 , Intangibles - Goodwill and Other - Goodwill, as of December 31, 2014. The operating results and cash flows of Dosteon have been presented separately as discontinued operations on the consolidated statements of operations and comprehensive (loss) income and the consolidated statements of cash flows, respectively, for the year ended December 31, 2014 and all comparable periods presented herein. As discussed in further detail in Note T - “Discontinued Operations,” assets of these businesses that were expected to be disposed of by sale are reported as “Assets held for sale” on the Company’s consolidated balance sheets as of December 31, 2014. See Note T - “Discontinued Operations” for the details of our discontinued operations in 2014. cc. Reclassification of Equipment Capital Lease Liabilities - The Company previously reported the current portion of equipment capital lease liabilities within “Accrued expenses and other current liabilities” and the non-current portion within “Other liabilities.” The Company is now presenting lease related financing liabilities, including capital leases and financing obligations related to certain real property transactions within “Long-term debt, less current portion” and “Current portion of long-term debt,” respectively, as the balances are similar in nature to long-term debt. The 2013 equipment capital leases have been reclassified accordingly. For additional disclosure information, see Note O - “Long-Term Debt.” Refer also to Note W - “Quarterly Financial Information (Unaudited)” for disclosure of the nature of the restatement adjustments and adjustment amounts on each of the quarterly and year-to-date periods ended March 31 and June 30, 2014, as well as each quarterly and year-to-date period within 2013. Consolidated financial statement adjustment tables The following tables present the differing adjustments to previously issued consolidated financial statements from the restatement adjustments as well as the reclassification of expenses and discontinued operations. This information is presented for each impacted caption of the previously reported consolidated balance sheets as of December 31, 2013, consolidated statement of operations and comprehensive income for the years ended December 31, 2013 and 2012 and consolidated statement of cash flows for the years ended December 31, 2013 and 2012. The corrections of misstatements affecting fiscal years prior to 2012 are reflected as a cumulative adjustment to the balance of retained earnings as of December 31, 2011 on the consolidated statements of changes in shareholders’ equity. HANGER, INC. CONSOLIDATED BALANCE SHEET (dollars in thousands, except par value and share amounts) As of December 31, 2013 As Previously Restatement Restatement As Restated ASSETS Current assets: Cash and cash equivalents $ $ ) h,i $ Accounts receivable, net of allowance for doubtful accounts of $6,472 ) b,e,f,h,i Inventories ) a,h Other current assets d,h,k,i Deferred income taxes k Total current assets ) Non-current assets: Property, plant and equipment, net ) c,d,g,h Goodwill h,k Other intangible assets, net ) h Debt issuance costs, net ) h Other assets d,h Total assets $ $ ) $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ $ d,h,cc $ Accounts payable g,h Accrued expenses and other current liabilities d,e,g,h,k,cc Accrued interest payable d Accrued compensation related costs h Total current liabilities Long-term liabilities: Long-term debt, less current portion d,h,cc Deferred income taxes ) k Other liabilities ) d,h,cc Total liabilities Commitments and contingent liabilities Shareholders’ Equity: Common stock, $.01 par value; 60,000,000 shares authorized, 35,158,196 shares issued and 35,017,042 shares outstanding ) j Additional paid-in capital j,h Accumulated other comprehensive loss ) — ) Retained earnings ) a,b,c,d,e,f, g,h,j ) Treasury stock at cost, 141,154 shares ) — ) Total shareholders’ equity ) Total liabilities and shareholders’ equity $ $ ) $ HANGER, INC. CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (dollars in thousands, except share and per share amounts) For the Year Ended December 31, 2013 As Restatement Restatement Reclassification Discontinued As Restated Net revenue $ $ ) b,e,f,h $ — $ ) $ Material costs a,h — ) Personnel costs a,c,h,j ) ) Other operating costs ) a,b,c,d,g,h ) ) General and administrative expenses — — — Professional accounting and legal fees — — — Depreciation and amortization ) c,d,h — ) Income from operations ) — Interest expense, net d,h — ) Extinguishment of debt — — — Income from continuing operations before income taxes ) — Provision for income taxes ) k — Income from continuing operations ) — Loss from discontinued operations, net of income taxes — — — ) ) Net income $ $ ) $ — $ — $ Other comprehensive income Unrealized gain on SERP net of tax provision of $531 $ $ — $ — $ — $ Total other comprehensive income — — — Comprehensive income $ $ ) $ — $ — $ Basic Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations, net of income taxes — — — ) ) Basic income per share $ $ ) $ — $ — $ Shares used to compute basic per common share amounts j — — Diluted Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations, net of income taxes — — — ) ) Diluted income per share $ $ ) $ — $ — $ Shares used to compute diluted per common share amounts ) j — — HANGER, INC. CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (dollars in thousands, except share and per share amounts) For the Year Ended December 31, 2012 As Restatement Restatement Reference Reclassification Discontinued As Restated Net revenue $ $ ) b,e,f,h $ — $ ) $ Material costs a,h — ) Personnel costs a,c,h,j ) ) Other operating costs ) a,b,c,d,g,h ) ) General and administrative expenses — — — Professional accounting and legal fees — — — Depreciation and amortization ) c,d,h — ) Income from operations ) — Interest expense, net d,h — ) Income from continuing operations before income taxes ) — Provision for income taxes ) k — Income from continuing operations ) — Loss from discontinued operations, net of income taxes — — — ) ) Net income $ $ ) $ — $ — $ Other comprehensive income Unrealized loss on SERP, net of tax benefit of $439 $ ) $ — $ — $ — $ ) Total other comprehensive loss ) — — — ) Comprehensive income $ $ ) $ — $ — $ Basic Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations, net of income taxes — — — ) ) Basic income per share $ $ ) $ — $ — $ Shares used to compute basic per common share amounts ) j — — Diluted Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations, net of income taxes — — — ) ) Diluted income per share $ $ ) $ — $ — $ Shares used to compute diluted per common share amounts ) j — — HANGER, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in thousands) For the Year Ended December 31, 2013 As Previously Restatement Restatement As Restated Cash flows from operating activities: Net income $ $ ) a - h,j,k $ Loss from discontinued operations, net of income taxes — ) bb ) Income from continuing operations ) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ) c,d,h Provision for doubtful accounts ) b,h Compensation expense on restricted stock units j Benefit from deferred income taxes ) ) k ) Amortization of debt issuance costs h Loss on extinguishment of debt — Gain on sale of property, plant and equipment ) ) c ) Contingent consideration gains ) ) h ) Changes in operating assets and liabilities, net of effects of acquired companies: Net accounts receivable ) b,e,f,h ) Inventories ) a,h ) Other current assets and income taxes d,h,k Accounts payable ) g,h Accrued expenses and other current liabilities, accrued interest payable ) d,e,g,h Accrued compensation related costs ) h ) Other liabilities d,h,k Net cash provided by operating activities - continuing operations ) Net cash used in operating activities - discontinued operations — ) bb ) Net cash provided by operating activities ) Cash flows from investing activities: Purchase of property, plant and equipment, net of acquisitions ) c,d,g,h ) Purchase of equipment leased to third parties under operating leases ) c ) Acquisitions, net of cash acquired ) ) h ) Change in restricted cash associated with workers’ compensation program — Proceeds from sale of property, plant and equipment c Net cash used in investing activities - continuing operations ) ) Net cash used in investing activities - discontinued operations — ) bb ) Net cash used in investing activities ) ) Cash flows from financing activities: Borrowings under term loan — Repayment of term loan ) — ) Borrowings under revolving credit agreement — Repayments under revolving credit agreement ) — ) Payment of seller notes ) h ) Payment of contingent consideration — ) ) Payment of financing obligations ) ) d ) Payment of fees associated with debt modifications and extinguishments ) h ) Excess tax benefit from stock-based compensation ) h Proceeds from issuance of common stock — Purchase and retirement of common stock ) — ) Net cash used in financing activities - continuing operations ) ) Net cash used in financing activities - discontinued operations — ) bb ) Net cash used in financing activities ) ) Decrease in cash and cash equivalents ) ) ) Cash and cash equivalents, at beginning of year ) i Cash and cash equivalents, at end of year $ $ ) $ HANGER, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in thousands) For the Year Ended December 31, 2012 As Previously Restatement Restatement As Restated Cash flows from operating activities: Net income $ $ ) a - h, j,k $ Loss from discontinued operations, net of income taxes — ) bb ) Income from continuing operations ) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ) c,d,h Provision for doubtful accounts ) b,h Compensation expense on restricted stock units j Benefit from deferred income taxes ) ) k ) Amortization of debt issuance costs h Loss (gain) on sale of property, plant and equipment ) c ) Contingent consideration gains ) ) h ) Changes in operating assets and liabilities, net of effects of acquired companies: Net accounts receivable ) b,e,f,h ) Inventories ) a,h Other current assets and income taxes ) d,h,k Accounts payable ) g,h Accrued expenses, other current liabilities and accrued interest payable ) d,e,g,h Accrued compensation related costs ) h Other liabilities ) d,h,k ) Net cash provided by operating activities - continuing operations ) Net cash used in operating activities - discontinued operations — ) bb ) Net cash provided by operating activities ) Cash flows from investing activities: Purchase of property, plant and equipment, net of acquisitions ) c,d,g,h ) Purchase of equipment leased to third parties under operating leases ) c ) Acquisitions, net of cash acquired ) h ) Change in restricted cash associated with workers’ compensation program ) — ) Purchase of company-owned life insurance investment ) — ) Proceeds from sale of property, plant and equipment c Net cash used in investing activities - continuing operations ) ) Net cash used in investing activities - discontinued operations — ) bb ) Net cash used in investing activities ) ) Cash flows from financing activities: Repayment of term loan ) — ) Payment of seller notes ) h ) Payment of contingent consideration — ) ) Payment of financing obligations ) ) d ) Excess tax benefit from stock-based compensation (16 ) h Proceeds from issuance of common stock — h Purchase and retirement of common stock ) — ) Net cash used in financing activities - continuing operations ) ) ) Net cash used in financing activities - discontinued operations — ) bb ) Net cash used in financing activities ) ) ) Decrease in cash and cash equivalents ) ) ) Cash and cash equivalents, at beginning of year i Cash and cash equivalents, at end of year $ $ ) $ Impact of restatement adjustments on previously reported consolidated statements of operations and comprehensive income The following set of tables separately present the impact of each of the more prominent cumulative restatement adjustments to the previously reported consolidated statements of operations and comprehensive income for the years ended December 31, 2013 and 2012. For the Year Ended December 31, 2013 (in thousands) Total Inventory Allowances Property, Real All Other Net revenue $ ) $ — $ ) $ — $ — $ ) Material costs — — — ) Personnel costs — — Other operating costs ) ) ) ) Depreciation and amortization ) — — ) ) Income from operations ) ) ) ) ) Interest expense, net — — — Income from continuing operations before taxes $ ) $ ) $ ) $ ) $ ) $ ) For the Year Ended December 31, 2012 (in thousands) Total Inventory Allowances Property, Real All Other Net revenue $ ) $ — $ ) $ — $ — $ ) Material costs — — — ) Personnel costs — — Other operating costs ) ) ) Depreciation and amortization ) — — ) Income from operations ) ) ) ) ) Interest expense, net — — — Income from continuing operations before taxes $ ) $ ) $ ) $ ) $ ) $ ) |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2014 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE C - SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in the accompanying consolidated financial statements. Use of Estimates and Assumptions The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the use of estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and contingencies. Although actual results in subsequent periods may differ from these estimates, such estimates are developed based on the best information available to management and management’s best judgments at the time. We base our estimates on historical experience, observable trends and various other assumptions that we believe are reasonable under the circumstances. All significant assumptions and estimates underlying the amounts reported in the consolidated financial statements and accompanying notes are regularly reviewed and updated when necessary. Changes in estimates are reflected prospectively in the consolidated financial statements based upon on-going actual experience trends, or subsequent settlements and realizations depending on the nature and predictability of the estimates and contingencies. Interim changes in estimates related to annual operating costs are applied prospectively within annual periods. The most significant assumptions and estimates underlying these consolidated financial statements and accompanying notes involve revenue recognition and accounts receivable, inventories, accounts payable and accrued liabilities (including contingencies), impairments of long-lived assets including goodwill, accounting for income taxes, business combinations, leases and stock-based compensation. Changes in Presentation Presentation of expenses on the Company’s consolidated statements of operations and comprehensive (loss) income In previously issued consolidated financial statements, the Company presented personnel costs and other operating costs related to general and administrative activities within those entitled captions in its consolidated statements of operations and comprehensive (loss) income. Commencing in 2014, the Company experienced increases in general and administrative expenses, including professional accounting and legal fees. Therefore the Company changed its presentation of these expenses within newly created captions titled “General and administrative expenses” and “Professional accounting and legal fees” on its consolidated statements of operations and comprehensive (loss) income. These changes have been reflected retrospectively and have no impact on net (loss) income from continuing operations, net (loss) income, basic net (loss) income per share, or diluted (loss) income per share. See the accounting policies below for further information regarding the types of expenses recognized in the “Personnel costs,” “Other operating costs,” “General and administrative expenses,” and “Professional accounting and legal fees” captions. See Note B - “Restatement of Previously Issued Consolidated Financial Statements” and Note W - “Quarterly Financial Information (Unaudited)” which presents the impacts of these reclassifications on previously issued consolidated financial statements. Revenue Recognition Patient Care Segment Revenues in the Company’s Patient Care segment are primarily derived from the sale of O&P devices and are recognized when the patient has received the device. At or subsequent to delivery, the Company issues an invoice to a third party payor, which primarily consist of commercial insurance companies, Medicare, Medicaid, Veterans Administration and Private or Patient Pay (“Patient Pay”). The Company recognizes revenue for the amounts it expects to receive from payors and patients based on expected contractual reimbursement rates, which are net of estimated contractual discounts. These revenue amounts are further revised as claims are adjudicated, which may result in disallowances, or decreases to revenue. The Company believes that adjustments related to write-offs of receivables should predominantly be recorded as a reduction of revenues, which the Company refers to as Disallowed Revenue. This is due to the majority of the Company’s revenues being collected from commercial insurance companies, Medicare, Medicaid and the Veterans Administration, most of which are under contractual reimbursement rates. As such, the Company believes adjustments do not relate to an inability to pay but to contractual allowances, lack of timely claims submission, insufficient medical documentation or due to administrative errors. Amounts recorded to bad debt expense, which are presented within “Other operating costs,” generally relate to commercial payor bankruptcies and private pay balances for which there was an assessment of collectability and collection attempts were made. At the end of each period, the Company establishes allowances for estimated disallowances relating to that period based on its prior adjudication experience and records such amounts as a reduction of revenue. In a similar fashion, the Company also estimates and records allowances for doubtful accounts on unpaid receivables at each period end. The Company also records a liability, with a corresponding reduction of revenue, for estimated refunds expected to be paid to its patients or third party payors. Medicare and Medicaid regulations and the various agreements we have with other third party payors, including commercial healthcare providers under which these contractual adjustments and disallowed revenue are calculated, are complex and are subject to interpretation and adjustment, and may include multiple reimbursement mechanisms for different types of services provided by the Company. Therefore, the particular O&P devices and related services authorized and provided, and the related reimbursement, are subject to interpretation and adjustment that could result in payments that differ from our estimates. Additionally, updated regulations and reimbursement schedules, and contract renegotiations, occur frequently, necessitating regular review and assessment of the estimation process by management. As a result, there is a reasonable possibility that recorded estimates will change materially in the short-term and any related adjustments will be recorded as changes in estimates when they become known. For more information on the Company’s use of estimates to calculate Allowances for Disallowed Revenue and Doubtful Accounts, refer to the accounting policy for Accounts Receivable, Net below. The Company often invoices patients or payors after a device is delivered. To account for this delay, the Company records an estimated revenue accrual for devices delivered but not yet invoiced at period end. This estimate is based on a historical look-back analysis of lag times between delivery and invoicing that occur over a period end. Products & Services Segment Revenues in the Company’s Products & Services segment are derived from the distribution of O&P components and the leasing and sale of rehabilitation equipment and ancillary consumable supplies combined with equipment maintenance, education, and training. Distribution revenues are recorded upon the delivery of products, net of estimated returns. Equipment leasing and related services revenue are recognized over the applicable term as the customer has the right to use the equipment and as the services are provided. Equipment sales revenue is recognized upon delivery, with any related services revenue deferred and recognized as the services are performed. Sales of consumables are recognized upon delivery. Material Costs Material costs in the Patient Care segment reflect purchases of orthotics and prosthetic componentry and other related costs in connection with the delivery of care through our clinic locations and other patient care operations. Material costs in our Products & Services segment reflect purchases of orthotics and prosthetic materials and other related costs in connection with the distribution of products and services to third party customers. Personnel Costs Personnel costs reflect salaries, benefits, incentive compensation, contract labor, and other personnel costs we incur in connection with our delivery of care through our clinic locations and other patient care operations, or distribution of products and services, and exclude similar costs incurred in connection with activities we consider to be general and administrative in nature. Other Operating Costs Other operating costs reflect other costs we incur in connection with our delivery of care through our clinic locations and other patient care operations or distribution of products and services. Marketing costs, including advertising, are expensed as incurred and are presented within this financial statement caption. The Company incurred approximately $3.4 million, $3.5 million, and $3.3 million in marketing costs during the years ended December 31, 2014, 2013 and 2012, respectively. Other costs include rent, utilities, and other occupancy costs, general office expenses, bad debt expense, and travel and clinical professional education costs. Similar costs incurred in connection with general and administrative activities are excluded from this line. General and Administrative Expenses General and administrative expenses reflect expenses we incur in the general management and administration of our businesses that are not directly attendant to the operation of our clinics or provision of products and services. These include personnel costs and other operating costs supporting general and administrative functions. Professional Accounting and Legal Fees The Company recognizes fees associated with financial statement audits in the fiscal period to which the audit relates. All other professional fees are recognized as expense in the periods in which services are performed. Depreciation and Amortization Depreciation and amortization expenses reflect all depreciation and amortization expense, whether incurred in connection with our delivery of care through clinic locations, our distribution of products and services, or in the general management and administration of our business. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. The Company maintains cash balances in excess of Federal Deposit Insurance Corporation (“FDIC”) limits at certain financial institutions. The Company manages this credit risk by concentrating its cash balances in high quality financial institutions and by periodically evaluating the credit quality of the primary financial institutions holding such deposits. With short maturities, the investments present insignificant risk of changes in value because of interest rate changes and are readily convertible to cash. Historically, no losses have been incurred due to such cash concentrations. Restricted cash balances are presented within “Other current assets” on the consolidated balance sheets. See Note J - “Other Current Assets and Other Assets” for further information. Accounts Receivable, Net Patient Care Segment The Company establishes allowances for its accounts receivable to reduce the carrying value of such receivables to their estimated net realizable value. The Patient Care accounts receivables are recorded net of estimated unapplied cash, estimated Allowance for Disallowed Revenue and estimated Allowance for Doubtful Accounts, as described in the Revenue Recognition accounting policy above. Both the Allowance for Disallowed Revenue and the Allowance for Doubtful Accounts estimates consider historical collection experience by each of the Medicare and non-Medicare (commercial insurance, Medicaid, Veteran’s Administration and Private Pay) primary payor class groupings. For each payor class grouping, liquidation analysis of historical period end receivable balances are performed to ascertain collections experience by aging category. The Company believes its use of historical collection experience applied to current period end receivable balances is reasonable. In the absence of an evident adverse trend, the Company uses historical experience rates calculated using an average of four quarters of data with at least twelve months of adjudication. The Company believes the time periods analyzed provide sufficient time for most balances to adjudicate in the normal course of operations. The Company will modify the time periods analyzed when significant trends indicate that adjustments should be made. In addition, estimates are adjusted when appropriate for information available up through the issuance of the consolidated financial statements. In the restated consolidated financial statements, the Company has restated its estimates of Allowances for Disallowed Revenue and Doubtful Accounts using estimates prepared as outlined above. The restatement was undertaken to correct identified misstatements in the original estimates affecting those periods in compliance with ASC 250, “ Accounting Changes and Error Corrections ,” which requires each individual prior period presented to be adjusted to reflect corrections of the period-specific effects of the misstatements using information that would have been contemporaneously available as of each period end. Refer to further discussion in Note B - “Restatement of Previously Issued Consolidated Financial Statements.” Products & Services Segment The Products & Services segment’s Allowance for Doubtful Accounts is estimated based on the analysis of the segment’s historical write-offs experience, accounts receivable aging and economic status of its customers. Accounts receivable that are deemed uncollectible are written-off to the Allowance for Doubtful Accounts. Accounts receivable are also recorded net of an allowance for estimated sales returns. Inventories Inventories are valued at the lower of estimated cost or market, with cost determined on a first-in, first out (“FIFO”) basis. Provisions have also been made to reduce the carrying value of inventories for excess, obsolete, or otherwise impaired inventory on hand at period-end. Patient Care Segment Substantially all of Patient Care Segment inventories are recorded through a periodic approach whereby inventory quantities are adjusted on the basis of an annual physical count performed during the fourth quarter each year. Segment inventories relate primarily to raw materials and work-in-process (“WIP”) at Hanger Clinics, Dosteon raw materials, and CARES finished goods. Inventories at Hanger Clinics totaled $30.8 million and $35.5 million at December 31, 2014 and 2013, respectively. In connection with the preparation of the restated consolidated financial statements, the Company has restated its estimates of inventory amounts related to the Patient Care Segment using certain estimates that are discussed below. The restatement was undertaken to correct identified misstatements in the original estimates affecting those periods in compliance with ASC 250, Accounting Changes and Error Corrections , which requires each individual prior period presented to be adjusted to reflect corrections of the period-specific effects of the misstatements using contemporaneous information as of each period-end to the extent available. Refer also to further discussion in Note B - “Restatement of Previously Issued Consolidated Financial Statements.” Raw materials consists of purchased parts, components, and supplies which are used in the assembly of O&P devices for delivery to patients. In some cases, purchased parts and components are also sold directly to patients. Raw materials are valued based on the basis of recent vendor invoices, reduced by estimated vendor rebates. Such rebates are recognized as a reduction of cost of materials in the consolidated statement of operations and comprehensive (loss) income when the related devices or components are delivered to the patient. Approximately 51% and 80% of materials at December 31, 2014 and 2013, respectively were purchased from our Products & Services Segment. WIP consists of devices which are in the process of assembly at the Company’s clinics or fabrication centers. WIP quantities were determined by the physical count of patient orders in process at December 31, 2014 while the related stage of completion of each order was established by clinic personnel. The Company does not have an inventory costing system and as a result, the identified WIP quantities were valued on the basis of estimated raw materials, labor, and overhead costs. To estimate such costs, the Company developed bills of materials for certain categories of devices that it assembles and delivers to its patients. Within each bill of material, the Company estimated (i) the typical types of component parts necessary to assemble each device; (ii) the points in the assembly process when such component parts are added; (iii) the estimated cost of such parts based on historical purchasing data; (iv) the estimated labor costs incurred at each stage of assembly; and (v) the estimated overhead costs applicable to the device. In the restated consolidated financial statements as of December 31, 2013 and for the years ended December 31, 2013, and 2012, WIP was valued on the basis of physical counts performed as October 31, 2013, 2012, and 2011, and then valued using corrected historical cost information for materials, labor, and overhead applied to the estimated sales value of WIP inventory, similar to the approach originally used in those periods. Raw materials were valued on the basis of recent vendor invoices. These balances were then adjusted to December 31, 2013, 2012, and 2011 (and subsequent interim period ends) through the use of the gross profit method, adjusted for changes in the estimated number of WIP devices on hand at the respective year-ends. In correcting the misstatements identified in prior periods, including the intentional misstatements described in Note B, the Company determined that it lacked sufficient contemporaneous information to correct certain of the misstatements. In those cases, the Company used information as of December 31, 2014 to determine the related restatement adjustments to inventory at December 31, 2013 and to cost of materials for the years ended December 31, 2013 and 2012. The Company recorded adjustments to decrease inventories by $3.0 million in the fourth quarter of 2014, increase inventories by $0.2 million in the fourth quarter of 2013, and decrease inventories by $1.9 million in the fourth quarter of 2012 to reconcile the recorded amounts to those physically counted and costed in connection with the annual count. Dosteon inventories consist primarily of raw materials and totaled $5.4 million and $8.0 million at December 31, 2014 and 2013, respectively. Such inventories were determined on the basis of physical counts performed as of December 31, 2014 and 2013. As discussed in Note T, Dosteon inventories are included in assets held for sale as of December 31, 2014. CARES inventories consist primarily of finished goods and totaled $0.9 million and $1.1 million at December 31, 2014 and 2013, respectively. Products & Services Segment Segment inventories consist primarily of finished goods at its distribution centers as well as raw materials at fabrication facilities, and totaled $38.9 million and $37.7 million as of December 31, 2014 and 2013, respectively. Finished goods include products that are available for sale to third party customers as well as the Company’s Patient Care Segment as described above. Such inventories were determined on the basis of perpetual records. Fair Value Measurements The Company follows the authoritative guidance for financial assets and liabilities, which establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements. The authoritative guidance requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy by which these assets and liabilities must be categorized, based on significant levels of inputs as follows: Level 1 consists of securities for which there are quoted prices in active markets for identical securities; Level 2 consists of securities for which observable inputs other than Level 1 inputs are used, such as quoted prices for similar securities in active markets or quoted prices for identical securities in less active markets and model-derived valuations for which the variables are derived from, or corroborated by, observable market data; and Level 3 consists of securities for which there are no observable inputs to the valuation methodology that are significant to the measurement of the fair value. The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Financial Instruments The Company holds investments in money market funds which are measured at fair value on a recurring basis. As of December 31, 2014 and 2013, $12.0 million and $4.0 million, respectively, of money market funds are presented within “Cash and cash equivalents” and $3.8 million and $3.7 million of money market funds which are restricted from the general use are presented within “Other current assets.” The fair values of the Company’s money market funds are based on Level 1 observable market prices and are equivalent to one dollar. The carrying value of accounts receivable and accounts payable, approximate their fair values based on the short-term nature of these instruments. The carrying values of the Company’s outstanding term loan as of December 31, 2014 and 2013, was $213.8 million and $222.2 million compared to their fair value of $211.7 million and $223.1, respectively. The Company has estimated their fair value based on debt with similar terms and remaining maturities as of December 31, 2014, which represent Level 2 measurements. The carrying value of amounts outstanding on the Company’s revolving credit facilities as of December 31, 2014 and 2013, was $70.0 million and $25.0 million compared to their fair value of $69.2 million and $25.1 million, respectively. The Company has estimated their fair value based on debt with similar terms and remaining maturities as of December 31, 2014 and 2013, which represent Level 2 measurements. The carrying value of the senior notes was $200.0 million as of December 31, 2014 and 2013 compared to their fair value of $203.0 million and $213.3 million, respectively. The Company has determined the fair value of the senior notes based on market observable inputs and has therefore concluded these are Level 2 measurements. The carrying value of the Company’s outstanding subordinated promissory notes issued in connection with acquisitions (“Seller Notes”) as of December 31, 2014 and 2013 was $26.6 million and $21.1 million, respectively. The Company believes that the carrying value of the Seller Notes approximates the related fair values based on a discounted cash flow model using unobservable inputs, primarily, the Company’s credit spread for subordinated debt, which represents a Level 3 measurement. Insurance Recoveries Receivable We incur legal and other costs with respect to a variety of issues on an ongoing basis. We record a related receivable when costs are reimbursable under applicable insurance policies, we believe it is probable such costs will be reimbursed and such reimbursements can be reasonably estimated. We record the benefit of related receivables from the insurer as a recovery of costs in the same financial statement caption in which the related loss was recognized in our consolidated statements of operations and comprehensive (loss) income. Loss contingency reserves, which are recorded within accrued liabilities, are not reduced by estimated insurance recoveries. Property, Plant and Equipment, Net Property, plant and equipment are recorded at cost less accumulated depreciation and amortization, with the exception of assets acquired through acquisitions, which are initially recorded at estimated fair value. Equipment acquired under capital lease is recorded at the present value of the future minimum lease payments. The cost and related accumulated depreciation of assets sold, retired or otherwise disposed of are removed from the respective accounts, and any resulting gains or losses are included in the consolidated statements of operations and comprehensive (loss) income. Depreciation is computed for financial reporting purposes using the straight-line method over the useful lives of the related assets estimated as follows: furniture and fixtures, equipment and information systems, principally five years, buildings ten to forty years, capital leases over the lease term, and leasehold improvements over the shorter of ten years or lease term. The Company records maintenance and repairs, including the cost of minor replacements, to maintenance expense. Costs of major repairs that extend the effective useful life of property are capitalized and depreciated accordingly. We capitalize the costs of obtaining or developing internal use software, including external direct costs of materials and services and directly related payroll costs. Amortization begins when the internal use software is ready for its intended use. Costs incurred during the preliminary project and post-implementation stages, as well as maintenance and training costs, are expensed as incurred. Business Combinations The Company records tangible and intangible assets acquired and liabilities assumed in business combinations under the acquisition method of accounting. For consideration of the net assets acquired, the Company typically pays cash and issues a Seller Note. It may also include contingent consideration with payment terms associated with the achievement of designated collection targets of the acquired business. Amounts paid for each acquisition are allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition inclusive of identifiable intangible assets. The estimated fair value of identifiable intangible assets are based on detailed valuations performed internally or by external valuation specialists that use information and assumptions provided by management. We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired and liabilities assumed to goodwill. Significant management judgments and assumptions are required in determining the fair value of acquired assets and liabilities, particularly acquired intangible assets, including estimated useful lives. The valuation of purchased intangible assets is based upon estimates of the future performance and discounted cash flows from the acquired business. Each asset acquired or liability assumed is measured at estimated fair value from the perspective of a market participant. Subsequent changes in estimated fair value of contingent consideration are recognized as “General and administrative expenses” within the consolidated statements of operations and comprehensive (loss) income. Goodwill and Other Intangible Assets, Net Goodwill represents the excess of purchase price over the estimated fair value of net identifiable assets acquired and liabilities assumed from purchased businesses. The Company assesses goodwill for impairment annually during the fourth quarter, or when events or circumstances indicate that the carrying value of the reporting units may not be recoverable. The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. If the Company determines that a two-step goodwill impairment test is necessary or more efficient than a qualitative approach, it will measure the fair value of the Company’s reporting units using a combination of income and market approaches. Any impairment would be recognized by a charge to income from operations and a reduction in the carrying value of the goodwill. We use income and market approaches to determine the fair value of a reporting unit. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, and the second step of the impairment test is not required. The second step, if required, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. The fair value of a reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination. If the carrying amount of the reporting unit’s goodwill exceeds its implied fair value, an impairment charge is recognized in an amount equal to that excess. The fair value of acquired customer intangibles is estimated using an excess earnings model. Key assumptions utilized in the valuation model include pro-forma projected cash flows adjusted for market-participant assumptions, forecasted customer retention curve, and discount rate. Customer intangibles are amortized, using the straight-line method over an estimated useful life of ten to fourteen years. The fair value associated with trade names is estimated using the relief-from-royalty method. These assets, some of which have indefinite lives, are primarily included in the Products & Services segment. Indefinite lived intangible assets are assessed for impairment in the fourth quarter of each year, or more frequently if events or changes in circumstances occur which indicate the carrying value might not be recoverable. Intangible assets with definite lives are amortized over their estimated useful lives of one to ten years. The fair value of non-compete agreements are estimated using a discounted cash flow model. The related intangible assets are amortized, using the straight-line method, over their term which ranges from two to five years. Other definite-lived intangible assets are recorded at cost and are amortized, using the straight-line method, over their estimated useful lives of up to seventeen years. Long-Lived Asset Impairment The Company evaluates the carrying value of long-lived assets to be held and used whenever events or changes in circumstance indicate that the carrying amount may not be recoverable. The carrying value of a long-lived asset group is not recoverable and is considered impaired if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. The Company measures impairment as the amount by which the carrying value exceeds the estimated fair value. Estimated fair value is determined primarily using the projected future cash flows discounted at a rate commensurate with the risk involved. Long-lived assets to be disposed of by sale are classified as held for sale when the applicable criteria are met, and recognized within the consolidated balance sheet at the lower of carrying value or fair value less cost to sell. Depreciation on such assets is ceased. Debt Issuance Costs, Net Debt issuance costs incurred in connection with the Company’s long-term debt are amortized, on a straight-line basis, which is not materially different from the effective interest method, through the maturity of the related debt instrument. Amortization of these costs are included within “Interest Expense, Net” in the consolidated statements of operations and comprehensive (loss) income. Accounts Payable and Accrued Liabilities The Company does not maintain a purchase order system, therefore accounts payable relating to goods or services received is estimated using various factors including payments made subsequent to period end, vendor invoice dates, shipping terms confirmed by certain vendors or other third party documentation. Accrued liabilities are recorded based on estimates of services received or amounts expected to be paid to third parties. Accrued legal costs for legal contingencies are recorded when they are probable and estimable. Leases The Company leases the vast majority of its patient care clinics under operating lease arrangements |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2014 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE D - EARNINGS PER SHARE Basic per common share amounts are computed using the weighted average number of common shares outstanding during the period. Diluted per common share amounts are computed using the weighted average number of common shares outstanding during the period and dilutive potential common shares. Dilutive potential common shares consist of stock options, restricted stock units and performance-based units calculated using the treasury stock method. Our credit agreement restricts the payment of dividends or other distributions to the shareholders of the Company with respect to the parent company or any of its subsidiaries. See Note O - “Long-Term Debt” for additional information. As of December 31, 2014, 2013 and 2012, total anti-dilutive shares amounted to 8,088, 1,939 and 37, respectively. The reconciliation of the numerators and denominators used to calculate basic and diluted net (loss) income per share are as follows: Year Ended December 31, (As Restated) (in thousands, except share and per share data) 2014 2013 2012 Net (loss) income from continuing operations applicable to common shareholders $ ) $ $ Loss from discontinued operations, net of income taxes ) ) ) Net (loss) income applicable to common shareholders $ ) $ $ Shares of common stock outstanding used to compute basic per common share amounts Effect of dilutive restricted stock units and options (1) — Shares used to compute diluted per common share amounts Basic: (Loss) income from continuing operations per share applicable to common shareholders $ ) $ $ Loss from discontinued operations per share applicable to common shareholders ) ) ) Net (loss) income per share applicable to common shareholders $ ) $ $ Diluted: (Loss) income from continuing operations per share applicable to common shareholders $ ) $ $ Loss from discontinued operations per share applicable to common shareholders ) ) ) Net (loss) income per share applicable to common shareholders $ ) $ $ (1) For 2014, given the Company is recognizing a net loss from continuing operations, shares used to compute diluted per common share amounts excludes 256,880 potentially dilutive common shares related to unvested restricted stock units and unexercised options in accordance with ASC 260 - Earnings Per Share. |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2014 | |
ACCOUNTS RECEIVABLE, NET | |
ACCOUNTS RECEIVABLE, NET | NOTE E - ACCOUNTS RECEIVABLE, NET Accounts receivable are principally from Medicare and Medicaid programs and commercial insurance plans. The Company’s accounts receivables are recorded net of its contractual discounts and net of estimated Allowances for Disallowed Revenue and Sales Returns. These allowances are presented as a reduction of gross accounts receivable. The Company also records Allowance for Doubtful Accounts, which are deducted from gross accounts receivable to arrive at “Accounts receivable, net.” Accounts receivable, net as of December 31, 2014, and 2013 is comprised of the following: As of December 31, 2014 (As Restated) (in thousands) Patient Care Products & Consolidated Patient Care Products & Consolidated Accounts receivable, before allowance $ $ $ $ $ $ Allowance for disallowed revenue ) — ) ) — ) Accounts receivable, gross Allowance for doubtful accounts ) ) ) ) ) ) Accounts receivable, net $ $ $ $ $ $ Net revenues generated directly from Medicare program represented approximately 29%, 31% and 29% of the Company’s net revenues for the years ended December 31, 2014, 2013, and 2012, respectively. Approximately 29% and 28% of the Company’s net accounts receivable are from Medicare at December 31, 2014 and 2013, respectively. The following tables represent the estimated net trade accounts receivable by major payor classifications and by aging categories as of December 31, 2014 and 2013, respectively: December 31, 2014 (in thousands) 0-60 61-120 121-180 Over 180 Total Patient Care Commercial insurance $ $ $ $ $ Private pay Medicaid VA Non-Medicare Medicare Products & Services Accounts receivable, net $ $ $ $ $ December 31, 2013 (As Restated) (in thousands) 0-60 61-120 121-180 Over 180 Total Patient Care Commercial insurance $ $ $ $ $ Private pay Medicaid VA Non-Medicare Medicare Products & Services Accounts receivable, net $ $ $ $ $ The following table summarizes activities by year for the Allowance for Disallowed Revenue and the Allowance for Doubtful Accounts. The information regarding the Allowance for Disallowed Revenue is provided for supplemental disclosure regarding this balance. (in thousands) Allowance for Allowance for Balance at January 1, 2012 (As Restated) $ $ Additions (1) Reductions ) ) Balance at December 31, 2012 (As Restated) Additions (1) Reductions ) ) Balance at December 31, 2013 (As Restated) Additions (1) Reductions ) ) Balance at December 31, 2014 $ $ (1)The accounts receivables associated with the Dosteon businesses, which are recognized as discontinued operations as of each respective date of the consolidated financial statements, are not included in “Assets held for sale” because they were not a part of the disposal transaction. Therefore the associated allowances, additions, and reductions are included in the above table. Dosteon’s bad debt expense included in “Loss on discontinued operations net of income tax” in 2014, 2013, and 2012 were $2.6 million, $3.1 million, and ($0.3) million, respectively. Dosteon’s disallowed revenue included in “Loss on discontinued operations, net of income tax” for 2014, 2013, and 2012 were $14.0 million, $8.7 million, and $5.8 million, respectively. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2014 | |
INVENTORIES | |
INVENTORIES | NOTE F - INVENTORIES A description of the Company’s inventory valuation methodologies are presented in Note C - “Significant Accounting Policies” to our consolidated financial statements included in this Annual Report on Form 10-K. The Company’s inventories are comprised of the following: December 31, (As Restated) (in thousands) 2014 2013 Raw materials $ $ Work in process Finished goods Total inventories $ $ |
PROPERTY PLANT AND EQUIPMENT, N
PROPERTY PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2014 | |
PROPERTY PLANT AND EQUIPMENT, NET | |
PROPERTY PLANT AND EQUIPMENT, NET | NOTE G - PROPERTY PLANT AND EQUIPMENT, NET Property, plant and equipment, net were comprised of the following: December 31, (As Restated) (in thousands) 2014 2013 Land $ $ Buildings Furniture and fixtures Machinery and equipment Equipment leased to third parties under operating leases Leasehold improvements Computers and software Total property, plant, and equipment, gross Less: Accumulated depreciation ) ) Total property, plant, and equipment, net $ $ Total depreciation expense from both continuing operations and discontinued operations was approximately $32.8 million, $29.0 million, and $28.1 million for the years ended December 31, 2014, 2013 and 2012, respectively. Included within Buildings was $21.3 million and $23.8 million recorded as an asset for certain build-to-suit leases as of December 31, 2014 and 2013, respectively. Accumulated depreciation on these assets was $6.3 million and $8.4 million as of December 31, 2014 and 2013, respectively. The following table summarizes the Company’s investment in equipment leased to third parties under operating leases: December 31, (As Restated) (in thousands) 2014 2013 Program equipment $ $ Less: Accumulated depreciation ) ) Net book value $ $ In connection with the Company’s strategic assessment of its CARES business during the third quarter of 2014, we performed an impairment analysis of the associated long-lived tangible assets. The Company determined certain assets were not recoverable and recorded an impairment charge of $2.2 million, which is included in “Other operating costs” and “General and administrative expenses” within the consolidated statements of operations and comprehensive (loss) income. In connection with a similar strategic assessment of its Dosteon businesses, the Company recorded other tangible long-lived asset impairments of $1.5 million in 2014 which are included in “Loss from discontinued operations, net of income taxes” on the Company’s consolidated statements of operations and comprehensive (loss) income. See Note T - “Discontinued Operations” for additional information. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2014 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE H - ACQUISITIONS During 2014, the Company acquired twelve O&P businesses consisting of 37 clinics and one distribution center for an aggregate purchase price of $52.7 million. During 2013, the Company acquired nine O&P businesses consisting of 22 clinics for an aggregate purchase price of $13.3 million. During 2012, the Company acquired sixteen O&P businesses consisting of fifty-nine clinics and one rehabilitation business for an aggregate purchase price of $83.8 million. The components of the respective aggregate purchase prices are listed in the schedule below. The acquisitions were primarily undertaken to acquire the expertise of an assembled workforce to continue to build upon the core capabilities of our strategic business platforms and brand, through the expansion of the Company’s service area or service capability to better serve our patients. Estimated fair value amounts of contingent consideration are recorded at the respective acquisition dates. Future changes to the estimated fair value of contingent consideration are recognized as income (loss) through the consolidated statements of operations and comprehensive (loss) income. The assets acquired and liabilities assumed for all acquisitions were recorded at their estimated fair values at the dates of the acquisitions and the results of their operations are included in the Company’s consolidated financial statements from the effective dates of the acquisitions. The Company’s valuations are subject to adjustments as additional information is obtained; however, these adjustments are not expected to be material. The excess of purchase price over the aggregate estimated fair values of assets acquired and liabilities assumed was recorded as goodwill. The value of goodwill from acquisitions can be attributed to a number of business factors including, but not limited to, synergies associated with combining the acquired businesses with the Company’s existing business. The Company has made an election to treat the majority of these acquisitions as asset purchases for income tax purposes resulting in approximately $34.3 million, $5.0 million and $15.3 million of acquired goodwill being deductible for income tax purposes for acquisitions completed in 2014, 2013 and 2012, respectively. The Company incurred $1.2 million, $0.9 million and $1.2 million in acquisition-related expenses for the years ended December 31, 2014, 2013 and 2012, respectively which are presented within “General and administrative expenses” on the Company’s consolidated statements of operations and comprehensive (loss) income. The following table summarizes the components of the aggregated purchase price the assets acquired and liabilities assumed in the above transactions and recognized at their respective acquisition dates at estimated fair values: Year Ended December 31, (As Restated) (in thousands) 2014 2013 2012 Net cash $ $ $ Issuance of seller notes Contingent consideration Other working capital adjustments — Aggregate purchase price Accounts receivable Inventories Acquired customer intangibles and other intangible assets, net Other assets Accounts payable and other liabilities assumed ) ) ) Net assets acquired Goodwill $ $ $ Included within cash paid for acquisitions on the consolidated statements of cash flows are cash payment for adjustments to working capital for acquisitions which occurred in prior fiscal years. These amounts were $0.0 million, $0.3 million, and $0.5 million for the years ended December 31, 2014, 2013 and 2012, respectively. The majority of the intangible assets acquired relate to customer relationships. Amortizable intangible assets acquired during 2014, 2013 and 2012 had weighted-average estimated useful lives of ten, eight, and nine years, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2014 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE I - GOODWILL AND OTHER INTANGIBLE ASSETS In the third quarter of 2014, as the result of the following indicators, the Company performed Step One of the goodwill impairment test. These factors included, but were not limited to, reductions in same store revenue, net income and cash flow from operations compared with prior years, the reduction in forecasted revenue, net income, and cash from operations for 2014, and a sustained decrease in the Company’s share price during the quarter. The results of this test indicated there was no impairment for any of the Company’s reporting units with goodwill. The Company performed a qualitative goodwill impairment assessment as of October 1, 2014, the date of its annual assessment test. The results of this test indicated there was no impairment for any of the Company’s reporting units. The Company performed Step One of the goodwill impairment test again as of December 31, 2014 to take into consideration the impact the restatement adjustments would have on the Company’s forecasted cash flows. The results of this test indicated there was no impairment of goodwill as of December 31, 2014. The Company could incur a material impairment in future years if the Company does not achieve its anticipated cash flows. In the fourth quarter of 2014, the Patient Care segment’s Dosteon businesses met the requirements to be accounted for as assets held for sale and to be classified as a discontinued operation. Accordingly, the Company allocated $8.4 million of goodwill to the businesses to be sold based upon the relative fair value of the businesses to be sold to the estimated fair value of the reporting unit. Goodwill allocated to the Company’s reportable segments for the years ended December 31, 2014 and 2013 is as follows: Patient Care Products & Services (In thousands) Gross Accumulated Gross Accumulated Total Balance as of December 31, 2012 (As Restated) $ $ ) $ $ — $ Additions due to acquisitions — — — Adjustments — ) — Balance as of December 31, 2013 (As Restated) ) — Additions due to acquisitions — — Adjustments — — — Allocation to Assets held for sale ) — — — ) Balance at December 31, 2014 $ $ ) $ $ — $ The balances related to intangible assets as of December 31, 2014 and 2013 are as follows: December 31, 2014 (As Restated) (in thousands) Gross Accumulated Net Gross Accumulated Net Customer Lists $ $ ) $ $ $ ) $ Trade Names ) ) Patents and Other Intangibles ) ) Definite-lived intangible assets ) ) Indefinite life - Trade Name — — Total $ $ ) $ $ $ ) $ In connection with the Company’s strategic assessment of its Dosteon businesses, we performed an impairment analysis of the associated long-lived intangible assets, in the third quarter of 2014. The Company determined certain assets were not recoverable and recorded an impairment charge of $2.4 million. This impairment charge is recognized within “Loss from discontinued operations, net of income taxes” on the Company’s consolidated statements of operations and comprehensive (loss) income. See Note T - “Discontinued Operations” for additional information. The weighted average life of the additions to customer lists, patents and other intangibles is ten years as of December 31, 2014. Total intangible amortization expense from both continuing operations and discontinued operations was approximately $7.4 million, $6.6 million and $5.5 million for the years ended December 31, 2014, 2013 and 2012, respectively. Estimated aggregate amortization expense for definite-lived intangible assets for each of the five years ending December 31 and thereafter is as follows: (in thousands) 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
OTHER CURRENT ASSETS AND OTHER
OTHER CURRENT ASSETS AND OTHER ASSETS | 12 Months Ended |
Dec. 31, 2014 | |
OTHER CURRENT ASSETS AND OTHER ASSETS | |
OTHER CURRENT ASSETS AND OTHER ASSETS | NOTE J - OTHER CURRENT ASSETS AND OTHER ASSETS Other current assets consists of the following: As of December 31, (in thousands) 2014 (As Restated) Non-trade receivables $ $ Prepaid rent Restricted cash Prepaid maintenance Other miscellaneous Total $ $ Prepaid expenses primarily relate to prepaid rent, prepaid software and hardware maintenance and license fees, prepaid expenses related to the Company’s annual Education Fair event occurring in the first quarter of each fiscal year and other miscellaneous prepaid expenses. Non-trade receivables primarily relate to vendor rebate receivables, tenant improvement allowance receivables, and other non-trade receivables. Restricted cash relates to funds held by the Company’s captive insurance subsidiary and whose use for general purposes is restricted by Nevada state insurance regulations. Other assets consists of the following: As of December 31, (in thousands) 2014 (As Restated) Cash surrender value of COLI $ $ Non-trade receivables Deposits Other miscellaneous Total $ $ Company owned life insurance (“COLI”) policies represents the combined cash surrender values of both the policies associated with the Company’s Defined Benefit Senior Executive Retirement Plan ( “SERP”) and its Defined Contribution Senior Executive Retirement Plan (“DC SERP”). See Note L - “Employee Benefits” for additional information. Non-trade receivables primarily relate to estimated receivables due from the Company’s various business insurance policies. Deposits primarily relate to security deposits made in connection with the Company’s property leases. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2014 | |
INCOME TAXES | |
INCOME TAXES | NOTE K—INCOME TAXES Components of income tax expense are as follows: Year Ended December 31, (As Restated) (In thousands) 2014 2013 2012 Current: Federal $ $ $ State Total current Deferred: Federal ) ) ) State ) ) Total deferred ) ) ) Provision for income taxes from continuing operations $ $ $ Income tax benefit attributable to discontinued operations $ ) $ ) $ ) A reconciliation of the federal statutory tax rate to the Company’s effective tax rate is as follows for the Company’s continuing operations: Year Ended December 31, (As Restated) 2014 2013 2012 Federal statutory tax rate - (benefit) / provision .0)% .0% .0% State and local income taxes .2)% .0% .4% Change in valuation allowance .6% .2)% .5)% Domestic manufacturing deduction .9)% .8)% .2)% Research and development credit .3)% .2)% .7)% Change in uncertain tax positions .6% .6% .8% Other .1% .4% .4% Tax provision .9% .8% .2% The significant components of the net deferred income tax asset and liability are as follows: As of December 31, (In thousands) 2014 (As Restated) Deferred tax liabilities: Goodwill amortization $ $ Acquired intangibles Software development costs — Prepaid expenses Sec. 481(a) adjustments — Other Deferred tax assets: Property, plant and equipment Net operating loss carryforwards Accrued expenses Deferred benefit plan compensation Provision for doubtful accounts Inventory Restricted stock Capital leases Deferred rent Refund liabilities Interest on Seller Notes Other Valuation allowance ) ) Net deferred tax asset $ $ The significant components of the net deferred income tax asset/(liability) are classified as follows on the accompanying consolidated balance sheet: As of December 31, (In thousands) 2014 (As Restated) 2013 Current: Deferred tax assets $ $ Deferred tax liabilities ) ) Valuation allowance ) ) Net current deferred income tax asset Non-current: Deferred tax assets Deferred tax liabilities ) ) Valuation allowance ) ) Net non-current deferred income tax liability ) ) Net deferred income tax asset $ $ The Company has $8.9 million and $10.4 million of U.S. federal and $43.3 million and $49.3 million of state net operating loss carryforwards available at December 31, 2014 and 2013, respectively. These carryforwards will be used to offset future income but may be limited by the change in ownership rules in Section 382 of the Internal Revenue Code. These net operating loss carryforwards will expire in varying amounts between 2015 and 2034. The Company establishes valuation allowances when necessary to reduce deferred tax assets to amounts expected to be realized. We record a valuation allowance to reduce our deferred tax assets to the amount that is estimated to be realized under the more-likely-than-not recognition criteria. As of December 31, 2014 and 2013, the Company had a valuation allowance of approximately $5.7 million and $1.3 million, respectively, related primarily to certain state loss carryforwards, which are expected to expire before utilization. The Company will continue to monitor the realization of its deferred tax assets, and accordingly, the Company may record additional valuation allowances in future periods. An increase to the valuation allowance would result in additional income tax expense in the period recorded, whereas future releases of the valuation allowance, if any, would result in a reduction of income tax expense. The following schedule presents the activity in the valuation allowance over the previous three fiscal years: Balance at Balance at (In thousands) Beginning End Year of Year Acquisitions Generated Released of Year 2014 $ $ — $ $ $ 2013 (As Restated) $ $ — $ $ $ 2012 (As Restated) $ $ — $ $ $ A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows: Year Ended December 31, (As Restated) (in thousands) 2014 2013 2012 Unrecognized tax benefits, at beginning of the year $ $ $ Additions for tax positions related to the current year Additions for tax positions of prior years — Decrease related to prior year positions ) ) ) Decrease for lapse of applicable statute of limitations ) ) ) Unrecognized tax benefits, at end of the year $ $ $ As of December 31, 2014, the total amount of unrecognized tax benefits, if recognized, that would affect the effective tax rate is approximately $0.5 million. The Company expects the amount of unrecognized tax benefits will change by approximately $0.7 million within the next twelve months due primarily to the lapse of statute limitations. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2014, 2013 and 2012, the amount of accrued interest and penalties was approximately $0.5 million, $0.4 million and $0.3 million, respectively. The Company is subject to income tax in the U.S. federal, state and local jurisdictions. With few exceptions, the Company is no longer subject to U.S. Federal income tax examinations for years prior to 2013, as the statute of limitations has lapsed for 2012 and all preceding years. Tax years 2014 and 2013 remain open. However, due to acquired net operating losses, tax authorities have the ability to adjust those net operating losses related to closed years. We believe we have adequate accruals for additional taxes and related interest expense which could ultimately result from tax examinations. We believe the ultimate disposition of tax examinations should not have a material adverse effect on our consolidated financial position, statements of operations, or liquidity. The Company has been recently notified that it will be audited by the IRS for the 2013 and 2015 tax years. |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2014 | |
EMPLOYEE BENEFITS | |
EMPLOYEE BENEFITS | NOTE L - EMPLOYEE BENEFITS Savings Plan The Company maintains a 401(k) Savings and Retirement plan that covers all of its employees. Under the plan, employees may defer a portion of their compensation up to the levels permitted by the Internal Revenue Service. The Company recorded matching contributions of approximately $6.2 million, $6.0 million and $4.2 million under this plan during 2014, 2013 and 2012, respectively, which were included within “Personnel costs” and “General and administrative expenses” on the Company’s consolidated statements of operations and comprehensive (loss) income. Supplemental Executive Retirement Plan (“SERP”) Effective January 2004, the Company implemented an unfunded noncontributory defined benefit plan (the “Plan”) for certain senior executives. The Plan, which is administered by the Company, calls for fifteen annual payments upon retirement with the payment amount based on years of service and final average salary. Benefit costs and liabilities balances are calculated based on certain assumptions including benefits earned, discount rates, interest costs, mortality rates and other factors. The Company engaged an independent actuary to calculate the related benefit obligation at December 31, 2014 and 2013 as well as net periodic benefit plan expense for the years ended December 31, 2014, 2013, and 2012. As of December 31, 2014, the average remaining service period of plan participants is 10.7 years. The Company believes the assumptions used are appropriate; however, changes in assumptions or differences in actual experience may affect our benefit obligation and future expenses. Actual results that differ from the assumptions are accumulated and amortized over future periods, affecting the recorded obligation and expense in future periods. The Plan’s net benefit cost is as follows: Change in Benefit Obligation (in thousands) Benefit obligation at December 31, 2011 (As Restated) $ Service cost Interest cost Amortization of loss Payments ) Actuarial loss Benefit obligation at December 31, 2012 (As Restated) Service cost Interest cost Amortization of loss Payments ) Actuarial gain ) Benefit obligation at December 31, 2013 (As Restated) Service cost Interest cost Amortization of loss — Payments ) Actuarial loss Benefit obligation at December 31, 2014 $ Unfunded status $ Unamortized net (gain) loss — Net amount recognized $ Amounts Recognized in the Consolidated Balance Sheet at December 31, 2014 Current: Accrued compensation related costs $ Long-Term Liabilities: Other liabilities Total accrued benefit obligation $ The Company recorded actuarial (losses) gains under the Plan of ($1.4 million), $1.6 million, and ($1.2 million) in 2014, 2013, and 2012, respectively, in other comprehensive (loss) income. Immaterial amounts were recognized within the consolidated statement of operations from accumulated other comprehensive income during 2014, 2013, and 2012. As of December 31, 2014, the Company does not expect to recognize amounts from accumulated other comprehensive income as a component of net periodic benefit cost in fiscal years 2015. There were no other components such as prior service costs or transition obligations relating to the Plan costs recorded within accumulated other comprehensive (loss) income during 2014, 2013 or 2012. The following weighted average assumptions were used to determine the benefit obligation as of December 31 of each year and net benefit cost for each year ended December 31. The Company used a third party actuarial specialist to assist in determining, among other things, the discount rate for all three years presented. 2014 2013 2012 Discount rate % % % Average rate of increase in compensation % % % At December 31, 2014, the estimated accumulated benefit obligation is $23.1 million. Future payments under the Plan are as follows: (in thousands) 2015 $ 2016 2017 2018 2019 Thereafter Total $ In connection with the SERP obligation, the Company maintains a COLI policy. The carrying value of the COLI is measured at its cash surrender value and is presented within “Other assets” on the Company’s consolidated balance sheets. See Note J - “Other Current Assets and Other Assets” for additional information. Defined Contribution Supplemental Executive Retirement Plan On May 1, 2013, the Company established a Defined Contribution Supplemental Executive Retirement Plan. The Company has a corresponding investment in a company owned life insurance policy. The Company has not made any explicit or implicit commitments to maintain life insurance on any specific executive that would benefit the executive or his or her beneficiaries. Each participant is given a notional account to manage his or her annual distributions and allocate the funds among various investment options (e.g. mutual funds). These accounts are tracking accounts only for the purpose of calculating the participant’s benefit. The participant does not have ownership of the underling mutual funds. When a participant initiates or changes the allocation of his or her notional account, the Company will generally make an allocation of its investments in its insurance policy, to match those chosen by the participant. While the allocation of the Company’s sub accounts is generally intended to mirror the participant’s account records (i.e. the distributions and gains or losses on those funds), the employee does not have legal ownership of any funds until payout from the Company upon retirement. The underlying investments are owned by the insurance company (and the Company in turn owns an insurance policy). To date, the Company’s contributions to this plan have not been material. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2014 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE M - STOCK - BASED COMPENSATION On May 13, 2010, the shareholders of the Company approved the 2010 Omnibus Incentive Plan (the “2010 Plan”) and prohibited future awards under the Amended and Restated 2002 Stock Incentive and Bonus Plan (the “2002 Plan”) and 2003 Non-Employee Directors’ Stock Incentive Plan (the “2003 Plan”). In conjunction with this approval, it was determined that no new awards will be granted under the 2002 Plan or the 2003 Plan; however, awards granted under either the 2002 Plan or the 2003 Plan that were outstanding will remain outstanding and continue to be subject to all of the terms and conditions of the 2002 Plan or the 2003 Plan, as applicable. The 2010 Plan provides that 2.5 million shares of common stock are reserved for issuance, subject to adjustment as set forth in the 2010 Plan, provided, however, that only 1.5 million shares may be issued pursuant to the exercise of incentive stock options. Of the 2.5 million shares, approximately 2.0 million are shares that were newly authorized for issuance under the 2010 Plan and approximately 500,000 are unissued shares not subject to awards that had been carried over from the shares previously authorized for issuance under the terms of the 2002 Plan and the 2003 Plan. Unless earlier terminated by the Board of Directors, the 2010 Plan remains in effect until the earlier of (i) the date that is ten years from the date the plan is approved by the Company’s shareholders, namely May 13, 2020, or (ii) the date all shares reserved for issuance have been issued. As of December 31, 2014, of the 2.5 million shares of common stock authorized for issuance under the Company’s 2010 Plan, awards relating to approximately 1.9 million shares have been issued of which awards relating to approximately 0.3 million shares have been subsequently forfeited and added back to the pool, leaving approximately 0.9 million shares available for future issuance. In 2014, shares issued under equity plans are issued from authorized and unissued shares. Total unrecognized stock-based compensation cost related to unvested restricted stock unit awards is approximately $14.8 million as of December 31, 2014, and is expected to be recognized as compensation expense over approximately four years. See Note V - “Subsequent Events” to our consolidated financial statements in this Annual Report on Form 10-K for information regarding the 2016 Omnibus Incentive Plan. Restricted Stock Units For the years ended December 31, 2014, 2013 and 2012, the Company recognized a total of approximately $9.8 million, $9.4 million and $8.3 million, respectively, of stock-based compensation expense for the 2002, 2003 and 2010 plans. Of these amounts, approximately $0.2 million, $0.1 million, and $0.1 million, for the years ended December 31, 2014, 2013, and 2012, respectively, are associated with the Dosteon business and are included within “Loss from discontinued operations, net of income taxes.” Stock compensation expense, net of estimate forfeiture rate, relates to restricted stock units and performance-based restricted stock units. The summary of restricted stock units, performance-based stock units, and weighted average grant date fair values are as follows: Employee Service-Based Employee Performance-Based Awards Director Awards Units Weighted Units Weighted Units Weighted Nonvested at December 31, 2011(As Restated) $ $ $ Granted Vested ) ) ) Forfeited ) ) — — Nonvested at December 31, 2012(As Restated) $ $ $ Granted Vested ) ) ) Forfeited ) ) ) Nonvested at December 31, 2013(As Restated) $ $ $ Granted Vested ) ) ) Forfeited ) ) ) Nonvested at December 31, 2014 $ $ $ During the years ended December 31, 2014, 2013 and 2012, approximately 377,000, 348,000, and 377,000 restricted stock units of common stock with an intrinsic value of $12.8 million, $11.0 million and $8.4 million, respectively, became fully vested. As of December 31, 2014, total unrecognized compensation expense related to unvested restricted stock units and unvested performance based restricted stock units for which the Company has concluded the performance condition was probable of achievement was approximately $15.0 million and the related weighted-average period over which it is expected to be recognized is approximately 2.5 years. The aggregate granted units have vesting dates through March 2017. The 2014, 2013 and 2012 aggregate grants had total estimated grant date fair values of $12.2 million, $12.2 million and $11.3 million, respectively. Options The summary of option activity and weighted average exercise prices are as follows: Employee Awards Director Awards Weighted Weighted Weighted Average Exercise Price Shares Exercise Price Shares Exercise Price Outstanding at December 31, 2011 $ $ Granted — — — — Terminated ) — — Exercised ) ) Outstanding at December 31, 2012 $ $ Granted — — — — Terminated ) — — Exercised ) ) Outstanding at December 31, 2013 — $ — $ Granted — — — — Terminated — — — — Exercised — — ) Outstanding at December 31, 2014 — $ — $ Aggregate intrinsic value at December 31, 2014 $ — $ Weighted average remaining contractual term (years) — The intrinsic value of options exercised during the years ended December 31, 2014, 2013 and 2012 was approximately $0.1 million, $2.4 million and $3.6 million, respectively. Options exercisable under the Company’s stock-based compensation plans at December 31, 2014, 2013 and 2012 were 7,947 shares, 13,320 shares and 221,855 shares, respectively, with a weighted average exercise price of $5.09, $9.53 and $11.72, respectively, average remaining contractual terms of 0.4, 1.0 and 1.0, respectively, and aggregate intrinsic values of approximately $0.1 million, $0.1 million and $2.6 million, respectively. Cash received by the Company related to the exercise of options during the years ended December 31, 2014, 2013 and 2012 amounted to $0.1 million, $2.4 million and $3.6 million, respectively. As of December 31, 2014, 2013 and 2012, there is no unrecognized compensation cost related to stock option awards. Information concerning outstanding and exercisable options as of December 31, 2014 is as follows: Options Outstanding and Exercisable Number of Weighted Average Range of Options Remaining Exercise Exercise Prices or Awards Life (Years) Price $5.09 to $5.09 $ |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2014 | |
LEASES | |
LEASES | NOTE N - LEASES Rent expense under operating leases was approximately $50.1 million, $45.8 million, and $40.5 million, for the years ended December 31, 2014, 2013 and 2012, respectively, which was included within “Other operating costs” and “General and administrative expenses” on the Company’s consolidated statements of operations and comprehensive (loss) income. Sublease rental income is not material. The net book value of office equipment under capital leases was approximately $1.1 million and $0.6 million at December 31, 2014 and 2013, respectively. Equipment capital lease obligations are included in long-term debt as a part of “Financing Leases and Other” in Note O - “Long-Term Debt.” Future minimum rental payments, by year and in the aggregate, under operating and financing obligations with terms of one year or more at December 31, 2014 are as follows: (in thousands) Operating Capital 2015 $ $ 2016 2017 2018 2019 — Thereafter — Total $ $ |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2014 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | NOTE O - LONG-TERM DEBT Long-term debt as of December 31 was as follows: (in thousands) 2014 (As Restated) Revolving credit facility $ $ Term loan 7 1/8 % senior notes due 2018 Seller notes Financing obligations and other Total debt before unamortized discount Unamortized discount ) ) Total debt $ $ Reported as: Current portion of long-term debt $ $ Long-term debt, less current portion Total debt $ $ Refinancing and Amendments Refer to the Debt Related Subsequent Events section below for disclosure of covenant violations, amendments and waivers related thereto and refinancing of the senior notes occurring subsequent to December 31, 2014. Credit Agreement - Revolving Credit Facility and Term Loan During the second quarter of 2013, the Company refinanced its bank credit facilities through a five year credit agreement dated as of June 17, 2013 (as amended from time to time, the “Credit Agreement”) that increased its senior secured facilities to an aggregate principal amount of up to $425.0 million from $400.0 million previously. The Credit Agreement includes a $200.0 million revolving credit facility and a $225.0 million term loan facility both of which mature on June 17, 2018 and are subject to a leveraged-based pricing grid in which the applicable interest rate is dependent on the Company’s leverage ratio. As of December 31, 2014, the interest rate on the revolving and term loan facilities was 2.17% based on a LIBOR rate of 0.17% and the applicable margin of 2.00%. Subject to certain exceptions, the facilities under the Credit Agreement are senior obligations and are secured by first priority perfected liens and security interests in substantially all of the Company’s personal property and each subsidiary guarantor. In conjunction with the 2013 refinancing, the Company incurred a pre-tax non-cash charge of approximately $6.6 million during the second quarter of 2013 related to the write-off of existing debt issuance costs associated with its previous credit agreement. No prepayment penalties were incurred. The Company had approximately $126.4 million and $171.4 million available under the revolving credit facility as of December 31, 2014 and 2013, respectively. The amounts outstanding under the revolving credit facility were $70.0 million and $25.0 million of borrowings as of December 31, 2014 and 2013, respectively, and outstanding standby letters of credit of approximately $3.6 million as of both dates. The amount outstanding under the term loan facility was approximately $213.8 million as of December 31, 2014. Commencing September 30, 2013 throughout the life of the term loan facility, quarterly principal payments are required. The amount of the required quarterly principal payments begins at of 0.625% of the initial $225 million borrowed and then escalates to 1.25% on September 30, 2014, to 1.875% on September 30, 2015, to 2.5% on September 30, 2016, and 3.75% on September 30, 2017. A final principal installment of approximately $143.4 million is due at maturity in June 2018. From time to time, mandatory prepayments may be required as a result of the incurrence of certain types of debt, certain asset sales, or other events as defined in the Credit Agreement. No such mandatory prepayments were required during 2014 and 2013. The Company incurs an unused commitment fee on the amount of unused commitments under the Credit Agreement in the amount of 0.375% based on average quarterly utilization. The unamortized loan discount is being recorded as additional interest expense on a quarterly basis over the term of the credit agreement. 7 1 / 8 % Senior Notes due 2018 The 7 1 / 8 % Senior Notes (the “Senior Notes”) are scheduled to mature on November 15, 2018. The Senior Notes are senior unsecured indebtedness. Interest is payable on the Senior Notes semi-annually on May 15 and November 15 of each year. Subsequent to November 15, 2014, the Company may redeem all or a part of the Senior Notes at the redemption price of 103.6% of the outstanding principal. On or after November 15, 2015, the redemption price is reduced to 101.8% of outstanding principal and after November 15, 2016, the Senior Notes are callable at par. See the “Debt Related Subsequent Event” section below for information on the Company’s refinance of this indebtedness subsequent to December 31, 2014. Subsidiary Guarantees The obligations under the Credit Agreement and the Senior Notes are guaranteed by the Company’s material domestic subsidiaries, which incorporates subsidiaries that both make up no less than 90% of the Company’s total net revenues and make up no less than 90% of the total assets of the Company. Separate condensed consolidating information is not included as the parent company does not have independent assets or operations, and the guarantees are full and unconditional and joint and several. Seller Notes The Company typically issues subordinated promissory notes (“Seller Notes”) as a part of the consideration transferred when making acquisitions. The Seller Notes are non-collateralized and net of unamortized discount of $1.3 million and $0.9 million as of December 31, 2014 and 2013, respectively. In accordance with ASC 805, Accounting for Business Combinations , the Company has measured these instruments at estimated fair value as of their respective acquisition dates. The stated interest rates on these instruments range from 2.00% to 4.00% while the effective interest rate is 6.50%. Principal and interest are payable in either monthly, quarterly or annual installments and mature through November 2018. The Company estimates fair value of the Seller Notes with a discounted cash flow model using unobservable rates and has determined these represent Level 3 measurements. Financing Obligations and Other Financing obligations relate to agreements when the Company is deemed the owner of the leased building, typically due to significant involvement during the construction period, and which do not qualify for de-recognition under the sale-leaseback accounting guidance due to one or more prohibited forms of continuing involvement in the property. Such forms of continuing involvement include the Company paying for a more than insignificant portion of project construction costs, the Company providing a security interest in the tenant’s personal property located at the premises, and/or the Company having renewal options for a term that comprises 90% or more of the remaining economic life of the property at a price other than estimated fair value. These liabilities have remaining terms ranging from 1 to 20 years with an average inherent interest rate of approximately 13%. Other obligations include equipment under capital leases. See “Note N - Leases” for certain additional information. Following are the aggregate contractual payments associated with the financing obligations over the next 5 years and thereafter, which include principal and interest. Included in these amounts are optional renewal periods for which management believes it will exercise its rights to renew, as well as the final non-monetary payment made with the return of the property at the end of the financing term: (in thousands) December 31, 2015 $ 2016 2017 2018 2019 Thereafter Total $ Interest Expense, Net Interest expense for all instruments is recognized within “Interest expense, net” on the Company’s consolidated statements of operations and comprehensive (loss) income. Immaterial amounts of interest income are also recognized within this caption. Debt Covenants as of December 31, 2014 As of December 31, 2014, the terms of the Credit Agreement and the Indenture associated with the Senior Notes dated as of November 2, 2010 (as amended and supplemented from time to time, the “Indenture”) governing the Senior Notes limited the Company’s ability to, among other things, purchase capital assets, incur additional indebtedness, create liens, pay dividends on or redeem capital stock, make certain investments, make restricted payments, make certain dispositions of assets, engage in transactions with affiliates, engage in certain business activities, and engage in mergers, consolidations and certain sales of assets. The Credit Agreement required compliance with various covenants, including but not limited to (i) quarterly and annual financial reporting requirements, (ii) minimum consolidated interest coverage ratio of 3.50:1.00 and (iii) maximum net leverage ratio of 4.00:1.00. As discussed below, effective August 1, 2016, the leverage ratio covenant and the interest coverage ratio covenant were eliminated for fiscal periods ended prior to June 30, 2016. Accordingly, these two covenants were not evaluated as of December 31, 2014. The Senior Notes required compliance with various covenants, including but not limited to quarterly and annual financial reporting requirements. The Senior Notes also included certain cross default provisions. In December 2014, the Company was not in compliance with certain financial reporting requirements under these debt agreements. On December 12, 2014, the Company entered into an agreement relating to its Credit Agreement to, among other things, waive any default or event of default under the Credit Agreement arising from the Company’s failure to deliver certain financial information and other materials for the period ended September 30, 2014. This waiver was in effect until the close of business on January 15, 2015. The Company has since concluded that it was not in compliance with certain representations and warranties in the Credit Agreement at December 31, 2014 due to the materiality of the restatement impacts on certain prior annual periods. See the Debt Related Subsequent Events section below for information regarding subsequent amendments and waivers. Maturities of long-term debt at December 31, 2014 and the years thereafter are as follows: (in thousands) December 31, 2015 $ 2016 2017 2018 2019 Thereafter Total debt before unamortized discount Unamortized discount ) Total long-term debt $ Debt Related Subsequent Events Subsequent covenant violations and amendments and waivers related thereto to Credit Agreement and Indenture Subsequent to December 31, 2014, the Company entered into seven agreements relating to its Credit Agreement that waived certain actual and potential defaults and events of default and amended various covenants and other provisions. Among other things, these waivers and amendments: · waived the failure to timely deliver financial statements and certain related materials, including certificates demonstrating compliance by the Company with the financial covenants under the Credit Agreement (as modified and waived from time to time), for the following fiscal periods: · Waiver No. 2 dated January 14, 2015 - fiscal period ended September 30, 2014; · Waiver No. 3 dated March 17, 2015 - fiscal periods ended September 30, 2014, December 31, 2014, and March 31, 2015; · First Amendment and Waiver dated June 19, 2015 - fiscal periods ended September 30, 2014, December 31, 2014, March 31, 2015, and June 30, 2015; · Second Amendment and Waiver dated September 11, 2015 - fiscal periods ended September 30, 2014, December 31, 2014, March 31, 2015, and June 30, 2015; · Third Amendment and Waiver dated November 13, 2015 (the “Third Amendment”) - fiscal periods ended September 30, 2014, December 31, 2014, March 31, 2015, June 30, 2015, and September 30, 2015; · Fourth Amendment and Waiver dated February 10, 2016 (the “Fourth Amendment”) - fiscal periods ended September 30, 2014, December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, and December 31, 2015; and · Fifth Amendment and Waiver dated July 15, 2016 and effective August 1, 2016 (the “Fifth Amendment”) - fiscal periods ended September 30, 2014, December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015 and March 31, 2016. · under the Fifth Amendment, extended the deadline to August 15, 2017 for delivering financial statements and certain related materials for the fiscal periods ended September 30, 2014, December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015 and December 31, 2016; · under the Third Amendment, waived compliance with the leverage ratio covenant as of September 30, 2015; · under the Fifth Amendment, waived compliance with the leverage ratio covenant as of March 31, 2016; · under the Fifth Amendment, reduced the lenders’ aggregate revolving commitments from $200.0 million to $118.3 million, subject to potential further mandatory reductions in connection with the receipt of certain federal income tax refunds as described below in the section “Credit Agreement, as Amended to Date”; · under the Fifth Amendment, added temporary quarterly limitations on the amounts available for borrowing under the revolving credit facility ranging from $10.7 million to $20.7 million less than the aggregate revolving commitments in effect from time to time, depending on the fiscal quarter, as described below in the section “Credit Agreement, as Amended to Date”; · under the Fourth Amendment, increased the interest rate margins for borrowings based on LIBOR from 2.00% to 3.00% per annum and for borrowings based on the base rate from 1.00% to 2.00% per annum; · under the Fifth Amendment, further increased the interest rate margins for borrowings based on LIBOR from 3.00% to 4.75% per annum and for borrowings based on the base rate from 2.00% to 3.75% per annum, subject in each case to certain further adjustments as described below in the section “Credit Agreement, as Amended to Date”; · under the Fourth Amendment, eliminated the leverage ratio covenant for fiscal periods ended prior to March 31, 2016 and increased the permitted maximum leverage ratio as of the end of the fiscal quarter ended March 31, 2016 and subsequent fiscal quarters, as described below: · 4.35 to 1.00 as of the last day of the fiscal quarter ended March 31, 2016; · 4.50 to 1.00 as of the last day of the fiscal quarters ending June 30, 2016; · 4.20 to 1.00 as of the last day of the fiscal quarter ending September 30, 2016; · 4.10 to 1.00 as of the last day of the fiscal quarter ending December 31, 2016; and · 4.00 to 1.00 as of the last day of each fiscal quarter thereafter; and · under the Fifth Amendment, the parties amended and restated the financial covenants in their entirety to remove the financial ratio requirements for periods prior to the quarter ending June 30, 2016 and to set new ratio requirements for periods commencing with the second quarter 2016. The new covenant requirements for June 30, 2016 and future periods are discussed below. Subsequent to December 31, 2014, the Company also entered into two supplemental indentures relating to the Indenture. Among other things, these supplemental indentures: · waived certain actual and potential defaults and events of default relating to the failure to timely deliver certain historical financial information and other materials, and amended the financial reporting covenants to delay the required delivery of certain financial information and other materials, in each case until November 16, 2015 under the Fourth Supplemental Indenture dated as of July 9, 2015, and until August 31, 2016 under the Fifth Supplemental Indenture dated as of December 11, 2015 (the “Fifth Supplemental Indenture”); · under the Fifth Supplemental Indenture, increased the interest rate on the Senior Notes to 9.125% per annum effective as of November 15, 2015, and to 10.625% per annum effective as of May 15, 2016; and · under the Fifth Supplemental Indenture, limited the ability of the Company to incur certain secured indebtedness to an amount not to exceed $375.0 million. In securing these amendments and waivers relating to the Credit Agreement and the Indenture, the Company paid $6.1 million of fees in 2015 and $10.4 million of fees in 2016 to the respective lenders and Senior Note holders. Included in these amounts, the Company paid $1.7 million in 2015 and $4.1 million in 2016 to obtain the amendments and waivers relating to the Credit Agreement. The remaining $4.4 million of fees paid in 2015 and $6.3 million of fees paid 2016 related to the supplemental indentures under the Indenture. In addition to fees paid to holders of its debt, the Company paid legal and professional fees in connection with these amendments and waivers of $1.7 million in 2015 and $8.0 million in 2016. Subsequent Refinancing of Senior Notes On August 1, 2016, the Company took a number of actions to amend and refinance its debt, including (i) causing the Fifth Amendment to the Credit Agreement discussed above to become effective, (ii) entering into a new Term B Credit Agreement (as defined below) providing for a new $280 million senior unsecured term loan facility and (iii) issuing a notification of redemption to the holders of the Senior Notes. On August 31, 2016, the Company used approximately $205.3 million of the proceeds from the Term B Credit Agreement and from existing cash on hand to redeem all of the Senior Notes and satisfy and discharge the Indenture, approximately $81.0 million to pay down the revolving credit facility under the Credit Agreement, approximately $7.9 million to pay Term B issuance costs and bank consent fees, and approximately $1.9 million to pay related legal and professional fees. The Company’s Credit Agreements, after giving effect to such refinancing activities are described in more detail below. Credit Agreement, as Amended to Date as of August 1, 2016 The Credit Agreement (giving effect to all amendments and waivers to date, including the Fifth Amendment) provides for (i) a revolving credit facility with aggregate revolving commitments of $118.3 million as of December 31, 2016 (subject to the mandatory commitment reductions and usage limitations described below) that matures in June 2018, and (ii) a $225 million term loan facility due in quarterly principal installments ranging from 0.625% to 3.750% of the initial $225 million and in a final principal installment of approximately $143.4 million at maturity in June 2018. If the Company receives certain federal income tax refunds in respect of tax year 2015 or earlier, then 50% of the Company’s net cash proceeds in respect of those refunds will be applied as a further permanent reduction of the aggregate revolving commitments under the Credit Agreement, except that in no event shall the commitment be reduced to less than $108.0 million as a result of such refunds. Until such time as (a) the Company has achieved a leverage ratio (as described below) for the Company’s then most recently ended fiscal quarter, of less than or equal to 4.00 to 1.00, and (b) the Company has delivered financial statements and certain related materials for the fiscal periods ended September 30, 2014, December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015 and December 31, 2016 (the “Required Financial Information”), the amount that the Company can borrow under the Credit Agreement in the form of revolving loans, swing line loans and/or letters of credit is reduced by amounts ranging between $10.7 million and $20.7 million less than the aggregate revolving commitments in effect from time to time, depending on the fiscal quarter. Borrowings under the Credit Agreement now bear interest at a variable rate per annum equal to (i) LIBOR plus 4.75%, or (ii) the base rate (which is the highest of (a) the administrative agent’s prime rate, (b) the federal funds rate plus 0.50% or (c) the sum of 1% plus one-month LIBOR) plus 3.75%, in each case through December 31, 2016. Pursuant to the Fifth Amendment, effective January 1, 2017, each such margin increased by 0.50% per annum, thus increasing the margin for borrowings based on LIBOR to 5.25% per annum and the margin for borrowings based on the base rate to 4.25% per annum. If the Company fails to deliver the Required Financial Information on or before June 30, 2017, then the applicable interest rate for loans under the Credit Agreement will increase by an additional 0.50% per annum, effective July 1, 2017. Upon (a) the Company delivering the Required Financial Information and (b) the Company achieving a leverage ratio (as described below), for the Company’s then most recently ended fiscal quarter, of less than or equal to 4.00 to 1.00, the margin for borrowings based on LIBOR will decrease to 4.00% per annum and the margin for borrowings based on the base rate will decrease to 3.00% per annum. The Credit Agreement contains various restrictions and covenants, including requirements that the Company maintain certain financial ratios at prescribed levels (as described below) and restrictions on the ability of the Company and certain of its subsidiaries to consolidate or merge, create liens, incur additional indebtedness, dispose of assets, consummate acquisitions, make investments and pay dividends and other distributions. The Credit Agreement requires the Company to maintain a maximum consolidated leverage ratio (defined as, with certain adjustments, the ratio of the Company’s consolidated indebtedness to consolidated net income before interest, taxes, depreciation, amortization, non-cash charges and certain other items (“EBITDA”) as of the end of any period of four consecutive fiscal quarters, as follows: · 5.00 to 1.00 as of the last day of the fiscal quarter ended June 30, 2016; · 5.75 to 1.00 as of the last day of the fiscal quarter ended September 30, 2016; · 5.00 to 1.00 as of the last day of the fiscal quarters ending December 31, 2016 and March 31, 2017; · 4.50 to 1.00 as of the last day of the fiscal quarter ending June 30, 2017; · 4.25 to 1.00 as of the last day of the fiscal quarter ending September 30, 2017; and · 4.00 to 1.00 as of the last day of each fiscal quarter thereafter. The Credit Agreement requires the Company to maintain a minimum interest coverage ratio (defined as, with certain adjustments, the ratio of the Company’s EBITDA to the Company’s consolidated interest expense) as of the end of any period of four consecutive fiscal quarters, as follows: · 3.50 to 1.00 as of the last day of the fiscal quarter ended June 30, 2016; · 2.25 to 1.00 as of the last day of the fiscal quarters ending September 30, 2016, December 31, 2016, § March 31, 2017 and June 30, 2017; and · 2.50 to 1.00 as of the last day of each fiscal quarter thereafter. The Credit Agreement also requires the Company to provide the Required Financial Information, including the audited financial statements as of and for the years ended December 31, 2015 and 2016 by August 15, 2017, the unaudited and unreviewed financial statements for the quarterly period ending March 31, 2017 by May 30, 2017, and the unaudited and unreviewed financial statements for the quarterly period ending June 30, 2017 by August 14, 2017. The Company cannot estimate the date that the audited financial statements will be provided. The failure to timely deliver the Required Financial Information would constitute an immediate event of default under the Credit Agreement. If the unaudited and unreviewed financial statements for the quarterly periods ending March 31, 2017 and June 30, 2017 are not timely delivered, then, upon the expiration of a 30-day notice period, the continued failure to deliver either or both of such unaudited financial statements would constitute an event of default under the Credit Agreement. The occurrence of any such event of default would provide the lenders the right to declare all outstanding amounts under the credit Agreement to be due and payable. In the event that the debt were to be accelerated, then the Company would need to seek alternative financing to satisfy its obligations. This alternative financing may not be available to the Company on terms that are favorable to it, or at all. The Credit Agreement also contains other customary events of default and related remedies. Loans outstanding under the Credit Agreement will bear interest at a rate of 2.00% per annum in excess of the otherwise applicable rate (i) upon acceleration of such loans, (ii) while a payment event of default exists or (iii) upon the lenders’ request, during the continuance of any other event of default. Term B Credit Agreement as of August 1, 2016 On August 1, 2016, the Company entered into a credit agreement (the “Term B Credit Agreement”) by and among the Company, the various lenders party thereto and Wilmington Trust, National Association, as administrative agent. The Term B Credit Agreement provides for a $280 million senior unsecured term loan facility under which all outstanding principal is due at maturity on August 1, 2019. Borrowings under the Term B Credit Agreement bear interest at a fixed rate per annum equal to 11.50% payable quarterly in arrears. Pursuant to the terms of the Term B Credit Agreement, proceeds from the borrowings under the Term B Credit Agreement were required to be used: (i) to redeem all of the Senior Notes, (ii) to repay a portion of the revolving borrowings under the Credit Agreement, (iii) to pay fees and expenses in connection with the foregoing actions and (iv) for working capital and general corporate purposes of the Company and its subsidiaries. The Company may prepay borrowings under the Term B Credit Agreement in whole or in part at any time. Any voluntary prepayment by the Company of any loans under the Term B Credit Agreement, certain mandatory prepayments by the Company of any loans under the Term B Credit Agreement and prepayments in connection with certain repricing transactions of the loans under the Term B Credit Agreement will be subject to the following prepayment premiums: (i) if such prepayment is made before February 1, 2018, an amount equal to the discounted present value as of the date of prepayment, utilizing a comparable U.S. Treasury note yield plus 50 basis points, of the sum of (A) the remaining payments of interest on the principal amount prepaid through February 1, 2018, plus (B) 3.00% of the principal amount prepaid, (ii) if such prepayment is made on or after February 1, 2018, but prior to February 1, 2019, an amount equal to 3.00% of the principal amount prepaid, and (iii) if such prepayment is made on or after February 1, 2019, an amount equal to 1.50% of the principal amount prepaid. The Company’s obligations under the Term B Credit Agreement are guaranteed by its material domestic subsidiaries. The Term B Credit Agreement contains various restrictions and covenants, including restrictions on the ability of the Company and certain of its subsidiaries to consolidate or merge, create liens, incur additional indebtedness, dispose of assets, consummate acquisitions, make investments and pay dividends and other distributions. The covenants in the Term B Credit Agreement are similar to those contained in the Credit Agreement, except that the Term B Credit Agreement does not contain any separate financial covenants. Subject to a 90-day grace period, an event of default under the Credit Agreement will cause an event of default under the Term B Credit Agreement. An event of default under the Credit Agreement that results in acceleration of the indebtedness thereunder will cause an immediate event of default under the Term B Credit Agreement. The Term B Credit Agreement also contains customary events of default and related remedies. Loans outstanding under the Term B Credit Agreement will bear interest at a rate of 2.00% per annum in excess of the otherwise applicable rate (i) upon acceleration of such loans, (ii) while a payment event of default exists or (iii) upon the lenders’ request, during the continuance of any other event of default. |
ACCRUED EXPENSES, OTHER CURRENT
ACCRUED EXPENSES, OTHER CURRENT LIABILITIES AND OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2014 | |
ACCRUED EXPENSES, OTHER CURRENT LIABILITIES AND OTHER LIABILITIES | |
ACCRUED EXPENSES, OTHER CURRENT LIABILITIES AND OTHER LIABILITIES | NOTE P - ACCRUED EXPENSES, OTHER CURRENT LIABILITIES AND OTHER LIABILITIES Accrued expenses and other current liabilities consist of: As of December 31, (in thousands) 2014 (As Restated) Accrued professional fees $ $ Other current liabilities Accrued insurance Patient prepayments deposits and refunds payable Accrued sales taxes and other taxes Total $ $ Accrued professional fees primarily relate to accruals for professional accounting and legal fees. Other current liabilities are primarily related to accruals for unclaimed property, deferred revenue and warranty liabilities. Accrued insurance primarily relate to accruals for estimated losses for certain self-insured risks including property, professional liability, general liability and employee health related matters. Patient deposits and refunds includes funds received for devices not yet delivered to a patient and refunds for overpayment due to reimbursement sources. Accrued sales taxes and other taxes primarily relate to state sales taxes. Other liabilities consist of: As of December 31, (in thousands) 2014 (As Restated) Senior executive retirement plan obligations $ $ Unrecognized tax benefits Deferred tenant improvement allowances Other miscellaneous liabilities Deferred rent Total $ $ Senior executive retirement plan obligations includes obligations due on both the Company’s Defined Benefit Senior Executive Retirement Plan and its Defined Contribution Senior Executive Retirement Plan. See Note L - “Employee Benefits” for additional information on the SERP plans. Deferred tenant improvement allowance credits represents deferred credits associated with receiving property lease incentives. Deferred rent represents net deferred credits associated with recognizing rent expense on a straight-line basis for property operating leases whose lease payments escalate over the life of the lease. Both deferred credits are recognized as reductions of rent expense over the term of the associated lease. |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2014 | |
COMMITMENTS AND CONTINGENT LIABILITIES | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE Q - COMMITMENTS AND CONTINGENT LIABILITIES Commitments In April 2014, in connection with the settlement of a patent infringement dispute, the Company’s wholly owned subsidiary, Southern Prosthetic Supplies (“SPS”), entered into an agreement to purchase and distribute a total of $4.5 million of prosthetic gel liners over five years. As of December 31, 2014, $3.0 million of the non-cancellable purchase commitment was outstanding with $0.5 million, $1.0 million, $1.0 million, and $0.5 million of purchases due by April of 2016, 2017, 2018, and 2019, respectively. At the time of the legal settlement, the Company recorded a loss on legal settlement of $0.2 million. The Company also recorded an estimated loss of $3.4 million associated with the non-cancellable purchase commitment in accordance with ASC 440-10-25-4 based on the terms of the agreement, the product shelf life and estimated sales of the liners over the life of the product. Contingencies Legal Proceedings In November 2014, a securities class action complaint was filed in federal district court in Texas against the Company. The case, City of Pontiac General Employees’ Retirement System v. Hanger, et al. , C.A. No. 1:14-cv-01026-SS, is currently pending before the United States District Court for the Western District of Texas. The complaint names as defendants the Company and certain of its current and former officers and directors for allegedly making materially false and misleading statements regarding, among other things, its financial statements, Recovery Audit Contractor (“RAC”) audit success rate, the Company’s implementation of new financial systems, same-store sales growth, and the adequacy of the Company’s internal processes and controls. The complaint alleges violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. The complaint seeks unspecified damages, costs and attorneys’ fees, and equitable relief. On April 1, 2016, the court granted the Company’s motion to dismiss the lawsuit for failure to state a claim upon which relief can be granted, and permitted plaintiffs to file an amended complaint. On July 1, 2016, plaintiffs filed an amended complaint. Defendants moved to dismiss plaintiffs’ latest complaint and, on January 26, 2017, the court granted the Company’s motion to dismiss the lawsuit with prejudice all claims against all defendants for failure to state a claim. On February 24, 2017, plaintiffs filed a notice of appeal to the United States Fifth Circuit Court of Appeals. The Company has accrued legal fees associated with defending itself against this claim as of December 31, 2014. Legal Proceedings - Subsequent Events Subsequent to December 31, 2014, in February and August of 2015, two separate shareholder derivative suits were filed in Texas state court against the Company related to the announced restatement of certain financial statements of the Company. The cases were subsequently consolidated into Judy v. Asar, et. al., Cause No. D-1-GN-15-000625 . On October 25, 2016, plaintiffs in that action filed an amended complaint, and the case is currently pending before the 345 th Judicial District Court of Travis County, Texas. The amended complaint in the consolidated derivative action names as defendants the Company and certain of its current and former officers and directors. It alleges claims for breach of fiduciary duty based, inter alia , on the defendants’ alleged failure to exercise good faith to ensure that the Company had in place adequate accounting and financial controls and that its disclosures regarding its business, financial performance, and internal controls were truthful and accurate. The complaint seeks unspecified damages, costs and attorneys’ fees and equitable relief. On June 6, 2016, the Board of Directors appointed a Special Litigation Committee of the Board (the “Special Committee”). The Board delegated to the Special Committee the authority to (1) determine whether it is in the best interests of the Company to pursue any of the allegations made in the derivative cases filed in Texas state court against the Company (which cases were consolidated into the Judy case discussed above), (2) determine whether it is in the best interests of the Company and its shareholders to pursue any remedies against any of the Company’s current or former employees, officers or directors as a result of the conduct discovered in the Investigation, and (3) otherwise resolve claims or matters relating to the findings of the Investigation. The Special Committee retained independent legal counsel to assist and advise it in carrying out its duties, and reviewed and considered the evidence and various factors relating to the best interests of the Company. In accordance with its findings and conclusions, the Special Committee determined that it is not in the Company’s best interest to pursue any of the claims in the Judy derivative case. Also, in accordance with its findings and conclusions, the Special Committee determined that it is not in the best interests of the Company and its shareholders to pursue legal remedies against any of the Company’s current or former employees, officers or directors. On April 14, 2017, the Company filed a motion to dismiss the consolidated derivative action based on the resolution by the Special Committee that it is not in the best interest of the Company and its shareholders to pursue the derivative claims. Counsel for the derivative plaintiffs have indicated that they will oppose the motion to dismiss. Management intends to vigorously defend against the shareholder derivative actions and the appeal in the securities class action. At this time, we cannot predict how the Courts will rule on the merits of the claims and/or the scope of the potential loss in the event of an adverse outcome. The Company believes this matter represents a reasonably possible loss contingency as defined in ASC 450. Should the Company ultimately be found liable, the resulting damages could have a material adverse effect on our consolidated financial position, liquidity and results of our operations. However, due to the preliminary nature of this matter, at this time, the Company is unable to estimate the possible loss or range of possible loss if the Company were found liable. During 2014, the Company accrued estimated legal fees associated with defending itself against this action. Governmental Inquiries The Securities and Exchange Commission’s Division of Enforcement has made inquiries of the Company concerning the circumstances surrounding the restatement and related matters. The Company has responded to those inquiries and provided requested documentation to the Staff of the Division of Enforcement. By letter dated January 10, 2017, the Staff of the Division of Enforcement notified the Company that it had concluded its investigation of these matters and, based on information it had as of that date, did not intend to recommend an enforcement action by the Commission against the Company. The information in the Staff’s letter was provided under the guidelines set out in the final paragraph of Securities Act Release No. 5310. Other The Company is subject to legal proceedings and claims which arise from time to time in the ordinary course of its business, including additional payments under business purchase agreements. In the opinion of management, the amount of ultimate liability, if any, with respect to these actions will not have a materially adverse effect on the consolidated financial position, liquidity or results of operations of the Company. The Company is in a highly regulated industry and receives regulatory agency inquiries from time to time in the ordinary course of its business, including inquiries relating to the Company’s billing activities. To date these inquiries have not resulted in material liabilities, but no assurance can be given that future regulatory agencies’ inquiries will be consistent with the results to date or that any discrepancies identified during a regulatory review will not have a material adverse effect on the Company’s consolidated financial statements. Guarantees and Indemnifications In the ordinary course of its business, the Company may enter into service agreements with service providers in which it agrees to indemnify or limit the service provider against certain losses and liabilities arising from the service provider’s performance of the agreement. The Company has reviewed its existing contracts containing indemnification or clauses of guarantees and does not believe that its liability under such agreements is material to the Company’s operations. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2014 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE R - RELATED PARTY TRANSACTIONS The firm of Foley & Lardner LLP serves as the Company’s primary outside legal counsel. The Company’s former Chairman is the brother-in-law of the partner in charge of the relationship for the year ended December 31, 2012. The Company’s former Chairman retired from the board in 2013. As of December 31, 2013, the Company no longer considers Foley & Lardner LLP to be a related party. Total fees paid by the Company to Foley & Lardner LLP were approximately $2.9 million, $3.0 million, and $2.4 million, for the years ended December 31, 2014, 2013 and 2012, respectively. Total fees accrued and payable by the Company to Foley & Lardner LLP were not material as of December 31, 2014 and 2013, respectively. |
SEGMENT AND RELATED INFORMATION
SEGMENT AND RELATED INFORMATION | 12 Months Ended |
Dec. 31, 2014 | |
SEGMENT AND RELATED INFORMATION | |
SEGMENT AND RELATED INFORMATION | NOTE S - SEGMENT AND RELATED INFORMATION The Company has identified two operating segments and both performance evaluation and resource allocation decisions are determined based on each operating segment’s income from operations. The operating segments are described further below: Patient Care - This segment consists of (i) the Company’s owned and operated patient care clinics, Dosteon, and CARES, and (ii) its contracting and network management business. Dosteon is being presented as a discontinued operation and has therefore been excluded from the summarized financial information below. See Note T - “Discontinued Operations” for further information regarding the discontinuance of this business. The patient care clinics provide services to design and fit O&P devices to patients. These clinics also instruct patients in the use, care and maintenance of the devices. The principal reimbursement sources for the Company’s services are: · Commercial private payors and other, which consist of individuals, rehabilitation providers, commercial insurance companies, HMOs, PPOs, hospitals, vocational rehabilitation, workers’ compensation programs and similar sources; · Medicare, a federally funded health insurance program providing health insurance coverage for persons aged 65 or older and certain disabled persons, which provides reimbursement for O&P products and services based on prices set forth in published fee schedules with 10 regional pricing areas for prosthetics and orthotics and by state for durable medical equipment; · Medicaid, a health insurance program jointly funded by federal and state governments providing health insurance coverage for certain persons in financial need, regardless of age, which may supplement Medicare benefits for financially needy persons aged 65 or older; and · U.S. Department of Veterans Affairs. The Company’s contract and network management business, known as Linkia, is the only network management company dedicated solely to serving the O&P market and is focused on managing the O&P services of national and regional insurance companies. The Company partners with healthcare insurance companies by securing a national or regional contract either as a preferred provider or to manage their O&P network of providers. Products & Services - This segment consists of the Company’s distribution business, which distributes and fabricates O&P products and components for both the O&P industry and the Company’s own patient care clinics and rehabilitation solutions business. Rehabilitation solutions leases and sells rehabilitation equipment and ancillary consumable supplies combined with equipment maintenance, education, and training. This segment also develops emerging neuromuscular technologies for the O&P and rehabilitation markets. Corporate & Other - This consists of corporate overhead and includes unallocated expense such as personnel costs, professional fees and corporate offices expenses. The accounting policies of the segments are the same as those described in Note C - “Significant Accounting Policies”. Summarized financial information concerning the Company’s reporting segments is shown in the following tables. Segment performance is evaluated based on each segment’s earnings before interest expense, income taxes, and depreciation & amortization expenses or EBITDA. Dosteon’s discontinued operations have been removed from the Patient Care segment for all periods presented, see Note T - “Discontinued Operations” for further discussion. Intersegment revenue primarily include sales of O&P components from the Products & Services segment to the Patient Care segment and were made at prices which the Company believes approximate market values. The Company’s foreign and export sales and assets located outside of the United States of America are not significant. For the Patient Care segment, net revenues generated directly from Medicare program represented approximately 29%, 31% and 29% of the Company’s net revenues for the years ended December 31, 2014, 2013, and 2012, respectively. Additionally, for the Products & Services segment, no single customer accounted for more than 10% of net revenues in 2014, 2013 or 2012, respectively. (in thousands) Patient Care Products & Corporate & Consolidating Total 2014 Net revenue Third Party $ $ $ — $ — $ Intersegments — — ) — Total net revenue — ) Material costs Third party suppliers — — Intersegments — ) — Total material costs — ) Personnel costs — — Other expenses — Depreciation and amortization — Income from continuing operations ) — Interest expense (income) ) — Income (loss) from continuing operations before income taxes ) — ) Provision for income taxes — — — Net income (loss) from continuing operations $ $ $ ) $ — $ ) EBITDA ) — Total assets — Capital expenditures — (in thousands) Patient Care Products & Corporate & Consolidating Total 2013 (As Restated) Net revenue Third Party $ $ $ — $ — $ Intersegments — — ) — Total net revenue — ) Material costs Third party suppliers — — Intersegments — ) — Total material costs — ) Personnel costs — — Other expenses — Depreciation and amortization — Income from continuing operations ) — Interest expense (income) ) — Extinguishment of debt — — — Income from continuing operations before income taxes ) — Provision for income taxes — — — Net income from continuing operations $ $ $ ) $ — $ EBITDA ) — Total assets — Capital expenditures — (in thousands) Patient Care Products & Corporate & Consolidating Total 2012 (As Restated) Net revenue Third Party $ $ $ — $ — $ Intersegments — — ) — Total net revenue — ) Material costs Third party suppliers — — Intersegments — ) — Total material costs — ) Personnel costs — — Other expenses — Depreciation and amortization — Income from continuing operations ) — Interest expense (income) ) — Income from continuing operations before income taxes ) — Provision for income taxes — — — Net income from continuing operations $ $ $ ) $ — $ EBITDA ) — Total assets — Capital expenditures — |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2014 | |
DISCONTINUED OPERATIONS | |
DISCONTINUED OPERATIONS | NOTE T - DISCONTINUED OPERATIONS On November 5, 2014, the Audit Committee of the Board of Directors approved a plan to sell and/or otherwise dispose of the Company’s Dosteon distribution product group (“Dosteon”), a component of its Patient Care segment. This action was taken following the conclusion of the Company’s strategic evaluation of this business in the fourth quarter of 2014. In accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations , ASC 360-10 Property, Plant and Equipment - Overall, and ASC 350-20 , Intangibles - Goodwill and Other - Goodwill, the operating results and cash flows of Dosteon have been presented separately as discontinued operations on the consolidated statements of operations and comprehensive (loss) income and the consolidated statements of cash flows, respectively, for the year ended December 31, 2014 and all comparable periods. As discussed in further detail below, assets of these businesses that were expected to be disposed of by sale are reported as “Assets held for sale” on the Company’s consolidated balance sheets as of December 31, 2014. On November 6, 2014, the Company entered into a definitive agreement to sell one of its Dosteon businesses primarily located in California for cash at closing of approximately $2.7 million. The remaining portions of Dosteon were sold in 2015 for aggregate proceeds of approximately $4.9 million. See Note V - “Subsequent Events” for additional information. Assets held for sale on the Company’s consolidated balance sheets have been recorded at their lower of carrying amount at designation and expected fair value less costs to sell as of December 31, 2014. These assets relate to businesses primarily located in Arizona, Colorado, and Washington state and are comprised of the following: (in thousands) As of Inventory $ Property and equipment, net Goodwill Total assets held for sale $ Associated with the Company’s strategic evaluation and disposal of these businesses, $8.2 million of pre-tax impairment expenses have been recognized within “Loss from discontinued operations, net of income taxes” for the year ended December 31, 2014 on the Company’s consolidated statements of operations and comprehensive (loss) income. The pre-tax impairment charges comprise of $4.2 million related to allocated goodwill, $2.4 million related to definite-lived intangibles assets, and $1.6 million related to property, plant and equipment. The following is a summary of the Company’s operating results for discontinued operations: Year Ended December 31, (As Restated) (As Restated) (in thousands) 2014 2013 2012 Net revenue $ $ $ Loss before income taxes from discontinued operations ) ) ) Income tax benefit Loss from discontinued operations, net of tax $ ) $ ) $ ) The accounts receivable of Dosteon were not included within the sale and accordingly are not presented within “Assets held for sale,” through 2015. The cash flows related to Dosteon discontinued operations are disclosed separately on the consolidated statements of cash flows for all periods presented. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2014 | |
SUPPLEMENTAL CASH FLOW INFORMATION | |
SUPPLEMENTAL CASH FLOW INFORMATION | NOTE U - SUPPLEMENTAL CASH FLOW INFORMATION The supplemental disclosure requirements for the statements of cash flows are as follows: Year Ended December 31, (in thousands) 2014 (As Restated) (As Restated) Cash paid during the period for: Interest $ $ $ Income taxes $ $ $ Non-cash financing and investing activities: Issuance of seller notes in connection with acquisitions $ $ $ Issuance of note in connection with intangible acquisition $ — $ — $ Additions to property, plant and equipment acquired through financing obligations $ $ $ Retirements of financed property, plant and equipment and related financing obligations $ $ $ Purchase of property, plant and equipment in accounts payable $ $ $ |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE V - SUBSEQUENT EVENTS In addition to subsequent events noted within certain footnotes above, following are relevant subsequent events that have occurred since December 31, 2014. Notification of Delisting On February 29, 2016, the Company received a formal notice from New York Stock Exchange Regulation (the “NYSE”) confirming that due to Hanger, Inc.’s non-compliance with certain listing standards, the NYSE had suspended trading in the Company’s common stock, effective upon the market close on February 26, 2016, and stated its intention to commence proceedings to delist the Company’s common stock from the NYSE at the opening of business on April 4, 2016. The Company’s common stock began trading on the OTC Pink marketplace operated by the OTC Markets Group Inc. at the open on Monday, February 29, 2016 under the trading symbol “HNGR.” Shareholder’s Rights Plan On February 28, 2016, the Board of Directors declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock, par value $0.01 per share (the “Common Stock”). The dividend is payable to the shareholders of record on March 10, 2016 (the “Record Date”). The Rights will not be exercisable until after the public announcement that a person or group of affiliated or associated persons has acquired or obtained the right or obligation to acquire beneficial ownership of 10% or more of the Company’s outstanding Common Stock (“Acquiring Person”) or following the commencement of a tender offer or exchange offer that, if consummated, would result in a person or group becoming an Acquiring Person. If a shareholder’s beneficial ownership of the Company’s Common Stock as of the time of the public announcement of the Rights Agreement and associated dividend declaration is at or above the applicable threshold (including through entry into certain derivative positions), that shareholder’s then-existing ownership percentage would be grandfathered, but the rights would become exercisable if at any time after such announcement, the shareholder increases its ownership percentage. Once exercisable, each Right will allow its holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share (the “Preferred Stock”), for $65.00 (the “Purchase Price”), subject to adjustment. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights. The description and terms of the Rights are set forth in a Rights Agreement, dated as of February 28, 2016, between the Company and Computershare Inc., as the Rights Agent. The Rights have certain anti-takeover effects. The Rights will cause a substantial dilution to any person or group that attempts to acquire the Company without the approval of the Company’s Board of Directors. As a result, the overall effect of the Rights may be to render more difficult or discourage any attempt to acquire the Company even if such acquisition may be favorable to the interests of the Company’s shareholders. Because the Company’s Board of Directors can redeem the Rights and amend the Rights Agreement in any respect prior to a person or group becoming an Acquiring Person, the Rights should not interfere with a merger or other business combination approved by the Board of Directors of the Company. The Rights will expire on August 28, 2017. Debt Amendments, Covenant Waivers and Refinance of 7 1 / 8 % Senior Notes. For further discussion of these events, see the subsequent events section of Note O - “Long-Term Debt.” Legal proceedings For further discussion of these events, see the legal proceedings subsequent events section of Note Q - “Commitments and Contingencies.” Dosteon Discontinued Operations Between February 2015 and May 2015, the Company completed its sale of its remaining Dosteon businesses. Exit of CARES Business During the third quarter of 2015, the Company completed its exit of the CARES business which is reported within the Patient Care segment. The results of operations of this business were not significant to the consolidated financial statements for any period presented. 2016 Omnibus Incentive Plan On April 15, 2016, the Board of Directors of the Company approved the Hanger, Inc. 2016 Omnibus Incentive Plan (the “2016 Plan”). Upon approval of the 2016 Plan, the Company’s 2010 Omnibus Incentive Plan (the “2010 Plan”) was no longer available for future awards. However, awards previously granted under the 2010 Plan and still outstanding continue to be subject to all terms and conditions of the 2010 Plan. The 2016 Plan authorizes the issuance of up to 2,250,000 shares of Common Stock, plus (1) the number of shares available for issuance under the 2010 Plan that had not been made subject to outstanding awards as of the effective date of the 2016 Plan and (2) any shares that would have become available again for new grants under the terms of the 2010 Plan if such plan were still in effect. |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2014 | |
QUARTERLY FINANCIAL INFORMATION | |
QUARTERLY FINANCIAL INFORMATION | NOTE W - QUARTERLY FINANCIAL INFORMATION (UNAUDITED) As further described in Note B - “Restatement of Previously Issued Consolidated Financial Statements.” the previously reported financial information for the first two quarters of 2014 and for all fiscal 2013 quarters have been restated. In lieu of filing amended Quarterly Report on Form 10-Q for the first and second quarter of 2014 and a Quarterly Report on Form 10-Q for the third quarter of 2014, quarterly financial data for 2014 (as restated for the first and second quarter) and 2013 (as restated) is included in this report in the tables that follow. Amounts are computed independently each quarter, therefore, the sum of the quarterly amounts may not equal the total amount for the respective year due to rounding. HANGER, INC. QUARTERLY CONSOLIDATED BALANCE SHEETS (dollars in thousands, except par value and share amounts) (Unaudited) (As Restated) As of As of As of ASSETS Current assets: Cash and cash equivalents $ $ $ Accounts receivable, net of allowance for doubtful accounts of $7,920, $9,078, $10,197 at March 31, June 30 and September 30, 2014, respectively Inventories Other current assets Deferred income taxes Total current assets Non-current assets: Property, plant and equipment, net Goodwill Other intangible assets, net Debt issuance costs, net Other assets Total assets $ $ $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ $ $ Accounts payable Accrued expenses and other current liabilities Accrued interest payable Accrued compensation related costs Total current liabilities Long-term liabilities: Long-term debt, less current portion Deferred income taxes Other liabilities Total liabilities Shareholders’ Equity: Common stock, $.01 par value; 60,000,000 shares authorized, 35,486,033, 35,527,002 and 35,537,528 shares issued and 35,344,879, 35,385,848 and 35,396,374 shares outstanding at March 31, June 30 and September 30, 2014, respectively Additional paid-in capital Accumulated other comprehensive loss ) ) ) Retained earnings Treasury stock, at cost 141,154 shares at March 31, June 30 and September 30, 2014, respectively ) ) ) Total shareholders’ equity Total liabilities and shareholders’ equity $ $ $ HANGER, INC. QUARTERLY CONSOLIDATED BALANCE SHEETS (dollars in thousands, except par value and share amounts) (Unaudited) (As Restated) As of As of As of ASSETS Current assets: Cash and cash equivalents $ $ $ Accounts receivable, net of allowance for doubtful accounts of $4,941, $4,971, $5,837 at March 31, June 30 and September 30, 2013, respectively Inventories Other current assets Deferred income taxes Total current assets Non-current assets: Property, plant and equipment, net Goodwill Other intangible assets, net Debt issuance costs, net Other assets Total assets $ $ $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ $ $ Accounts payable Accrued expenses and other current liabilities Accrued interest payable Accrued compensation related costs Total current liabilities Long-term liabilities: Long-term debt, less current portion Deferred income taxes Other liabilities Total liabilities Shareholders’ Equity: Common stock, $.01 par value; 60,000,000 shares authorized, 34,953,812, 35,062,931 and 35,062,367 shares issued and 34,812,658, 34,921,777 and 34,921,213 shares outstanding at March 31, June 30 and September 30, 2013, respectively Additional paid-in capital Accumulated other comprehensive loss ) ) ) Retained earnings Treasury stock, at cost 141,154 shares at March 31, June 30, and September 30, 2013, respectively ) ) ) Total shareholders’ equity Total liabilities and shareholders’ equity $ $ $ HANGER, INC. QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (dollars in thousands, except share and per share amounts) (Unaudited) As Restated Three Months Three Months Six Months Three Months Nine Months Three Months March 31, June 30, June 30, September 30, September 30, December 31, 2014 2014 2014 2014 2014 2014 Net revenue $ $ $ $ $ $ Material costs Personnel costs Other operating costs General and administrative expenses Professional accounting and legal fees Depreciation and amortization Income (loss) from operations ) Interest expense, net (Loss) income from continuing operations before income taxes ) ) ) (Benefit) provision for income taxes ) ) Net (loss) income from continuing operations ) ) ) ) (Loss) income from discontinued operations, net of income taxes ) ) ) ) Net (loss) income $ ) $ $ ) $ ) $ ) $ ) Other comprehensive loss: Unrealized loss on SERP, net of tax benefit of $525 for Q4 2014 $ — $ — $ — $ — $ — $ ) Total other comprehensive loss — — — — — ) Comprehensive (loss) income $ ) $ $ ) $ ) $ ) $ ) Basic Per Common Share Data Net (loss) income from continuing operations $ ) $ ) $ ) $ $ ) $ Net (loss) income from discontinued operations ) ) ) ) Basic (loss) income per share $ ) $ $ ) $ ) $ ) $ ) Shares used to compute basic per common share amounts Diluted Per Common Share Data Net (loss) income from continuing operations $ ) $ ) $ ) $ $ ) $ Net (loss) income from discontinued operations ) ) ) ) Diluted (loss) income per share $ ) $ $ ) $ ) $ ) $ ) Shares used to compute diluted per common share amounts HANGER, INC. QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (dollars in thousands, except share and per share amounts) (Unaudited) (As Restated) Three Months Three Months Six Months Three Months Nine Months Three Months March 31, June 30, June 30, September 30, September 30, December 31, 2013 2013 2013 2013 2013 2013 Net revenue $ $ $ $ $ $ Material costs Personnel costs Other operating costs General and administrative expenses Professional accounting and legal fees Depreciation and amortization Income from operations Interest expense, net Extinguishment of debt — — — Income from continuing operations before income taxes Provision for income taxes Net income from continuing operations Income (loss) from discontinued operations, net of income taxes ) ) ) ) ) Net income $ $ $ $ $ $ Other comprehensive income Unrealized gain on SERP, net of tax provision of $531 for Q4 2013 $ — $ — $ — $ — $ — $ Total other comprehensive income — — — — — Comprehensive income $ $ $ $ $ $ Basic Per Common Share Data Net income from continuing operations $ $ $ $ $ $ Net loss from discontinued operations — ) ) ) ) ) Basic income per share $ $ $ $ $ $ Shares used to compute basic per common share amounts Diluted Per Common Share Data Net income from continuing operations $ $ $ $ $ $ Net loss from discontinued operations — ) ) ) ) ) Diluted income per share $ $ $ $ $ $ Shares used to compute diluted per common share amounts HANGER, INC. QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) (Unaudited) (As Restated) Three Months Ended Six Months Ended Nine Months Ended Cash flows from operating activities: Net loss $ ) $ ) $ ) (Loss) income from discontinued operations, net of income taxes ) ) Net loss from continuing operations ) ) ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization Provision for doubtful accounts Impairment of long-lived assets and intangible assets — — Compensation expense on restricted stock units Provision for deferred income taxes Amortization of debt issuance costs Gain on sale and disposal of property, plant and equipment ) ) ) Contingent consideration gains — — ) Changes in operating assets and liabilities, net of effects of acquired companies: Net accounts receivable ) ) Inventories ) ) ) Other current assets and income taxes ) ) ) Accounts payable ) ) ) Accrued expenses, other current liabilities and accrued interest payable Accrued compensation related costs ) ) ) Other liabilities ) ) Net cash (used in) provided by operating activities - continuing operations ) ) Net cash (used in) provided by operating activities - discontinued operations ) ) Net cash (used in) provided by operating activities ) ) Cash flows from investing activities: Purchase of property, plant and equipment, net of acquisitions ) ) ) Purchase of equipment leased to third parties under operating leases ) ) ) Acquisitions, net of cash acquired ) ) ) Purchase of company-owned life insurance investment ) ) ) Proceeds from sale of property, plant and equipment Net cash used in investing activities - continuing operations ) ) ) Net cash used in investing activities - discontinued operations ) ) ) Net cash used in investing activities ) ) ) Cash flows from financing activities: Repayment of term loan ) ) ) Borrowings under revolving credit agreement Repayments under revolving credit agreement ) ) ) Payment of seller notes ) ) ) Payment of contingent consideration ) ) ) Payment of financing obligations ) ) ) Excess tax benefit from stock-based compensation Proceeds from issuance of common stock Net cash provided by financing activities - continuing operations Net cash used in financing activities - discontinued operations ) ) ) Net cash provided by financing activities Increase (decrease) in cash and cash equivalents ) Cash and cash equivalents, at beginning of year Cash and cash equivalents, at end of period $ $ $ SUPPLEMENTAL CASH FLOW FINANCIAL INFORMATION: Cash paid during the period for: Interest $ $ $ Income taxes Non-cash financing and investing activities: Issuance of seller notes in connection with acquisitions Additions to property, plant and equipment acquired through finance obligations Retirements of financed property, plant and equipment Purchase of property, plant & equipment in accounts payable HANGER, INC. QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) (Unaudited) (As Restated) Three Months Ended Six Months Ended Nine Months Ended Cash flows from operating activities: Net income $ $ $ Income (loss) from discontinued operations, net of income tax ) ) Net income from continuing operations Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization Provision for doubtful accounts Compensation expense on restricted stock units Provision for deferred income taxes — ) ) Amortization of debt issuance costs Loss on extinguishment of debt — Gain on sale and disposal of property, plant and equipment ) ) ) Contingent consideration gains — ) ) Changes in operating assets and liabilities, net of effects of acquired companies: Net accounts receivable Inventories ) ) ) Other current assets and income taxes ) ) Accounts payable ) Accrued expenses, other current liabilities and accrued interest payable ) Accrued compensation related costs ) ) ) Other liabilities Net cash (used in) provided by operating activities - continuing operations ) Net cash provided by (used in) operating activities - discontinued operations ) ) Net cash (used in) provided by operating activities ) Cash flows from investing activities: Purchase of property, plant and equipment, net of acquisitions ) ) ) Purchase of equipment leased to third parties under operating leases ) ) ) Acquisitions, net of cash acquired ) ) ) Change in restricted cash associated with workers’ compensation program — — Proceeds from sale of property, plant and equipment Net cash used in investing activities - continuing operations ) ) ) Net cash used in investing activities - discontinued operations ) ) ) Net cash used in investing activities ) ) ) Cash flows from financing activities: Borrowings under term loan — Repayment of term loan ) ) ) Borrowings under revolving credit agreement Repayments under revolving credit agreement ) ) ) Payment of seller notes ) ) ) Payment of contingent consideration ) ) ) Payment of financing obligations ) ) ) Payment of fees associated with debt modifications and extinguishments — ) ) Excess tax benefit from stock-based compensation Proceeds from issuance of common stock Purchase and retirement of common stock — ) ) Net cash used in financing activities - continuing operations ) ) ) Net cash used in financing activities - discontinued operations ) ) ) Net cash used in financing activities ) ) ) Decrease in cash and cash equivalents ) ) ) Cash and cash equivalents, at beginning of year Cash and cash equivalents, at end of period $ $ $ SUPPLEMENTAL CASH FLOW FINANCIAL INFORMATION: Cash paid during the period for: Interest $ $ $ Income taxes Non-cash financing and investing activities: Issuance of seller notes in connection with acquisitions — Additions to property, plant and equipment acquired through finance obligations Retirements of financed property, plant and equipment — Purchase of property, plant & equipment in accounts payable The following tables present the impacts of the restatement adjustments to the previously reported financial information for the March 31, 2014 ended quarter, the June 30, 2014 ended quarter, and for each quarterly period within fiscal 2013. Refer to discussion in Note B - “Restatement of Previously Issued Consolidated Financial Statements”. The references identified in the tickmarks to the following tables directly correlate to the adjustments detailed below. Amounts are computed independently each quarter, therefore, the sum of the quarterly amounts may not equal the total amount for the respective year due to rounding. The individual restatement misstatements are described below: a. Inventory Valuation - The Company has identified misstatements in its historical inventory valuations. The misstatements related primarily to the valuation of work-in-process inventory (“WIP”), and included intentional misstatements that had the effect of overstating the number of items in WIP, the relative stages of completion of WIP, and the overall valuation of WIP. The Company’s valuation of WIP requires the use of various estimates. Other misstatements included not reducing raw materials and WIP for vendor rebates and not ensuring inventory is recorded at the lower of cost or market. Refer to further discussions regarding inventory valuation in Note C - “Significant accounting policies.” b. Allowance for Disallowed Revenue and Doubtful Accounts - The historical estimates of allowances for disallowed revenue and doubtful accounts did not sufficiently consider changes to the Company’s collection experience or differentiate between payor types. When preparing its estimates, the Company inappropriately relied upon aggregate averages of prior periods’ collections experience from varying numbers of older historical periods. The Company did not timely recognize adverse changes in its collection experience, and did not consider likely write-offs of residual receivable balances, as well as consider differences in collection patterns between payor types and aging categories. Additionally, misstatements in the classification of bad debt expense have been corrected and presented as disallowed revenue. Refer to further discussion regarding allowances for disallowed revenue and bad debts in Note E - “Accounts Receivable.” c. Property, Plant and Equipment, net - During the periods covered by the restated consolidated financial statements, misstatements occurred in the Company’s accounting for property, plant and equipment. These misstatements included improper capitalization of certain labor associated with internal-use software and improper capitalization into property, plant and equipment costs that should have been expensed. The Company also found misstatements in the commencement of depreciation of its fixed assets and not recording disposals on a timely basis. Misstatements regarding leasehold improvement related items, which are recorded in property, plant and equipment in the financial statements, are included in the real property lease adjustment below. d. Real Property Leases - The Company did not properly apply real property lease accounting standards. The Company identified misstatements with respect to the determination of the proper term of its leases, establishment of proper balances for deferred rent and tenant improvement allowances, determining depreciable lives of leasehold improvements, consideration of lessee involvement in the construction of leased assets (resulting in not properly identifying certain build-to-suit arrangements, which are accounted for as financings after evaluating sale leaseback accounting), and proper evaluation of capital lease obligations. Additionally, the Company did not properly establish and account for asset retirement obligations. All Other Restatement Adjustments e. Certain Revenue Adjustments - The Company determined that it had not properly established a liability to reserve for revenue collected from third-party payors and patients that was subject to refund in subsequent periods resulting in misstatements of net revenue. Additionally, the Company recognized purchase rebates as net revenue rather than a reduction of cost of materials. The misstatements overstated previously reported income from operations before income taxes. f. Revenue Accrual - The Company often invoice patients or payors after a device is delivered. To account for this delay, the Company records an estimated revenue accrual for devices delivered but not yet invoiced at period-end. The Company’s historical revenue accrual estimation model did not reasonably estimate the proper cut-off related to goods delivered but not yet invoiced, resulting in misstatements of both “Net revenue” and “Accounts receivable.” g. Method of Accrual for Accounts Payable - The Company recorded an accrual for estimated accounts payable which utilized average accounts payable levels from historical periods. This model was prepared based upon when invoices were received, not when goods or services were received. This misstatement produced misstatements of previously reported “Accounts payable” and “Income before income taxes.” h. Education Fair training event - The Company originally deferred and recognized expenses for its annual Education Fair training event ratably over each quarter in a fiscal year. The Company has determined these expenses should have been recognized as incurred in the first quarter each year. This misstatement understated previously reported “Other operating costs” in the first quarter of each year and overstated previously reported “Other operating costs” in the second, third, and fourth quarter of each year. i. Janus Depreciation - The Company did not commence depreciation of Janus, its new patient management system, in the reporting period the system was ready for its intended use. In addition, misstatements were also identified regarding the capitalization of certain expenses relating to the new system. The misstatements overstated previously reported fixed assets and understated previously reported “Depreciation & amortization expenses” and “Other operating costs.” j. Accrued Compensation Costs - The Company has identified misstatements that primarily relate to recognizing compensation related costs in the proper reporting periods. These misstatements are primarily associated with employee bonuses, employee benefits, and vacation, and resulted in misstatements of previously reported “Personnel costs” and “Accrued compensation.” k. Loss on firm purchase commitment - As described in additional detail in Note Q - “Commitments and Contingencies,” the Company’s SPS subsidiary entered into a firm purchase commitment in the second quarter of 2014. The Company did not sufficiently evaluate this agreement in the second quarter of 2014 which resulted in an understatement of previously reported second quarter of 2014 income before income taxes of $3.4 million. l. Demo equipment - The Company originally recorded an out of period adjustment amounting to $1.4 million in the second quarter of 2014 to fully depreciate certain older demonstration equipment that was incorrectly recorded in inventory. In the restated consolidated financial statements, the Company is now correcting this error retrospectively in earlier periods. m. Other Profit & Loss Restatement Adjustments - There are certain other restatement misstatements not otherwise described in items (a) through (l) of this Note. The related adjustments are individually insignificant to previously reported income (loss) from operations before income taxes for each period presented. n. Cash and cash equivalents - The Company identified balance sheet classification misstatements in which cash balances were overstated due to certain checks not being recognized as a reduction of cash in the period in which they were issued, which also understated other current assets. Additionally, certain cash receipts were not recorded as an increase to cash and a decrease to accounts receivable in a timely manner. Lastly, the Company misclassified restricted cash as “Cash and cash equivalents”; restricted cash is now classified as “Other current assets.” o. Common Stock and APIC - The Company identified misstatements related to the incorrect application of stock compensation accounting standards. Restricted stock units with a performance condition were not expensed using the graded-vesting methodology. In addition, modifications to certain outstanding units were not recorded correctly. Restricted stock units were incorrectly recorded as share issuances on their grant date, rather than an issuance of shares on their vesting date. p. Income Taxes - The Company has identified certain errors in its historical accounting for income taxes, primarily related to uncertain tax positions and reconciliation of deferred tax balances. In addition, the more significant adjustments primarily relate to the income tax effects of other restatement adjustments noted above. Other adjustments to previously reported financial information The Company has also made certain reclassification adjustments to the previously reported consolidated financial statements. These adjustments do not relate to the correction of misstatements and are discussed in more detail below. aa. Reclassification of expenses - Due to increases and resultant materiality of certain expenses in 2014, and to enable the presentation of the consolidated statements of operations and comprehensive income to be more comparable with other health care services companies, the Company concluded that certain expenses should be reported separately in 2014. The Company reclassified prior year balances to conform to the current year presentation. For additional disclosure information, see Note C - “Significant Accounting Policies.” bb. Discontinued operations - On November 5, 2014, the Audit Committee of the Board of Directors approved a plan to sell and/or otherwise dispose of the Company’s Dosteon distribution product group (“Dosteon”), part of its Patient Care operating segment. Dosteon is presented in the accompanying consolidated financial statements as a discontinued operation in accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations , ASC 360-10 Property, Plant and Equipment - Overall , and ASC 350-20 Intangibles - Goodwill and Other - Goodwill, as of December 31, 2014. The operating results and cash flows of Dosteon have been presented separately as discontinued operations on the consolidated statements of operations and comprehensive (loss) income and the consolidated statements of cash flows, respectively, for the year ended December 31, 2014 and all comparable periods presented herein. For additional disclosure information refer to Note T - “Discontinued Operations.” cc. Reclassification of Equipment Capital Lease Liabilities - The Company previously reported the current portion of equipment capital lease liabilities within “accrued expenses and other current liabilities” and the non-current portion within “Other liabilities.” The Company is now presenting lease related financing liabilities, including capital leases and financing obligations related to certain real property transactions within “Long-term debt, less current portion” and “Current portion of long-term debt,” respectively, as the balances are similar in nature to long-term debt. For additional disclosure information, see Note O - “Long-Term Debt.” HANGER, INC. QUARTERLY CONSOLIDATED BALANCE SHEET (dollars in thousands, except par value and share amounts) (Unaudited) As of March 31, 2014 As Previously Restatement Restatement Reference As Restated ASSETS Current assets: Cash and cash equivalents $ $ ) m,n $ Accounts receivable, net of allowance for doubtful accounts of $7,920 ) b,e,f,m,n Inventories ) a,m Other current assets ) d,h,j,m,n,p Deferred income taxes p Total current assets ) Non-current assets: Property, plant and equipment, net ) c,d,g,i,m Goodwill c,m Other intangible assets, net ) m Debt issuance costs, net ) m Other assets d,m Total assets $ $ ) $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ $ d,m,cc $ Accounts payable g,i,m Accrued expenses and other current liabilities c,d,e,h,j,m,p,cc Accrued interest payable d Accrued compensation related costs ) j,m Total current liabilities Long-term liabilities: Long-term debt, less current portion d,m,cc Deferred income taxes ) p Other liabilities ) d,m,p,cc Total liabilities Shareholders’ Equity: Common stock, $.01 par value; 60,000,000 shares authorized, 35,486,033 shares issued and 35,344,879 shares outstanding ) o Additional paid-in capital j,m,o Accumulated other comprehensive loss ) — ) Retained earnings ) a - j,l,m,o ) Treasury stock, at cost 141,154 shares ) — ) Total shareholders’ equity ) Total liabilities and shareholders’ equity $ $ ) $ HANGER, INC. QUARTERLY CONSOLIDATED BALANCE SHEET (dollars in thousands, except par value and share amounts) (Unaudited) As of June 30, 2014 As Previously Restatement Restatement As Restated ASSETS Current assets: Cash and cash equivalents $ $ ) m,n $ Accounts receivable, net of allowance for doubtful accounts of $9,078 ) b,e,f,m.n Inventories ) a,k,l,m Other current assets d,h,j,k,m,n,p Deferred income taxes p Total current assets ) Non-current assets: Property, plant and equipment, net ) c,d,g,i,m Goodwill ) c,m Other intangible assets, net m Debt issuance costs, net ) m Other assets c,d,m Total assets $ $ ) $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ $ d,m,cc $ Accounts payable g,i,k,m Accrued expenses and other current liabilities c,d,e,g,h,j,m,p,cc Accrued interest payable d,m Accrued compensation related costs j,m Total current liabilities Long-term liabilities: Long-term debt, less current portion d,m,cc Deferred income taxes ) p Other liabilities ) c,d,k,m,cc Total liabilities Shareholders’ Equity: Common stock, $.01 par value; 60,000,000 shares authorized, 35,527,002 issued and 35,385,848 shares outstanding ) o Additional paid-in capital j,m,o Accumulated other comprehensive loss ) — ) Retained earnings ) a - m, o ) Treasury stock at cost, 141,154 shares ) — ) Total shareholders’ equity ) Total liabilities and shareholders’ equity $ $ ) $ HANGER, INC. QUARTERLY CONSOLIDATED BALANCE SHEET (dollars in thousands, except par value and share amounts) (Unaudited) As of March 31, 2013 As Previously Restatement Restatement As Restated ASSETS Current assets: Cash and cash equivalents $ $ ) m,n $ Accounts receivable, net of allowance for doubtful accounts of $4,941 ) b,e,f,m,n Inventories ) a,m Other current assets d,h,j,m,n,p Deferred income taxes p Total current assets ) Non-current assets: Property, plant and equipment, net ) c,d,g,i,m Goodwill m Other intangible assets, net ) m Debt issuance costs, net — Other assets m Total assets $ $ ) $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ $ d,m,cc $ Accounts payable g,i,m Accrued expenses and other current liabilities d,e,h,j,m,cc Accrued interest payable d Accrued compensation related costs ) j,m Total current liabilities Long-term liabilities: Long-term debt, less current portion d,m,cc Deferred income taxes ) p Other liabilities ) d,m,cc Total liabilities Shareholders’ Equity: Common stock, $.01 par value; 60,000,000 shares authorized, 34,953,812 shares issued and 34,812,658 shares outstanding ) j,o Additional paid-in capital j,o Accumulated other comprehensive loss ) — ) Retained earnings ) a - j,m,o ) Treasury stock, at cost 141,154 shares ) — ) Total shareholders’ equity ) Total liabilities and shareholders’ equity $ $ ) $ HANGER, INC. QUARTERLY CONSOLIDATED BALANCE SHEET (dollars in thousands, except par value and share amounts) (Unaudited) As of June 30, 2013 As Previously Restatement Restatement As Restated ASSETS Current assets: Cash and cash equivalents $ $ ) m,n $ Accounts receivable, net of allowance for doubtful accounts of $4,971 ) b,e,f,m,n Inventories ) a,m Other current assets d,g,h,j,m,n,p Deferred income taxes p Total current assets ) Non-current assets: Property, plant and equipment, net ) c,d,g,i,m Goodwill m Intangible assets, net ) m Debt issuance costs, net ) m Other assets m Total assets $ $ ) $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ $ d,cc $ Accounts payable g,i,m Accrued expenses and other current liabilities d,e,h,j,m,cc Accrued interest payable d Accrued compensation related costs j,m Total current liabilities Long-term liabilities: Long-term debt, less current portion d,m,cc Deferred income taxes ) p Other liabilities ) d,m,cc Total liabilities Shareholders’ Equity: Common stock, $.01 par value; 60,000,000 shares authorized, 35,062,931 shares issued and 34,921,777 shares outstanding ) o Additional paid-in capital j,o Accumulated other comprehensive loss ) — ) Retained earnings ) a - j,m,o ) Treasury stock, at cost 141,154 shares ) — ) Total shareholders’ equity ) Total liabilities and shareholders’ equity $ $ ) $ HANGER, INC. QUARTERLY CONSOLIDATED BALANCE SHEET (dollars in thousands, except par value and share amounts) (Unaudited) As of September 30, 2013 As Previously Restatement Restatement As Restated ASSETS Current assets: Cash and cash equivalents $ $ ) m,n $ Accounts receivable, net of allowance for doubtful accounts of $5,837 ) b,e,f,m,n Inventories ) a,m Other current assets d,g,h,j,m,n,p Deferred income taxes p Total current assets ) Non-current assets: Property, plant and equipment, net ) c,d,g,i,m Goodwill m Intangible assets, net ) m Debt issuance costs, net ) m Other assets m Total assets $ $ ) $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ $ d,m,cc $ Accounts payable g,i,m Accrued expenses and other current liabilities d,e,h,j,m,p,cc Accrued interest payable d Accrued compensation related costs j,m Total current liabilities Long-term liabilities: Long-term debt, less current portion d,m,cc Deferred income taxes ) p Other liabilities ) d,m,cc Total liabilities Shareholders’ Equity: Common stock, $.01 par value; 60,000,000 shares authorized, 35,062,367 shares issued and 34,921,213 shares outstanding ) o Additional paid-in capital j,o Accumulated other comprehensive loss ) — ) Retained earnings ) a - j,m,o ) Treasury stock at cost, 141,154 shares ) — ) Total shareholders’ equity ) Total liabilities and shareholders’ equity $ $ ) $ HANGER, INC. QUARTERLY CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (dollars in thousands, except share and per share amounts) (Unaudited) For the Three Months Ended March 31, 2014 As Restatement Restatement Reclassification Discontinued As Restated Net revenue $ $ ) b,e,f,m $ — $ ) $ Material costs a,g,m — ) Personnel costs a,c,j,m,o ) ) Other operating costs a,b,c,d,e,g,h,j,m ) ) General and administrative expenses — — — Professional accounting and legal fees — — — Depreciation and amortization ) c,d,i,m — ) Income from operations ) — Interest expense, net d,m — Income (loss) from continuing operations before income taxes ) — ) Provision (benefit) for income taxes ) p — ) Income (loss) from continuing operations ) — ) Loss from discontinued operations, net of taxes — — — ) ) Net income (loss) $ $ ) $ — $ — $ ) Comprehensive income (loss) $ $ ) $ — $ — $ ) Basic Per Common Share Data Income (loss) from continuing operations $ $ ) $ — $ $ ) Loss from discontinued operations — — — ) ) Basic income (loss) per share $ $ ) $ — $ — $ ) Shares used to compute basic per common share amounts ) o — — Diluted Per Common Share Data Income (loss) from continuing operations $ $ ) $ — $ $ ) Loss from discontinued operations — — — ) ) Diluted income (loss) per share $ $ ) $ — $ — $ ) Shares used to compute diluted per common share amounts ) o — — HANGER, INC. QUARTERLY CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (dollars in th |
SIGNIFICANT ACCOUNTING POLICI31
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in the accompanying consolidated financial statements. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the use of estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and contingencies. Although actual results in subsequent periods may differ from these estimates, such estimates are developed based on the best information available to management and management’s best judgments at the time. We base our estimates on historical experience, observable trends and various other assumptions that we believe are reasonable under the circumstances. All significant assumptions and estimates underlying the amounts reported in the consolidated financial statements and accompanying notes are regularly reviewed and updated when necessary. Changes in estimates are reflected prospectively in the consolidated financial statements based upon on-going actual experience trends, or subsequent settlements and realizations depending on the nature and predictability of the estimates and contingencies. Interim changes in estimates related to annual operating costs are applied prospectively within annual periods. The most significant assumptions and estimates underlying these consolidated financial statements and accompanying notes involve revenue recognition and accounts receivable, inventories, accounts payable and accrued liabilities (including contingencies), impairments of long-lived assets including goodwill, accounting for income taxes, business combinations, leases and stock-based compensation. |
Changes in Presentation | Changes in Presentation Presentation of expenses on the Company’s consolidated statements of operations and comprehensive (loss) income In previously issued consolidated financial statements, the Company presented personnel costs and other operating costs related to general and administrative activities within those entitled captions in its consolidated statements of operations and comprehensive (loss) income. Commencing in 2014, the Company experienced increases in general and administrative expenses, including professional accounting and legal fees. Therefore the Company changed its presentation of these expenses within newly created captions titled “General and administrative expenses” and “Professional accounting and legal fees” on its consolidated statements of operations and comprehensive (loss) income. These changes have been reflected retrospectively and have no impact on net (loss) income from continuing operations, net (loss) income, basic net (loss) income per share, or diluted (loss) income per share. See the accounting policies below for further information regarding the types of expenses recognized in the “Personnel costs,” “Other operating costs,” “General and administrative expenses,” and “Professional accounting and legal fees” captions. See Note B - “Restatement of Previously Issued Consolidated Financial Statements” and Note W - “Quarterly Financial Information (Unaudited)” which presents the impacts of these reclassifications on previously issued consolidated financial statements. |
Revenue Recognition | Revenue Recognition Patient Care Segment Revenues in the Company’s Patient Care segment are primarily derived from the sale of O&P devices and are recognized when the patient has received the device. At or subsequent to delivery, the Company issues an invoice to a third party payor, which primarily consist of commercial insurance companies, Medicare, Medicaid, Veterans Administration and Private or Patient Pay (“Patient Pay”). The Company recognizes revenue for the amounts it expects to receive from payors and patients based on expected contractual reimbursement rates, which are net of estimated contractual discounts. These revenue amounts are further revised as claims are adjudicated, which may result in disallowances, or decreases to revenue. The Company believes that adjustments related to write-offs of receivables should predominantly be recorded as a reduction of revenues, which the Company refers to as Disallowed Revenue. This is due to the majority of the Company’s revenues being collected from commercial insurance companies, Medicare, Medicaid and the Veterans Administration, most of which are under contractual reimbursement rates. As such, the Company believes adjustments do not relate to an inability to pay but to contractual allowances, lack of timely claims submission, insufficient medical documentation or due to administrative errors. Amounts recorded to bad debt expense, which are presented within “Other operating costs,” generally relate to commercial payor bankruptcies and private pay balances for which there was an assessment of collectability and collection attempts were made. At the end of each period, the Company establishes allowances for estimated disallowances relating to that period based on its prior adjudication experience and records such amounts as a reduction of revenue. In a similar fashion, the Company also estimates and records allowances for doubtful accounts on unpaid receivables at each period end. The Company also records a liability, with a corresponding reduction of revenue, for estimated refunds expected to be paid to its patients or third party payors. Medicare and Medicaid regulations and the various agreements we have with other third party payors, including commercial healthcare providers under which these contractual adjustments and disallowed revenue are calculated, are complex and are subject to interpretation and adjustment, and may include multiple reimbursement mechanisms for different types of services provided by the Company. Therefore, the particular O&P devices and related services authorized and provided, and the related reimbursement, are subject to interpretation and adjustment that could result in payments that differ from our estimates. Additionally, updated regulations and reimbursement schedules, and contract renegotiations, occur frequently, necessitating regular review and assessment of the estimation process by management. As a result, there is a reasonable possibility that recorded estimates will change materially in the short-term and any related adjustments will be recorded as changes in estimates when they become known. For more information on the Company’s use of estimates to calculate Allowances for Disallowed Revenue and Doubtful Accounts, refer to the accounting policy for Accounts Receivable, Net below. The Company often invoices patients or payors after a device is delivered. To account for this delay, the Company records an estimated revenue accrual for devices delivered but not yet invoiced at period end. This estimate is based on a historical look-back analysis of lag times between delivery and invoicing that occur over a period end. Products & Services Segment Revenues in the Company’s Products & Services segment are derived from the distribution of O&P components and the leasing and sale of rehabilitation equipment and ancillary consumable supplies combined with equipment maintenance, education, and training. Distribution revenues are recorded upon the delivery of products, net of estimated returns. Equipment leasing and related services revenue are recognized over the applicable term as the customer has the right to use the equipment and as the services are provided. Equipment sales revenue is recognized upon delivery, with any related services revenue deferred and recognized as the services are performed. Sales of consumables are recognized upon delivery. |
Material Costs | Material Costs Material costs in the Patient Care segment reflect purchases of orthotics and prosthetic componentry and other related costs in connection with the delivery of care through our clinic locations and other patient care operations. Material costs in our Products & Services segment reflect purchases of orthotics and prosthetic materials and other related costs in connection with the distribution of products and services to third party customers. |
Personnel Costs | Personnel Costs Personnel costs reflect salaries, benefits, incentive compensation, contract labor, and other personnel costs we incur in connection with our delivery of care through our clinic locations and other patient care operations, or distribution of products and services, and exclude similar costs incurred in connection with activities we consider to be general and administrative in nature. |
Other Operating Costs | Other Operating Costs Other operating costs reflect other costs we incur in connection with our delivery of care through our clinic locations and other patient care operations or distribution of products and services. Marketing costs, including advertising, are expensed as incurred and are presented within this financial statement caption. The Company incurred approximately $3.4 million, $3.5 million, and $3.3 million in marketing costs during the years ended December 31, 2014, 2013 and 2012, respectively. Other costs include rent, utilities, and other occupancy costs, general office expenses, bad debt expense, and travel and clinical professional education costs. Similar costs incurred in connection with general and administrative activities are excluded from this line. |
General and Administrative Expenses | General and Administrative Expenses General and administrative expenses reflect expenses we incur in the general management and administration of our businesses that are not directly attendant to the operation of our clinics or provision of products and services. These include personnel costs and other operating costs supporting general and administrative functions. |
Professional Accounting and Legal Fees | Professional Accounting and Legal Fees The Company recognizes fees associated with financial statement audits in the fiscal period to which the audit relates. All other professional fees are recognized as expense in the periods in which services are performed. |
Depreciation and Amortization | Depreciation and Amortization Depreciation and amortization expenses reflect all depreciation and amortization expense, whether incurred in connection with our delivery of care through clinic locations, our distribution of products and services, or in the general management and administration of our business. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. The Company maintains cash balances in excess of Federal Deposit Insurance Corporation (“FDIC”) limits at certain financial institutions. The Company manages this credit risk by concentrating its cash balances in high quality financial institutions and by periodically evaluating the credit quality of the primary financial institutions holding such deposits. With short maturities, the investments present insignificant risk of changes in value because of interest rate changes and are readily convertible to cash. Historically, no losses have been incurred due to such cash concentrations. Restricted cash balances are presented within “Other current assets” on the consolidated balance sheets. See Note J - “Other Current Assets and Other Assets” for further information. |
Accounts Receivable, Net | Accounts Receivable, Net Patient Care Segment The Company establishes allowances for its accounts receivable to reduce the carrying value of such receivables to their estimated net realizable value. The Patient Care accounts receivables are recorded net of estimated unapplied cash, estimated Allowance for Disallowed Revenue and estimated Allowance for Doubtful Accounts, as described in the Revenue Recognition accounting policy above. Both the Allowance for Disallowed Revenue and the Allowance for Doubtful Accounts estimates consider historical collection experience by each of the Medicare and non-Medicare (commercial insurance, Medicaid, Veteran’s Administration and Private Pay) primary payor class groupings. For each payor class grouping, liquidation analysis of historical period end receivable balances are performed to ascertain collections experience by aging category. The Company believes its use of historical collection experience applied to current period end receivable balances is reasonable. In the absence of an evident adverse trend, the Company uses historical experience rates calculated using an average of four quarters of data with at least twelve months of adjudication. The Company believes the time periods analyzed provide sufficient time for most balances to adjudicate in the normal course of operations. The Company will modify the time periods analyzed when significant trends indicate that adjustments should be made. In addition, estimates are adjusted when appropriate for information available up through the issuance of the consolidated financial statements. In the restated consolidated financial statements, the Company has restated its estimates of Allowances for Disallowed Revenue and Doubtful Accounts using estimates prepared as outlined above. The restatement was undertaken to correct identified misstatements in the original estimates affecting those periods in compliance with ASC 250, “ Accounting Changes and Error Corrections ,” which requires each individual prior period presented to be adjusted to reflect corrections of the period-specific effects of the misstatements using information that would have been contemporaneously available as of each period end. Refer to further discussion in Note B - “Restatement of Previously Issued Consolidated Financial Statements.” Products & Services Segment The Products & Services segment’s Allowance for Doubtful Accounts is estimated based on the analysis of the segment’s historical write-offs experience, accounts receivable aging and economic status of its customers. Accounts receivable that are deemed uncollectible are written-off to the Allowance for Doubtful Accounts. Accounts receivable are also recorded net of an allowance for estimated sales returns. |
Inventories | Inventories Inventories are valued at the lower of estimated cost or market, with cost determined on a first-in, first out (“FIFO”) basis. Provisions have also been made to reduce the carrying value of inventories for excess, obsolete, or otherwise impaired inventory on hand at period-end. Patient Care Segment Substantially all of Patient Care Segment inventories are recorded through a periodic approach whereby inventory quantities are adjusted on the basis of an annual physical count performed during the fourth quarter each year. Segment inventories relate primarily to raw materials and work-in-process (“WIP”) at Hanger Clinics, Dosteon raw materials, and CARES finished goods. Inventories at Hanger Clinics totaled $30.8 million and $35.5 million at December 31, 2014 and 2013, respectively. In connection with the preparation of the restated consolidated financial statements, the Company has restated its estimates of inventory amounts related to the Patient Care Segment using certain estimates that are discussed below. The restatement was undertaken to correct identified misstatements in the original estimates affecting those periods in compliance with ASC 250, Accounting Changes and Error Corrections , which requires each individual prior period presented to be adjusted to reflect corrections of the period-specific effects of the misstatements using contemporaneous information as of each period-end to the extent available. Refer also to further discussion in Note B - “Restatement of Previously Issued Consolidated Financial Statements.” Raw materials consists of purchased parts, components, and supplies which are used in the assembly of O&P devices for delivery to patients. In some cases, purchased parts and components are also sold directly to patients. Raw materials are valued based on the basis of recent vendor invoices, reduced by estimated vendor rebates. Such rebates are recognized as a reduction of cost of materials in the consolidated statement of operations and comprehensive (loss) income when the related devices or components are delivered to the patient. Approximately 51% and 80% of materials at December 31, 2014 and 2013, respectively were purchased from our Products & Services Segment. WIP consists of devices which are in the process of assembly at the Company’s clinics or fabrication centers. WIP quantities were determined by the physical count of patient orders in process at December 31, 2014 while the related stage of completion of each order was established by clinic personnel. The Company does not have an inventory costing system and as a result, the identified WIP quantities were valued on the basis of estimated raw materials, labor, and overhead costs. To estimate such costs, the Company developed bills of materials for certain categories of devices that it assembles and delivers to its patients. Within each bill of material, the Company estimated (i) the typical types of component parts necessary to assemble each device; (ii) the points in the assembly process when such component parts are added; (iii) the estimated cost of such parts based on historical purchasing data; (iv) the estimated labor costs incurred at each stage of assembly; and (v) the estimated overhead costs applicable to the device. In the restated consolidated financial statements as of December 31, 2013 and for the years ended December 31, 2013, and 2012, WIP was valued on the basis of physical counts performed as October 31, 2013, 2012, and 2011, and then valued using corrected historical cost information for materials, labor, and overhead applied to the estimated sales value of WIP inventory, similar to the approach originally used in those periods. Raw materials were valued on the basis of recent vendor invoices. These balances were then adjusted to December 31, 2013, 2012, and 2011 (and subsequent interim period ends) through the use of the gross profit method, adjusted for changes in the estimated number of WIP devices on hand at the respective year-ends. In correcting the misstatements identified in prior periods, including the intentional misstatements described in Note B, the Company determined that it lacked sufficient contemporaneous information to correct certain of the misstatements. In those cases, the Company used information as of December 31, 2014 to determine the related restatement adjustments to inventory at December 31, 2013 and to cost of materials for the years ended December 31, 2013 and 2012. The Company recorded adjustments to decrease inventories by $3.0 million in the fourth quarter of 2014, increase inventories by $0.2 million in the fourth quarter of 2013, and decrease inventories by $1.9 million in the fourth quarter of 2012 to reconcile the recorded amounts to those physically counted and costed in connection with the annual count. Dosteon inventories consist primarily of raw materials and totaled $5.4 million and $8.0 million at December 31, 2014 and 2013, respectively. Such inventories were determined on the basis of physical counts performed as of December 31, 2014 and 2013. As discussed in Note T, Dosteon inventories are included in assets held for sale as of December 31, 2014. CARES inventories consist primarily of finished goods and totaled $0.9 million and $1.1 million at December 31, 2014 and 2013, respectively. Products & Services Segment Segment inventories consist primarily of finished goods at its distribution centers as well as raw materials at fabrication facilities, and totaled $38.9 million and $37.7 million as of December 31, 2014 and 2013, respectively. Finished goods include products that are available for sale to third party customers as well as the Company’s Patient Care Segment as described above. Such inventories were determined on the basis of perpetual records. |
Fair Value Measurements | Fair Value Measurements The Company follows the authoritative guidance for financial assets and liabilities, which establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements. The authoritative guidance requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy by which these assets and liabilities must be categorized, based on significant levels of inputs as follows: Level 1 consists of securities for which there are quoted prices in active markets for identical securities; Level 2 consists of securities for which observable inputs other than Level 1 inputs are used, such as quoted prices for similar securities in active markets or quoted prices for identical securities in less active markets and model-derived valuations for which the variables are derived from, or corroborated by, observable market data; and Level 3 consists of securities for which there are no observable inputs to the valuation methodology that are significant to the measurement of the fair value. The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. |
Financial Instruments | Financial Instruments The Company holds investments in money market funds which are measured at fair value on a recurring basis. As of December 31, 2014 and 2013, $12.0 million and $4.0 million, respectively, of money market funds are presented within “Cash and cash equivalents” and $3.8 million and $3.7 million of money market funds which are restricted from the general use are presented within “Other current assets.” The fair values of the Company’s money market funds are based on Level 1 observable market prices and are equivalent to one dollar. The carrying value of accounts receivable and accounts payable, approximate their fair values based on the short-term nature of these instruments. The carrying values of the Company’s outstanding term loan as of December 31, 2014 and 2013, was $213.8 million and $222.2 million compared to their fair value of $211.7 million and $223.1, respectively. The Company has estimated their fair value based on debt with similar terms and remaining maturities as of December 31, 2014, which represent Level 2 measurements. The carrying value of amounts outstanding on the Company’s revolving credit facilities as of December 31, 2014 and 2013, was $70.0 million and $25.0 million compared to their fair value of $69.2 million and $25.1 million, respectively. The Company has estimated their fair value based on debt with similar terms and remaining maturities as of December 31, 2014 and 2013, which represent Level 2 measurements. The carrying value of the senior notes was $200.0 million as of December 31, 2014 and 2013 compared to their fair value of $203.0 million and $213.3 million, respectively. The Company has determined the fair value of the senior notes based on market observable inputs and has therefore concluded these are Level 2 measurements. The carrying value of the Company’s outstanding subordinated promissory notes issued in connection with acquisitions (“Seller Notes”) as of December 31, 2014 and 2013 was $26.6 million and $21.1 million, respectively. The Company believes that the carrying value of the Seller Notes approximates the related fair values based on a discounted cash flow model using unobservable inputs, primarily, the Company’s credit spread for subordinated debt, which represents a Level 3 measurement. |
Insurance Recoveries Receivable | Insurance Recoveries Receivable We incur legal and other costs with respect to a variety of issues on an ongoing basis. We record a related receivable when costs are reimbursable under applicable insurance policies, we believe it is probable such costs will be reimbursed and such reimbursements can be reasonably estimated. We record the benefit of related receivables from the insurer as a recovery of costs in the same financial statement caption in which the related loss was recognized in our consolidated statements of operations and comprehensive (loss) income. Loss contingency reserves, which are recorded within accrued liabilities, are not reduced by estimated insurance recoveries. |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment are recorded at cost less accumulated depreciation and amortization, with the exception of assets acquired through acquisitions, which are initially recorded at estimated fair value. Equipment acquired under capital lease is recorded at the present value of the future minimum lease payments. The cost and related accumulated depreciation of assets sold, retired or otherwise disposed of are removed from the respective accounts, and any resulting gains or losses are included in the consolidated statements of operations and comprehensive (loss) income. Depreciation is computed for financial reporting purposes using the straight-line method over the useful lives of the related assets estimated as follows: furniture and fixtures, equipment and information systems, principally five years, buildings ten to forty years, capital leases over the lease term, and leasehold improvements over the shorter of ten years or lease term. The Company records maintenance and repairs, including the cost of minor replacements, to maintenance expense. Costs of major repairs that extend the effective useful life of property are capitalized and depreciated accordingly. We capitalize the costs of obtaining or developing internal use software, including external direct costs of materials and services and directly related payroll costs. Amortization begins when the internal use software is ready for its intended use. Costs incurred during the preliminary project and post-implementation stages, as well as maintenance and training costs, are expensed as incurred. |
Business Combinations | Business Combinations The Company records tangible and intangible assets acquired and liabilities assumed in business combinations under the acquisition method of accounting. For consideration of the net assets acquired, the Company typically pays cash and issues a Seller Note. It may also include contingent consideration with payment terms associated with the achievement of designated collection targets of the acquired business. Amounts paid for each acquisition are allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition inclusive of identifiable intangible assets. The estimated fair value of identifiable intangible assets are based on detailed valuations performed internally or by external valuation specialists that use information and assumptions provided by management. We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired and liabilities assumed to goodwill. Significant management judgments and assumptions are required in determining the fair value of acquired assets and liabilities, particularly acquired intangible assets, including estimated useful lives. The valuation of purchased intangible assets is based upon estimates of the future performance and discounted cash flows from the acquired business. Each asset acquired or liability assumed is measured at estimated fair value from the perspective of a market participant. Subsequent changes in estimated fair value of contingent consideration are recognized as “General and administrative expenses” within the consolidated statements of operations and comprehensive (loss) income. |
Goodwill and Other Intangible Assets, Net | Goodwill and Other Intangible Assets, Net Goodwill represents the excess of purchase price over the estimated fair value of net identifiable assets acquired and liabilities assumed from purchased businesses. The Company assesses goodwill for impairment annually during the fourth quarter, or when events or circumstances indicate that the carrying value of the reporting units may not be recoverable. The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. If the Company determines that a two-step goodwill impairment test is necessary or more efficient than a qualitative approach, it will measure the fair value of the Company’s reporting units using a combination of income and market approaches. Any impairment would be recognized by a charge to income from operations and a reduction in the carrying value of the goodwill. We use income and market approaches to determine the fair value of a reporting unit. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, and the second step of the impairment test is not required. The second step, if required, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. The fair value of a reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination. If the carrying amount of the reporting unit’s goodwill exceeds its implied fair value, an impairment charge is recognized in an amount equal to that excess. The fair value of acquired customer intangibles is estimated using an excess earnings model. Key assumptions utilized in the valuation model include pro-forma projected cash flows adjusted for market-participant assumptions, forecasted customer retention curve, and discount rate. Customer intangibles are amortized, using the straight-line method over an estimated useful life of ten to fourteen years. The fair value associated with trade names is estimated using the relief-from-royalty method. These assets, some of which have indefinite lives, are primarily included in the Products & Services segment. Indefinite lived intangible assets are assessed for impairment in the fourth quarter of each year, or more frequently if events or changes in circumstances occur which indicate the carrying value might not be recoverable. Intangible assets with definite lives are amortized over their estimated useful lives of one to ten years. The fair value of non-compete agreements are estimated using a discounted cash flow model. The related intangible assets are amortized, using the straight-line method, over their term which ranges from two to five years. Other definite-lived intangible assets are recorded at cost and are amortized, using the straight-line method, over their estimated useful lives of up to seventeen years. |
Long-Lived Asset Impairment | Long-Lived Asset Impairment The Company evaluates the carrying value of long-lived assets to be held and used whenever events or changes in circumstance indicate that the carrying amount may not be recoverable. The carrying value of a long-lived asset group is not recoverable and is considered impaired if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. The Company measures impairment as the amount by which the carrying value exceeds the estimated fair value. Estimated fair value is determined primarily using the projected future cash flows discounted at a rate commensurate with the risk involved. Long-lived assets to be disposed of by sale are classified as held for sale when the applicable criteria are met, and recognized within the consolidated balance sheet at the lower of carrying value or fair value less cost to sell. Depreciation on such assets is ceased. |
Debt Issuance Costs, Net | Debt Issuance Costs, Net Debt issuance costs incurred in connection with the Company’s long-term debt are amortized, on a straight-line basis, which is not materially different from the effective interest method, through the maturity of the related debt instrument. Amortization of these costs are included within “Interest Expense, Net” in the consolidated statements of operations and comprehensive (loss) income. |
Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities The Company does not maintain a purchase order system, therefore accounts payable relating to goods or services received is estimated using various factors including payments made subsequent to period end, vendor invoice dates, shipping terms confirmed by certain vendors or other third party documentation. Accrued liabilities are recorded based on estimates of services received or amounts expected to be paid to third parties. Accrued legal costs for legal contingencies are recorded when they are probable and estimable. |
Leases | Leases The Company leases the vast majority of its patient care clinics under operating lease arrangements. Certain of the Company’s lease agreements contain renewal options, rent escalation clauses, and/or landlord incentives. Rent expense for noncancellable operating leases with scheduled rent increases and/or landlord incentives is recognized on a straight-line basis over the lease term, including any applicable rent holidays, beginning on the earlier of the lease commencement date or the date the Company takes control of the leased space. The Company has certain building leases that are accounted for as financing transactions. In these instances, pursuant to ASC 840-40-55, “The Effect of Lessee Involvement in Asset Construction,” the Company is the deemed owner of the property and, during the construction phase, the associated building assets and financing obligations are recognized on the Company’s consolidated balance sheet. Subsequent to construction, the arrangement is evaluated in accordance with ASC 840-40 to determine whether the arrangement qualifies as a sale leaseback. Sale leasebacks of real estate require an analysis to identify indicators of continuing involvement and other factors. If no indicators of continuing involvement are found, the lease is considered to have passed the sales-leaseback criteria and both the asset and the related financing obligation are derecognized. These leases are then assessed for classification at lease inception and reported in accordance with ASC 840. If indicators of continuing involvement are present, these transactions do not qualify for sale accounting and are accounted for as a failed sale-leaseback. In accordance with ASC 840-40, Leases - Sale-Leaseback Transactions, the buildings and related assets, as well as their associated financing obligations, continue to be reflected on the Company’s consolidated balance sheet, with the assets depreciated over their remaining useful lives. Payments required under the arrangement are recognized as reductions of the financing obligation and interest expense. At the end of the lease term, the corresponding financing obligation and the remaining net book value of the building are derecognized. When applicable, any associated gain is recognized within “Other operating costs” on the Company’s consolidated statements of operations and comprehensive (loss) income. |
Income Taxes | Income Taxes The Company uses the liability method of accounting for income taxes as set forth in the authoritative guidance for accounting for income taxes. Under this method, the Company recognizes deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the respective carrying amounts and tax bases of our assets and liabilities. The Company recognizes a valuation allowance on deferred tax assets if it is more likely than not that the assets will not be realized in future years. Significant accounting judgment is required in determining the provision for income taxes and related consolidated balance sheet accounts. The Company believes that its tax positions are consistent with applicable tax law, but certain positions may be challenged by taxing authorities. In the ordinary course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. In addition, the Company is subject to periodic audits and examinations by the Internal Revenue Service and other state and local taxing authorities. In these cases, the Company records the financial statement effects of a tax position when it is more-likely-than-not, based on the technical merits, that the position will be sustained upon examination. The Company records the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. If not paid, the liability for uncertain tax positions is generally recorded as a reduction of income tax expense at the earlier of the period when the position is effectively settled or when the statute of limitations has expired. Although the Company believes that its estimates are reasonable, actual results could differ from these estimates. Interest and penalties, when applicable, are recorded within the income tax provision. |
Stock-Based Compensation | Stock - Based Compensation The Company primarily issues restricted common stock units under one active stock-based compensation plan. Shares of common stock issued under the stock-based compensation plan are issued from the Company’s authorized and unissued shares. The Company applies the fair value recognition provisions of the authoritative guidance for stock compensation, which require companies to measure and recognize compensation expense, net of estimated forfeiture, for all stock-based payments at fair value. The Company’s outstanding awards are primarily comprised of restricted stock units and performance-based restricted stock units. All employee stock options are fully vested as of December 31, 2014 and 2013, and all associated compensation expense has been recognized in prior years. The restricted stock units are subject to a service condition or vesting period ranging from one to four years. The performance based restricted stock units include both performance and service conditions. The performance conditions are based on annual earnings per share targets. Compensation expense associated with restricted stock units is recognized on a straight-line basis over the requisite service period. Compensation expense associated with performance-based restricted stock units is recognized on a graded vesting or accelerated basis over the requisite service period when the performance condition is probable of being achieved. |
Segment Information | Segment Information The Company has two segments, Patient Care and Products & Services, and descriptions of their respective businesses are provided in Note A - “The Company.” Except for the policies identified above, the two segments follow the same accounting policies as followed in the consolidated financial statements. The Company applies the “management approach” to disclosure of segment information. The management approach designates the internal organization that is used by management for making operating decisions and assessing performance as the basis of the Company’s reportable segments. The description of the Company’s reportable segments and the disclosure of segment information are presented in Note S - “Segment and Related Information” in this Annual Report on Form 10-K. |
Discontinued Operations | Discontinued Operations We reported our Dosteon product group as a discontinued operation in accordance with ASC 205-20, Presentation of Financial Statements-Discontinued Operations , ASC 360-10 Property, Plant and Equipment-Overall, and ASC 350-20 , Intangibles -Goodwill and Other - Goodwill as of December 31, 2014. The operating results and cash flows of Dosteon have been presented separately as discontinued operations on the consolidated statements of operations and comprehensive (loss) income and the consolidated statements of cash flows, respectively, for the year ended December 31, 2014 and all comparable periods. Proceeds from the sale of Dosteon businesses are recorded in the consolidated statement of cash flows within the “Net cash used in investing activities - discontinued operations” caption. Also included within this caption are any impairments and losses on disposal. As discussed in further detail below, assets of these businesses that were expected to be disposed of by sale are reported as “Assets held for sale” on the Company’s consolidated balance sheet as of December 31, 2014. See Note T - “Discontinued Operations” to our consolidated financial statements in this Annual Report on Form 10-K for the details of our discontinued operations in 2014. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-7, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This ASU requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost, which include interest cost and prior service cost or credit, among others, are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. This ASU is effective for the Company’s fiscal year 2018, including interim periods. The Company is currently evaluating the effects that the adoption of this ASU will have on its consolidated financial statements. The Company has not yet concluded how the new standard will impact the consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-4 , Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU simplifies how an entity is required to test goodwill for impairment by eliminating Step Two from the goodwill impairment test. Step Two measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under this standard, an entity will recognize an impairment charge for the amount by which the carrying value of a reporting unit exceeds it fair value. The amendments in this ASU are effective for us in fiscal year 2020 with early adoption permitted beginning in 2017. The Company is currently evaluating the effects that the adoption of this ASU will have on its consolidated financial statements. The Company has not yet concluded how the new standard will impact the consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-3 , Accounting Changes and Error Corrections (Topic 250) and Investments-Equity Method and Joint Ventures (Topic 232): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings. This ASU expands disclosures regarding potential material effects to the Company’s consolidated financial statements that may occur when adopting ASU’s in the future. When a company cannot reasonably estimate the impact of adopting an ASU, disclosures are to be expanded to include qualitative disclosures including a description to the effect to the company’s accounting policies, a comparison the existing policies, the status of its process to implement the new standard and any significant implementation matters yet to be addressed. This standard will generally require more disclosure in the Company’s consolidated financial statements when adopted. In January 2017, the FASB issued ASU No. 2017-1 , Business Combinations (Topic 805): Clarifying the Definition of a Business. This ASU clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This ASU is effective for the Company’s fiscal year 2018, including interim periods. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In December 2016, the FASB issued ASU No. 2016-19 , Technical Corrections and Improvements. This ASU clarifies and improves ease of understanding for existing guidance under the Accounting Standards Codification by making the text more uniform and streamlined. This ASU was effective when issued. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18 , Statement of Cash Flows (Topic 230): Restricted Cash. This ASU provides guidance on presenting restricted cash in the statement of cash flows. Restricted cash and cash equivalents are to be included in cash and cash equivalents when reconciling the changes during the period, while separately identifying the changes in restricted cash and cash equivalents. This ASU is effective for the Company’s fiscal year 2018, including interim periods and will require a retrospective transition. Early adoption is permitted. The adoption of this standard will add restricted cash into the cash and cash equivalent totals on the Company’s consolidated statements of cash flows and change the presentation of restricted cash on the Company’s consolidated statements of cash flows. See Note J - “Other Current Assets and Other Assets” for further information regarding the Company’s restricted cash balances. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This ASU requires the recognition of the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU is effective for the Company’s fiscal year 2018, with early adoption permitted. The amendments in this ASU should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The purpose of this ASU is to reduce the diversity in practice regarding how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This ASU is effective for the Company’s fiscal year 2018. Early adoption is permitted. A retrospective transition method is to be used in the application of this amendments. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-9, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This ASU simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This ASU is effective for the Company’s fiscal year 2017. We anticipate the primary impact of adopting ASU 2016-9 will be the recognition of excess tax benefits and tax deficiencies resulting from our stock awards to be included in our provision for income taxes, whereas previously these amounts were taken directly to additional paid-in capital. Additionally, these amounts are required to appear in the statement of cash flow under operating activities, whereas previously these amounts were reported as financing activities. We do not anticipate any impact to our classification of awards as either equity or liabilities. Upon adoption, we will need to elect to either estimate the number of awards that we expect to vest, or recognize future forfeitures as they occur. In February 2016, the FASB issued ASU No. 2016-2 , Leases (Topic 842). The amendments in this ASU revise the accounting for leases. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases that extend beyond 12 months. The asset and liability will initially be measured at the present value of the lease payments. The new lease guidance also simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The amendments in this ASU are effective for the Company’s fiscal year 2019 and will be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements. Early adoption is permitted. The Company is currently evaluating the effects that the adoption of this ASU will have on its consolidated financial statements. The Company has not yet concluded how the new standard will impact the consolidated financial statements. Nonetheless, it is anticipated that there will be a material increase to assets and lease liabilities for existing property leases representing our nationwide retail locations that are not already included on our consolidated balance sheet through failed sale-leaseback accounting treatment. In January 2016, the FASB issued ASU No. 2016-1, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . The amendments in this ASU revise the accounting related to (i) the classification and measurement of investments in equity securities and (ii) the presentation of certain fair value changes for financial liabilities at fair value. The amendments in this ASU are effective for us beginning on January 1, 2018 and should be applied through a cumulative-effect adjustment to the Company’s consolidated balance sheet. Early adoption is permitted under certain circumstances. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that all deferred income tax assets and liabilities be presented as noncurrent in the Company’s consolidated balance sheet. The pronouncement is effective for our fiscal 2017 consolidated financial statements, with early application permitted. The adoption of this guidance will result in the reclassification of deferred income taxes currently reported as a current asset to be reported as a non-current asset. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments . The amendments in this ASU allow an acquirer to recognize applicable adjustments during the measurement period in the reporting period in which the adjustment amounts are determined. This will be inclusive of the effect on earnings of changes in depreciation, amortization, or other income effects as a result of the change to provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments in this ASU are effective for the Company beginning on January 1, 2016, to be applied prospectively. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962) Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient . This ASU simplifies the measurement of fully benefit-responsive investment contracts to be reported at contract value. The amendments in this ASU are effective for the Company beginning January 1, 2016 and should be applied retrospectively. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory . This ASU simplifies the measurement of inventory. Under this new standard, inventory should be measured using the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonable predictable costs of completion, disposal and transportation. The amendments in this ASU are effective for the Company beginning January 1, 2017 and should be applied prospectively. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In May 2015, the FASB issued ASU No. 2015-7, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) . This ASU removes certain requirements related to valuing assets where fair value is measured using the net asset value per share practical expedient. This ASU is effective on January 1, 2016 for the Company. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-5, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . This ASU provides guidance to customers about whether a cloud computing arrangement includes a software license. If an arrangement includes a software license, the accounting for the license will be consistent with other software licenses. If the arrangement does not include a license, the arrangement will be accounted for as a service contract. This ASU is effective on January 1, 2016 for the Company, with early adoption permitted. The Company is currently evaluating the effects that the adoption of this ASU will have on its consolidated financial statements. The Company has not yet concluded how the new standard will impact the consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-4, Compensation - Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets. This ASU provides guidance for entities whose fiscal year-end does not coincide with a month-end. In these instances the closest month-end date may be used for valuation purposes. This ASU is effective on January 1, 2017 for the Company. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-3, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This ASU requires debt issuance costs to be presented in the balance sheet as a reduction to the debt liability. This standard was subsequently modified in August 2015 with the issuance of ASU 2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements , which clarifies that the treatment of debt issuance costs related to a line-of-credit may continue to be deferred in an asset position and subsequently amortized over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. Both of these ASUs are effective on January 1, 2016 for the Company. The adoption of these standards will result in certain debt issuance costs to be moved from a non-current asset to a reduction of the associated “Long-term debt” on the Company’s consolidated balance sheet. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments in this ASU provide guidance on management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern. This ASU is effective on December 31, 2016 for the Company. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-9, Revenue from Contracts with Customers (Topic 606). This ASU provides a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer in an amount that reflects the consideration it expects to receive in exchange for those goods or services. Additional disclosures are required regarding 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 FASB issued additional related ASU’s providing guidance on principal versus agent considerations, identification of performance obligations and the implementation guidance for licensing. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial adoption. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date which deferred the effective date until the Company’s fiscal year 2018. The Company is currently evaluating the effects that the adoption of these ASUs will have on its consolidated financial statements. The Company has not yet concluded how the new standards will impact the consolidated financial statements. Depending on the results of our evaluation, there could be changes to the timing of recognition of revenues and related costs. The Company is also evaluating which transition method to select. In April 2014, the FASB issued ASU 2014-8, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU changes the requirements for reporting discontinued operations to include a strategic shift that has a major effect on an entity’s operations and financial results. Entities are required to provide additional disclosures about individually significant components that are disposed of or held for sale but do not meet the discontinued operations criteria. The ASU is effective prospectively for all disposals or classifications as held for sale that occur within annual periods beginning January 1, 2015, with early adoption permitted. The Company will adopt this guidance beginning on January 1, 2015. Other recently issued ASUs were assessed and determined to be either not applicable or are expected to have a minimal impact on the Company’s consolidated financial statements. |
RESTATEMENT OF PREVIOUSLY ISS32
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS | |
Summary impact of restatement adjustments to previously reported financial information | As of December 31, (in thousands) 2013 2012 2011 As previously reported - Retained Earnings $ $ $ Inventory valuation ) ) ) Allowance for disallowed revenue and doubtful accounts ) ) ) Property, plant and equipment, net ) ) ) Real property leases ) ) ) All other restatement adjustments ) ) ) Total restatement adjustments ) ) ) Tax effect of restatement adjustments As restated - Retained Earnings $ $ $ As of December 31, (in thousands) 2013 2012 As previously reported - Income before Income Taxes $ $ Inventory valuation ) ) Allowance for disallowed revenue and doubtful accounts ) ) Property, plant and equipment, net ) ) Real property leases ) ) All other restatement adjustments ) ) Total restatement adjustments ) ) Restated Income before Income Taxes Adjustment for loss from discontinued operations As restated - Income from Continuing Operations before Income Taxes $ $ |
Schedule of differing adjustments to previously issued consolidated balance sheets from the restatement adjustments and discontinued operations | CONSOLIDATED BALANCE SHEET (dollars in thousands, except par value and share amounts) As of December 31, 2013 As Previously Restatement Restatement As Restated ASSETS Current assets: Cash and cash equivalents $ $ ) h,i $ Accounts receivable, net of allowance for doubtful accounts of $6,472 ) b,e,f,h,i Inventories ) a,h Other current assets d,h,k,i Deferred income taxes k Total current assets ) Non-current assets: Property, plant and equipment, net ) c,d,g,h Goodwill h,k Other intangible assets, net ) h Debt issuance costs, net ) h Other assets d,h Total assets $ $ ) $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ $ d,h,cc $ Accounts payable g,h Accrued expenses and other current liabilities d,e,g,h,k,cc Accrued interest payable d Accrued compensation related costs h Total current liabilities Long-term liabilities: Long-term debt, less current portion d,h,cc Deferred income taxes ) k Other liabilities ) d,h,cc Total liabilities Commitments and contingent liabilities Shareholders’ Equity: Common stock, $.01 par value; 60,000,000 shares authorized, 35,158,196 shares issued and 35,017,042 shares outstanding ) j Additional paid-in capital j,h Accumulated other comprehensive loss ) — ) Retained earnings ) a,b,c,d,e,f, g,h,j ) Treasury stock at cost, 141,154 shares ) — ) Total shareholders’ equity ) Total liabilities and shareholders’ equity $ $ ) $ |
Schedule of differing adjustments to previously issued consolidated statements of operations and comprehensive income from the restatement adjustments, reclassification of expenses and discontinued operations | CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (dollars in thousands, except share and per share amounts) For the Year Ended December 31, 2013 As Restatement Restatement Reclassification Discontinued As Restated Net revenue $ $ ) b,e,f,h $ — $ ) $ Material costs a,h — ) Personnel costs a,c,h,j ) ) Other operating costs ) a,b,c,d,g,h ) ) General and administrative expenses — — — Professional accounting and legal fees — — — Depreciation and amortization ) c,d,h — ) Income from operations ) — Interest expense, net d,h — ) Extinguishment of debt — — — Income from continuing operations before income taxes ) — Provision for income taxes ) k — Income from continuing operations ) — Loss from discontinued operations, net of income taxes — — — ) ) Net income $ $ ) $ — $ — $ Other comprehensive income Unrealized gain on SERP net of tax provision of $531 $ $ — $ — $ — $ Total other comprehensive income — — — Comprehensive income $ $ ) $ — $ — $ Basic Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations, net of income taxes — — — ) ) Basic income per share $ $ ) $ — $ — $ Shares used to compute basic per common share amounts j — — Diluted Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations, net of income taxes — — — ) ) Diluted income per share $ $ ) $ — $ — $ Shares used to compute diluted per common share amounts ) j — — CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (dollars in thousands, except share and per share amounts) For the Year Ended December 31, 2012 As Restatement Restatement Reference Reclassification Discontinued As Restated Net revenue $ $ ) b,e,f,h $ — $ ) $ Material costs a,h — ) Personnel costs a,c,h,j ) ) Other operating costs ) a,b,c,d,g,h ) ) General and administrative expenses — — — Professional accounting and legal fees — — — Depreciation and amortization ) c,d,h — ) Income from operations ) — Interest expense, net d,h — ) Income from continuing operations before income taxes ) — Provision for income taxes ) k — Income from continuing operations ) — Loss from discontinued operations, net of income taxes — — — ) ) Net income $ $ ) $ — $ — $ Other comprehensive income Unrealized loss on SERP, net of tax benefit of $439 $ ) $ — $ — $ — $ ) Total other comprehensive loss ) — — — ) Comprehensive income $ $ ) $ — $ — $ Basic Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations, net of income taxes — — — ) ) Basic income per share $ $ ) $ — $ — $ Shares used to compute basic per common share amounts ) j — — Diluted Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations, net of income taxes — — — ) ) Diluted income per share $ $ ) $ — $ — $ Shares used to compute diluted per common share amounts ) j — — |
Schedule of differing adjustments to previously issued consolidated statements of cash flows from the restatement adjustments | CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in thousands) For the Year Ended December 31, 2013 As Previously Restatement Restatement As Restated Cash flows from operating activities: Net income $ $ ) a - h,j,k $ Loss from discontinued operations, net of income taxes — ) bb ) Income from continuing operations ) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ) c,d,h Provision for doubtful accounts ) b,h Compensation expense on restricted stock units j Benefit from deferred income taxes ) ) k ) Amortization of debt issuance costs h Loss on extinguishment of debt — Gain on sale of property, plant and equipment ) ) c ) Contingent consideration gains ) ) h ) Changes in operating assets and liabilities, net of effects of acquired companies: Net accounts receivable ) b,e,f,h ) Inventories ) a,h ) Other current assets and income taxes d,h,k Accounts payable ) g,h Accrued expenses and other current liabilities, accrued interest payable ) d,e,g,h Accrued compensation related costs ) h ) Other liabilities d,h,k Net cash provided by operating activities - continuing operations ) Net cash used in operating activities - discontinued operations — ) bb ) Net cash provided by operating activities ) Cash flows from investing activities: Purchase of property, plant and equipment, net of acquisitions ) c,d,g,h ) Purchase of equipment leased to third parties under operating leases ) c ) Acquisitions, net of cash acquired ) ) h ) Change in restricted cash associated with workers’ compensation program — Proceeds from sale of property, plant and equipment c Net cash used in investing activities - continuing operations ) ) Net cash used in investing activities - discontinued operations — ) bb ) Net cash used in investing activities ) ) Cash flows from financing activities: Borrowings under term loan — Repayment of term loan ) — ) Borrowings under revolving credit agreement — Repayments under revolving credit agreement ) — ) Payment of seller notes ) h ) Payment of contingent consideration — ) ) Payment of financing obligations ) ) d ) Payment of fees associated with debt modifications and extinguishments ) h ) Excess tax benefit from stock-based compensation ) h Proceeds from issuance of common stock — Purchase and retirement of common stock ) — ) Net cash used in financing activities - continuing operations ) ) Net cash used in financing activities - discontinued operations — ) bb ) Net cash used in financing activities ) ) Decrease in cash and cash equivalents ) ) ) Cash and cash equivalents, at beginning of year ) i Cash and cash equivalents, at end of year $ $ ) $ CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in thousands) For the Year Ended December 31, 2012 As Previously Restatement Restatement As Restated Cash flows from operating activities: Net income $ $ ) a - h, j,k $ Loss from discontinued operations, net of income taxes — ) bb ) Income from continuing operations ) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ) c,d,h Provision for doubtful accounts ) b,h Compensation expense on restricted stock units j Benefit from deferred income taxes ) ) k ) Amortization of debt issuance costs h Loss (gain) on sale of property, plant and equipment ) c ) Contingent consideration gains ) ) h ) Changes in operating assets and liabilities, net of effects of acquired companies: Net accounts receivable ) b,e,f,h ) Inventories ) a,h Other current assets and income taxes ) d,h,k Accounts payable ) g,h Accrued expenses, other current liabilities and accrued interest payable ) d,e,g,h Accrued compensation related costs ) h Other liabilities ) d,h,k ) Net cash provided by operating activities - continuing operations ) Net cash used in operating activities - discontinued operations — ) bb ) Net cash provided by operating activities ) Cash flows from investing activities: Purchase of property, plant and equipment, net of acquisitions ) c,d,g,h ) Purchase of equipment leased to third parties under operating leases ) c ) Acquisitions, net of cash acquired ) h ) Change in restricted cash associated with workers’ compensation program ) — ) Purchase of company-owned life insurance investment ) — ) Proceeds from sale of property, plant and equipment c Net cash used in investing activities - continuing operations ) ) Net cash used in investing activities - discontinued operations — ) bb ) Net cash used in investing activities ) ) Cash flows from financing activities: Repayment of term loan ) — ) Payment of seller notes ) h ) Payment of contingent consideration — ) ) Payment of financing obligations ) ) d ) Excess tax benefit from stock-based compensation (16 ) h Proceeds from issuance of common stock — h Purchase and retirement of common stock ) — ) Net cash used in financing activities - continuing operations ) ) ) Net cash used in financing activities - discontinued operations — ) bb ) Net cash used in financing activities ) ) ) Decrease in cash and cash equivalents ) ) ) Cash and cash equivalents, at beginning of year i Cash and cash equivalents, at end of year $ $ ) $ |
Schedule of impact of restatement adjustments on previously reported consolidated statements of operations and comprehensive income | For the Year Ended December 31, 2013 (in thousands) Total Inventory Allowances Property, Real All Other Net revenue $ ) $ — $ ) $ — $ — $ ) Material costs — — — ) Personnel costs — — Other operating costs ) ) ) ) Depreciation and amortization ) — — ) ) Income from operations ) ) ) ) ) Interest expense, net — — — Income from continuing operations before taxes $ ) $ ) $ ) $ ) $ ) $ ) For the Year Ended December 31, 2012 (in thousands) Total Inventory Allowances Property, Real All Other Net revenue $ ) $ — $ ) $ — $ — $ ) Material costs — — — ) Personnel costs — — Other operating costs ) ) ) Depreciation and amortization ) — — ) Income from operations ) ) ) ) ) Interest expense, net — — — Income from continuing operations before taxes $ ) $ ) $ ) $ ) $ ) $ ) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
EARNINGS PER SHARE | |
Schedule of reconciliation of the numerators and denominators used to calculate basic and diluted net (loss) income per share | Year Ended December 31, (As Restated) (in thousands, except share and per share data) 2014 2013 2012 Net (loss) income from continuing operations applicable to common shareholders $ ) $ $ Loss from discontinued operations, net of income taxes ) ) ) Net (loss) income applicable to common shareholders $ ) $ $ Shares of common stock outstanding used to compute basic per common share amounts Effect of dilutive restricted stock units and options (1) — Shares used to compute diluted per common share amounts Basic: (Loss) income from continuing operations per share applicable to common shareholders $ ) $ $ Loss from discontinued operations per share applicable to common shareholders ) ) ) Net (loss) income per share applicable to common shareholders $ ) $ $ Diluted: (Loss) income from continuing operations per share applicable to common shareholders $ ) $ $ Loss from discontinued operations per share applicable to common shareholders ) ) ) Net (loss) income per share applicable to common shareholders $ ) $ $ (1) For 2014, given the Company is recognizing a net loss from continuing operations, shares used to compute diluted per common share amounts excludes 256,880 potentially dilutive common shares related to unvested restricted stock units and unexercised options in accordance with ASC 260 - Earnings Per Share. |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
ACCOUNTS RECEIVABLE, NET | |
Schedule of accounts receivable allowances | As of December 31, 2014 (As Restated) (in thousands) Patient Care Products & Consolidated Patient Care Products & Consolidated Accounts receivable, before allowance $ $ $ $ $ $ Allowance for disallowed revenue ) — ) ) — ) Accounts receivable, gross Allowance for doubtful accounts ) ) ) ) ) ) Accounts receivable, net $ $ $ $ $ $ |
Schedule of gross accounts receivable by major payor classification | December 31, 2014 (in thousands) 0-60 61-120 121-180 Over 180 Total Patient Care Commercial insurance $ $ $ $ $ Private pay Medicaid VA Non-Medicare Medicare Products & Services Accounts receivable, net $ $ $ $ $ December 31, 2013 (As Restated) (in thousands) 0-60 61-120 121-180 Over 180 Total Patient Care Commercial insurance $ $ $ $ $ Private pay Medicaid VA Non-Medicare Medicare Products & Services Accounts receivable, net $ $ $ $ $ |
Schedule of activities by year for the Allowance for Disallowed Revenue and the Allowance for Doubtful Accounts | (in thousands) Allowance for Allowance for Balance at January 1, 2012 (As Restated) $ $ Additions (1) Reductions ) ) Balance at December 31, 2012 (As Restated) Additions (1) Reductions ) ) Balance at December 31, 2013 (As Restated) Additions (1) Reductions ) ) Balance at December 31, 2014 $ $ (1)The accounts receivables associated with the Dosteon businesses, which are recognized as discontinued operations as of each respective date of the consolidated financial statements, are not included in “Assets held for sale” because they were not a part of the disposal transaction. Therefore the associated allowances, additions, and reductions are included in the above table. Dosteon’s bad debt expense included in “Loss on discontinued operations net of income tax” in 2014, 2013, and 2012 were $2.6 million, $3.1 million, and ($0.3) million, respectively. Dosteon’s disallowed revenue included in “Loss on discontinued operations, net of income tax” for 2014, 2013, and 2012 were $14.0 million, $8.7 million, and $5.8 million, respectively. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
INVENTORIES | |
Schedule of inventories | December 31, (As Restated) (in thousands) 2014 2013 Raw materials $ $ Work in process Finished goods Total inventories $ $ |
PROPERTY PLANT AND EQUIPMENT,36
PROPERTY PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
PROPERTY PLANT AND EQUIPMENT, NET | |
Schedule of Property, plant and equipment | December 31, (As Restated) (in thousands) 2014 2013 Land $ $ Buildings Furniture and fixtures Machinery and equipment Equipment leased to third parties under operating leases Leasehold improvements Computers and software Total property, plant, and equipment, gross Less: Accumulated depreciation ) ) Total property, plant, and equipment, net $ $ |
Schedule of equipment leased to third parties under operating leases | December 31, (As Restated) (in thousands) 2014 2013 Program equipment $ $ Less: Accumulated depreciation ) ) Net book value $ $ |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
ACQUISITIONS | |
Summary of assets acquired and liabilities assumed | Year Ended December 31, (As Restated) (in thousands) 2014 2013 2012 Net cash $ $ $ Issuance of seller notes Contingent consideration Other working capital adjustments — Aggregate purchase price Accounts receivable Inventories Acquired customer intangibles and other intangible assets, net Other assets Accounts payable and other liabilities assumed ) ) ) Net assets acquired Goodwill $ $ $ |
GOODWILL AND OTHER INTANGIBLE38
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of goodwill allocated to the Company's reportable segments | Patient Care Products & Services (In thousands) Gross Accumulated Gross Accumulated Total Balance as of December 31, 2012 (As Restated) $ $ ) $ $ — $ Additions due to acquisitions — — — Adjustments — ) — Balance as of December 31, 2013 (As Restated) ) — Additions due to acquisitions — — Adjustments — — — Allocation to Assets held for sale ) — — — ) Balance at December 31, 2014 $ $ ) $ $ — $ |
Schedule of balances related to intangible assets | December 31, 2014 (As Restated) (in thousands) Gross Accumulated Net Gross Accumulated Net Customer Lists $ $ ) $ $ $ ) $ Trade Names ) ) Patents and Other Intangibles ) ) Definite-lived intangible assets ) ) Indefinite life - Trade Name — — Total $ $ ) $ $ $ ) $ |
Schedule of estimated aggregate amortization expense for definite-lived intangible assets | (in thousands) 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
OTHER CURRENT ASSETS AND OTHE39
OTHER CURRENT ASSETS AND OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
OTHER CURRENT ASSETS AND OTHER ASSETS | |
Schedule of other current assets | As of December 31, (in thousands) 2014 (As Restated) Non-trade receivables $ $ Prepaid rent Restricted cash Prepaid maintenance Other miscellaneous Total $ $ |
Schedule of other assets | As of December 31, (in thousands) 2014 (As Restated) Cash surrender value of COLI $ $ Non-trade receivables Deposits Other miscellaneous Total $ $ |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
INCOME TAXES | |
Schedule of components of income tax expense | Year Ended December 31, (As Restated) (In thousands) 2014 2013 2012 Current: Federal $ $ $ State Total current Deferred: Federal ) ) ) State ) ) Total deferred ) ) ) Provision for income taxes from continuing operations $ $ $ Income tax benefit attributable to discontinued operations $ ) $ ) $ ) |
Schedule of reconciliation of the federal statutory tax rate to the Company's effective tax rate | Year Ended December 31, (As Restated) 2014 2013 2012 Federal statutory tax rate - (benefit) / provision .0)% .0% .0% State and local income taxes .2)% .0% .4% Change in valuation allowance .6% .2)% .5)% Domestic manufacturing deduction .9)% .8)% .2)% Research and development credit .3)% .2)% .7)% Change in uncertain tax positions .6% .6% .8% Other .1% .4% .4% Tax provision .9% .8% .2% |
Schedule of components of net deferred income tax asset and liability | The significant components of the net deferred income tax asset and liability are as follows: As of December 31, (In thousands) 2014 (As Restated) Deferred tax liabilities: Goodwill amortization $ $ Acquired intangibles Software development costs — Prepaid expenses Sec. 481(a) adjustments — Other Deferred tax assets: Property, plant and equipment Net operating loss carryforwards Accrued expenses Deferred benefit plan compensation Provision for doubtful accounts Inventory Restricted stock Capital leases Deferred rent Refund liabilities Interest on Seller Notes Other Valuation allowance ) ) Net deferred tax asset $ $ The significant components of the net deferred income tax asset/(liability) are classified as follows on the accompanying consolidated balance sheet: As of December 31, (In thousands) 2014 (As Restated) 2013 Current: Deferred tax assets $ $ Deferred tax liabilities ) ) Valuation allowance ) ) Net current deferred income tax asset Non-current: Deferred tax assets Deferred tax liabilities ) ) Valuation allowance ) ) Net non-current deferred income tax liability ) ) Net deferred income tax asset $ $ |
Schedule of activity in the valuation allowance | Balance at Balance at (In thousands) Beginning End Year of Year Acquisitions Generated Released of Year 2014 $ $ — $ $ $ 2013 (As Restated) $ $ — $ $ $ 2012 (As Restated) $ $ — $ $ $ |
Summary of reconciliation of the beginning and ending balances of unrecognized tax benefits | Year Ended December 31, (As Restated) (in thousands) 2014 2013 2012 Unrecognized tax benefits, at beginning of the year $ $ $ Additions for tax positions related to the current year Additions for tax positions of prior years — Decrease related to prior year positions ) ) ) Decrease for lapse of applicable statute of limitations ) ) ) Unrecognized tax benefits, at end of the year $ $ $ |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
EMPLOYEE BENEFITS | |
Schedule of change in benefit obligation | (in thousands) Benefit obligation at December 31, 2011 (As Restated) $ Service cost Interest cost Amortization of loss Payments ) Actuarial loss Benefit obligation at December 31, 2012 (As Restated) Service cost Interest cost Amortization of loss Payments ) Actuarial gain ) Benefit obligation at December 31, 2013 (As Restated) Service cost Interest cost Amortization of loss — Payments ) Actuarial loss Benefit obligation at December 31, 2014 $ Unfunded status $ Unamortized net (gain) loss — Net amount recognized $ Amounts Recognized in the Consolidated Balance Sheet at December 31, 2014 Current: Accrued compensation related costs $ Long-Term Liabilities: Other liabilities Total accrued benefit obligation $ |
Schedule of weighted average assumptions used to determine benefit obligation and net benefit cost | 2014 2013 2012 Discount rate % % % Average rate of increase in compensation % % % |
Schedule of Future payments under the Plan | (in thousands) 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
STOCK-BASED COMPENSATION | |
Summary of restricted stock units, performance-based stock units, and weighted average grant date fair values | Employee Service-Based Employee Performance-Based Awards Director Awards Units Weighted Units Weighted Units Weighted Nonvested at December 31, 2011(As Restated) $ $ $ Granted Vested ) ) ) Forfeited ) ) — — Nonvested at December 31, 2012(As Restated) $ $ $ Granted Vested ) ) ) Forfeited ) ) ) Nonvested at December 31, 2013(As Restated) $ $ $ Granted Vested ) ) ) Forfeited ) ) ) Nonvested at December 31, 2014 $ $ $ |
Summary of option activity and weighted average exercise prices | Employee Awards Director Awards Weighted Weighted Weighted Average Exercise Price Shares Exercise Price Shares Exercise Price Outstanding at December 31, 2011 $ $ Granted — — — — Terminated ) — — Exercised ) ) Outstanding at December 31, 2012 $ $ Granted — — — — Terminated ) — — Exercised ) ) Outstanding at December 31, 2013 — $ — $ Granted — — — — Terminated — — — — Exercised — — ) Outstanding at December 31, 2014 — $ — $ Aggregate intrinsic value at December 31, 2014 $ — $ Weighted average remaining contractual term (years) — |
Summary of information concerning outstanding and exercisable options | Information concerning outstanding and exercisable options as of December 31, 2014 is as follows: Options Outstanding and Exercisable Number of Weighted Average Range of Options Remaining Exercise Exercise Prices or Awards Life (Years) Price $5.09 to $5.09 $ |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
LEASES | |
Schedule of future minimum rental payments, by year and in the aggregate, under operating and financing obligations with terms of one year or more | (in thousands) Operating Capital 2015 $ $ 2016 2017 2018 2019 — Thereafter — Total $ $ |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
LONG-TERM DEBT | |
Schedule of long-term debt | (in thousands) 2014 (As Restated) Revolving credit facility $ $ Term loan 7 1/8 % senior notes due 2018 Seller notes Financing obligations and other Total debt before unamortized discount Unamortized discount ) ) Total debt $ $ Reported as: Current portion of long-term debt $ $ Long-term debt, less current portion Total debt $ $ |
Schedule of aggregate contractual payments associated with the financing obligations | (in thousands) December 31, 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
Schedule of maturities of long-term debt | (in thousands) December 31, 2015 $ 2016 2017 2018 2019 Thereafter Total debt before unamortized discount Unamortized discount ) Total long-term debt $ |
ACCRUED EXPENSES, OTHER CURRE45
ACCRUED EXPENSES, OTHER CURRENT LIABILITIES AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
ACCRUED EXPENSES, OTHER CURRENT LIABILITIES AND OTHER LIABILITIES | |
Schedule of accrued expenses and other current liabilities | As of December 31, (in thousands) 2014 (As Restated) Accrued professional fees $ $ Other current liabilities Accrued insurance Patient prepayments deposits and refunds payable Accrued sales taxes and other taxes Total $ $ |
Schedule of other liabilities | As of December 31, (in thousands) 2014 (As Restated) Senior executive retirement plan obligations $ $ Unrecognized tax benefits Deferred tenant improvement allowances Other miscellaneous liabilities Deferred rent Total $ $ |
SEGMENT AND RELATED INFORMATI46
SEGMENT AND RELATED INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
SEGMENT AND RELATED INFORMATION | |
Summary of financial information concerning the Company's operating segments | (in thousands) Patient Care Products & Corporate & Consolidating Total 2014 Net revenue Third Party $ $ $ — $ — $ Intersegments — — ) — Total net revenue — ) Material costs Third party suppliers — — Intersegments — ) — Total material costs — ) Personnel costs — — Other expenses — Depreciation and amortization — Income from continuing operations ) — Interest expense (income) ) — Income (loss) from continuing operations before income taxes ) — ) Provision for income taxes — — — Net income (loss) from continuing operations $ $ $ ) $ — $ ) EBITDA ) — Total assets — Capital expenditures — (in thousands) Patient Care Products & Corporate & Consolidating Total 2013 (As Restated) Net revenue Third Party $ $ $ — $ — $ Intersegments — — ) — Total net revenue — ) Material costs Third party suppliers — — Intersegments — ) — Total material costs — ) Personnel costs — — Other expenses — Depreciation and amortization — Income from continuing operations ) — Interest expense (income) ) — Extinguishment of debt — — — Income from continuing operations before income taxes ) — Provision for income taxes — — — Net income from continuing operations $ $ $ ) $ — $ EBITDA ) — Total assets — Capital expenditures — (in thousands) Patient Care Products & Corporate & Consolidating Total 2012 (As Restated) Net revenue Third Party $ $ $ — $ — $ Intersegments — — ) — Total net revenue — ) Material costs Third party suppliers — — Intersegments — ) — Total material costs — ) Personnel costs — — Other expenses — Depreciation and amortization — Income from continuing operations ) — Interest expense (income) ) — Income from continuing operations before income taxes ) — Provision for income taxes — — — Net income from continuing operations $ $ $ ) $ — $ EBITDA ) — Total assets — Capital expenditures — |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
DISCONTINUED OPERATIONS | |
Schedule of assets held for sale and operating results of discontinued operations | (in thousands) As of Inventory $ Property and equipment, net Goodwill Total assets held for sale $ Year Ended December 31, (As Restated) (As Restated) (in thousands) 2014 2013 2012 Net revenue $ $ $ Loss before income taxes from discontinued operations ) ) ) Income tax benefit Loss from discontinued operations, net of tax $ ) $ ) $ ) |
SUPPLEMENTAL CASH FLOW INFORM48
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
SUPPLEMENTAL CASH FLOW INFORMATION | |
Schedule of supplemental disclosure requirements for the statements of cash flows | Year Ended December 31, (in thousands) 2014 (As Restated) (As Restated) Cash paid during the period for: Interest $ $ $ Income taxes $ $ $ Non-cash financing and investing activities: Issuance of seller notes in connection with acquisitions $ $ $ Issuance of note in connection with intangible acquisition $ — $ — $ Additions to property, plant and equipment acquired through financing obligations $ $ $ Retirements of financed property, plant and equipment and related financing obligations $ $ $ Purchase of property, plant and equipment in accounts payable $ $ $ |
QUARTERLY FINANCIAL INFORMATI49
QUARTERLY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
QUARTERLY FINANCIAL INFORMATION | |
Summary of quarterly financial information | HANGER, INC. QUARTERLY CONSOLIDATED BALANCE SHEETS (dollars in thousands, except par value and share amounts) (Unaudited) (As Restated) As of As of As of ASSETS Current assets: Cash and cash equivalents $ $ $ Accounts receivable, net of allowance for doubtful accounts of $7,920, $9,078, $10,197 at March 31, June 30 and September 30, 2014, respectively Inventories Other current assets Deferred income taxes Total current assets Non-current assets: Property, plant and equipment, net Goodwill Other intangible assets, net Debt issuance costs, net Other assets Total assets $ $ $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ $ $ Accounts payable Accrued expenses and other current liabilities Accrued interest payable Accrued compensation related costs Total current liabilities Long-term liabilities: Long-term debt, less current portion Deferred income taxes Other liabilities Total liabilities Shareholders’ Equity: Common stock, $.01 par value; 60,000,000 shares authorized, 35,486,033, 35,527,002 and 35,537,528 shares issued and 35,344,879, 35,385,848 and 35,396,374 shares outstanding at March 31, June 30 and September 30, 2014, respectively Additional paid-in capital Accumulated other comprehensive loss ) ) ) Retained earnings Treasury stock, at cost 141,154 shares at March 31, June 30 and September 30, 2014, respectively ) ) ) Total shareholders’ equity Total liabilities and shareholders’ equity $ $ $ HANGER, INC. QUARTERLY CONSOLIDATED BALANCE SHEETS (dollars in thousands, except par value and share amounts) (Unaudited) (As Restated) As of As of As of ASSETS Current assets: Cash and cash equivalents $ $ $ Accounts receivable, net of allowance for doubtful accounts of $4,941, $4,971, $5,837 at March 31, June 30 and September 30, 2013, respectively Inventories Other current assets Deferred income taxes Total current assets Non-current assets: Property, plant and equipment, net Goodwill Other intangible assets, net Debt issuance costs, net Other assets Total assets $ $ $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ $ $ Accounts payable Accrued expenses and other current liabilities Accrued interest payable Accrued compensation related costs Total current liabilities Long-term liabilities: Long-term debt, less current portion Deferred income taxes Other liabilities Total liabilities Shareholders’ Equity: Common stock, $.01 par value; 60,000,000 shares authorized, 34,953,812, 35,062,931 and 35,062,367 shares issued and 34,812,658, 34,921,777 and 34,921,213 shares outstanding at March 31, June 30 and September 30, 2013, respectively Additional paid-in capital Accumulated other comprehensive loss ) ) ) Retained earnings Treasury stock, at cost 141,154 shares at March 31, June 30, and September 30, 2013, respectively ) ) ) Total shareholders’ equity Total liabilities and shareholders’ equity $ $ $ HANGER, INC. QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (dollars in thousands, except share and per share amounts) (Unaudited) As Restated Three Months Three Months Six Months Three Months Nine Months Three Months March 31, June 30, June 30, September 30, September 30, December 31, 2014 2014 2014 2014 2014 2014 Net revenue $ $ $ $ $ $ Material costs Personnel costs Other operating costs General and administrative expenses Professional accounting and legal fees Depreciation and amortization Income (loss) from operations ) Interest expense, net (Loss) income from continuing operations before income taxes ) ) ) (Benefit) provision for income taxes ) ) Net (loss) income from continuing operations ) ) ) ) (Loss) income from discontinued operations, net of income taxes ) ) ) ) Net (loss) income $ ) $ $ ) $ ) $ ) $ ) Other comprehensive loss: Unrealized loss on SERP, net of tax benefit of $525 for Q4 2014 $ — $ — $ — $ — $ — $ ) Total other comprehensive loss — — — — — ) Comprehensive (loss) income $ ) $ $ ) $ ) $ ) $ ) Basic Per Common Share Data Net (loss) income from continuing operations $ ) $ ) $ ) $ $ ) $ Net (loss) income from discontinued operations ) ) ) ) Basic (loss) income per share $ ) $ $ ) $ ) $ ) $ ) Shares used to compute basic per common share amounts Diluted Per Common Share Data Net (loss) income from continuing operations $ ) $ ) $ ) $ $ ) $ Net (loss) income from discontinued operations ) ) ) ) Diluted (loss) income per share $ ) $ $ ) $ ) $ ) $ ) Shares used to compute diluted per common share amounts HANGER, INC. QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (dollars in thousands, except share and per share amounts) (Unaudited) (As Restated) Three Months Three Months Six Months Three Months Nine Months Three Months March 31, June 30, June 30, September 30, September 30, December 31, 2013 2013 2013 2013 2013 2013 Net revenue $ $ $ $ $ $ Material costs Personnel costs Other operating costs General and administrative expenses Professional accounting and legal fees Depreciation and amortization Income from operations Interest expense, net Extinguishment of debt — — — Income from continuing operations before income taxes Provision for income taxes Net income from continuing operations Income (loss) from discontinued operations, net of income taxes ) ) ) ) ) Net income $ $ $ $ $ $ Other comprehensive income Unrealized gain on SERP, net of tax provision of $531 for Q4 2013 $ — $ — $ — $ — $ — $ Total other comprehensive income — — — — — Comprehensive income $ $ $ $ $ $ Basic Per Common Share Data Net income from continuing operations $ $ $ $ $ $ Net loss from discontinued operations — ) ) ) ) ) Basic income per share $ $ $ $ $ $ Shares used to compute basic per common share amounts Diluted Per Common Share Data Net income from continuing operations $ $ $ $ $ $ Net loss from discontinued operations — ) ) ) ) ) Diluted income per share $ $ $ $ $ $ Shares used to compute diluted per common share amounts HANGER, INC. QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) (Unaudited) (As Restated) Three Months Ended Six Months Ended Nine Months Ended Cash flows from operating activities: Net loss $ ) $ ) $ ) (Loss) income from discontinued operations, net of income taxes ) ) Net loss from continuing operations ) ) ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization Provision for doubtful accounts Impairment of long-lived assets and intangible assets — — Compensation expense on restricted stock units Provision for deferred income taxes Amortization of debt issuance costs Gain on sale and disposal of property, plant and equipment ) ) ) Contingent consideration gains — — ) Changes in operating assets and liabilities, net of effects of acquired companies: Net accounts receivable ) ) Inventories ) ) ) Other current assets and income taxes ) ) ) Accounts payable ) ) ) Accrued expenses, other current liabilities and accrued interest payable Accrued compensation related costs ) ) ) Other liabilities ) ) Net cash (used in) provided by operating activities - continuing operations ) ) Net cash (used in) provided by operating activities - discontinued operations ) ) Net cash (used in) provided by operating activities ) ) Cash flows from investing activities: Purchase of property, plant and equipment, net of acquisitions ) ) ) Purchase of equipment leased to third parties under operating leases ) ) ) Acquisitions, net of cash acquired ) ) ) Purchase of company-owned life insurance investment ) ) ) Proceeds from sale of property, plant and equipment Net cash used in investing activities - continuing operations ) ) ) Net cash used in investing activities - discontinued operations ) ) ) Net cash used in investing activities ) ) ) Cash flows from financing activities: Repayment of term loan ) ) ) Borrowings under revolving credit agreement Repayments under revolving credit agreement ) ) ) Payment of seller notes ) ) ) Payment of contingent consideration ) ) ) Payment of financing obligations ) ) ) Excess tax benefit from stock-based compensation Proceeds from issuance of common stock Net cash provided by financing activities - continuing operations Net cash used in financing activities - discontinued operations ) ) ) Net cash provided by financing activities Increase (decrease) in cash and cash equivalents ) Cash and cash equivalents, at beginning of year Cash and cash equivalents, at end of period $ $ $ SUPPLEMENTAL CASH FLOW FINANCIAL INFORMATION: Cash paid during the period for: Interest $ $ $ Income taxes Non-cash financing and investing activities: Issuance of seller notes in connection with acquisitions Additions to property, plant and equipment acquired through finance obligations Retirements of financed property, plant and equipment Purchase of property, plant & equipment in accounts payable HANGER, INC. QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) (Unaudited) (As Restated) Three Months Ended Six Months Ended Nine Months Ended Cash flows from operating activities: Net income $ $ $ Income (loss) from discontinued operations, net of income tax ) ) Net income from continuing operations Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization Provision for doubtful accounts Compensation expense on restricted stock units Provision for deferred income taxes — ) ) Amortization of debt issuance costs Loss on extinguishment of debt — Gain on sale and disposal of property, plant and equipment ) ) ) Contingent consideration gains — ) ) Changes in operating assets and liabilities, net of effects of acquired companies: Net accounts receivable Inventories ) ) ) Other current assets and income taxes ) ) Accounts payable ) Accrued expenses, other current liabilities and accrued interest payable ) Accrued compensation related costs ) ) ) Other liabilities Net cash (used in) provided by operating activities - continuing operations ) Net cash provided by (used in) operating activities - discontinued operations ) ) Net cash (used in) provided by operating activities ) Cash flows from investing activities: Purchase of property, plant and equipment, net of acquisitions ) ) ) Purchase of equipment leased to third parties under operating leases ) ) ) Acquisitions, net of cash acquired ) ) ) Change in restricted cash associated with workers’ compensation program — — Proceeds from sale of property, plant and equipment Net cash used in investing activities - continuing operations ) ) ) Net cash used in investing activities - discontinued operations ) ) ) Net cash used in investing activities ) ) ) Cash flows from financing activities: Borrowings under term loan — Repayment of term loan ) ) ) Borrowings under revolving credit agreement Repayments under revolving credit agreement ) ) ) Payment of seller notes ) ) ) Payment of contingent consideration ) ) ) Payment of financing obligations ) ) ) Payment of fees associated with debt modifications and extinguishments — ) ) Excess tax benefit from stock-based compensation Proceeds from issuance of common stock Purchase and retirement of common stock — ) ) Net cash used in financing activities - continuing operations ) ) ) Net cash used in financing activities - discontinued operations ) ) ) Net cash used in financing activities ) ) ) Decrease in cash and cash equivalents ) ) ) Cash and cash equivalents, at beginning of year Cash and cash equivalents, at end of period $ $ $ SUPPLEMENTAL CASH FLOW FINANCIAL INFORMATION: Cash paid during the period for: Interest $ $ $ Income taxes Non-cash financing and investing activities: Issuance of seller notes in connection with acquisitions — Additions to property, plant and equipment acquired through finance obligations Retirements of financed property, plant and equipment — Purchase of property, plant & equipment in accounts payable HANGER, INC. QUARTERLY CONSOLIDATED BALANCE SHEET (dollars in thousands, except par value and share amounts) (Unaudited) As of March 31, 2014 As Previously Restatement Restatement Reference As Restated ASSETS Current assets: Cash and cash equivalents $ $ ) m,n $ Accounts receivable, net of allowance for doubtful accounts of $7,920 ) b,e,f,m,n Inventories ) a,m Other current assets ) d,h,j,m,n,p Deferred income taxes p Total current assets ) Non-current assets: Property, plant and equipment, net ) c,d,g,i,m Goodwill c,m Other intangible assets, net ) m Debt issuance costs, net ) m Other assets d,m Total assets $ $ ) $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ $ d,m,cc $ Accounts payable g,i,m Accrued expenses and other current liabilities c,d,e,h,j,m,p,cc Accrued interest payable d Accrued compensation related costs ) j,m Total current liabilities Long-term liabilities: Long-term debt, less current portion d,m,cc Deferred income taxes ) p Other liabilities ) d,m,p,cc Total liabilities Shareholders’ Equity: Common stock, $.01 par value; 60,000,000 shares authorized, 35,486,033 shares issued and 35,344,879 shares outstanding ) o Additional paid-in capital j,m,o Accumulated other comprehensive loss ) — ) Retained earnings ) a - j,l,m,o ) Treasury stock, at cost 141,154 shares ) — ) Total shareholders’ equity ) Total liabilities and shareholders’ equity $ $ ) $ HANGER, INC. QUARTERLY CONSOLIDATED BALANCE SHEET (dollars in thousands, except par value and share amounts) (Unaudited) As of June 30, 2014 As Previously Restatement Restatement As Restated ASSETS Current assets: Cash and cash equivalents $ $ ) m,n $ Accounts receivable, net of allowance for doubtful accounts of $9,078 ) b,e,f,m.n Inventories ) a,k,l,m Other current assets d,h,j,k,m,n,p Deferred income taxes p Total current assets ) Non-current assets: Property, plant and equipment, net ) c,d,g,i,m Goodwill ) c,m Other intangible assets, net m Debt issuance costs, net ) m Other assets c,d,m Total assets $ $ ) $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ $ d,m,cc $ Accounts payable g,i,k,m Accrued expenses and other current liabilities c,d,e,g,h,j,m,p,cc Accrued interest payable d,m Accrued compensation related costs j,m Total current liabilities Long-term liabilities: Long-term debt, less current portion d,m,cc Deferred income taxes ) p Other liabilities ) c,d,k,m,cc Total liabilities Shareholders’ Equity: Common stock, $.01 par value; 60,000,000 shares authorized, 35,527,002 issued and 35,385,848 shares outstanding ) o Additional paid-in capital j,m,o Accumulated other comprehensive loss ) — ) Retained earnings ) a - m, o ) Treasury stock at cost, 141,154 shares ) — ) Total shareholders’ equity ) Total liabilities and shareholders’ equity $ $ ) $ HANGER, INC. QUARTERLY CONSOLIDATED BALANCE SHEET (dollars in thousands, except par value and share amounts) (Unaudited) As of March 31, 2013 As Previously Restatement Restatement As Restated ASSETS Current assets: Cash and cash equivalents $ $ ) m,n $ Accounts receivable, net of allowance for doubtful accounts of $4,941 ) b,e,f,m,n Inventories ) a,m Other current assets d,h,j,m,n,p Deferred income taxes p Total current assets ) Non-current assets: Property, plant and equipment, net ) c,d,g,i,m Goodwill m Other intangible assets, net ) m Debt issuance costs, net — Other assets m Total assets $ $ ) $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ $ d,m,cc $ Accounts payable g,i,m Accrued expenses and other current liabilities d,e,h,j,m,cc Accrued interest payable d Accrued compensation related costs ) j,m Total current liabilities Long-term liabilities: Long-term debt, less current portion d,m,cc Deferred income taxes ) p Other liabilities ) d,m,cc Total liabilities Shareholders’ Equity: Common stock, $.01 par value; 60,000,000 shares authorized, 34,953,812 shares issued and 34,812,658 shares outstanding ) j,o Additional paid-in capital j,o Accumulated other comprehensive loss ) — ) Retained earnings ) a - j,m,o ) Treasury stock, at cost 141,154 shares ) — ) Total shareholders’ equity ) Total liabilities and shareholders’ equity $ $ ) $ HANGER, INC. QUARTERLY CONSOLIDATED BALANCE SHEET (dollars in thousands, except par value and share amounts) (Unaudited) As of June 30, 2013 As Previously Restatement Restatement As Restated ASSETS Current assets: Cash and cash equivalents $ $ ) m,n $ Accounts receivable, net of allowance for doubtful accounts of $4,971 ) b,e,f,m,n Inventories ) a,m Other current assets d,g,h,j,m,n,p Deferred income taxes p Total current assets ) Non-current assets: Property, plant and equipment, net ) c,d,g,i,m Goodwill m Intangible assets, net ) m Debt issuance costs, net ) m Other assets m Total assets $ $ ) $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ $ d,cc $ Accounts payable g,i,m Accrued expenses and other current liabilities d,e,h,j,m,cc Accrued interest payable d Accrued compensation related costs j,m Total current liabilities Long-term liabilities: Long-term debt, less current portion d,m,cc Deferred income taxes ) p Other liabilities ) d,m,cc Total liabilities Shareholders’ Equity: Common stock, $.01 par value; 60,000,000 shares authorized, 35,062,931 shares issued and 34,921,777 shares outstanding ) o Additional paid-in capital j,o Accumulated other comprehensive loss ) — ) Retained earnings ) a - j,m,o ) Treasury stock, at cost 141,154 shares ) — ) Total shareholders’ equity ) Total liabilities and shareholders’ equity $ $ ) $ HANGER, INC. QUARTERLY CONSOLIDATED BALANCE SHEET (dollars in thousands, except par value and share amounts) (Unaudited) As of September 30, 2013 As Previously Restatement Restatement As Restated ASSETS Current assets: Cash and cash equivalents $ $ ) m,n $ Accounts receivable, net of allowance for doubtful accounts of $5,837 ) b,e,f,m,n Inventories ) a,m Other current assets d,g,h,j,m,n,p Deferred income taxes p Total current assets ) Non-current assets: Property, plant and equipment, net ) c,d,g,i,m Goodwill m Intangible assets, net ) m Debt issuance costs, net ) m Other assets m Total assets $ $ ) $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ $ d,m,cc $ Accounts payable g,i,m Accrued expenses and other current liabilities d,e,h,j,m,p,cc Accrued interest payable d Accrued compensation related costs j,m Total current liabilities Long-term liabilities: Long-term debt, less current portion d,m,cc Deferred income taxes ) p Other liabilities ) d,m,cc Total liabilities Shareholders’ Equity: Common stock, $.01 par value; 60,000,000 shares authorized, 35,062,367 shares issued and 34,921,213 shares outstanding ) o Additional paid-in capital j,o Accumulated other comprehensive loss ) — ) Retained earnings ) a - j,m,o ) Treasury stock at cost, 141,154 shares ) — ) Total shareholders’ equity ) Total liabilities and shareholders’ equity $ $ ) $ HANGER, INC. QUARTERLY CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (dollars in thousands, except share and per share amounts) (Unaudited) For the Three Months Ended March 31, 2014 As Restatement Restatement Reclassification Discontinued As Restated Net revenue $ $ ) b,e,f,m $ — $ ) $ Material costs a,g,m — ) Personnel costs a,c,j,m,o ) ) Other operating costs a,b,c,d,e,g,h,j,m ) ) General and administrative expenses — — — Professional accounting and legal fees — — — Depreciation and amortization ) c,d,i,m — ) Income from operations ) — Interest expense, net d,m — Income (loss) from continuing operations before income taxes ) — ) Provision (benefit) for income taxes ) p — ) Income (loss) from continuing operations ) — ) Loss from discontinued operations, net of taxes — — — ) ) Net income (loss) $ $ ) $ — $ — $ ) Comprehensive income (loss) $ $ ) $ — $ — $ ) Basic Per Common Share Data Income (loss) from continuing operations $ $ ) $ — $ $ ) Loss from discontinued operations — — — ) ) Basic income (loss) per share $ $ ) $ — $ — $ ) Shares used to compute basic per common share amounts ) o — — Diluted Per Common Share Data Income (loss) from continuing operations $ $ ) $ — $ $ ) Loss from discontinued operations — — — ) ) Diluted income (loss) per share $ $ ) $ — $ — $ ) Shares used to compute diluted per common share amounts ) o — — HANGER, INC. QUARTERLY CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (dollars in thousands, except share and per share amounts) (Unaudited) For the Three Months Ended June 30, 2014 As Previously Restatement Restatement Reclassification Discontinued As Restated Net revenue $ $ ) b,e,f,m $ — $ ) $ Material costs a,g,k,m — ) Personnel costs a,c,j,m,o ) ) Other operating costs a,b,c,d,g,h,j,k,m ) ) General and administrative expenses — — — Professional accounting and legal fees — — — Depreciation and amortization ) c,d,i,l,m — ) Income from operations ) — Interest expense, net c,d,m — ) Income from continuing operations before income taxes ) — Provision for income taxes ) p — Income (loss) from continuing operations ) — ) ) Income from discontinued operations, net of income taxes — — — Net income $ $ ) $ — $ — $ Comprehensive income $ $ ) $ — $ — $ Basic Per Common Share Data Income (loss) from continuing operations $ $ ) $ — $ ) $ ) Income from discontinued operations — — — Basic income per share $ 0.36 $ ) $ — $ — $ Shares used to compute basic per common share amounts ) o — — Diluted Per Common Share Data Income (loss) from continuing operations $ $ ) $ — $ ) $ ) Income from discontinued operations — — — Diluted income per share $ $ ) $ — $ — $ Shares used to compute diluted per common share amounts ) o — — HANGER, INC. QUARTERLY CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (dollars in thousands, except share and per share amounts) (Unaudited) For the Six Months Ended June 30, 2014 As Restatement Restatement Reclassification Discontinued As Restated Net revenue $ $ ) b,e,f,m $ — $ ) $ Material costs a,g,k,m — ) Personnel costs a,c,j,m,o ) ) Other operating costs a,b,c,d,e,g,h,j,k,m ) ) General and administrative expenses — — — Professional accounting and legal fees — — — Depreciation and amortization ) c,d,i,l,m — ) Income from operations ) — Interest expense, net c,d,m — ) Income from continuing operations before income taxes ) — Provision for income taxes ) p — Income (loss) from continuing operations ) — ) ) Income from discontinued operations, net of income taxes — — — Net income (loss) $ $ ) $ — $ — $ ) Comprehensive income (loss) $ $ ) $ — $ — $ ) Basic Per Common Share Data Income (loss) from continuing operations $ $ ) $ — $ ) $ ) Income from discontinued operations — — — Basic income (loss) per share $ $ ) $ — $ — $ ) Shares used to compute basic per common share amounts ) o — — Diluted Per Common Share Data Income (loss) from continuing operations $ $ ) $ — $ ) $ ) Income from discontinued operations — — — Diluted income (loss) per share $ $ ) $ — $ — $ ) Shares used to compute diluted per common share amounts ) o — — HANGER, INC. QUARTERLY CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (dollars in thousands, except share and per share amounts) (Unaudited) For the Three Months Ended March 31, 2013 As Restatement Restatement Reclassification Discontinued As Restated Net revenue $ $ ) b,e,f,m $ — $ ) $ Material costs a,g,m — ) Personnel costs a,c,j,m,o ) ) Other operating costs a,b,c,d,g,h,j,m ) ) General and administrative expenses — — — Professional accounting and legal fees — — — Depreciation and amortization ) c,d,m — ) Income from operations ) — ) Interest expense, net d,i,m — ) Income from continuing operations before income taxes ) — ) Provision for income taxes ) p — ) Income from continuing operations ) — ) Income from discontinued operations, net of income taxes — — — Net income $ $ ) $ — $ — $ Comprehensive income $ $ ) $ — $ — $ Basic Per Common Share Data Income from continuing operations $ $ ) $ — $ — $ Income from discontinued operations — — — — — Basic income per share $ $ ) $ — $ — $ Shares used to compute basic per common share amounts ) o — — Diluted Per Common Share Data Income from continuing operations $ $ ) $ — $ — $ Income from discontinued operations — — — — — Diluted income per share $ $ ) $ — $ — $ Shares used to compute diluted per common share amounts ) o — — HANGER, INC. QUARTERLY CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (dollars in thousands, except share and per share amounts) (Unaudited) For the Three Months Ended June 30, 2013 As Restatement Restatement Reclassification Discontinued As Restated Net revenue $ $ ) b,e,f,m $ — $ ) $ Material costs a,g,m — ) Personnel costs a,c,j,m,o ) ) Other operating costs ) a,b,c,d,g,h,i,j,m ) ) General and administrative expenses — — — Professional accounting and legal fees — — — Depreciation and amortization ) c,d,m — ) Income from operations ) — Interest expense, net d,i,m — ) Extinguishment of debt — — — Income from continuing operations before income taxes ) — Provision for income taxes ) p — Income from continuing operations ) — Loss from discontinued operations, net of income taxes — — — ) ) Net income $ $ ) $ — $ — $ Comprehensive income $ $ ) $ — $ — $ Basic Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations — — — ) ) Basic income per share $ $ ) $ — $ — $ Shares used to compute basic per common share amounts o — — Diluted Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations — — — ) ) Diluted income per share $ $ ) $ — $ — $ Shares used to compute diluted per common share amounts ) o — — HANGER, INC. QUARTERLY CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (dollars in thousands, except share and per share amounts) (Unaudited) For the Six Months Ended June 30, 2013 As Restatement Restatement Reclassification Discontinued As Restated Net revenue $ $ ) b,e,f,m $ — $ ) $ Material costs a,g,m — ) Personnel costs a,c,j,m,o ) ) Other operating costs ) a,b,c,d,g,h,i,j,m ) ) General and administrative expenses — — — Professional accounting and legal fees — — — Depreciation and amortization ) c,d,m — ) Income from operations ) — Interest expense, net d,i,m — ) Extinguishment of debt — — — Income from continuing operations before income taxes ) — Provision for income taxes ) p — Income from continuing operations ) — Loss from discontinued operations, net of income taxes — — — ) ) Net income $ $ ) $ — $ — $ Comprehensive income $ $ ) $ — $ — $ Basic Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations — — — ) ) Basic income per share $ $ ) $ — $ — $ Shares used to compute basic per common share amounts ) o — — Diluted Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations — — — ) ) Diluted income per share $ $ ) $ — $ — $ Shares used to compute diluted per common share amounts ) o — — HANGER, INC. QUARTERLY CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (dollars in thousands, except share and per share amounts) (Unaudited) For the Three Months Ended September 30, 2013 As Restatement Restatement Reclassification Discontinued As Restated Net revenue $ $ ) b,e,f,m $ — $ ) $ Material costs a,g,m — ) Personnel costs ) a,c,j,m,o ) ) Other operating costs ) a,b,c,d,g,h,i,j,m ) ) General and administrative expenses — — — Professional accounting and legal fees — — — Depreciation and amortization ) c,d,m — ) Income from operations ) — Interest expense, net d,i,m — ) Income from continuing operations before income taxes ) — Provision for income taxes ) p — Net income from continuing operations ) — Loss from discontinued operations, net of income taxes — — — ) ) Net income $ $ ) $ — $ — $ Comprehensive income $ $ ) $ — $ — $ Basic Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations — — — ) ) Basic income per share $ $ ) $ — $ — $ Shares used to compute basic per common share amounts o — — Diluted Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations — — — ) ) Diluted income per share $ $ ) $ — $ — $ Shares used to compute diluted per common share amounts ) o — — HANGER, INC. QUARTERLY CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (dollars in thousands, except share and per share amounts) (Unaudited) For the Nine Months Ended September 30, 2013 As Restatement Restatement Reclassification Discontinued As Restated Net revenue $ $ ) b,e,f,m $ — $ ) $ Material costs a,g,m — ) Personnel costs a,c,j,m,o ) ) Other operating costs ) a,b,c,d,g,h,i,j,m ) ) General and administrative expenses — — — Professional accounting and legal fees — — — Depreciation and amortization ) c,d,m — ) Income from operations ) — Interest expense, net d,i,m — ) Extinguishment of debt — d,m — — Income from continuing operations before income taxes ) — Provision for income taxes ) p — Income from continuing operations ) — Loss from discontinued operations, net of income taxes — — — ) ) Net income $ $ ) $ — $ — $ Comprehensive income $ $ ) $ — $ — $ Basic Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations — — — ) ) Basic income per share $ $ ) $ — $ — $ Shares used to compute basic per common share amounts ) o — — Diluted Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations — — — ) ) Diluted income per share $ $ ) $ — $ — $ Shares used to compute diluted per common share amounts ) o — — HANGER, INC. QUARTERLY CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (dollars in thousands, except share and per share amounts) (Unaudited) For the Three Months Ended December 31, 2013 As Restatement Restatement Reclassification Discontinued As Restated Net revenue $ $ ) b,e,f,m $ — $ ) $ Material costs ) a,m — ) Personnel costs a,c,j,m,o ) ) Other operating costs ) a,b,c,d,g,h,i,j,m ) ) General and administrative expenses — — — Professional accounting and legal fees — — — Depreciation and amortization ) c,d,m — ) Income from operations ) — Interest expense, net d,i,m — ) Income from continuing operations before income taxes ) — Provision for income taxes ) p — Income from continuing operations ) — Loss from discontinued operations, net of income taxes — — — ) ) Net income $ $ ) $ — $ — $ Other comprehensive income Unrealized gain on SERP, net of tax provision of $531 $ $ — $ — $ — $ Total other comprehensive income — — — Comprehensive income $ $ ) $ — $ — $ Basic Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations — — — ) ) Basic income per share $ $ ) $ — $ — $ Shares used to compute basic per common share amounts o — — Diluted Per Common Share Data Income from continuing operations $ $ ) $ — $ $ Loss from discontinued operations — — — ) ) Diluted income per share $ $ ) $ — $ — $ Shares used to compute diluted per common share amounts ) o — — HANGER, INC. QUARTERLY CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in thousands) (Unaudited) For the Three Months Ended March 31, 2014 As Previously Restatement Reference As Restated Cash flows from operating activities: Net income (loss) $ $ ) a - j, m - p $ ) Loss from discontinued operations, net of income taxes — ) bb ) Income (loss) from continuing operations ) ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization ) c,d,i,m Provision for doubtful accounts ) b,h Compensation expense on restricted stock units ) o Provision for deferred income taxes — p Amortization of debt issuance costs m Gain on sale of property, plant and equipment ) ) c ) Changes in operating assets and liabilities, net of effects of acquired companies: Net accounts receivable b,e,f,m Inventories ) a,m ) Other current assets and income taxes ) c,d,h,j,n,p ) Accounts payable ) g,m ) Accrued expenses, other current liabilities and accrued interest payable ) e,m Accrued compensation related costs ) ) j ) Other liabilities ) d,m,k ) Net cash used in operating activities - continuing operations ) ) Net cash used in operating activities - discontinued operations — ) bb ) Net cash used in operating activities ) ) ) Cash flows from investing activities: Purchase of property, plant and equipment, net of acquisitions ) ) c,d,g,m ) Purchase of equipment leased to third parties under operating leases ) — ) Acquisitions, net of cash acquired ) m ) Purchase of company-owned life insurance investment ) — ) Proceeds from sale of property, plant and equipment c Net cash used in investing activities - continuin |
THE COMPANY (Details)
THE COMPANY (Details) | 12 Months Ended |
Dec. 31, 2014statesegmentlocationitemclinic | |
THE COMPANY | |
Number of segments | segment | 2 |
Minimum number of O&P provider network of clinics managed | clinic | 767 |
Number of O&P patient-care clinic locations | location | 120 |
Number of states in which patient-care clinics are located | state | 45 |
Minimum number of long-term care facilities and other sub-acute rehabilitation providers served | item | 5,000 |
RESTATEMENT OF PREVIOUSLY ISS51
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS - SUMMARY (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Summary impact of restatement adjustments | ||||||||||||||||
Retained earnings | $ 178,559 | $ 181,988 | $ 190,790 | $ 187,560 | $ 197,525 | $ 185,494 | $ 169,975 | $ 158,777 | $ 190,790 | $ 169,975 | $ 181,988 | $ 185,494 | $ 178,559 | $ 197,525 | $ 157,014 | $ 108,990 |
Loss from discontinued operations, net of income taxes | (6,235) | (10,751) | 4,661 | (3,621) | (3,063) | (2,034) | (282) | 11 | 1,040 | (271) | (9,711) | (2,305) | (15,946) | (5,368) | (235) | |
(Loss) income from continuing operations before income taxes | $ 4,073 | $ (8,104) | 9,402 | (6,368) | 28,172 | 27,367 | 18,167 | 2,628 | 3,034 | 20,795 | $ (5,070) | 48,162 | $ (997) | 76,334 | 74,465 | |
As Previously Reported | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Retained earnings | 307,428 | 294,809 | 288,813 | 270,455 | 248,796 | 234,718 | 307,428 | 248,796 | 270,455 | 288,813 | 225,229 | 161,537 | ||||
(Loss) income from continuing operations before income taxes | 20,202 | 9,932 | 29,625 | 33,889 | 22,291 | 14,939 | 30,134 | 37,230 | 71,119 | 100,744 | 98,169 | |||||
Restatement Adjustments | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Retained earnings | (116,638) | (107,249) | (91,288) | (84,961) | (78,821) | (75,941) | (116,638) | (78,821) | (84,961) | (91,288) | ||||||
Total restatement adjustments | 140,590 | 107,455 | 83,436 | |||||||||||||
Tax effect of restatement adjustments | 49,302 | 39,240 | 30,889 | |||||||||||||
Loss from discontinued operations, net of income taxes | (3,621) | 11 | 1,040 | (271) | (2,305) | (5,368) | (235) | |||||||||
Restatement Adjustments | Net revenue | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (27,976) | (11,629) | ||||||||||||||
Restatement Adjustments | Material costs | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | 738 | 2,686 | ||||||||||||||
Restatement Adjustments | Personnel costs | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | 9,264 | 9,255 | ||||||||||||||
Restatement Adjustments | Other operating costs | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (7,178) | (2,047) | ||||||||||||||
Restatement Adjustments | Depreciation and amortization | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (1,819) | (1,044) | ||||||||||||||
Restatement Adjustments | Income from operations | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (28,981) | (20,479) | ||||||||||||||
Restatement Adjustments | Interest expense, net | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | 4,154 | 3,540 | ||||||||||||||
Restatement Adjustments | Income from operations before taxes | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (33,135) | (24,019) | ||||||||||||||
Restatement adjusted Income from operations before taxes | 67,609 | 74,150 | ||||||||||||||
Restatement Adjustments | Inventory valuation | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Total restatement adjustments | 61,323 | 51,275 | 39,907 | |||||||||||||
Restatement Adjustments | Inventory valuation | Material costs | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | 3,455 | 4,587 | ||||||||||||||
Restatement Adjustments | Inventory valuation | Personnel costs | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | 6,656 | 5,347 | ||||||||||||||
Restatement Adjustments | Inventory valuation | Other operating costs | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (63) | 1,434 | ||||||||||||||
Restatement Adjustments | Inventory valuation | Income from operations | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (10,048) | (11,368) | ||||||||||||||
Restatement Adjustments | Inventory valuation | Income from operations before taxes | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (10,048) | (11,368) | ||||||||||||||
Restatement Adjustments | Allowance for disallowed revenue and doubtful accounts | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Total restatement adjustments | 28,301 | 14,997 | 12,952 | |||||||||||||
Restatement Adjustments | Allowance for disallowed revenue and doubtful accounts | Net revenue | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (20,616) | (5,940) | ||||||||||||||
Restatement Adjustments | Allowance for disallowed revenue and doubtful accounts | Other operating costs | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (7,312) | (3,895) | ||||||||||||||
Restatement Adjustments | Allowance for disallowed revenue and doubtful accounts | Income from operations | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (13,304) | (2,045) | ||||||||||||||
Restatement Adjustments | Allowance for disallowed revenue and doubtful accounts | Income from operations before taxes | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (13,304) | (2,045) | ||||||||||||||
Restatement Adjustments | Property, plant and equipment, net | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Total restatement adjustments | 11,311 | 10,489 | 8,214 | |||||||||||||
Restatement Adjustments | Property, plant and equipment, net | Personnel costs | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | 2,312 | 2,889 | ||||||||||||||
Restatement Adjustments | Property, plant and equipment, net | Other operating costs | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | 1,216 | 1,703 | ||||||||||||||
Restatement Adjustments | Property, plant and equipment, net | Depreciation and amortization | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (2,706) | (2,317) | ||||||||||||||
Restatement Adjustments | Property, plant and equipment, net | Income from operations | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (822) | (2,275) | ||||||||||||||
Restatement Adjustments | Property, plant and equipment, net | Income from operations before taxes | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (822) | (2,275) | ||||||||||||||
Restatement Adjustments | Real property leases | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Total restatement adjustments | 7,542 | 6,681 | 5,031 | |||||||||||||
Restatement Adjustments | Real property leases | Other operating costs | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (2,972) | (2,588) | ||||||||||||||
Restatement Adjustments | Real property leases | Depreciation and amortization | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | 1,002 | 1,239 | ||||||||||||||
Restatement Adjustments | Real property leases | Income from operations | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | 1,970 | 1,349 | ||||||||||||||
Restatement Adjustments | Real property leases | Interest expense, net | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | 2,831 | 2,999 | ||||||||||||||
Restatement Adjustments | Real property leases | Income from operations before taxes | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (861) | (1,650) | ||||||||||||||
Restatement Adjustments | All other restatement adjustments | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Total restatement adjustments | 32,113 | 24,013 | $ 17,332 | |||||||||||||
Restatement Adjustments | All other restatement adjustments | Net revenue | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (7,360) | (5,689) | ||||||||||||||
Restatement Adjustments | All other restatement adjustments | Material costs | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (2,717) | (1,901) | ||||||||||||||
Restatement Adjustments | All other restatement adjustments | Personnel costs | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | 296 | 1,019 | ||||||||||||||
Restatement Adjustments | All other restatement adjustments | Other operating costs | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | 1,953 | 1,299 | ||||||||||||||
Restatement Adjustments | All other restatement adjustments | Depreciation and amortization | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (115) | 34 | ||||||||||||||
Restatement Adjustments | All other restatement adjustments | Income from operations | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (6,777) | (6,140) | ||||||||||||||
Restatement Adjustments | All other restatement adjustments | Interest expense, net | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | 1,323 | 541 | ||||||||||||||
Restatement Adjustments | All other restatement adjustments | Income from operations before taxes | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (8,100) | (6,681) | ||||||||||||||
Restatement Adjustments | Refund Adjustments | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Retained earnings | (3,100) | (3,100) | ||||||||||||||
Restatement Adjustments | Refund Adjustments | Income from operations before taxes | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (3,700) | |||||||||||||||
Restatement Adjustments | Revenue Accrual | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Retained earnings | (3,300) | (3,300) | ||||||||||||||
Restatement Adjustments | Revenue Accrual | Income from operations before taxes | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (1,300) | (1,500) | ||||||||||||||
Restatement Adjustments | Method of Accrual for Accounts Payable | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Retained earnings | (3,400) | (3,400) | ||||||||||||||
Restatement Adjustments | Method of Accrual for Accounts Payable | Income from operations before taxes | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | 200 | (1,500) | ||||||||||||||
Restatement Adjustments | Other Profit & Loss Restatement Adjustments | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Retained earnings | (22,300) | (22,300) | ||||||||||||||
Restatement Adjustments | Other Profit & Loss Restatement Adjustments | Income from operations before taxes | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | (3,200) | (3,700) | ||||||||||||||
Restatement Adjustments | Cash and cash equivalents | Income from operations before taxes | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | 8,200 | |||||||||||||||
Restatement Adjustments | Common Stock and APIC | Income from operations before taxes | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Restatement adjustments | 2,400 | |||||||||||||||
Discontinued Operations | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Loss from discontinued operations, net of income taxes | 4,661 | (3,621) | (3,063) | (2,034) | (282) | 11 | 1,040 | (271) | (2,305) | (5,368) | (235) | |||||
(Loss) income from continuing operations before income taxes | $ 3,243 | $ 4,198 | $ 4,966 | $ 3,326 | $ 454 | $ (21) | $ 7,441 | $ 433 | $ 3,759 | 8,725 | 315 | |||||
Discontinued Operations | Income from operations before taxes | ||||||||||||||||
Summary impact of restatement adjustments | ||||||||||||||||
Loss from discontinued operations, net of income taxes | $ 8,725 | $ 315 |
RESTATEMENT OF PREVIOUSLY ISS52
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS - BALANCE SHEET (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Current assets: | ||||||||||||
Cash and cash equivalents | $ 11,699 | $ 1,565 | $ 1,630 | $ 45,836 | $ 1,613 | $ 1,246 | $ 2,858 | $ 6,273 | $ 13,130 | $ 13,130 | $ 43,323 | |
Accounts receivable, net of allowance for doubtful accounts of $6,472 | 174,248 | 165,787 | 159,471 | 146,060 | 154,739 | 149,952 | 150,276 | 139,756 | ||||
Accounts receivable, allowance for doubtful accounts (in dollars) | 9,944 | 10,197 | 9,078 | 7,920 | 6,472 | 5,837 | 4,971 | 4,941 | 4,928 | 3,844 | ||
Inventories | 70,517 | 86,155 | 90,506 | 85,783 | 82,257 | 83,293 | 81,214 | 79,575 | ||||
Other current assets | 21,356 | 46,604 | 33,097 | 27,466 | 21,606 | 22,861 | 28,937 | 29,313 | ||||
Deferred income taxes | 109,252 | 70,333 | 70,789 | 71,569 | 75,616 | 64,209 | 64,153 | 61,055 | ||||
Total current assets | 395,287 | 370,444 | 355,493 | 376,714 | 335,831 | 321,561 | 327,438 | 315,972 | ||||
Non-current assets: | ||||||||||||
Property, plant and equipment, net | 112,350 | 114,223 | 119,677 | 120,225 | 116,289 | 113,144 | 109,475 | 106,249 | ||||
Goodwill | 710,053 | 716,571 | 715,010 | 702,769 | 682,628 | 679,721 | 678,748 | 675,451 | 675,468 | |||
Other intangible assets, net | 58,515 | 60,553 | 62,600 | 60,352 | 56,240 | 56,906 | 58,520 | 59,311 | ||||
Debt issuance costs, net | 6,648 | 7,110 | 7,572 | 8,034 | 8,496 | 8,958 | 9,420 | 13,169 | ||||
Other assets | 19,452 | 20,055 | 18,384 | 17,826 | 15,504 | 16,305 | 15,872 | 16,064 | ||||
Total assets | 1,302,305 | 1,288,956 | 1,278,736 | 1,285,920 | 1,214,988 | 1,196,595 | 1,199,473 | 1,186,216 | 1,201,288 | |||
Current liabilities: | ||||||||||||
Current portion of long-term debt | 26,852 | 25,677 | 24,505 | 21,906 | 17,728 | 15,437 | 15,652 | 13,229 | ||||
Accounts payable | 48,554 | 49,658 | 45,642 | 43,964 | 44,519 | 44,921 | 47,798 | 36,189 | ||||
Accrued expenses and other current liabilities | 91,778 | 68,118 | 47,436 | 44,508 | 44,433 | 41,043 | 41,605 | 40,096 | ||||
Accrued interest payable | 2,366 | 5,950 | 2,274 | 5,646 | 2,019 | 5,934 | 2,351 | 6,645 | ||||
Accrued compensation related costs | 41,288 | 35,656 | 24,664 | 21,417 | 38,606 | 35,304 | 25,914 | 22,084 | ||||
Total current liabilities | 210,838 | 185,059 | 144,521 | 137,441 | 147,305 | 142,639 | 133,320 | 118,243 | ||||
Long-term liabilities: | ||||||||||||
Long-term debt, less current portion | 502,132 | 511,698 | 535,093 | 559,096 | 469,818 | 474,068 | 505,751 | 522,189 | ||||
Deferred income taxes | 59,924 | 62,786 | 62,338 | 61,640 | 65,329 | 65,906 | 65,935 | 66,489 | ||||
Other liabilities | 45,875 | 44,150 | 44,734 | 42,120 | 41,223 | 39,256 | 37,744 | 37,257 | ||||
Total liabilities | 818,769 | 803,693 | 786,686 | 800,297 | 723,675 | 721,869 | 742,750 | 744,178 | ||||
Commitments and contingent liabilities | ||||||||||||
Shareholders' Equity: | ||||||||||||
Common stock, $.01 par value; 60,000,000 shares authorized, 35,158,196 shares issued and 35,017,042 shares outstanding | $ 355 | $ 355 | $ 355 | $ 355 | $ 351 | $ 352 | $ 352 | $ 350 | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Common stock, shares authorized | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | ||||
Common stock, shares issued | 35,540,630 | 35,537,528 | 35,527,002 | 35,486,033 | 35,158,196 | 35,062,367 | 35,062,931 | 34,953,812 | ||||
Common stock, shares outstanding | 35,399,476 | 35,396,374 | 35,385,848 | 35,344,879 | 35,017,042 | 34,921,213 | 34,921,777 | 34,812,658 | ||||
Additional paid-in capital | $ 307,166 | $ 304,596 | $ 302,581 | $ 299,384 | $ 295,113 | $ 291,455 | $ 288,971 | $ 285,486 | ||||
Accumulated other comprehensive loss | (1,888) | (1,020) | (1,020) | (1,020) | (1,020) | (1,919) | (1,919) | (1,919) | ||||
Retained earnings | 178,559 | 181,988 | 190,790 | 187,560 | 197,525 | 185,494 | 169,975 | 158,777 | 157,014 | 108,990 | ||
Shareholders' equity, excluding treasury stock | 484,192 | 485,919 | 492,706 | 486,279 | 491,969 | 475,382 | 457,379 | 442,694 | ||||
Treasury stock at cost, 141,154 shares | $ (656) | $ (656) | $ (656) | $ (656) | $ (656) | $ (656) | $ (656) | $ (656) | ||||
Treasury stock, shares | 141,154 | 141,154 | 141,154 | 141,154 | 141,154 | 141,154 | 141,154 | 141,154 | ||||
Total shareholders' equity | $ 483,536 | $ 485,263 | $ 492,050 | $ 485,623 | $ 491,313 | $ 474,726 | $ 456,723 | $ 442,038 | 437,055 | 378,031 | ||
Total liabilities and shareholders' equity | $ 1,302,305 | $ 1,288,956 | 1,278,736 | 1,285,920 | 1,214,988 | 1,196,595 | 1,199,473 | 1,186,216 | ||||
As Previously Reported | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | 4,902 | 55,624 | 9,860 | 7,216 | 5,766 | 15,033 | 19,211 | 42,896 | ||||
Accounts receivable, net of allowance for doubtful accounts of $6,472 | 205,325 | 183,548 | 185,769 | 176,663 | 170,601 | 156,813 | ||||||
Inventories | 158,957 | 153,952 | 141,518 | 144,374 | 137,557 | 132,492 | ||||||
Other current assets | 21,147 | 27,678 | 15,519 | 14,560 | 21,453 | 22,911 | ||||||
Deferred income taxes | 30,381 | 30,366 | 30,298 | 31,115 | 30,920 | 28,043 | ||||||
Total current assets | 420,712 | 451,168 | 382,964 | 373,928 | 366,297 | 355,292 | ||||||
Non-current assets: | ||||||||||||
Property, plant and equipment, net | 142,650 | 131,419 | 126,798 | 115,963 | 115,242 | 111,901 | ||||||
Goodwill | 715,656 | 702,455 | 681,547 | 678,215 | 676,190 | 674,416 | ||||||
Other intangible assets, net | 62,517 | 61,367 | 58,021 | 58,638 | 61,262 | 62,661 | ||||||
Debt issuance costs, net | 7,703 | 8,134 | 8,564 | 8,994 | 9,424 | 13,169 | ||||||
Other assets | 15,321 | 15,142 | 13,766 | 12,261 | 11,209 | 11,482 | ||||||
Total assets | 1,364,559 | 1,369,685 | 1,271,660 | 1,247,999 | 1,239,624 | 1,228,921 | ||||||
Current liabilities: | ||||||||||||
Current portion of long-term debt | 23,638 | 20,869 | 15,998 | 13,673 | 13,802 | 11,528 | ||||||
Accounts payable | 31,815 | 41,789 | 36,729 | 32,339 | 34,314 | 26,345 | ||||||
Accrued expenses and other current liabilities | 26,339 | 22,734 | 24,923 | 30,391 | 24,496 | 23,089 | ||||||
Accrued interest payable | 2,049 | 5,534 | 1,898 | 5,772 | 2,205 | 6,516 | ||||||
Accrued compensation related costs | 23,051 | 21,605 | 36,331 | 33,991 | 24,940 | 22,134 | ||||||
Total current liabilities | 106,892 | 112,531 | 115,879 | 116,166 | 99,757 | 89,612 | ||||||
Long-term liabilities: | ||||||||||||
Long-term debt, less current portion | 516,251 | 541,066 | 452,261 | 457,384 | 490,672 | 506,958 | ||||||
Deferred income taxes | 76,784 | 76,971 | 76,545 | 76,480 | 76,509 | 77,730 | ||||||
Other liabilities | 58,589 | 48,615 | 46,755 | 40,869 | 39,638 | 38,989 | ||||||
Total liabilities | 758,516 | 779,183 | 691,440 | 690,899 | 706,576 | 713,289 | ||||||
Commitments and contingent liabilities | ||||||||||||
Shareholders' Equity: | ||||||||||||
Common stock, $.01 par value; 60,000,000 shares authorized, 35,158,196 shares issued and 35,017,042 shares outstanding | 364 | 363 | 361 | 360 | 360 | 359 | ||||||
Additional paid-in capital | 299,927 | 297,006 | 292,722 | 288,860 | 286,467 | 283,130 | ||||||
Accumulated other comprehensive loss | (1,020) | (1,020) | (1,020) | (1,919) | (1,919) | (1,919) | ||||||
Retained earnings | 307,428 | 294,809 | 288,813 | 270,455 | 248,796 | 234,718 | 225,229 | 161,537 | ||||
Shareholders' equity, excluding treasury stock | 606,699 | 591,158 | 580,876 | 557,756 | 533,704 | 516,288 | ||||||
Treasury stock at cost, 141,154 shares | (656) | (656) | (656) | (656) | (656) | (656) | ||||||
Total shareholders' equity | 606,043 | 590,502 | 580,220 | 557,100 | 533,048 | 515,632 | $ 428,582 | |||||
Total liabilities and shareholders' equity | 1,364,559 | 1,369,685 | 1,271,660 | 1,247,999 | 1,239,624 | 1,228,921 | ||||||
Restatement Adjustments | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | (3,272) | (9,788) | (8,247) | (5,970) | (2,908) | (8,760) | $ (6,081) | $ 427 | ||||
Accounts receivable, net of allowance for doubtful accounts of $6,472 | (45,854) | (37,488) | (31,030) | (26,711) | (20,325) | (17,057) | ||||||
Inventories | (68,451) | (68,169) | (59,261) | (61,081) | (56,343) | (52,917) | ||||||
Other current assets | 11,950 | (212) | 6,087 | 8,301 | 7,484 | 6,402 | ||||||
Deferred income taxes | 40,408 | 41,203 | 45,318 | 33,094 | 33,233 | 33,012 | ||||||
Total current assets | (65,219) | (74,454) | (47,133) | (52,367) | (38,859) | (39,320) | ||||||
Non-current assets: | ||||||||||||
Property, plant and equipment, net | (22,973) | (11,194) | (10,509) | (2,819) | (5,767) | (5,652) | ||||||
Goodwill | (646) | 314 | 1,081 | 1,506 | 2,558 | 1,035 | ||||||
Other intangible assets, net | 83 | (1,015) | (1,781) | (1,732) | (2,742) | (3,350) | ||||||
Debt issuance costs, net | (131) | (100) | (68) | (36) | (4) | |||||||
Other assets | 3,063 | 2,684 | 1,738 | 4,044 | 4,663 | 4,582 | ||||||
Total assets | (85,823) | (83,765) | (56,672) | (51,404) | (40,151) | (42,705) | ||||||
Current liabilities: | ||||||||||||
Current portion of long-term debt | 867 | 1,037 | 1,730 | 1,764 | 1,850 | 1,701 | ||||||
Accounts payable | 13,827 | 2,175 | 7,790 | 12,582 | 13,484 | 9,844 | ||||||
Accrued expenses and other current liabilities | 21,097 | 21,774 | 19,510 | 10,652 | 17,109 | 17,007 | ||||||
Accrued interest payable | 225 | 112 | 121 | 162 | 146 | 129 | ||||||
Accrued compensation related costs | 1,613 | (188) | 2,275 | 1,313 | 974 | (50) | ||||||
Total current liabilities | 37,629 | 24,910 | 31,426 | 26,473 | 33,563 | 28,631 | ||||||
Long-term liabilities: | ||||||||||||
Long-term debt, less current portion | 18,842 | 18,030 | 17,557 | 16,684 | 15,079 | 15,231 | ||||||
Deferred income taxes | (14,446) | (15,331) | (11,216) | (10,574) | (10,574) | (11,241) | ||||||
Other liabilities | (13,855) | (6,495) | (5,532) | (1,613) | (1,894) | (1,732) | ||||||
Total liabilities | 28,170 | 21,114 | 32,235 | 30,970 | 36,174 | 30,889 | ||||||
Commitments and contingent liabilities | ||||||||||||
Shareholders' Equity: | ||||||||||||
Common stock, $.01 par value; 60,000,000 shares authorized, 35,158,196 shares issued and 35,017,042 shares outstanding | (9) | (8) | (10) | (8) | (8) | (9) | ||||||
Additional paid-in capital | 2,654 | 2,378 | 2,391 | 2,595 | 2,504 | 2,356 | ||||||
Retained earnings | (116,638) | (107,249) | (91,288) | (84,961) | (78,821) | (75,941) | ||||||
Shareholders' equity, excluding treasury stock | (113,993) | (104,879) | (88,907) | (82,374) | (76,325) | (73,594) | ||||||
Total shareholders' equity | (113,993) | (104,879) | (88,907) | (82,374) | (76,325) | (73,594) | ||||||
Total liabilities and shareholders' equity | $ (85,823) | $ (83,765) | $ (56,672) | $ (51,404) | $ (40,151) | $ (42,705) |
RESTATEMENT OF PREVIOUSLY ISS53
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS - INCOME AND COMPREHENSIVE INCOME (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Revision of Previously Reported Consolidated Financial Information | |||||||||||||||
Net revenue | $ 278,910 | $ 261,699 | $ 255,574 | $ 215,917 | $ 255,048 | $ 253,217 | $ 253,667 | $ 213,837 | $ 471,491 | $ 467,504 | $ 733,190 | $ 720,721 | $ 1,012,100 | $ 975,769 | $ 923,521 |
Material costs | 86,365 | 86,238 | 81,109 | 70,572 | 77,831 | 78,933 | 77,273 | 67,966 | 151,681 | 145,239 | 237,919 | 224,172 | 324,284 | 302,003 | 285,873 |
Personnel costs | 93,516 | 89,104 | 88,738 | 82,228 | 83,742 | 82,071 | 82,836 | 77,131 | 170,966 | 159,967 | 260,070 | 242,038 | 353,586 | 325,780 | 299,004 |
Other operating costs | 35,636 | 34,621 | 34,291 | 32,337 | 27,398 | 28,526 | 28,620 | 31,223 | 66,628 | 59,843 | 101,249 | 88,369 | 136,885 | 115,767 | 110,881 |
General and administrative expenses | 22,383 | 21,794 | 22,545 | 19,616 | 21,841 | 19,137 | 21,204 | 16,476 | 42,161 | 37,680 | 63,955 | 56,817 | 86,338 | 78,658 | 81,182 |
Professional accounting and legal fees | 19,768 | 20,973 | 2,600 | 1,457 | 1,205 | 1,715 | 1,501 | 1,400 | 4,057 | 2,901 | 25,030 | 4,616 | 44,798 | 5,821 | 4,907 |
Depreciation and amortization | 9,978 | 9,818 | 9,826 | 9,307 | 8,487 | 8,526 | 8,805 | 8,367 | 19,133 | 17,172 | 28,951 | 25,698 | 38,929 | 34,185 | 32,589 |
Income from operations | 11,264 | (849) | 16,465 | 400 | 34,544 | 34,309 | 33,428 | 11,274 | 16,865 | 44,702 | 16,016 | 79,011 | 27,280 | 113,555 | 109,085 |
Interest expense, net | 7,191 | 7,255 | 7,063 | 6,768 | 6,372 | 6,942 | 8,616 | 8,646 | 13,831 | 17,262 | 21,086 | 24,204 | 28,277 | 30,576 | 34,620 |
Extinguishment of debt | 6,645 | 6,645 | 6,645 | 6,645 | |||||||||||
(Loss) income from continuing operations before income taxes | 4,073 | (8,104) | 9,402 | (6,368) | 28,172 | 27,367 | 18,167 | 2,628 | 3,034 | 20,795 | (5,070) | 48,162 | (997) | 76,334 | 74,465 |
Provision for income taxes | 1,267 | (10,054) | 10,832 | (22) | 13,077 | 9,815 | 6,688 | 875 | 10,810 | 7,563 | 756 | 17,378 | 2,023 | 30,455 | 26,206 |
(Loss) income from continuing operations | 2,806 | 1,950 | (1,430) | (6,346) | 15,095 | 17,552 | 11,479 | 1,753 | (7,776) | 13,232 | (5,826) | 30,784 | (3,020) | 45,879 | 48,259 |
Loss from discontinued operations, net of income taxes | (6,235) | (10,751) | 4,661 | (3,621) | (3,063) | (2,034) | (282) | 11 | 1,040 | (271) | (9,711) | (2,305) | (15,946) | (5,368) | (235) |
Net (loss) income | (3,429) | (8,801) | 3,231 | (9,967) | 12,032 | 15,518 | 11,197 | 1,764 | (6,736) | 12,961 | (15,537) | 28,479 | (18,966) | 40,511 | 48,024 |
Other comprehensive (loss) income: | |||||||||||||||
Unrealized gain (loss) on SERP, net of income tax provision (benefit) | (868) | 899 | (868) | 899 | (734) | ||||||||||
Unrealized (loss) gain on SERP, tax (benefit) provision | 525 | 531 | (525) | 531 | (439) | ||||||||||
Total other comprehensive (loss) income | (868) | 899 | (868) | 899 | (734) | ||||||||||
Comprehensive (loss) income | $ (4,297) | $ (8,801) | $ 3,231 | $ (9,967) | $ 12,931 | $ 15,518 | $ 11,197 | $ 1,764 | $ (6,736) | $ 12,961 | $ (15,537) | $ 28,479 | $ (19,834) | $ 41,410 | $ 47,290 |
Basic Per Common Share Data | |||||||||||||||
Net income from continuing operations (in dollars per share) | $ 0.08 | $ 0.05 | $ (0.04) | $ (0.18) | $ 0.43 | $ 0.50 | $ 0.33 | $ 0.05 | $ (0.22) | $ 0.38 | $ (0.17) | $ 0.89 | $ (0.09) | $ 1.32 | $ 1.41 |
Loss from discontinued operations, net of income taxes | (0.18) | (0.30) | 0.13 | (0.10) | (0.09) | (0.06) | (0.01) | 0.03 | (0.01) | (0.27) | (0.07) | (0.45) | (0.16) | (0.01) | |
Basic (loss) income per share (in dollars per share) | $ (0.10) | $ (0.25) | $ 0.09 | $ (0.28) | $ 0.34 | $ 0.44 | $ 0.32 | $ 0.05 | $ (0.19) | $ 0.37 | $ (0.44) | $ 0.82 | $ (0.54) | $ 1.16 | $ 1.40 |
Shares used to compute basic per common share amounts (in shares) | 35,397,195 | 35,388,862 | 35,377,939 | 35,056,902 | 34,945,120 | 34,927,373 | 34,872,430 | 34,570,836 | 35,209,849 | 34,710,269 | 35,275,046 | 34,782,207 | 35,309,478 | 34,825,867 | 34,273,621 |
Diluted Per Common Share Data | |||||||||||||||
Net income from continuing operations (in dollars per share) | $ 0.08 | $ 0.05 | $ (0.04) | $ (0.18) | $ 0.43 | $ 0.50 | $ 0.33 | $ 0.05 | $ (0.22) | $ 0.38 | $ (0.17) | $ 0.88 | $ (0.09) | $ 1.30 | $ 1.39 |
Loss from discontinued operations, net of income taxes | (0.18) | (0.30) | 0.13 | (0.10) | (0.09) | (0.06) | (0.01) | 0.03 | (0.01) | (0.27) | (0.07) | (0.45) | (0.15) | (0.01) | |
Diluted (loss) income per share (in dollars per share) | $ (0.10) | $ (0.25) | $ 0.09 | $ (0.28) | $ 0.34 | $ 0.44 | $ 0.32 | $ 0.05 | $ (0.19) | $ 0.37 | $ (0.44) | $ 0.81 | $ (0.54) | $ 1.15 | $ 1.38 |
Shares used to compute diluted per common share amounts (in shares) | 35,615,092 | 35,571,188 | 35,377,939 | 35,056,902 | 35,364,729 | 35,298,046 | 35,211,878 | 35,062,115 | 35,209,849 | 35,124,223 | 35,275,046 | 35,180,990 | 35,309,478 | 35,208,754 | 34,737,420 |
As Previously Reported | |||||||||||||||
Revision of Previously Reported Consolidated Financial Information | |||||||||||||||
Net revenue | $ 275,854 | $ 235,605 | $ 278,237 | $ 271,053 | $ 267,798 | $ 229,350 | $ 511,459 | $ 497,148 | $ 768,201 | $ 1,046,438 | $ 974,429 | ||||
Material costs | 81,822 | 67,345 | 92,461 | 79,401 | 79,446 | 67,739 | 149,167 | 147,184 | 226,585 | 319,046 | 296,193 | ||||
Personnel costs | 102,755 | 96,431 | 91,841 | 94,768 | 93,176 | 89,953 | 199,186 | 183,129 | 277,897 | 369,738 | 335,328 | ||||
Other operating costs | 52,741 | 45,600 | 49,870 | 47,754 | 49,022 | 39,657 | 98,341 | 88,680 | 136,434 | 186,304 | 178,918 | ||||
Depreciation and amortization | 12,133 | 10,199 | 9,467 | 9,224 | 9,510 | 9,285 | 22,332 | 18,795 | 28,019 | 37,486 | 34,652 | ||||
Income from operations | 26,403 | 16,030 | 34,598 | 39,906 | 36,644 | 22,716 | 42,433 | 59,360 | 99,266 | 133,864 | 129,338 | ||||
Interest expense, net | 6,201 | 6,098 | 4,973 | 6,017 | 7,708 | 7,777 | 12,299 | 15,485 | 21,502 | 26,475 | 31,169 | ||||
Extinguishment of debt | 6,645 | 6,645 | 6,645 | 6,645 | |||||||||||
(Loss) income from continuing operations before income taxes | 20,202 | 9,932 | 29,625 | 33,889 | 22,291 | 14,939 | 30,134 | 37,230 | 71,119 | 100,744 | 98,169 | ||||
Provision for income taxes | 7,583 | 3,935 | 11,269 | 12,230 | 8,212 | 5,449 | 11,518 | 13,661 | 25,891 | 37,160 | 34,477 | ||||
(Loss) income from continuing operations | 12,619 | 5,997 | 18,356 | 21,659 | 14,079 | 9,490 | 18,616 | 23,569 | 45,228 | 63,584 | 63,692 | ||||
Net (loss) income | 12,619 | 5,997 | 18,356 | 21,659 | 14,079 | 9,490 | 18,616 | 23,569 | 45,228 | 63,584 | 63,692 | ||||
Other comprehensive (loss) income: | |||||||||||||||
Unrealized gain (loss) on SERP, net of income tax provision (benefit) | 899 | 899 | (734) | ||||||||||||
Total other comprehensive (loss) income | 899 | 899 | (734) | ||||||||||||
Comprehensive (loss) income | $ 12,619 | $ 5,997 | $ 19,255 | $ 21,659 | $ 14,079 | $ 9,490 | $ 18,616 | $ 23,569 | $ 45,228 | $ 64,483 | $ 62,958 | ||||
Basic Per Common Share Data | |||||||||||||||
Net income from continuing operations (in dollars per share) | $ 0.36 | $ 0.17 | $ 0.53 | $ 0.62 | $ 0.40 | $ 0.27 | $ 0.53 | $ 0.68 | $ 1.30 | $ 1.83 | $ 1.86 | ||||
Basic (loss) income per share (in dollars per share) | $ 0.36 | $ 0.17 | $ 0.53 | $ 0.62 | $ 0.40 | $ 0.27 | $ 0.53 | $ 0.68 | $ 1.30 | $ 1.83 | $ 1.86 | ||||
Shares used to compute basic per common share amounts (in shares) | 35,469,769 | 35,076,828 | 34,922,599 | 34,902,103 | 34,849,659 | 34,598,494 | 35,319,944 | 34,724,077 | 34,783,419 | 34,818,214 | 34,282,591 | ||||
Diluted Per Common Share Data | |||||||||||||||
Net income from continuing operations (in dollars per share) | $ 0.35 | $ 0.17 | $ 0.52 | $ 0.61 | $ 0.40 | $ 0.27 | $ 0.52 | $ 0.67 | $ 1.28 | $ 1.80 | $ 1.83 | ||||
Diluted (loss) income per share (in dollars per share) | $ 0.35 | $ 0.17 | $ 0.52 | $ 0.61 | $ 0.40 | $ 0.27 | $ 0.52 | $ 0.67 | $ 1.28 | $ 1.80 | $ 1.83 | ||||
Shares used to compute diluted per common share amounts (in shares) | 35,591,764 | 35,415,018 | 35,463,539 | 35,401,273 | 35,307,697 | 35,066,032 | 35,470,170 | 35,225,871 | 35,315,897 | 35,394,721 | 34,832,830 | ||||
Restatement Adjustments (excluding reclassification adjustments and discontinued operations) | |||||||||||||||
Revision of Previously Reported Consolidated Financial Information | |||||||||||||||
Net revenue | $ (8,794) | $ (9,134) | $ (12,049) | $ (8,383) | $ (2,963) | $ (4,581) | $ (17,928) | $ (7,544) | $ (15,927) | $ (27,976) | $ (11,629) | ||||
Material costs | 3,855 | 8,016 | (8,949) | 3,417 | 2,023 | 4,247 | 11,871 | 6,271 | 9,688 | 738 | 2,686 | ||||
Personnel costs | 1,712 | 2,679 | 6,673 | (552) | 1,462 | 1,681 | 4,391 | 3,143 | 2,591 | 9,264 | 9,255 | ||||
Other operating costs | 688 | 485 | (4,185) | (2,015) | (2,452) | 1,475 | 1,173 | (978) | (2,993) | (7,178) | (2,047) | ||||
Depreciation and amortization | (1,898) | (483) | (580) | (317) | (344) | (578) | (2,381) | (922) | (1,239) | (1,819) | (1,044) | ||||
Income from operations | (13,151) | (19,831) | (5,008) | (8,916) | (3,652) | (11,406) | (32,982) | (15,058) | (23,974) | (28,981) | (20,479) | ||||
Interest expense, net | 892 | 667 | 1,411 | 932 | 926 | 884 | 1,559 | 1,810 | 2,742 | 4,154 | 3,540 | ||||
(Loss) income from continuing operations before income taxes | (14,043) | (20,498) | (6,419) | (9,848) | (4,578) | (12,290) | (34,541) | (16,868) | (26,716) | (33,135) | (24,019) | ||||
Provision for income taxes | (4,655) | (4,534) | (95) | (3,707) | (1,696) | (4,564) | (9,189) | (6,260) | (9,967) | (10,062) | (8,351) | ||||
(Loss) income from continuing operations | (9,388) | (15,964) | (6,324) | (6,141) | (2,882) | (7,726) | (25,352) | (10,608) | (16,749) | (23,073) | (15,668) | ||||
Net (loss) income | (9,388) | (15,964) | (6,324) | (6,141) | (2,882) | (7,726) | (25,352) | (10,608) | (16,749) | (23,073) | (15,668) | ||||
Other comprehensive (loss) income: | |||||||||||||||
Comprehensive (loss) income | $ (9,388) | $ (15,964) | $ (6,324) | $ (6,141) | $ (2,882) | $ (7,726) | $ (25,352) | $ (10,608) | $ (16,749) | $ (23,073) | $ (15,668) | ||||
Basic Per Common Share Data | |||||||||||||||
Net income from continuing operations (in dollars per share) | $ (0.27) | $ (0.45) | $ (0.19) | $ (0.18) | $ (0.08) | $ (0.22) | $ (0.72) | $ (0.31) | $ (0.48) | $ (0.67) | $ (0.46) | ||||
Basic (loss) income per share (in dollars per share) | $ (0.27) | $ (0.45) | $ (0.19) | $ (0.18) | $ (0.08) | $ (0.22) | $ (0.72) | $ (0.31) | $ (0.48) | $ (0.67) | $ (0.46) | ||||
Shares used to compute basic per common share amounts (in shares) | (91,830) | (19,926) | 22,521 | 25,270 | 22,771 | (27,658) | (110,095) | (13,808) | (1,212) | 7,653 | (8,970) | ||||
Diluted Per Common Share Data | |||||||||||||||
Net income from continuing operations (in dollars per share) | $ (0.26) | $ (0.45) | $ (0.18) | $ (0.17) | $ (0.08) | $ (0.22) | $ (0.71) | $ (0.30) | $ (0.47) | $ (0.65) | $ (0.45) | ||||
Diluted (loss) income per share (in dollars per share) | $ (0.26) | $ (0.45) | $ (0.18) | $ (0.17) | $ (0.08) | $ (0.22) | $ (0.71) | $ (0.30) | $ (0.47) | $ (0.65) | $ (0.45) | ||||
Shares used to compute diluted per common share amounts (in shares) | (213,825) | (358,116) | (98,810) | (103,227) | (95,819) | (3,917) | (260,321) | (101,648) | (134,907) | (185,967) | (95,410) | ||||
Restatement Adjustments | |||||||||||||||
Revision of Previously Reported Consolidated Financial Information | |||||||||||||||
Depreciation and amortization | $ (892) | $ (918) | $ (3,199) | $ (1,623) | $ (2,321) | $ (3,301) | $ (2,063) | ||||||||
Extinguishment of debt | 6,645 | 6,645 | |||||||||||||
(Loss) income from continuing operations | (12,343) | (7,737) | (26,392) | (10,337) | (14,444) | (17,705) | (15,433) | ||||||||
Loss from discontinued operations, net of income taxes | (3,621) | 11 | 1,040 | (271) | (2,305) | (5,368) | (235) | ||||||||
Net (loss) income | (15,964) | (7,726) | (25,352) | (10,608) | (16,749) | (23,073) | (15,668) | ||||||||
Reclassification Adjustment | |||||||||||||||
Revision of Previously Reported Consolidated Financial Information | |||||||||||||||
Personnel costs | (31,805) | (27,133) | |||||||||||||
Other operating costs | (52,674) | (58,956) | |||||||||||||
General and administrative expenses | 78,658 | 81,182 | |||||||||||||
Professional accounting and legal fees | 5,821 | 4,907 | |||||||||||||
Discontinued Operations | |||||||||||||||
Revision of Previously Reported Consolidated Financial Information | |||||||||||||||
Net revenue | $ (11,486) | (10,554) | $ (11,140) | $ (9,453) | $ (11,168) | (10,932) | (22,040) | (22,100) | (31,553) | (42,693) | (39,279) | ||||
Material costs | (4,568) | (4,789) | (5,681) | (3,885) | (4,196) | (4,020) | (9,357) | (8,216) | (12,101) | (17,781) | (13,006) | ||||
Personnel costs | (5,712) | (5,836) | (5,911) | (5,370) | (5,198) | (4,938) | (11,548) | (10,136) | (15,506) | (21,417) | (18,446) | ||||
Other operating costs | (4,010) | (3,721) | (4,102) | (3,136) | (1,849) | (1,598) | (7,731) | (3,447) | (6,583) | (10,685) | (7,034) | ||||
Depreciation and amortization | (409) | (409) | (400) | (381) | (361) | (340) | (818) | (701) | (1,082) | (1,482) | (1,019) | ||||
Income from operations | 3,213 | 4,201 | 4,954 | 3,319 | 436 | (36) | 7,414 | 400 | 3,719 | 8,672 | 226 | ||||
Interest expense, net | (30) | 3 | (12) | (7) | (18) | (15) | (27) | (33) | (40) | (53) | (89) | ||||
(Loss) income from continuing operations before income taxes | 3,243 | 4,198 | 4,966 | 3,326 | 454 | (21) | 7,441 | 433 | 3,759 | 8,725 | 315 | ||||
Provision for income taxes | 7,904 | 577 | 1,903 | 1,292 | 172 | (10) | 8,481 | 162 | 1,454 | 3,357 | 80 | ||||
(Loss) income from continuing operations | (4,661) | 3,621 | 3,063 | 2,034 | 282 | (11) | (1,040) | 271 | 2,305 | 5,368 | 235 | ||||
Loss from discontinued operations, net of income taxes | $ 4,661 | $ (3,621) | $ (3,063) | $ (2,034) | $ (282) | $ 11 | $ 1,040 | $ (271) | $ (2,305) | $ (5,368) | $ (235) | ||||
Basic Per Common Share Data | |||||||||||||||
Net income from continuing operations (in dollars per share) | $ (0.13) | $ 0.10 | $ 0.09 | $ 0.06 | $ 0.01 | $ (0.03) | $ 0.01 | $ 0.07 | $ 0.16 | $ 0.01 | |||||
Loss from discontinued operations, net of income taxes | 0.13 | (0.10) | (0.09) | (0.06) | (0.01) | 0.03 | (0.01) | (0.07) | (0.16) | (0.01) | |||||
Diluted Per Common Share Data | |||||||||||||||
Net income from continuing operations (in dollars per share) | (0.13) | 0.10 | 0.09 | 0.06 | 0.01 | (0.03) | 0.01 | 0.07 | 0.15 | 0.01 | |||||
Loss from discontinued operations, net of income taxes | $ 0.13 | $ (0.10) | $ (0.09) | $ (0.06) | $ (0.01) | $ 0.03 | $ (0.01) | $ (0.07) | $ (0.15) | $ (0.01) |
RESTATEMENT OF PREVIOUSLY ISS54
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS - CASH FLOW STATEMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities: | |||||||||||||||
Net income | $ (3,429) | $ (8,801) | $ 3,231 | $ (9,967) | $ 12,032 | $ 15,518 | $ 11,197 | $ 1,764 | $ (6,736) | $ 12,961 | $ (15,537) | $ 28,479 | $ (18,966) | $ 40,511 | $ 48,024 |
Loss from discontinued operations, net of income taxes | (6,235) | (10,751) | 4,661 | (3,621) | (3,063) | (2,034) | (282) | 11 | 1,040 | (271) | (9,711) | (2,305) | (15,946) | (5,368) | (235) |
(Loss) income from continuing operations | 2,806 | 1,950 | (1,430) | (6,346) | 15,095 | 17,552 | 11,479 | 1,753 | (7,776) | 13,232 | (5,826) | 30,784 | (3,020) | 45,879 | 48,259 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 9,978 | 9,818 | 9,826 | 9,307 | 8,487 | 8,526 | 8,805 | 8,367 | 19,133 | 17,172 | 28,951 | 25,698 | 38,929 | 34,185 | 32,589 |
Provision for doubtful accounts | 1,989 | 474 | 4,463 | 1,705 | 9,094 | 3,441 | 11,639 | 5,053 | 4,423 | ||||||
Compensation expense on restricted stock units | 2,356 | 2,093 | 5,152 | 4,599 | 7,138 | 7,004 | 9,642 | 9,346 | 8,213 | ||||||
Benefit from deferred income taxes | 358 | 1,836 | (2,564) | 2,535 | (2,564) | (39,214) | (14,499) | (13,812) | |||||||
Amortization of debt issuance costs | 617 | 1,038 | 1,306 | 1,975 | 1,987 | 2,607 | 2,663 | 3,218 | 3,891 | ||||||
Loss on extinguishment of debt | 6,645 | 6,645 | 6,645 | 6,645 | |||||||||||
(Gain) loss on sale of property, plant and equipment | (553) | (277) | (620) | (900) | (1,412) | (6,369) | (293) | (6,258) | (2,019) | ||||||
Contingent consideration gains | (57) | (49) | (702) | (85) | (1,461) | (1,388) | |||||||||
Changes in operating assets and liabilities, net of effects of acquired companies: | |||||||||||||||
Net accounts receivable | 9,521 | 9,332 | (5,076) | 747 | (16,599) | 791 | (28,797) | (8,855) | (15,534) | ||||||
Inventories | (2,293) | (1,449) | (5,897) | (2,258) | (2,212) | (3,740) | 6,917 | (3,493) | 322 | ||||||
Other current assets and income taxes | (3,966) | (2,845) | (8,560) | (953) | (21,566) | 2,130 | 9,351 | 7,009 | 1,498 | ||||||
Accounts payable | (4,335) | (639) | (2,971) | 11,141 | (751) | 5,940 | (777) | 5,096 | 1,264 | ||||||
Accrued expenses, other current liabilities and accrued interest payable | 2,117 | 3,990 | 1,172 | (269) | 25,499 | 3,158 | 40,186 | 687 | 3,451 | ||||||
Accrued compensation related costs | (17,779) | (23,186) | (15,050) | (18,900) | (3,618) | (9,952) | (483) | (6,566) | 2,807 | ||||||
Other liabilities | (144) | 198 | 1,511 | 572 | (750) | 1,969 | 978 | 4,148 | (169) | ||||||
Net cash provided by operating activities - continuing operations | (9,151) | (1,151) | (11,377) | 31,887 | 23,924 | 66,840 | 50,061 | 80,134 | 73,795 | ||||||
Net cash used in operating activities - discontinued operations | (1,479) | 109 | 3,482 | (2,227) | (1,774) | (2,261) | (442) | (3,102) | (3,037) | ||||||
Net cash provided by operating activities | (10,630) | (1,042) | (7,895) | 29,660 | 22,150 | 64,579 | 49,619 | 77,032 | 70,758 | ||||||
Cash flows from investing activities: | |||||||||||||||
Purchase of property, plant and equipment, net of acquisitions | (8,526) | (3,450) | (14,805) | (13,741) | (18,924) | (19,174) | (27,096) | (25,907) | (24,503) | ||||||
Purchase of equipment leased to third parties under operating leases | (564) | (660) | (1,663) | (1,849) | (2,609) | (2,889) | (4,012) | (4,103) | (2,763) | ||||||
Acquisitions, net of cash acquired | (19,142) | (65) | (33,934) | (5,776) | (36,784) | (6,621) | (38,097) | (10,295) | (61,401) | ||||||
Change in restricted cash associated with workers' compensation program | 3,120 | 3,120 | (3,120) | ||||||||||||
Purchase of company-owned life insurance investment | (2,294) | (2,294) | (2,294) | (2,294) | (2,000) | ||||||||||
Proceeds from sale of property, plant and equipment | 595 | 663 | 1,674 | 1,644 | 2,331 | 4,717 | 2,518 | 9,066 | 3,231 | ||||||
Net cash used in investing activities - continuing operations | (29,931) | (3,512) | (51,022) | (19,722) | (58,280) | (20,847) | (68,981) | (28,119) | (90,556) | ||||||
Net cash provided by (used in) investing activities - discontinued operations | (265) | (256) | (464) | (604) | (532) | (944) | 2,507 | (1,438) | (1,118) | ||||||
Net cash used in investing activities | (30,196) | (3,768) | (51,486) | (20,326) | (58,812) | (21,791) | (66,474) | (29,557) | (91,674) | ||||||
Cash flows from financing activities: | |||||||||||||||
Borrowings under term loan | 225,000 | 225,000 | 225,000 | ||||||||||||
Repayment of term loan | (1,406) | (750) | (2,813) | (293,300) | (5,625) | (294,706) | (8,438) | (296,113) | (3,700) | ||||||
Borrowings under revolving credit agreement | 125,000 | 50,000 | 228,000 | 120,000 | 252,000 | 163,000 | 331,000 | 249,000 | |||||||
Repayments under revolving credit agreement | (38,000) | (50,000) | (163,000) | (65,000) | (203,000) | (137,000) | (286,000) | (224,000) | |||||||
Payment of seller notes | (1,631) | (1,411) | (3,569) | (3,117) | (6,845) | (6,449) | (9,435) | (8,656) | (4,904) | ||||||
Payment of contingent consideration | (375) | (675) | (626) | (925) | (700) | (1,965) | (825) | (2,590) | (2,915) | ||||||
Payment of financing obligations | (426) | (324) | (866) | (658) | (1,491) | (997) | (1,687) | (1,367) | (1,104) | ||||||
Payment of fees associated with debt modifications and extinguishments | (3,665) | (3,665) | (3,665) | ||||||||||||
Excess tax benefit from stock-based compensation | 1,803 | 1,054 | 2,191 | 2,005 | 2,197 | 2,058 | 2,249 | 3,348 | 1,489 | ||||||
Proceeds from issuance of common stock | 87 | 62 | 87 | 1,628 | 87 | 1,629 | 87 | 2,437 | 3,560 | ||||||
Purchase and retirement of common stock | (1,567) | (1,567) | (2,374) | (1,350) | |||||||||||
Net cash provided by (used in) financing activities - continuing operations | 85,052 | (2,044) | 59,404 | (19,599) | 36,623 | (54,662) | 26,951 | (58,980) | (8,924) | ||||||
Net cash used in financing activities - discontinued operations | (3) | (3) | (6) | (7) | (9) | (10) | (10) | (12) | (353) | ||||||
Net cash provided by (used in) financing activities | 85,049 | (2,047) | 59,398 | (19,606) | 36,614 | (54,672) | 26,941 | (58,992) | (9,277) | ||||||
Repayment of seller's notes and other contingent considerations | (1,631) | (1,411) | (3,569) | (3,117) | (6,845) | (6,449) | (9,435) | (8,656) | (4,904) | ||||||
Increase (decrease) in cash and cash equivalents | 44,223 | (6,857) | 17 | (10,272) | (48) | (11,884) | 10,086 | (11,517) | (30,193) | ||||||
Cash and cash equivalents, at beginning of year | 1,565 | 1,630 | 45,836 | 1,613 | 1,246 | 2,858 | 6,273 | 13,130 | 1,613 | 13,130 | 1,613 | 13,130 | 1,613 | 13,130 | 43,323 |
Cash and cash equivalents, at end of year | $ 11,699 | 1,565 | 1,630 | 45,836 | 1,613 | 1,246 | 2,858 | 6,273 | 1,630 | 2,858 | 1,565 | 1,246 | 11,699 | 1,613 | 13,130 |
As Previously Reported | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | 12,619 | 5,997 | 18,356 | 21,659 | 14,079 | 9,490 | 18,616 | 23,569 | 45,228 | 63,584 | 63,692 | ||||
(Loss) income from continuing operations | 12,619 | 5,997 | 18,356 | 21,659 | 14,079 | 9,490 | 18,616 | 23,569 | 45,228 | 63,584 | 63,692 | ||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 12,133 | 10,199 | 9,467 | 9,224 | 9,510 | 9,285 | 22,332 | 18,795 | 28,019 | 37,486 | 34,652 | ||||
Provision for doubtful accounts | 3,754 | 1,657 | 8,808 | 4,591 | 8,545 | 14,330 | 9,589 | ||||||||
Compensation expense on restricted stock units | 2,418 | 1,667 | 5,265 | 4,060 | 6,398 | 9,080 | 8,061 | ||||||||
Benefit from deferred income taxes | 358 | 358 | (2,564) | (2,564) | (1,602) | (4,303) | |||||||||
Amortization of debt issuance costs | 430 | 864 | 861 | 8,273 | 8,703 | 2,488 | 3,452 | ||||||||
Loss on extinguishment of debt | 6,645 | 6,645 | 6,645 | 6,645 | |||||||||||
(Gain) loss on sale of property, plant and equipment | (547) | 52 | (939) | 169 | (5,570) | (5,914) | 64 | ||||||||
Contingent consideration gains | (318) | (57) | (363) | (1,032) | (993) | ||||||||||
Changes in operating assets and liabilities, net of effects of acquired companies: | |||||||||||||||
Net accounts receivable | 1,537 | 7,216 | (23,564) | (7,712) | (14,586) | (32,060) | (30,259) | ||||||||
Inventories | (10,589) | (5,197) | (14,467) | (7,940) | (14,676) | (11,329) | (12,827) | ||||||||
Other current assets and income taxes | (12,736) | (3,860) | (5,104) | (2,746) | 5,028 | 4,689 | 3,867 | ||||||||
Accounts payable | 2,126 | (2,006) | (6,430) | 7,611 | 4,581 | 6,235 | (2,114) | ||||||||
Accrued expenses, other current liabilities and accrued interest payable | 2,384 | 3,883 | 1,080 | (202) | 5,421 | (223) | 3,501 | ||||||||
Accrued compensation related costs | (15,040) | (19,544) | (13,772) | (18,612) | (9,584) | (7,379) | 4,348 | ||||||||
Other liabilities | (253) | (1,314) | (211) | 409 | 3,946 | 1,262 | 589 | ||||||||
Net cash provided by operating activities - continuing operations | (9,962) | 2,193 | (7,485) | 27,644 | 68,526 | 86,260 | 81,319 | ||||||||
Net cash provided by operating activities | (9,962) | 2,193 | (7,485) | 27,644 | 68,526 | 86,260 | 81,319 | ||||||||
Cash flows from investing activities: | |||||||||||||||
Purchase of property, plant and equipment, net of acquisitions | (8,297) | (5,110) | (20,248) | (15,939) | (24,429) | (34,236) | (29,492) | ||||||||
Purchase of equipment leased to third parties under operating leases | (564) | (288) | (1,438) | (2,106) | (3,041) | (4,210) | (3,671) | ||||||||
Acquisitions, net of cash acquired | (19,167) | (34,201) | (4,741) | (5,695) | (9,296) | (62,500) | |||||||||
Change in restricted cash associated with workers' compensation program | 3,120 | 3,120 | (3,120) | ||||||||||||
Purchase of company-owned life insurance investment | (2,294) | (2,294) | (2,000) | ||||||||||||
Proceeds from sale of property, plant and equipment | 522 | 91 | 1,079 | 894 | 4,595 | 8,684 | 1,732 | ||||||||
Net cash used in investing activities - continuing operations | (29,800) | (5,307) | (57,102) | (21,892) | (25,450) | (35,938) | (99,051) | ||||||||
Net cash used in investing activities | (29,800) | (5,307) | (57,102) | (21,892) | (25,450) | (35,938) | (99,051) | ||||||||
Cash flows from financing activities: | |||||||||||||||
Borrowings under term loan | 225,000 | 225,000 | 225,000 | ||||||||||||
Repayment of term loan | (1,406) | (750) | (2,813) | (293,300) | (294,706) | (296,113) | (3,700) | ||||||||
Borrowings under revolving credit agreement | 125,000 | 228,000 | 120,000 | 163,000 | 249,000 | ||||||||||
Repayments under revolving credit agreement | (38,000) | (163,000) | (65,000) | (137,000) | (224,000) | ||||||||||
Payment of seller notes | (1,594) | (1,410) | (3,765) | (4,042) | (9,168) | (12,410) | (5,255) | ||||||||
Payment of financing obligations | (340) | (180) | (754) | (411) | (808) | (1,047) | (713) | ||||||||
Payment of fees associated with debt modifications and extinguishments | (3,665) | (3,665) | (3,667) | ||||||||||||
Excess tax benefit from stock-based compensation | 1,780 | 1,214 | 1,875 | 2,159 | 2,214 | 3,501 | 1,505 | ||||||||
Proceeds from issuance of common stock | 86 | 62 | 86 | 1,628 | 1,628 | 2,437 | 3,560 | ||||||||
Purchase and retirement of common stock | (1,566) | (1,566) | (2,374) | (1,350) | |||||||||||
Net cash provided by (used in) financing activities - continuing operations | 85,526 | (1,064) | 59,629 | (19,197) | (55,071) | (59,673) | (5,953) | ||||||||
Net cash provided by (used in) financing activities | 85,526 | (1,064) | 59,629 | (19,197) | (55,071) | (59,673) | (5,953) | ||||||||
Repayment of seller's notes and other contingent considerations | (1,594) | (1,410) | (3,765) | (4,042) | (9,168) | (12,410) | (5,255) | ||||||||
Increase (decrease) in cash and cash equivalents | 45,764 | (4,178) | (4,958) | (13,445) | (11,995) | (9,351) | (23,685) | ||||||||
Cash and cash equivalents, at beginning of year | 4,902 | 55,624 | 9,860 | 7,216 | 5,766 | 15,033 | 19,211 | 9,860 | 19,211 | 9,860 | 19,211 | 9,860 | 19,211 | 42,896 | |
Cash and cash equivalents, at end of year | 4,902 | 55,624 | 9,860 | 7,216 | 5,766 | 15,033 | 4,902 | 5,766 | 7,216 | 9,860 | 19,211 | ||||
Restatement Adjustments | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | (15,964) | (7,726) | (25,352) | (10,608) | (16,749) | (23,073) | (15,668) | ||||||||
Loss from discontinued operations, net of income taxes | (3,621) | 11 | 1,040 | (271) | (2,305) | (5,368) | (235) | ||||||||
(Loss) income from continuing operations | (12,343) | (7,737) | (26,392) | (10,337) | (14,444) | (17,705) | (15,433) | ||||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | (892) | (918) | (3,199) | (1,623) | (2,321) | (3,301) | (2,063) | ||||||||
Provision for doubtful accounts | (1,765) | (1,183) | (4,345) | (2,886) | (5,104) | (9,277) | (5,166) | ||||||||
Compensation expense on restricted stock units | (62) | 426 | (113) | 539 | 606 | 266 | 152 | ||||||||
Benefit from deferred income taxes | 1,478 | (12,897) | (9,509) | ||||||||||||
Amortization of debt issuance costs | 187 | 174 | 445 | (6,298) | (6,096) | 730 | 439 | ||||||||
Loss on extinguishment of debt | 6,645 | 6,645 | |||||||||||||
(Gain) loss on sale of property, plant and equipment | (6) | (329) | 319 | (1,069) | (799) | (344) | (2,083) | ||||||||
Contingent consideration gains | 318 | (339) | (429) | (395) | |||||||||||
Changes in operating assets and liabilities, net of effects of acquired companies: | |||||||||||||||
Net accounts receivable | 7,984 | 2,116 | 18,488 | 8,459 | 15,377 | 23,205 | 14,725 | ||||||||
Inventories | 8,296 | 3,748 | 8,570 | 5,682 | 10,936 | 7,836 | 13,149 | ||||||||
Other current assets and income taxes | 8,770 | 1,015 | (3,456) | 1,793 | (2,898) | 2,320 | (2,369) | ||||||||
Accounts payable | (6,461) | 1,367 | 3,459 | 3,530 | 1,359 | (1,139) | 3,378 | ||||||||
Accrued expenses, other current liabilities and accrued interest payable | (267) | 107 | 92 | (67) | (2,263) | 910 | (50) | ||||||||
Accrued compensation related costs | (2,739) | (3,642) | (1,278) | (288) | (368) | 813 | (1,541) | ||||||||
Other liabilities | 109 | 1,512 | 1,722 | 163 | (1,977) | 2,886 | (758) | ||||||||
Net cash provided by operating activities - continuing operations | 811 | (3,344) | (3,892) | 4,243 | (1,686) | (6,126) | (7,524) | ||||||||
Net cash used in operating activities - discontinued operations | (1,479) | 109 | 3,482 | (2,227) | (2,261) | (3,102) | (3,037) | ||||||||
Net cash provided by operating activities | (668) | (3,235) | (410) | 2,016 | (3,947) | (9,228) | (10,561) | ||||||||
Cash flows from investing activities: | |||||||||||||||
Purchase of property, plant and equipment, net of acquisitions | (229) | 1,660 | 5,443 | 2,198 | 5,255 | 8,329 | 4,989 | ||||||||
Purchase of equipment leased to third parties under operating leases | (372) | (225) | 257 | 152 | 107 | 908 | |||||||||
Acquisitions, net of cash acquired | 25 | (65) | 267 | (1,035) | (926) | (999) | 1,099 | ||||||||
Proceeds from sale of property, plant and equipment | 73 | 572 | 595 | 750 | 122 | 382 | 1,499 | ||||||||
Net cash used in investing activities - continuing operations | (131) | 1,795 | 6,080 | 2,170 | 4,603 | 7,819 | 8,495 | ||||||||
Net cash provided by (used in) investing activities - discontinued operations | (265) | (256) | (464) | (604) | (944) | (1,438) | (1,118) | ||||||||
Net cash used in investing activities | (396) | 1,539 | 5,616 | 1,566 | 3,659 | 6,381 | 7,377 | ||||||||
Cash flows from financing activities: | |||||||||||||||
Borrowings under revolving credit agreement | 50,000 | ||||||||||||||
Repayments under revolving credit agreement | (50,000) | ||||||||||||||
Payment of seller notes | (37) | (1) | 196 | 925 | 2,719 | 3,754 | 351 | ||||||||
Payment of contingent consideration | (375) | (675) | (626) | (925) | (1,965) | (2,590) | (2,915) | ||||||||
Payment of financing obligations | (86) | (144) | (112) | (247) | (189) | (320) | (391) | ||||||||
Payment of fees associated with debt modifications and extinguishments | 2 | ||||||||||||||
Excess tax benefit from stock-based compensation | 23 | (160) | 316 | (154) | (156) | (153) | (16) | ||||||||
Proceeds from issuance of common stock | 1 | 1 | 1 | ||||||||||||
Purchase and retirement of common stock | (1) | (1) | |||||||||||||
Net cash provided by (used in) financing activities - continuing operations | (474) | (980) | (225) | (402) | 409 | 693 | (2,971) | ||||||||
Net cash used in financing activities - discontinued operations | (3) | (3) | (6) | (7) | (10) | (12) | (353) | ||||||||
Net cash provided by (used in) financing activities | (477) | (983) | (231) | (409) | 399 | 681 | (3,324) | ||||||||
Repayment of seller's notes and other contingent considerations | (37) | (1) | 196 | 925 | 2,719 | 3,754 | 351 | ||||||||
Increase (decrease) in cash and cash equivalents | (1,541) | (2,679) | 4,975 | 3,173 | 111 | (2,166) | (6,508) | ||||||||
Cash and cash equivalents, at beginning of year | $ (3,272) | (9,788) | (8,247) | (5,970) | (2,908) | (8,760) | (6,081) | (8,247) | (6,081) | $ (8,247) | (6,081) | $ (8,247) | (6,081) | 427 | |
Cash and cash equivalents, at end of year | $ (3,272) | $ (9,788) | $ (8,247) | $ (5,970) | $ (2,908) | $ (8,760) | $ (3,272) | $ (2,908) | $ (5,970) | $ (8,247) | $ (6,081) |
SIGNIFICANT ACCOUNTING POLICI55
SIGNIFICANT ACCOUNTING POLICIES - Other Operating Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Other Operating Costs | |||
Marketing costs, including advertising | $ 3.4 | $ 3.5 | $ 3.3 |
SIGNIFICANT ACCOUNTING POLICI56
SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable, net (Details) | 12 Months Ended |
Dec. 31, 2014 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Minimum period of receivable balances for which an evaluation of its collectability is performed | 1 year |
Adjudication period of receivable balances for which an evaluation of its collectability is performed | 12 months |
SIGNIFICANT ACCOUNTING POLICI57
SIGNIFICANT ACCOUNTING POLICIES - Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | |
Inventories | |||||||||
Inventories | $ 70,517 | $ 82,257 | $ 86,155 | $ 90,506 | $ 85,783 | $ 83,293 | $ 81,214 | $ 79,575 | |
Raw materials | 22,872 | 34,015 | |||||||
Finished goods | 39,016 | 37,879 | |||||||
Patient Care | |||||||||
Inventories | |||||||||
(Increase) decrease in physical inventory | 3,000 | (200) | $ 1,900 | ||||||
Patient Care | Hanger Clinics | |||||||||
Inventories | |||||||||
Inventories | 30,800 | 35,500 | |||||||
Patient Care | Dosteon | |||||||||
Inventories | |||||||||
Raw materials | 5,400 | 8,000 | |||||||
Patient Care | CARES | |||||||||
Inventories | |||||||||
Finished goods | 900 | 1,100 | |||||||
Products and Services | |||||||||
Inventories | |||||||||
Inventories | $ 38,900 | $ 37,700 | |||||||
Percentage of raw materials inventory purchased from the Products and Services segment | 51.00% | 80.00% |
SIGNIFICANT ACCOUNTING POLICI58
SIGNIFICANT ACCOUNTING POLICIES - Financial Instruments (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2014 | Dec. 31, 2013 |
FAIR VALUE MEASUREMENTS | ||
Outstanding amount of debt | $ 530,292 | $ 488,485 |
New credit agreement | Term Loan | ||
FAIR VALUE MEASUREMENTS | ||
Outstanding amount of debt | 213,750 | 222,188 |
New credit agreement | Revolving Credit Facility | ||
FAIR VALUE MEASUREMENTS | ||
Outstanding amount of debt | 70,000 | 25,000 |
Senior Notes due 2018 | ||
FAIR VALUE MEASUREMENTS | ||
Outstanding amount of debt | 200,000 | 200,000 |
Sellers notes | ||
FAIR VALUE MEASUREMENTS | ||
Outstanding amount of debt | $ 26,624 | 21,072 |
Recurring basis | Level 1 | Money market funds | ||
FAIR VALUE MEASUREMENTS | ||
Market price (in dollars per share) | $ 1 | |
Recurring basis | Level 1 | Money market funds | Cash and cash equivalents | ||
FAIR VALUE MEASUREMENTS | ||
Fair value of assets | $ 12,000 | 4,000 |
Recurring basis | Level 1 | Money market funds | Other current assets | ||
FAIR VALUE MEASUREMENTS | ||
Fair value of assets | 3,800 | 3,700 |
Recurring basis | Level 2 | New credit agreement | Term Loan | ||
FAIR VALUE MEASUREMENTS | ||
Fair value of the debt | 211,700 | 223,100 |
Recurring basis | Level 2 | New credit agreement | Revolving Credit Facility | ||
FAIR VALUE MEASUREMENTS | ||
Fair value of the debt | 69,200 | 25,100 |
Recurring basis | Level 2 | Senior Notes due 2018 | ||
FAIR VALUE MEASUREMENTS | ||
Fair value of the debt | $ 203,000 | $ 213,300 |
SIGNIFICANT ACCOUNTING POLICI59
SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment, Net (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Furniture and fixtures | |
Property, Plant and Equipment, Net | |
Estimated life | 5 years |
Equipment and information systems | |
Property, Plant and Equipment, Net | |
Estimated life | 5 years |
Buildings | Minimum | |
Property, Plant and Equipment, Net | |
Estimated life | 10 years |
Buildings | Maximum | |
Property, Plant and Equipment, Net | |
Estimated life | 40 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment, Net | |
Estimated life | 10 years |
SIGNIFICANT ACCOUNTING POLICI60
SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Other Intangible Assets, Net (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Customer Lists | Minimum | |
Goodwill and Other Intangible Assets, Net | |
Estimated useful life | 10 years |
Customer Lists | Maximum | |
Goodwill and Other Intangible Assets, Net | |
Estimated useful life | 14 years |
Trade Names | Intangible assets with definite lives | Minimum | |
Goodwill and Other Intangible Assets, Net | |
Estimated useful life | 1 year |
Trade Names | Intangible assets with definite lives | Maximum | |
Goodwill and Other Intangible Assets, Net | |
Estimated useful life | 10 years |
Non-compete agreements | Minimum | |
Goodwill and Other Intangible Assets, Net | |
Estimated useful life | 2 years |
Non-compete agreements | Maximum | |
Goodwill and Other Intangible Assets, Net | |
Estimated useful life | 5 years |
Other definite-lived intangible assets | Maximum | |
Goodwill and Other Intangible Assets, Net | |
Estimated useful life | 17 years |
SIGNIFICANT ACCOUNTING POLICI61
SIGNIFICANT ACCOUNTING POLICIES - Stock Based Compensation (Details) | 12 Months Ended |
Dec. 31, 2014plan | |
Stock-Based Compensation | |
Number of stock-based compensation plans | 1 |
Restricted stock units | Minimum | |
Stock-Based Compensation | |
Period for vesting of awards | 1 year |
Restricted stock units | Maximum | |
Stock-Based Compensation | |
Period for vesting of awards | 4 years |
SIGNIFICANT ACCOUNTING POLICI62
SIGNIFICANT ACCOUNTING POLICIES - Segment Information (Details) | 12 Months Ended |
Dec. 31, 2014segment | |
Segment Information | |
Number of segments | 2 |
EARNINGS PER SHARE - Anti-dilut
EARNINGS PER SHARE - Anti-diluted Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Earnings per share | |||
Total anti-dilutive shares (in shares) | 8,088 | 1,939 | 37 |
Unvested restricted stock units and unexercised options | |||
Earnings per share | |||
Total anti-dilutive shares (in shares) | 256,880 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
EARNINGS PER SHARE | |||||||||||||||
Net (loss) income from continuing operations applicable to common shareholders | $ 2,806 | $ 1,950 | $ (1,430) | $ (6,346) | $ 15,095 | $ 17,552 | $ 11,479 | $ 1,753 | $ (7,776) | $ 13,232 | $ (5,826) | $ 30,784 | $ (3,020) | $ 45,879 | $ 48,259 |
Loss from discontinued operations, net of income taxes | (6,235) | (10,751) | 4,661 | (3,621) | (3,063) | (2,034) | (282) | 11 | 1,040 | (271) | (9,711) | (2,305) | (15,946) | (5,368) | (235) |
Net (loss) income applicable to common shareholders | $ (3,429) | $ (8,801) | $ 3,231 | $ (9,967) | $ 12,032 | $ 15,518 | $ 11,197 | $ 1,764 | $ (6,736) | $ 12,961 | $ (15,537) | $ 28,479 | $ (18,966) | $ 40,511 | $ 48,024 |
Shares of common stock outstanding used to compute basic per common share amounts | 35,397,195 | 35,388,862 | 35,377,939 | 35,056,902 | 34,945,120 | 34,927,373 | 34,872,430 | 34,570,836 | 35,209,849 | 34,710,269 | 35,275,046 | 34,782,207 | 35,309,478 | 34,825,867 | 34,273,621 |
Effect of dilutive restricted stock units and options (in shares) | 382,887 | 463,799 | |||||||||||||
Shares used to compute dilutive per common share amounts | 35,615,092 | 35,571,188 | 35,377,939 | 35,056,902 | 35,364,729 | 35,298,046 | 35,211,878 | 35,062,115 | 35,209,849 | 35,124,223 | 35,275,046 | 35,180,990 | 35,309,478 | 35,208,754 | 34,737,420 |
Basic | |||||||||||||||
(Loss) income from continuing operations per share applicable to common shareholders (in dollars per shares) | $ 0.08 | $ 0.05 | $ (0.04) | $ (0.18) | $ 0.43 | $ 0.50 | $ 0.33 | $ 0.05 | $ (0.22) | $ 0.38 | $ (0.17) | $ 0.89 | $ (0.09) | $ 1.32 | $ 1.41 |
Loss from discontinued operations per share applicable to common shareholders (in dollars per share) | (0.18) | (0.30) | 0.13 | (0.10) | (0.09) | (0.06) | (0.01) | 0.03 | (0.01) | (0.27) | (0.07) | (0.45) | (0.16) | (0.01) | |
Basic (loss) income per share (in dollars per share) | (0.10) | (0.25) | 0.09 | (0.28) | 0.34 | 0.44 | 0.32 | 0.05 | (0.19) | 0.37 | (0.44) | 0.82 | (0.54) | 1.16 | 1.40 |
Diluted | |||||||||||||||
(Loss) income from continuing operations per share applicable to common shareholders (in dollars per shares) | 0.08 | 0.05 | (0.04) | (0.18) | 0.43 | 0.50 | 0.33 | 0.05 | (0.22) | 0.38 | (0.17) | 0.88 | (0.09) | 1.30 | 1.39 |
Loss from discontinued operations per share applicable to common shareholders (in dollars per share) | (0.18) | (0.30) | 0.13 | (0.10) | (0.09) | (0.06) | (0.01) | 0.03 | (0.01) | (0.27) | (0.07) | (0.45) | (0.15) | (0.01) | |
Diluted (loss) income per share (in dollars per share) | $ (0.10) | $ (0.25) | $ 0.09 | $ (0.28) | $ 0.34 | $ 0.44 | $ 0.32 | $ 0.05 | $ (0.19) | $ 0.37 | $ (0.44) | $ 0.81 | $ (0.54) | $ 1.15 | $ 1.38 |
ACCOUNTS RECEIVABLE, NET - Allo
ACCOUNTS RECEIVABLE, NET - Allowances (Details) - USD ($) $ in Thousands | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accounts Receivable, net | ||||||||||
Accounts receivable, before allowance | $ 271,384 | $ 213,488 | ||||||||
Allowance for disallowed revenue | (87,192) | (52,277) | $ (31,447) | $ (31,136) | ||||||
Accounts receivable, gross | 184,192 | 161,211 | ||||||||
Allowance for doubtful accounts | (9,944) | $ (10,197) | $ (9,078) | $ (7,920) | (6,472) | $ (5,837) | $ (4,971) | $ (4,941) | $ (4,928) | $ (3,844) |
Accounts receivable, net | 174,248 | $ 165,787 | $ 159,471 | $ 146,060 | 154,739 | $ 149,952 | $ 150,276 | $ 139,756 | ||
Patient Care | ||||||||||
Accounts Receivable, net | ||||||||||
Accounts receivable, before allowance | 249,248 | 195,107 | ||||||||
Allowance for disallowed revenue | (87,192) | (52,277) | ||||||||
Accounts receivable, gross | 162,056 | 142,830 | ||||||||
Allowance for doubtful accounts | (8,285) | (5,127) | ||||||||
Accounts receivable, net | 153,771 | 137,703 | ||||||||
Products and Services | ||||||||||
Accounts Receivable, net | ||||||||||
Accounts receivable, before allowance | 22,136 | 18,381 | ||||||||
Accounts receivable, gross | 22,136 | 18,381 | ||||||||
Allowance for doubtful accounts | (1,659) | (1,345) | ||||||||
Accounts receivable, net | $ 20,477 | $ 17,036 |
ACCOUNTS RECEIVABLE, NET - Conc
ACCOUNTS RECEIVABLE, NET - Concentration Risk (Details) - Patient Care - Medicare | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Net Revenues | Customer Concentration | |||
Concentration Risk | |||
Concentration risk (as a percent) | 29.00% | 31.00% | 29.00% |
Net Accounts Receivable | Credit Concentration Risk | |||
Concentration Risk | |||
Concentration risk (as a percent) | 29.00% | 28.00% |
ACCOUNTS RECEIVABLE, NET - Agei
ACCOUNTS RECEIVABLE, NET - Ageing Categories (Details) - USD ($) $ in Thousands | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 |
Accounts Receivable, net | ||||||||
0-60 Days | $ 108,453 | $ 110,053 | ||||||
61-120 Days | 32,331 | 24,513 | ||||||
121-180 Days | 13,880 | 9,398 | ||||||
Over 180 Days | 19,584 | 10,775 | ||||||
Accounts receivable, net | 174,248 | $ 165,787 | $ 159,471 | $ 146,060 | 154,739 | $ 149,952 | $ 150,276 | $ 139,756 |
Patient Care | ||||||||
Accounts Receivable, net | ||||||||
Accounts receivable, net | 153,771 | 137,703 | ||||||
Patient Care | Non-Medicare | ||||||||
Accounts Receivable, net | ||||||||
0-60 Days | 64,012 | 68,038 | ||||||
61-120 Days | 19,314 | 14,829 | ||||||
121-180 Days | 8,462 | 5,748 | ||||||
Over 180 Days | 11,041 | 6,206 | ||||||
Accounts receivable, net | 102,829 | 94,821 | ||||||
Patient Care | Commercial insurance | ||||||||
Accounts Receivable, net | ||||||||
0-60 Days | 45,929 | 51,315 | ||||||
61-120 Days | 13,093 | 10,239 | ||||||
121-180 Days | 5,666 | 3,918 | ||||||
Over 180 Days | 7,880 | 4,664 | ||||||
Accounts receivable, net | 72,568 | 70,136 | ||||||
Patient Care | Private pay | ||||||||
Accounts Receivable, net | ||||||||
0-60 Days | 1,542 | 1,859 | ||||||
61-120 Days | 879 | 939 | ||||||
121-180 Days | 460 | 381 | ||||||
Over 180 Days | 411 | 152 | ||||||
Accounts receivable, net | 3,292 | 3,331 | ||||||
Patient Care | Medicaid | ||||||||
Accounts Receivable, net | ||||||||
0-60 Days | 12,441 | 10,936 | ||||||
61-120 Days | 4,246 | 2,871 | ||||||
121-180 Days | 1,832 | 1,143 | ||||||
Over 180 Days | 2,109 | 1,078 | ||||||
Accounts receivable, net | 20,628 | 16,028 | ||||||
Patient Care | VA | ||||||||
Accounts Receivable, net | ||||||||
0-60 Days | 4,100 | 3,928 | ||||||
61-120 Days | 1,096 | 780 | ||||||
121-180 Days | 504 | 306 | ||||||
Over 180 Days | 641 | 312 | ||||||
Accounts receivable, net | 6,341 | 5,326 | ||||||
Patient Care | Medicare | ||||||||
Accounts Receivable, net | ||||||||
0-60 Days | 31,450 | 31,404 | ||||||
61-120 Days | 7,704 | 5,523 | ||||||
121-180 Days | 3,973 | 2,538 | ||||||
Over 180 Days | 7,815 | 3,417 | ||||||
Accounts receivable, net | 50,942 | 42,882 | ||||||
Products and Services | ||||||||
Accounts Receivable, net | ||||||||
Accounts receivable, net | 20,477 | 17,036 | ||||||
Products and Services | Trade accounts receivable | ||||||||
Accounts Receivable, net | ||||||||
0-60 Days | 12,991 | 10,611 | ||||||
61-120 Days | 5,313 | 4,161 | ||||||
121-180 Days | 1,445 | 1,112 | ||||||
Over 180 Days | 728 | 1,152 | ||||||
Accounts receivable, net | $ 20,477 | $ 17,036 |
ACCOUNTS RECEIVABLE, NET - Al68
ACCOUNTS RECEIVABLE, NET - Allowance for Disallowed Revenue And Allowance for Doubtful Accounts(Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Allowance for Disallowed Revenue | |||
Balance at the beginning | $ 52,277 | $ 31,447 | $ 31,136 |
Additions | 119,323 | 94,965 | 73,118 |
Reductions | (84,408) | (74,135) | (72,807) |
Balance at the end | 87,192 | 52,277 | 31,447 |
Allowance for Doubtful Accounts | |||
Balance at the beginning | 6,472 | 4,928 | 3,844 |
Additions | 14,241 | 8,125 | 4,163 |
Reductions | (10,769) | (6,581) | (3,079) |
Balance at the end | 9,944 | 6,472 | 4,928 |
Dosteon | Loss on discontinued operations net of income tax | |||
Allowance for Doubtful Accounts | |||
Bad debts expense | 2,600 | 3,100 | (300) |
Disallowed revenue | $ 14,000 | $ 8,700 | $ 5,800 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 |
Inventories | ||||||||
Raw materials | $ 22,872 | $ 34,015 | ||||||
Work in process | 8,629 | 10,363 | ||||||
Finished goods | 39,016 | 37,879 | ||||||
Total inventories | $ 70,517 | $ 86,155 | $ 90,506 | $ 85,783 | $ 82,257 | $ 83,293 | $ 81,214 | $ 79,575 |
PROPERTY PLANT AND EQUIPMENT (D
PROPERTY PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | |
Property, Plant and Equipment, Net | |||||||||
Total property, plant, and equipment, gross | $ 304,648 | $ 289,601 | |||||||
Less: accumulated depreciation | (192,298) | (173,312) | |||||||
Total property, plant, and equipment, net | $ 114,223 | 112,350 | 116,289 | $ 119,677 | $ 120,225 | $ 113,144 | $ 109,475 | $ 106,249 | |
Depreciation expense | 32,800 | 29,000 | $ 28,100 | ||||||
Patient Care | CARES | |||||||||
Property, Plant and Equipment, Net | |||||||||
Impairments of fixed assets | $ 2,200 | ||||||||
Patient Care | Dosteon | |||||||||
Property, Plant and Equipment, Net | |||||||||
Impairments of fixed assets | 1,500 | ||||||||
Land | |||||||||
Property, Plant and Equipment, Net | |||||||||
Total property, plant, and equipment, gross | 794 | 794 | |||||||
Buildings | |||||||||
Property, Plant and Equipment, Net | |||||||||
Total property, plant, and equipment, gross | 25,878 | 28,244 | |||||||
Assets under capital leases | |||||||||
Assets under capital leases | 21,300 | 23,800 | |||||||
Accumulated depreciation of assets under capital leases | 6,300 | 8,400 | |||||||
Furniture and fixtures | |||||||||
Property, Plant and Equipment, Net | |||||||||
Total property, plant, and equipment, gross | 16,855 | 15,637 | |||||||
Machinery and equipment | |||||||||
Property, Plant and Equipment, Net | |||||||||
Total property, plant, and equipment, gross | 53,443 | 57,244 | |||||||
Equipment leased to third parties under operating leases | |||||||||
Property, Plant and Equipment, Net | |||||||||
Total property, plant, and equipment, gross | 37,645 | 35,453 | |||||||
Less: accumulated depreciation | (20,949) | (15,515) | |||||||
Total property, plant, and equipment, net | 16,696 | 19,938 | |||||||
Leasehold improvements | |||||||||
Property, Plant and Equipment, Net | |||||||||
Total property, plant, and equipment, gross | 86,966 | 77,906 | |||||||
Computers and software | |||||||||
Property, Plant and Equipment, Net | |||||||||
Total property, plant, and equipment, gross | $ 83,067 | $ 74,323 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Mar. 31, 2014USD ($) | Mar. 31, 2013USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2013USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | Dec. 31, 2014USD ($)itemclinic | Dec. 31, 2013USD ($)itemclinic | Dec. 31, 2012USD ($)itemclinic | |
Components of the aggregated purchase price the assets acquired and liabilities assumed | |||||||||
Net cash | $ 19,142 | $ 65 | $ 33,934 | $ 5,776 | $ 36,784 | $ 6,621 | $ 38,097 | $ 10,295 | $ 61,401 |
Issuance of seller notes | 8,450 | 11,901 | 268 | 13,172 | 614 | 13,964 | 2,344 | 20,223 | |
Goodwill | $ 702,769 | $ 675,451 | $ 715,010 | $ 678,748 | $ 716,571 | $ 679,721 | 710,053 | 682,628 | 675,468 |
Adjustments to working capital, included in cash paid for Acquisition | 0 | 300 | 500 | ||||||
O & P and Distribution companies | |||||||||
Acquisitions | |||||||||
Amount of goodwill deductible for tax purposes | 34,300 | 5,000 | 15,300 | ||||||
Acquisition expenses | 1,200 | 900 | 1,200 | ||||||
Components of the aggregated purchase price the assets acquired and liabilities assumed | |||||||||
Net cash | 38,069 | 9,975 | 60,947 | ||||||
Issuance of seller notes | 13,964 | 2,344 | 20,223 | ||||||
Contingent consideration | 291 | 708 | 2,625 | ||||||
Other working capital adjustments | 345 | 235 | |||||||
Aggregate purchase price of businesses | 52,669 | 13,262 | 83,795 | ||||||
Accounts receivable | 5,322 | 2,935 | 6,210 | ||||||
Inventories | 3,183 | 931 | 2,163 | ||||||
Acquired customer intangibles and other intangible assets, net | 12,136 | 1,507 | 10,317 | ||||||
Other assets | 1,800 | 1,997 | 4,164 | ||||||
Accounts payable and other liabilities assumed | (5,504) | (882) | (4,517) | ||||||
Net assets acquired | 16,937 | 6,488 | 18,337 | ||||||
Goodwill | $ 35,732 | $ 6,774 | $ 65,458 | ||||||
Weighted-average estimated useful lives of acquired intangible assets | 10 years | 8 years | 9 years | ||||||
O & P company | |||||||||
Acquisitions | |||||||||
Number of businesses acquired | item | 12 | 9 | 16 | ||||||
Number of patient care clinics operated by acquiree | clinic | 37 | 22 | 59 | ||||||
Number of rehabilitation centers operated | item | 1 | ||||||||
Distribution company | |||||||||
Acquisitions | |||||||||
Number of businesses acquired | item | 1 |
GOODWILL AND OTHER INTANGIBLE72
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Goodwill and other intangible assets | |||
Impairment of goodwill | $ 0 | ||
Goodwill allocated | |||
Balance as of beginning of the year | 682,628 | $ 675,468 | |
Additions due to acquisitions | 35,732 | 6,774 | |
Adjustments | 65 | 386 | |
Allocation to Assets held for sale | (8,372) | ||
Balance as of end of the year | 710,053 | 682,628 | |
Patient Care | |||
Goodwill allocated | |||
Balance as of beginning of the year | 592,310 | 585,100 | |
Additions due to acquisitions | 32,569 | 6,774 | |
Adjustments | 65 | 436 | |
Allocation to Assets held for sale | (8,372) | ||
Balance as of end of the year | 616,572 | 592,310 | |
Goodwill, Accumulated Impairment | (45,808) | (45,808) | $ (45,808) |
Products and Services | |||
Goodwill allocated | |||
Balance as of beginning of the year | 136,126 | 136,176 | |
Additions due to acquisitions | 3,163 | ||
Adjustments | (50) | ||
Balance as of end of the year | 139,289 | $ 136,126 | |
Dosteon | Held for sale | Patient Care | |||
Goodwill and other intangible assets | |||
Goodwill related to disposal group | $ 8,400 |
GOODWILL AND OTHER INTANGIBLE73
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Intangible assets | ||||
Gross Carrying Amount | $ 73,530 | $ 65,537 | ||
Accumulated Amortization | (23,862) | (18,367) | ||
Net Carrying Amount | 49,668 | 47,170 | ||
Gross Carrying Amount | 82,377 | 74,607 | ||
Net Carrying Amount | 58,515 | 56,240 | ||
Amortization expense | 7,400 | 6,600 | $ 5,500 | |
Patient Care | Dosteon | Loss from discontinued operations, net of income taxes | ||||
Intangible assets | ||||
Impairment of finite lived intangible assets | $ 2,400 | |||
Trade Names | ||||
Intangible assets | ||||
Indefinite life | 8,847 | 9,070 | ||
Customer Lists | ||||
Intangible assets | ||||
Gross Carrying Amount | 54,405 | 45,811 | ||
Accumulated Amortization | (15,693) | (11,832) | ||
Net Carrying Amount | $ 38,712 | 33,979 | ||
Weighted-average estimated useful lives of acquired intangible assets | 10 years | |||
Trade Names | ||||
Intangible assets | ||||
Gross Carrying Amount | $ 1,453 | 929 | ||
Accumulated Amortization | (639) | (240) | ||
Net Carrying Amount | 814 | 689 | ||
Patents and Other Intangibles | ||||
Intangible assets | ||||
Gross Carrying Amount | 17,672 | 18,797 | ||
Accumulated Amortization | (7,530) | (6,295) | ||
Net Carrying Amount | $ 10,142 | $ 12,502 | ||
Weighted-average estimated useful lives of acquired intangible assets | 10 years |
GOODWILL AND OTHER INTANGIBLE74
GOODWILL AND OTHER INTANGIBLE ASSETS - Estimated Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2014 | Dec. 31, 2013 |
Estimated aggregate amortization expense for definite-lived intangible assets | ||
2,015 | $ 7,121 | |
2,016 | 6,387 | |
2,017 | 6,007 | |
2,018 | 5,689 | |
2,019 | 4,841 | |
Thereafter | 19,623 | |
Net Carrying Amount | $ 49,668 | $ 47,170 |
OTHER CURRENT ASSETS AND OTHE75
OTHER CURRENT ASSETS AND OTHER ASSETS - Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 |
OTHER CURRENT ASSETS AND OTHER ASSETS | ||||||||
Non-trade receivables | $ 7,551 | $ 7,694 | ||||||
Prepaid Rent | 4,375 | 5,369 | ||||||
Restricted cash | 3,815 | 3,657 | ||||||
Prepaid maintenance | 2,258 | 1,465 | ||||||
Other miscellaneous | 3,357 | 3,421 | ||||||
Total | $ 21,356 | $ 46,604 | $ 33,097 | $ 27,466 | $ 21,606 | $ 22,861 | $ 28,937 | $ 29,313 |
OTHER CURRENT ASSETS AND OTHE76
OTHER CURRENT ASSETS AND OTHER ASSETS - Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 |
OTHER CURRENT ASSETS AND OTHER ASSETS | ||||||||
Cash Surrender Value of COLI | $ 11,851 | $ 9,116 | ||||||
Non-trade receivables | 2,339 | 2,001 | ||||||
Deposits | 5,251 | 4,128 | ||||||
Other miscellaneous | 11 | 259 | ||||||
Total | $ 19,452 | $ 20,055 | $ 18,384 | $ 17,826 | $ 15,504 | $ 16,305 | $ 15,872 | $ 16,064 |
INCOME TAXES - Expense (Details
INCOME TAXES - Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Current: | |||||||||||||||
Federal | $ 36,147 | $ 38,431 | $ 32,181 | ||||||||||||
State | 5,479 | 6,107 | 6,271 | ||||||||||||
Total current | 41,626 | 44,538 | 38,452 | ||||||||||||
Deferred: | |||||||||||||||
Federal | (39,712) | (12,596) | (10,362) | ||||||||||||
State | 109 | (1,487) | (1,884) | ||||||||||||
Total deferred | (39,603) | (14,083) | (12,246) | ||||||||||||
Provision for income taxes from continuing operations | $ 1,267 | $ (10,054) | $ 10,832 | $ (22) | $ 13,077 | $ 9,815 | $ 6,688 | $ 875 | $ 10,810 | $ 7,563 | $ 756 | $ 17,378 | 2,023 | 30,455 | 26,206 |
Income tax benefit attributable to discontinued operations | $ 8,914 | $ 3,357 | $ 80 |
INCOME TAXES - Rate Reconciliat
INCOME TAXES - Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Reconciliation of the federal statutory tax rate to the Company's effective tax rate | |||
Federal statutory tax rate - (benefit) / provision (as a percent) | 35.00% | 35.00% | 35.00% |
State and local income taxes (as a percent) | 53.20% | 4.00% | 3.40% |
Change in valuation allowance (as a percent) | (455.60%) | (0.20%) | (0.50%) |
Domestic manufacturing deduction (as a percent) | 206.90% | (2.80%) | (3.20%) |
Research and development credit (as a percent) | 14.30% | (0.20%) | (0.70%) |
Change in uncertain tax positions (as a percent) | (54.60%) | 3.60% | 0.80% |
Other (as a percent) | (2.10%) | 0.40% | 0.40% |
Tax provision (as a percent) | (202.90%) | 39.80% | 35.20% |
INCOME TAXES - Deferred Tax Lia
INCOME TAXES - Deferred Tax Liability (Asset) (Details) - USD ($) $ in Thousands | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 |
Deferred tax liabilities: | ||||||||
Goodwill amortization | $ 71,911 | $ 69,014 | ||||||
Acquired Intangibles | 15,147 | 16,494 | ||||||
Software development costs | 3,257 | |||||||
Prepaid expenses | 1,887 | 1,674 | ||||||
Sec. 481(a) adjustments | 786 | |||||||
Other | 117 | 6 | ||||||
Total deferred tax liabilities | 89,848 | 90,445 | ||||||
Deferred tax assets: | ||||||||
Property, plant and equipment | 2,304 | 133 | ||||||
Net operating loss carryforwards | 5,108 | 6,039 | ||||||
Accrued expenses | 41,431 | 25,883 | ||||||
Deferred benefit plan compensation | 9,119 | 8,351 | ||||||
Provision for doubtful accounts | 40,403 | 25,507 | ||||||
Inventory | 36,347 | 28,039 | ||||||
Restricted stock | 3,672 | 3,608 | ||||||
Capital leases | 641 | 318 | ||||||
Deferred rent | 2,060 | 1,660 | ||||||
Refund liabilities | 1,143 | 935 | ||||||
Interest on Seller Notes | 906 | 578 | ||||||
Other | 1,734 | 940 | ||||||
Total deferred tax assets | 144,868 | 101,991 | ||||||
Valuation allowance | (5,692) | (1,259) | ||||||
Net deferred tax assets | 139,176 | 100,732 | ||||||
Net deferred tax asset | 49,328 | 10,287 | ||||||
Current: | ||||||||
Deferred tax assets | 114,560 | 76,242 | ||||||
Deferred tax liabilities | (926) | (6) | ||||||
Valuation allowance | (4,382) | (620) | ||||||
Net current deferred income tax asset | 109,252 | $ 70,333 | $ 70,789 | $ 71,569 | 75,616 | $ 64,209 | $ 64,153 | $ 61,055 |
Non-current: | ||||||||
Deferred tax assets | 30,308 | 25,749 | ||||||
Deferred tax liabilities | (88,922) | (90,439) | ||||||
Valuation allowance | (1,310) | (639) | ||||||
Net non-current deferred income tax liability | (59,924) | $ (62,786) | $ (62,338) | $ (61,640) | (65,329) | $ (65,906) | $ (65,935) | $ (66,489) |
Net deferred tax asset | $ 49,328 | $ 10,287 |
INCOME TAXES - Net Operating Lo
INCOME TAXES - Net Operating Loss (Details) - USD ($) $ in Millions | Dec. 31, 2014 | Dec. 31, 2013 |
Federal | ||
Income Taxes | ||
Net operating loss carryforwards under the (tax effected) of U.S. federal and state tax laws | $ 8.9 | $ 10.4 |
State | ||
Income Taxes | ||
Net operating loss carryforwards under the (tax effected) of U.S. federal and state tax laws | 43.3 | 49.3 |
Valuation allowance related to operating loss carryforwards | $ 5.7 | $ 1.3 |
INCOME TAXES - Activity in Valu
INCOME TAXES - Activity in Valuation Allowance (Details) - Deferred tax asset valuation allowance - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Valuation allowance activities | |||
Balance at beginning of year | $ 1,259 | $ 1,000 | $ 1,374 |
Generated | 5,365 | 665 | 26 |
Released | (932) | (406) | (400) |
Balance at end of year | $ 5,692 | $ 1,259 | $ 1,000 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Reconciliation of beginning and ending balances of unrecognized tax benefits | |||
Unrecognized tax benefits, at beginning of the year | $ 7,475 | $ 4,434 | $ 2,105 |
Additions for tax positions related to the current year | 623 | 3,701 | 3,001 |
Additions for tax positions of prior years | 207 | 79 | |
Decrease related to prior year positions | (476) | (753) | (679) |
Decrease for lapse of applicable statute of limitations | (17) | (114) | (72) |
Unrecognized tax benefits, at end of the year | 7,605 | 7,475 | 4,434 |
Total amount of unrecognized tax benefits, if recognized, would affect the effective tax rate | 500 | ||
Unrecognized tax benefits that the Company expects would change significantly over the next 12 months | 700 | ||
Accrued interest and penalties | $ 500 | $ 400 | $ 300 |
EMPLOYEE BENEFITS (Details)
EMPLOYEE BENEFITS (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Jan. 31, 2004payment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | |
EMPLOYEE BENEFITS | |||||||
Matching employer contributions under 401(k) Savings and Retirement plan | $ 6,200 | $ 6,000 | $ 4,200 | ||||
Supplemental Executive Retirement Plan (SERP) | |||||||
Number of annual payments upon retirement | payment | 15 | ||||||
Average remaining service period | 10 years 8 months 12 days | ||||||
Change in Benefit Obligation | |||||||
Benefit obligation at the beginning of the year | $ 21,606 | 23,014 | 20,830 | ||||
Service cost | 518 | 556 | 894 | ||||
Interest cost | 807 | 713 | 782 | ||||
Amortization of loss | 121 | 40 | |||||
Payments | (1,271) | (1,247) | (706) | ||||
Actuarial loss (gain) | 1,394 | (1,551) | 1,174 | ||||
Benefit obligation at the end of the year | $ 23,054 | $ 21,606 | $ 23,014 | ||||
Unfunded status | $ 23,054 | ||||||
Net amount recognized | 23,054 | ||||||
Amounts Recognized in the Consolidated Balance Sheet | |||||||
Current: Accrued compensation related costs | 1,799 | ||||||
Long-Term Liabilities: Other liabilities | 21,255 | ||||||
Total accrued benefit obligation | 23,054 | ||||||
Other comprehensive loss- actuarial (losses) gains | $ (1,400) | $ 1,600 | $ (1,200) | ||||
Weighted average assumptions used to determine the benefit obligation and net benefit cost | |||||||
Discount rate, to determine the benefit obligation (as a percent) | 3.34% | 4.03% | 3.25% | ||||
Discount rate, to determine net benefit cost (as a percent) | 3.34% | 4.03% | 3.25% | ||||
Average rate of increase in compensation, to determine the benefit obligation (as a percent) | 3.00% | 3.00% | 3.00% | ||||
Average rate of increase in compensation, to determine net benefit cost (as a percent) | 3.00% | 3.00% | 3.00% | ||||
Future payments under the Plan | |||||||
2,015 | $ 1,847 | ||||||
2,016 | 1,847 | ||||||
2,017 | 1,847 | ||||||
2,018 | 1,920 | ||||||
2,019 | 1,920 | ||||||
Thereafter | 13,673 | ||||||
Total | $ 21,606 | $ 23,014 | $ 20,830 | $ 23,054 | $ 21,606 | $ 23,014 |
STOCK-BASED COMPENSATION - Plan
STOCK-BASED COMPENSATION - Plans (Details) - USD ($) $ in Millions | May 13, 2010 | Dec. 31, 2014 |
2010 Omnibus Incentive Plan | ||
Stock-Based Compensation | ||
Number of shares of available for future issuance | 900,000 | |
Shares of common stock reserved for issuance | 2,500,000 | |
Shares of common stock authorized for issuance under the share-based compensation plan | 2,000,000 | |
Plan expiration unless earlier terminated by the Board of Directors | 10 years | |
Shares issued | 1,900,000 | |
Number of authorized shares canceled | 300,000 | |
2002 Stock Incentive and Bonus Plan and 2003 Non-Employee Directors' Stock Incentive Plan | ||
Stock-Based Compensation | ||
Number of shares of available for future issuance | 0 | |
Shares of common stock reserved for issuance | 500,000 | |
Restricted stock units | ||
Stock-Based Compensation | ||
Unrecognized stock-based compensation expense related to non-vested stock | $ 14.8 | |
Period over which unrecognized share-based compensation cost will be expensed | 4 years | |
Incentive stock options | 2010 Omnibus Incentive Plan | ||
Stock-Based Compensation | ||
Number of shares of available for future issuance | 1,500,000 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Restricted stock units | |||
Stock-Based Compensation | |||
Stock-based compensation expense | $ 9.8 | $ 9.4 | $ 8.3 |
Units | |||
Vested (in units) | (377,000) | (348,000) | (377,000) |
Other disclosures | |||
Intrinsic value of shares fully vested during the period | $ 12.8 | $ 11 | $ 8.4 |
Unrecognized stock-based compensation expense related to non-vested stock | $ 14.8 | ||
Weighted- average period over which unrecognized stock-based compensation cost will be expensed | 2 years 6 months | ||
Total estimated grant date fair values | $ 12.2 | $ 12.2 | $ 11.3 |
Restricted stock units | Employee Awards | |||
Units | |||
Nonvested at the beginning of the year (in units) | 710,044 | 658,567 | 650,655 |
Granted (in units) | 285,332 | 302,261 | 335,750 |
Vested (in units) | (280,933) | (218,160) | (232,787) |
Forfeited (in units) | (43,708) | (32,624) | (95,051) |
Nonvested at the end of the year (in units) | 670,735 | 710,044 | 658,567 |
Weighted Average Grant Date Fair Value | |||
Nonvested at the beginning of the year (in dollars per unit) | $ 25.05 | $ 21.71 | $ 21.99 |
Granted (in dollars per unit) | 33.65 | 29.66 | 20.26 |
Vested (in dollars per unit) | 23.66 | 21.60 | 20.35 |
Forfeited (in dollars per unit) | 29.66 | 23.36 | 21.80 |
Nonvested at the end of the year (in dollars per unit) | $ 28.99 | $ 25.05 | $ 21.71 |
Restricted stock units | Director Awards | |||
Units | |||
Nonvested at the beginning of the year (in units) | 84,864 | 121,356 | 112,331 |
Granted (in units) | 36,794 | 49,751 | 63,497 |
Vested (in units) | (43,512) | (85,246) | (54,472) |
Forfeited (in units) | (5,314) | (997) | |
Nonvested at the end of the year (in units) | 72,832 | 84,864 | 121,356 |
Weighted Average Grant Date Fair Value | |||
Nonvested at the beginning of the year (in dollars per unit) | $ 27.91 | $ 22.62 | $ 21.33 |
Granted (in dollars per unit) | 30.08 | 32.50 | 22.35 |
Vested (in dollars per unit) | 27.82 | 23.08 | 19.65 |
Forfeited (in dollars per unit) | 22.43 | 25.72 | |
Nonvested at the end of the year (in dollars per unit) | $ 29.46 | $ 27.91 | $ 22.62 |
Performance-based stock units | Employee Awards | |||
Units | |||
Nonvested at the beginning of the year (in units) | 128,277 | 141,302 | 226,701 |
Granted (in units) | 41,713 | 54,300 | 147,300 |
Vested (in units) | (52,616) | (44,700) | (89,622) |
Forfeited (in units) | (41,713) | (22,625) | (143,077) |
Nonvested at the end of the year (in units) | 75,661 | 128,277 | 141,302 |
Weighted Average Grant Date Fair Value | |||
Nonvested at the beginning of the year (in dollars per unit) | $ 23.89 | $ 21.84 | $ 21 |
Granted (in dollars per unit) | 36.19 | 29.66 | 21.09 |
Vested (in dollars per unit) | 22.72 | 21.49 | 19.49 |
Forfeited (in dollars per unit) | 36.19 | 29.66 | 21.21 |
Nonvested at the end of the year (in dollars per unit) | $ 24.70 | $ 23.89 | $ 21.84 |
Discontinued Operations | Dosteon | Loss from discontinued operations, net of income taxes | Restricted stock and performance-based restricted stock units | |||
Stock-Based Compensation | |||
Stock-based compensation expense | $ 0.2 | $ 0.1 | $ 0.1 |
STOCK-BASED COMPENSATION - Opti
STOCK-BASED COMPENSATION - Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Other Disclosures | |||
Intrinsic value of options exercised | $ 100 | $ 2,400 | $ 3,600 |
Options exercisable (in shares) | 7,947 | 13,320 | 221,855 |
Weighted average exercise price of options exercisable (in dollars per share) | $ 5.09 | $ 9.53 | $ 11.72 |
Average remaining contractual term of options exercisable | 4 months 24 days | 1 year | 1 year |
Aggregate intrinsic value of exercisable options | $ 100 | $ 100 | $ 2,600 |
Cash received related to exercise of options | $ 100 | $ 2,400 | $ 3,600 |
Employee Awards | |||
Shares | |||
Outstanding at the beginning of the year (in shares) | 203,000 | 434,500 | |
Terminated (in shares) | (3,000) | (1,500) | |
Exercised (in shares) | (200,000) | (230,000) | |
Outstanding at the end of the year (in shares) | 203,000 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the year (in dollars per share) | $ 11.88 | $ 13.45 | |
Terminated (in dollars per share) | 12.10 | 15.60 | |
Exercised (in dollars per share) | $ 11.88 | 14.82 | |
Outstanding at the end of the year (in dollars per share) | $ 11.88 | ||
Director Awards | |||
Shares | |||
Outstanding at the beginning of the year (in shares) | 13,320 | 18,855 | 28,259 |
Exercised (in shares) | (5,373) | (5,535) | (9,404) |
Outstanding at the end of the year (in shares) | 7,947 | 13,320 | 18,855 |
Weighted Average Exercise Price | |||
Outstanding at the beginning of the year (in dollars per share) | $ 9.53 | $ 10.02 | $ 11.99 |
Exercised (in dollars per share) | 16.10 | 11.21 | 16.04 |
Outstanding at the end of the year (in dollars per share) | $ 5.09 | $ 9.53 | $ 10.02 |
Other Disclosures | |||
Aggregate intrinsic value at end of year | $ 40,450 | ||
Weighted average remaining contractual term (years) | 4 months 24 days | ||
Incentive stock options | |||
Other Disclosures | |||
Unrecognized stock-based compensation expense related to non-vested stock | $ 0 | $ 0 | $ 0 |
STOCK-BASED COMPENSATION - Op87
STOCK-BASED COMPENSATION - Options Exercisable Price Range (Details) - Range of Exercise Prices $5.09 to $5.09 | 12 Months Ended |
Dec. 31, 2014$ / sharesshares | |
Options Outstanding and Exercisable | |
Exercise price range, lower range limit (in dollars per share) | $ 5.09 |
Exercise price range, upper range limit (in dollars per share) | $ 5.09 |
Number of Options or Awards (in shares) | shares | 7,947 |
Weighted Average Remaining Life (Years) | 4 months 24 days |
Weighted Average Exercise Price (in dollars per share) | $ 5.09 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | |
Leases | |||||||||
Rent expense | $ 50,100 | $ 45,800 | $ 40,500 | ||||||
Net book value | 112,350 | 116,289 | $ 114,223 | $ 119,677 | $ 120,225 | $ 113,144 | $ 109,475 | $ 106,249 | |
Future minimum rental payments, by year and in the aggregate, under operating leases | |||||||||
2,015 | 38,592 | ||||||||
2,016 | 31,187 | ||||||||
2,017 | 24,726 | ||||||||
2,018 | 18,879 | ||||||||
2,019 | 13,209 | ||||||||
Thereafter | 25,253 | ||||||||
Total | 151,846 | ||||||||
Future minimum rental payments, by year and in the aggregate, under Capital Lease Obligations | |||||||||
2,015 | 436 | ||||||||
2,016 | 404 | ||||||||
2,017 | 299 | ||||||||
2,018 | 73 | ||||||||
Total | 1,212 | ||||||||
Office equipment under capital leases | |||||||||
Leases | |||||||||
Net book value | $ 1,100 | $ 600 |
LONG TERM DEBT (Details)
LONG TERM DEBT (Details) | Sep. 30, 2017 | Sep. 30, 2016 | Feb. 09, 2016 | Sep. 30, 2015 | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | Jun. 17, 2013USD ($) | Jun. 30, 2013USD ($) | Jun. 30, 2013USD ($) | Sep. 30, 2013USD ($) | Dec. 31, 2014USD ($)item | Dec. 31, 2013USD ($) | Aug. 01, 2016USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Jun. 16, 2013USD ($) | Mar. 31, 2013USD ($) |
Long-Term Debt | |||||||||||||||||
Debt before unamortized discount | $ 530,292,000 | $ 488,485,000 | |||||||||||||||
Unamortized discount | (1,308,000) | (939,000) | |||||||||||||||
Total Debt | 528,984,000 | 487,546,000 | |||||||||||||||
Current portion of long-term debt | $ 25,677,000 | $ 15,437,000 | $ 15,652,000 | $ 15,652,000 | $ 15,437,000 | 26,852,000 | 17,728,000 | $ 24,505,000 | $ 21,906,000 | $ 13,229,000 | |||||||
Long-term debt, less current portion | $ 511,698,000 | $ 474,068,000 | 505,751,000 | 505,751,000 | 474,068,000 | 502,132,000 | 469,818,000 | $ 535,093,000 | $ 559,096,000 | $ 522,189,000 | |||||||
Write-off of debt issuance costs | $ (6,645,000) | $ (6,645,000) | (6,645,000) | (6,645,000) | |||||||||||||
Aggregate contractual payments associated with the financing obligations | |||||||||||||||||
2,015 | 3,059,000 | ||||||||||||||||
2,016 | 3,041,000 | ||||||||||||||||
2,017 | 4,290,000 | ||||||||||||||||
2,018 | 3,281,000 | ||||||||||||||||
2,019 | 4,891,000 | ||||||||||||||||
Thereafter | 21,107,000 | ||||||||||||||||
Total | 39,669,000 | ||||||||||||||||
Standby letters of credit | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Letters of credit outstanding amount | $ 3,600,000 | 3,600,000 | |||||||||||||||
New credit agreement | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Term of agreement | 5 years | ||||||||||||||||
Maximum borrowing capacity | $ 425,000,000 | ||||||||||||||||
Year-end interest rate | 2.17% | ||||||||||||||||
Number of covenants not evaluated | item | 2 | ||||||||||||||||
New credit agreement | Minimum | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Consolidated interest coverage ratio | 3.50 | ||||||||||||||||
New credit agreement | Maximum | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Leverage ratio | 4 | ||||||||||||||||
New credit agreement | LIBOR | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Year-end interest rate | 0.17% | ||||||||||||||||
Interest rate margin (as a percent) | 2.00% | 2.00% | |||||||||||||||
New credit agreement | Term Loan | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Debt before unamortized discount | $ 213,750,000 | 222,188,000 | |||||||||||||||
Maximum borrowing capacity | 225,000,000 | ||||||||||||||||
Quarterly principal payments, as a percent to initial amount borrowed | 3.75% | 2.50% | 1.875% | 1.25% | 0.625% | ||||||||||||
Initial amount borrowed | $ 225,000,000 | $ 225,000,000 | 143,400,000 | ||||||||||||||
Mandatory prepayment | 0 | 0 | |||||||||||||||
New credit agreement | Revolving Credit Facility | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Debt before unamortized discount | 70,000,000 | 25,000,000 | |||||||||||||||
Maximum borrowing capacity | $ 200,000,000 | ||||||||||||||||
Available credit facility | 126,400,000 | 171,400,000 | |||||||||||||||
Unused commitment fee (as a percent) | 0.375 | ||||||||||||||||
Previous credit agreement | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Maximum borrowing capacity | $ 400,000,000 | ||||||||||||||||
Term B Credit Agreement | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Interest rate stated percentage | 11.50% | ||||||||||||||||
Maximum borrowing capacity | $ 280,000,000 | ||||||||||||||||
Senior Notes due 2018 | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Debt before unamortized discount | $ 200,000,000 | $ 200,000,000 | |||||||||||||||
Interest rate stated percentage | 7.125% | 7.125% | |||||||||||||||
Senior Notes due 2018 | Subsequent to November 15, 2014 | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Redemption period, start date | Nov. 16, 2014 | ||||||||||||||||
Redemption period, end date | Nov. 14, 2015 | ||||||||||||||||
Redemption premium (as a percent) | 103.60% | ||||||||||||||||
Senior Notes due 2018 | On or after November 15, 2015 | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Redemption period, start date | Nov. 15, 2015 | ||||||||||||||||
Redemption period, end date | Nov. 15, 2016 | ||||||||||||||||
Redemption premium (as a percent) | 101.80% | ||||||||||||||||
Sellers notes | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Debt before unamortized discount | $ 26,624,000 | $ 21,072,000 | |||||||||||||||
Unamortized discount | $ (1,300,000) | (900,000) | |||||||||||||||
Effective interest rate, minimum | 2.00% | ||||||||||||||||
Effective interest rate, maximum | 4.00% | ||||||||||||||||
Effective interest rate | 6.50% | ||||||||||||||||
Financing obligations and other | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Debt before unamortized discount | $ 19,918,000 | $ 20,225,000 | |||||||||||||||
Financing obligations and other | Leased building | Minimum | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Effective interest rate | 13.00% | ||||||||||||||||
Lease commitment terms | 1 year | ||||||||||||||||
Financing obligations and other | Leased building | Maximum | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Lease commitment terms | 20 years | ||||||||||||||||
Credit Agreement and Senior Notes | Minimum | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Subsidiary guarantors' percentage of revenue | 90.00% | ||||||||||||||||
Subsidiary guarantors' percentage of assets | 90.00% |
LONG-TERM DEBT - Future Maturit
LONG-TERM DEBT - Future Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2014 | Dec. 31, 2013 |
Maturities of long-term debt | ||
2,015 | $ 26,886 | |
2,016 | 31,044 | |
2,017 | 34,439 | |
2,018 | 424,574 | |
2,019 | 4,341 | |
Thereafter | 9,008 | |
Debt before unamortized discount | 530,292 | $ 488,485 |
Unamortized discount | (1,308) | (939) |
Total Debt | $ 528,984 | $ 487,546 |
LONG TERM DEBT - Debt Related S
LONG TERM DEBT - Debt Related Subsequent Events (Details) $ in Millions | Aug. 31, 2016USD ($) | Jul. 16, 2016USD ($) | Feb. 10, 2016 | Feb. 09, 2016 | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014 | Jul. 16, 2016USD ($)agreement | Aug. 31, 2016USD ($)agreement | Aug. 01, 2016USD ($) | May 15, 2016 | Nov. 15, 2015 | Dec. 31, 2013 | Jun. 17, 2013USD ($) | Jun. 16, 2013USD ($) |
Credit Agreement and Indenture Agreement | |||||||||||||||
Long-Term Debt | |||||||||||||||
Payment for debt amendments and waivers | $ 10.4 | $ 6.1 | |||||||||||||
Legal and professional fees | 8 | 1.7 | |||||||||||||
New credit agreement | |||||||||||||||
Long-Term Debt | |||||||||||||||
Number of agreements or supplemental indentures | agreement | 7 | ||||||||||||||
Maximum borrowing capacity | $ 425 | ||||||||||||||
Payment for debt amendments and waivers | 4.1 | 1.7 | |||||||||||||
New credit agreement | Maximum | |||||||||||||||
Long-Term Debt | |||||||||||||||
Leverage ratio | 4 | ||||||||||||||
New credit agreement | LIBOR | |||||||||||||||
Long-Term Debt | |||||||||||||||
Interest rate margin (as a percent) | 2.00% | 2.00% | |||||||||||||
New credit agreement | Base rate | |||||||||||||||
Long-Term Debt | |||||||||||||||
Interest rate margin (as a percent) | 1.00% | ||||||||||||||
New credit agreement | Fourth Amendment | Last day of the fiscal quarter ended March 31, 2016 | |||||||||||||||
Long-Term Debt | |||||||||||||||
Leverage ratio | 4.35 | ||||||||||||||
New credit agreement | Fourth Amendment | Last day of the fiscal quarter ending June 30, 2016 | |||||||||||||||
Long-Term Debt | |||||||||||||||
Leverage ratio | 4.50 | ||||||||||||||
New credit agreement | Fourth Amendment | Last day of the fiscal quarter ending September 30, 2016 | |||||||||||||||
Long-Term Debt | |||||||||||||||
Leverage ratio | 4.20 | ||||||||||||||
New credit agreement | Fourth Amendment | Last day of the fiscal quarter ending December 31, 2016 | |||||||||||||||
Long-Term Debt | |||||||||||||||
Leverage ratio | 4.10 | ||||||||||||||
New credit agreement | Fourth Amendment | Last day of each fiscal quarter after December 31, 2016 | |||||||||||||||
Long-Term Debt | |||||||||||||||
Leverage ratio | 4 | ||||||||||||||
New credit agreement | Fourth Amendment | LIBOR | |||||||||||||||
Long-Term Debt | |||||||||||||||
Interest rate margin (as a percent) | 3.00% | ||||||||||||||
New credit agreement | Fourth Amendment | Base rate | |||||||||||||||
Long-Term Debt | |||||||||||||||
Interest rate margin (as a percent) | 2.00% | ||||||||||||||
New credit agreement | Fifth Amendment | LIBOR | |||||||||||||||
Long-Term Debt | |||||||||||||||
Interest rate margin (as a percent) | 4.75% | ||||||||||||||
New credit agreement | Fifth Amendment | Base rate | |||||||||||||||
Long-Term Debt | |||||||||||||||
Interest rate margin (as a percent) | 3.75% | ||||||||||||||
New credit agreement | Revolving Credit Facility | |||||||||||||||
Long-Term Debt | |||||||||||||||
Maximum borrowing capacity | $ 200 | ||||||||||||||
Revolving credit facility pay down | $ 81 | ||||||||||||||
New credit agreement | Revolving Credit Facility | Fifth Amendment | |||||||||||||||
Long-Term Debt | |||||||||||||||
Maximum borrowing capacity | $ 118.3 | $ 118.3 | |||||||||||||
New credit agreement | Revolving Credit Facility | Fifth Amendment | Minimum | |||||||||||||||
Long-Term Debt | |||||||||||||||
Reduction of the available credit facility depending on fiscal quarter results | 10.7 | 10.7 | |||||||||||||
New credit agreement | Revolving Credit Facility | Fifth Amendment | Maximum | |||||||||||||||
Long-Term Debt | |||||||||||||||
Reduction of the available credit facility depending on fiscal quarter results | $ 20.7 | $ 20.7 | |||||||||||||
Previous credit agreement | |||||||||||||||
Long-Term Debt | |||||||||||||||
Maximum borrowing capacity | $ 400 | ||||||||||||||
Term B Credit Agreement | |||||||||||||||
Long-Term Debt | |||||||||||||||
Maximum borrowing capacity | $ 280 | ||||||||||||||
Interest rate stated percentage | 11.50% | ||||||||||||||
Payment of issuance costs and bank consent fees | 7.9 | ||||||||||||||
Legal and professional fees | 1.9 | ||||||||||||||
Indenture Agreement | |||||||||||||||
Long-Term Debt | |||||||||||||||
Number of agreements or supplemental indentures | agreement | 2 | ||||||||||||||
Payment for debt amendments and waivers | $ 6.3 | $ 4.4 | |||||||||||||
Indenture Agreement | Fifth Amendment | |||||||||||||||
Long-Term Debt | |||||||||||||||
Secured indebtedness that may be incurred | 375 | $ 375 | |||||||||||||
Senior Notes due 2018 | |||||||||||||||
Long-Term Debt | |||||||||||||||
Interest rate stated percentage | 7.125% | 7.125% | |||||||||||||
Redemption of senior notes | $ 205.3 | ||||||||||||||
Senior Notes due 2018 | Fifth Amendment | |||||||||||||||
Long-Term Debt | |||||||||||||||
Interest rate stated percentage | 10.625% | 9.125% |
LONG TERM DEBT - Credit Agreeme
LONG TERM DEBT - Credit Agreement, As Amended To Date (Details) - Credit Agreement, As Amended To Date | Jul. 01, 2017 | Jan. 01, 2017 | Jul. 15, 2016USD ($)item | Dec. 31, 2016USD ($) |
Long-Term Debt | ||||
Initial amount borrowed | $ 225,000,000 | |||
Percentage tax refunds to be applied to reduce revolving commitments | 50.00% | |||
Minimum commitment as a result of tax refunds | $ 108,000,000 | |||
Number of consecutive quarters to meet leverage ratio | item | 4 | |||
Maximum leverage ratio to use maximum credit facility | $ 4 | |||
Increase in interest rate | 0.50% | |||
Increase in interest rate for failure to delivery financial information on or before June 30, 2017 | 0.50% | |||
Interest rate in excess of applicable rate upon acceleration and default | 2.00% | |||
Minimum | ||||
Long-Term Debt | ||||
Quarterly principal payments, as a percent to initial amount borrowed | 0.625% | |||
Reduction of the available credit facility depending on fiscal quarter results | $ 10,700,000 | |||
Maximum | ||||
Long-Term Debt | ||||
Quarterly principal payments, as a percent to initial amount borrowed | 3.75% | |||
Reduction of the available credit facility depending on fiscal quarter results | $ 20,700,000 | |||
Last day of the fiscal quarter ending June 30, 2016 | ||||
Long-Term Debt | ||||
Consolidated leverage ratio | 5.00% | |||
Interest coverage ratio | 3.50 | |||
Quarters ending September 30, 2016, December 31, 2016, March 31, 2017 and June 30, 2017 | ||||
Long-Term Debt | ||||
Interest coverage ratio | 2.25 | |||
Last day of the fiscal quarter ending September 30, 2016 | ||||
Long-Term Debt | ||||
Consolidated leverage ratio | 5.75% | |||
Last day of the fiscal quarters ending December 31, 2016 and March 31, 2017 | ||||
Long-Term Debt | ||||
Consolidated leverage ratio | 5.00% | |||
Last day of the fiscal quarters ending June 30, 2017 | ||||
Long-Term Debt | ||||
Consolidated leverage ratio | 4.50% | |||
Last day of each fiscal quarter after June 30, 2017 | ||||
Long-Term Debt | ||||
Interest coverage ratio | 2.50 | |||
Last day of the fiscal quarter ending September 30, 2017 | ||||
Long-Term Debt | ||||
Consolidated leverage ratio | 4.25% | |||
Last day of each fiscal quarter after September 30, 2017 | ||||
Long-Term Debt | ||||
Consolidated leverage ratio | 4.00% | |||
LIBOR | ||||
Long-Term Debt | ||||
Interest rate margin (as a percent) | 5.25% | 4.75% | ||
Interest rate margin contingent on delivery of financial information and leverage ratio of 4.00 to 1.00 | 4.00% | |||
Base rate | ||||
Long-Term Debt | ||||
Interest rate margin (as a percent) | 4.25% | |||
Interest rate margin contingent on delivery of financial information and leverage ratio of 4.00 to 1.00 | 3.00% | |||
Federal funds rate | ||||
Long-Term Debt | ||||
Interest rate margin (as a percent) | 0.50% | |||
One-month LIBOR | ||||
Long-Term Debt | ||||
Interest rate margin (as a percent) | 3.75% | |||
Revolving Credit Facility | ||||
Long-Term Debt | ||||
Maximum borrowing capacity | $ 118,300,000 | |||
Term Loan | ||||
Long-Term Debt | ||||
Maximum borrowing capacity | $ 225,000,000 | |||
Final payment at maturity | $ 143,400,000 |
LONG TERM DEBT - Term B Credit
LONG TERM DEBT - Term B Credit Agreement (Details) - Term B Credit Agreement $ in Millions | Aug. 01, 2016USD ($) |
Long-Term Debt | |
Maximum borrowing capacity | $ 280 |
Interest rate stated percentage | 11.50% |
Grace period | 90 days |
Interest rate in excess of applicable rate upon acceleration and default | 2.00% |
Before February 1, 2018 | |
Long-Term Debt | |
Redemption period, start date | Aug. 2, 2016 |
Redemption period, end date | Jan. 31, 2018 |
Basis point spread to U.S. Treasury not to calculate present value at date of prepayment | 0.50% |
Prepayment penalty, as a percent of principal | 3.00% |
On or after February 1, 2018 but prior to February 1, 2019 | |
Long-Term Debt | |
Redemption period, start date | Feb. 1, 2018 |
Redemption period, end date | Jan. 31, 2019 |
Prepayment penalty, as a percent of principal | 3.00% |
On or after February 1, 2019 | |
Long-Term Debt | |
Redemption period, start date | Feb. 1, 2019 |
Redemption period, end date | Jul. 31, 2019 |
Prepayment penalty, as a percent of principal | 1.50% |
ACCRUED EXPENSES, OTHER CURRE94
ACCRUED EXPENSES, OTHER CURRENT LIABILITIES AND OTHER LIABILITIES - Accrued expenses and other current liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 |
ACCRUED EXPENSES, OTHER CURRENT LIABILITIES AND OTHER LIABILITIES | ||||||||
Accrued professional fees | $ 38,522 | $ 1,038 | ||||||
Other current liabilities | 16,900 | 13,723 | ||||||
Accrued insurance | 15,881 | 14,790 | ||||||
Patient prepayments deposits and refunds payable | 9,263 | 8,644 | ||||||
Accrued sales taxes and other taxes | 11,212 | 6,238 | ||||||
Total | $ 91,778 | $ 68,118 | $ 47,436 | $ 44,508 | $ 44,433 | $ 41,043 | $ 41,605 | $ 40,096 |
ACCRUED EXPENSES, OTHER CURRE95
ACCRUED EXPENSES, OTHER CURRENT LIABILITIES AND OTHER LIABILITIES - Other liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
ACCRUED EXPENSES, OTHER CURRENT LIABILITIES AND OTHER LIABILITIES | ||||||||||
Senior executive retirement plan obligations | $ 22,113 | $ 20,696 | ||||||||
Unrecognized Tax Benefits | 7,605 | 7,475 | $ 4,434 | $ 2,105 | ||||||
Deferred tenant improvement allowances | 6,289 | 5,859 | ||||||||
Other miscellaneous liabilities | 5,156 | 3,395 | ||||||||
Deferred rent | 4,712 | 3,798 | ||||||||
Total | $ 45,875 | $ 44,150 | $ 44,734 | $ 42,120 | $ 41,223 | $ 39,256 | $ 37,744 | $ 37,257 |
COMMITMENTS AND CONTINGENT LI96
COMMITMENTS AND CONTINGENT LIABILITIES - Commitments (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Apr. 30, 2014 | Dec. 31, 2014 | |
COMMITMENTS AND CONTINGENT LIABILITIES | ||
Outstanding purchase commitments | $ 4.5 | $ 3 |
Covered period of purchase commitment | 5 years | |
Due in April 2016 | 0.5 | |
Due in April 2017 | 1 | |
Due in April 2018 | 1 | |
Due in April 2019 | 0.5 | |
Loss on legal settlements | 0.2 | |
Estimated loss on purchase commitment | $ 3.4 |
COMMITMENTS AND CONTINGENT LI97
COMMITMENTS AND CONTINGENT LIABILITIES - Contingencies (Details) | 7 Months Ended |
Aug. 31, 2015lawsuit | |
Subsequent Events | |
Contingencies | |
Number of law suits filed | 2 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Foley & Lardner LLP | |||
Related Party Transactions | |||
Fees paid | $ 2.4 | ||
Foley & Lardner LLP | |||
Related Party Transactions | |||
Professional Fees | $ 2.9 | $ 3 |
SEGMENT AND RELATED INFORMATI99
SEGMENT AND RELATED INFORMATION (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2014USD ($)area | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Sep. 30, 2013USD ($) | Jun. 30, 2013USD ($) | Mar. 31, 2013USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2013USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | Dec. 31, 2014USD ($)segmentarea | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | |
Segment and related information | |||||||||||||||
Number of operating segments | segment | 2 | ||||||||||||||
Net revenue | |||||||||||||||
Net revenue | $ 278,910 | $ 261,699 | $ 255,574 | $ 215,917 | $ 255,048 | $ 253,217 | $ 253,667 | $ 213,837 | $ 471,491 | $ 467,504 | $ 733,190 | $ 720,721 | $ 1,012,100 | $ 975,769 | $ 923,521 |
Material costs | 86,365 | 86,238 | 81,109 | 70,572 | 77,831 | 78,933 | 77,273 | 67,966 | 151,681 | 145,239 | 237,919 | 224,172 | 324,284 | 302,003 | 285,873 |
Personnel costs | 93,516 | 89,104 | 88,738 | 82,228 | 83,742 | 82,071 | 82,836 | 77,131 | 170,966 | 159,967 | 260,070 | 242,038 | 353,586 | 325,780 | 299,004 |
Other expenses | 268,021 | 200,246 | 196,970 | ||||||||||||
Depreciation and amortization | 9,978 | 9,818 | 9,826 | 9,307 | 8,487 | 8,526 | 8,805 | 8,367 | 19,133 | 17,172 | 28,951 | 25,698 | 38,929 | 34,185 | 32,589 |
Income from operations | 11,264 | (849) | 16,465 | 400 | 34,544 | 34,309 | 33,428 | 11,274 | 16,865 | 44,702 | 16,016 | 79,011 | 27,280 | 113,555 | 109,085 |
Interest expense (income) | 7,191 | 7,255 | 7,063 | 6,768 | 6,372 | 6,942 | 8,616 | 8,646 | 13,831 | 17,262 | 21,086 | 24,204 | 28,277 | 30,576 | 34,620 |
Extinguishment of Debt | 6,645 | 6,645 | 6,645 | 6,645 | |||||||||||
(Loss) income from continuing operations before income taxes | 4,073 | (8,104) | 9,402 | (6,368) | 28,172 | 27,367 | 18,167 | 2,628 | 3,034 | 20,795 | (5,070) | 48,162 | (997) | 76,334 | 74,465 |
Provision for income taxes | 1,267 | (10,054) | 10,832 | (22) | 13,077 | 9,815 | 6,688 | 875 | 10,810 | 7,563 | 756 | 17,378 | 2,023 | 30,455 | 26,206 |
(Loss) income from continuing operations | 2,806 | 1,950 | (1,430) | (6,346) | 15,095 | 17,552 | 11,479 | 1,753 | (7,776) | 13,232 | (5,826) | 30,784 | (3,020) | 45,879 | 48,259 |
EBITDA | 66,209 | 147,740 | 141,674 | ||||||||||||
Total assets | 1,302,305 | $ 1,288,956 | $ 1,278,736 | $ 1,285,920 | 1,214,988 | $ 1,196,595 | $ 1,199,473 | $ 1,186,216 | $ 1,278,736 | $ 1,199,473 | $ 1,288,956 | $ 1,196,595 | 1,302,305 | 1,214,988 | 1,201,288 |
Capital expenditures | 27,096 | 25,907 | 24,503 | ||||||||||||
Operating segments | |||||||||||||||
Net revenue | |||||||||||||||
Net revenue | 1,012,100 | 975,769 | 923,521 | ||||||||||||
Material costs | 324,284 | 302,003 | 285,873 | ||||||||||||
Other | |||||||||||||||
Net revenue | |||||||||||||||
Other expenses | 88,124 | 45,496 | 47,744 | ||||||||||||
Depreciation and amortization | 8,138 | 7,169 | 6,871 | ||||||||||||
Income from operations | (96,262) | (52,665) | (54,615) | ||||||||||||
Interest expense (income) | (18,267) | (17,092) | (7,181) | ||||||||||||
Extinguishment of Debt | 6,645 | ||||||||||||||
(Loss) income from continuing operations before income taxes | (77,995) | (42,218) | (47,434) | ||||||||||||
Provision for income taxes | 2,023 | 30,455 | 26,206 | ||||||||||||
(Loss) income from continuing operations | (80,018) | (72,673) | (73,640) | ||||||||||||
EBITDA | (88,124) | (45,496) | (47,744) | ||||||||||||
Total assets | $ 191,533 | 149,785 | 191,533 | 149,785 | 147,675 | ||||||||||
Capital expenditures | 11,724 | 14,551 | 14,298 | ||||||||||||
Consolidating Adjustments | |||||||||||||||
Net revenue | |||||||||||||||
Net revenue | (183,640) | (222,899) | (208,823) | ||||||||||||
Material costs | $ (183,640) | (222,899) | (208,823) | ||||||||||||
Patient Care | |||||||||||||||
Segment and related information | |||||||||||||||
Medicare reimbursement for O&P products and services based on prices set forth in fee schedules, number of regional pricing areas | area | 10 | 10 | |||||||||||||
Net revenue | |||||||||||||||
Net revenue | $ 837,080 | 803,180 | 752,425 | ||||||||||||
Material costs | 240,685 | 226,646 | 205,538 | ||||||||||||
Personnel costs | 305,651 | 279,089 | 252,568 | ||||||||||||
Other expenses | 152,176 | 129,090 | 120,934 | ||||||||||||
Depreciation and amortization | 18,769 | 14,468 | 13,030 | ||||||||||||
Income from operations | 79,208 | 115,973 | 124,422 | ||||||||||||
Interest expense (income) | 33,465 | 33,198 | 32,476 | ||||||||||||
(Loss) income from continuing operations before income taxes | 45,743 | 82,775 | 91,946 | ||||||||||||
(Loss) income from continuing operations | 45,743 | 82,775 | 91,946 | ||||||||||||
EBITDA | 97,977 | 130,441 | 137,452 | ||||||||||||
Total assets | $ 848,051 | 805,248 | 848,051 | 805,248 | 794,698 | ||||||||||
Capital expenditures | 14,067 | 10,821 | 7,460 | ||||||||||||
Patient Care | Operating segments | |||||||||||||||
Net revenue | |||||||||||||||
Net revenue | 837,080 | 803,180 | 752,425 | ||||||||||||
Material costs | 281,276 | 264,560 | 241,471 | ||||||||||||
Patient Care | Intersegments | |||||||||||||||
Net revenue | |||||||||||||||
Material costs | 40,591 | 37,914 | 35,933 | ||||||||||||
Products and Services | |||||||||||||||
Net revenue | |||||||||||||||
Net revenue | 175,020 | 172,589 | 171,096 | ||||||||||||
Material costs | 83,599 | 75,357 | 80,335 | ||||||||||||
Personnel costs | 47,935 | 46,691 | 46,436 | ||||||||||||
Other expenses | 27,721 | 25,660 | 28,292 | ||||||||||||
Depreciation and amortization | 12,022 | 12,548 | 12,688 | ||||||||||||
Income from operations | 44,334 | 50,247 | 39,278 | ||||||||||||
Interest expense (income) | 13,079 | 14,470 | 9,325 | ||||||||||||
(Loss) income from continuing operations before income taxes | 31,255 | 35,777 | 29,953 | ||||||||||||
(Loss) income from continuing operations | 31,255 | 35,777 | 29,953 | ||||||||||||
EBITDA | 56,356 | 62,795 | 51,966 | ||||||||||||
Total assets | $ 262,721 | $ 259,955 | 262,721 | 259,955 | 258,915 | ||||||||||
Capital expenditures | 1,305 | 535 | 2,745 | ||||||||||||
Products and Services | Operating segments | |||||||||||||||
Net revenue | |||||||||||||||
Net revenue | 358,660 | 395,488 | 379,919 | ||||||||||||
Material costs | 226,648 | 260,342 | 253,225 | ||||||||||||
Products and Services | Intersegments | |||||||||||||||
Net revenue | |||||||||||||||
Net revenue | 183,640 | 222,899 | 208,823 | ||||||||||||
Material costs | $ 143,049 | $ 184,985 | $ 172,890 |
SEGMENT AND RELATED INFORMAT100
SEGMENT AND RELATED INFORMATION - Concentration Risk (Details) - Net Revenues - Customer Concentration - customer | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Patient Care | Medicare | |||
Concentration Risk | |||
Concentration risk (as a percent) | 29.00% | 31.00% | 29.00% |
Products and Services | |||
Concentration Risk | |||
Number of customers | 0 | 0 | 0 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) $ in Thousands | Nov. 06, 2014USD ($)facility | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Sep. 30, 2013USD ($) | Jun. 30, 2013USD ($) | Mar. 31, 2013USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2013USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) |
DISCONTINUED OPERATIONS | |||||||||||||||||
Total assets held for sale | $ 8,215 | $ 8,215 | |||||||||||||||
Loss from discontinued operations, net of tax | (6,235) | $ (10,751) | $ 4,661 | $ (3,621) | $ (3,063) | $ (2,034) | $ (282) | $ 11 | $ 1,040 | $ (271) | $ (9,711) | $ (2,305) | (15,946) | $ (5,368) | $ (235) | ||
Dosteon | Discontinued Operations | |||||||||||||||||
DISCONTINUED OPERATIONS | |||||||||||||||||
Amount for selling the facilities | $ 4,900 | ||||||||||||||||
Inventory | 5,428 | 5,428 | |||||||||||||||
Property and equipment, net | 199 | 199 | |||||||||||||||
Goodwill | 2,588 | 2,588 | |||||||||||||||
Total assets held for sale | $ 8,215 | 8,215 | |||||||||||||||
Pre-tax impairment expense | 8,200 | ||||||||||||||||
Allocated goodwill impairment charge | 4,200 | ||||||||||||||||
Allocated intangible assets, impairment charge | 2,400 | ||||||||||||||||
Allocated plant, property and equipment impairment charge | 1,600 | ||||||||||||||||
Net revenue | 37,856 | 42,693 | 39,279 | ||||||||||||||
Loss before income taxes from discontinued operations | (24,860) | (8,725) | (315) | ||||||||||||||
Income tax benefit | 8,914 | 3,357 | 80 | ||||||||||||||
Loss from discontinued operations, net of tax | $ (15,946) | $ (5,368) | $ (235) | ||||||||||||||
Dosteon | Discontinued Operations | California Facilities | |||||||||||||||||
DISCONTINUED OPERATIONS | |||||||||||||||||
Number of business sold | facility | 1 | ||||||||||||||||
Amount for selling the facilities | $ 2,700 |
SUPPLEMENTAL CASH FLOW INFOR102
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Mar. 31, 2014 | Mar. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cash paid during the period for: | |||||||||
Interest | $ 2,537 | $ 4,221 | $ 12,344 | $ 16,314 | $ 15,283 | $ 19,144 | $ 25,341 | $ 28,938 | $ 31,122 |
Income taxes | 11,159 | 5,591 | 11,538 | 15,558 | 19,095 | 21,033 | 25,433 | 34,409 | 34,468 |
Non-cash financing and investing activities: | |||||||||
Issuance of seller notes in connection with acquisitions | 8,450 | 11,901 | 268 | 13,172 | 614 | 13,964 | 2,344 | 20,223 | |
Issuance of note in connection with intangible acquisition | 500 | ||||||||
Additions to property, plant and equipment acquired through financing obligations | 1,266 | 386 | 1,973 | 740 | 3,001 | 2,797 | 3,461 | 3,958 | 3,094 |
Retirements of financed property, plant and equipment and related financing obligations | 7 | 7 | 150 | 2,097 | 529 | 2,071 | 399 | 2,095 | |
Purchase of property, plant and equipment in accounts payable | $ 2,184 | $ 357 | $ 1,169 | $ 574 | $ 1,793 | $ 638 | $ 1,588 | $ 1,109 | $ 416 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | Feb. 28, 2016 | Apr. 15, 2016 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | May 13, 2010 |
SUBSEQUENT EVENTS | |||||||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||
2010 Omnibus Incentive Plan | |||||||||||
SUBSEQUENT EVENTS | |||||||||||
Number of shares of available for future issuance | 900,000 | ||||||||||
Shares of common stock authorized for issuance under the share-based compensation plan | 2,000,000 | ||||||||||
Subsequent Events | 2010 Omnibus Incentive Plan | |||||||||||
SUBSEQUENT EVENTS | |||||||||||
Number of shares of available for future issuance | 0 | ||||||||||
Subsequent Events | 2016 Plan | |||||||||||
SUBSEQUENT EVENTS | |||||||||||
Shares of common stock authorized for issuance under the share-based compensation plan | 2,250,000 | ||||||||||
Subsequent Events | Common Stock | |||||||||||
SUBSEQUENT EVENTS | |||||||||||
Preferred share purchase right dividend | 1 | ||||||||||
Common stock, par value (in dollars per share) | $ 0.01 | ||||||||||
Minimum threshold percentage of common stock for rights exercisable | 10.00% | ||||||||||
Subsequent Events | Right | Series A Junior Participating Preferred Stock | |||||||||||
SUBSEQUENT EVENTS | |||||||||||
Number of preferred stock for each right | 0.001 | ||||||||||
Preferred stock, par value | $ 0.01 | ||||||||||
Purchase price | $ 65 |
QUARTERLY FINANCIAL INFORMAT104
QUARTERLY FINANCIAL INFORMATION - BALANCE SHEETS (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Current assets: | ||||||||||||
Cash and cash equivalents | $ 11,699 | $ 1,565 | $ 1,630 | $ 45,836 | $ 1,613 | $ 1,246 | $ 2,858 | $ 6,273 | $ 13,130 | $ 13,130 | $ 43,323 | |
Accounts Receivable, net | 174,248 | 165,787 | 159,471 | 146,060 | 154,739 | 149,952 | 150,276 | 139,756 | ||||
Accounts receivable, allowance for doubtful accounts (in dollars) | 9,944 | 10,197 | 9,078 | 7,920 | 6,472 | 5,837 | 4,971 | 4,941 | 4,928 | 3,844 | ||
Inventories | 70,517 | 86,155 | 90,506 | 85,783 | 82,257 | 83,293 | 81,214 | 79,575 | ||||
Other current assets | 21,356 | 46,604 | 33,097 | 27,466 | 21,606 | 22,861 | 28,937 | 29,313 | ||||
Deferred income taxes | 109,252 | 70,333 | 70,789 | 71,569 | 75,616 | 64,209 | 64,153 | 61,055 | ||||
Total current assets | 395,287 | 370,444 | 355,493 | 376,714 | 335,831 | 321,561 | 327,438 | 315,972 | ||||
Non-current assets: | ||||||||||||
Property, plant and equipment, net | 112,350 | 114,223 | 119,677 | 120,225 | 116,289 | 113,144 | 109,475 | 106,249 | ||||
Goodwill | 710,053 | 716,571 | 715,010 | 702,769 | 682,628 | 679,721 | 678,748 | 675,451 | 675,468 | |||
Other intangible assets, net | 58,515 | 60,553 | 62,600 | 60,352 | 56,240 | 56,906 | 58,520 | 59,311 | ||||
Debt issuance costs, net | 6,648 | 7,110 | 7,572 | 8,034 | 8,496 | 8,958 | 9,420 | 13,169 | ||||
Other assets | 19,452 | 20,055 | 18,384 | 17,826 | 15,504 | 16,305 | 15,872 | 16,064 | ||||
Total assets | 1,302,305 | 1,288,956 | 1,278,736 | 1,285,920 | 1,214,988 | 1,196,595 | 1,199,473 | 1,186,216 | 1,201,288 | |||
Current liabilities: | ||||||||||||
Current portion of long-term debt | 26,852 | 25,677 | 24,505 | 21,906 | 17,728 | 15,437 | 15,652 | 13,229 | ||||
Accounts payable | 48,554 | 49,658 | 45,642 | 43,964 | 44,519 | 44,921 | 47,798 | 36,189 | ||||
Accrued expenses and other current liabilities | 91,778 | 68,118 | 47,436 | 44,508 | 44,433 | 41,043 | 41,605 | 40,096 | ||||
Accrued interest payable | 2,366 | 5,950 | 2,274 | 5,646 | 2,019 | 5,934 | 2,351 | 6,645 | ||||
Accrued compensation related costs | 41,288 | 35,656 | 24,664 | 21,417 | 38,606 | 35,304 | 25,914 | 22,084 | ||||
Total current liabilities | 210,838 | 185,059 | 144,521 | 137,441 | 147,305 | 142,639 | 133,320 | 118,243 | ||||
Long-term liabilities: | ||||||||||||
Long-term debt, less current portion | 502,132 | 511,698 | 535,093 | 559,096 | 469,818 | 474,068 | 505,751 | 522,189 | ||||
Deferred income taxes | 59,924 | 62,786 | 62,338 | 61,640 | 65,329 | 65,906 | 65,935 | 66,489 | ||||
Other liabilities | 45,875 | 44,150 | 44,734 | 42,120 | 41,223 | 39,256 | 37,744 | 37,257 | ||||
Total liabilities | 818,769 | 803,693 | 786,686 | 800,297 | 723,675 | 721,869 | 742,750 | 744,178 | ||||
Shareholders' Equity: | ||||||||||||
Common stock, $.01 par value; 60,000,000 shares authorized | $ 355 | $ 355 | $ 355 | $ 355 | $ 351 | $ 352 | $ 352 | $ 350 | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Common stock, shares authorized | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | ||||
Common stock, shares issued | 35,540,630 | 35,537,528 | 35,527,002 | 35,486,033 | 35,158,196 | 35,062,367 | 35,062,931 | 34,953,812 | ||||
Common stock, shares outstanding | 35,399,476 | 35,396,374 | 35,385,848 | 35,344,879 | 35,017,042 | 34,921,213 | 34,921,777 | 34,812,658 | ||||
Additional paid-in capital | $ 307,166 | $ 304,596 | $ 302,581 | $ 299,384 | $ 295,113 | $ 291,455 | $ 288,971 | $ 285,486 | ||||
Accumulated other comprehensive loss | (1,888) | (1,020) | (1,020) | (1,020) | (1,020) | (1,919) | (1,919) | (1,919) | ||||
Retained earnings | 178,559 | 181,988 | 190,790 | 187,560 | 197,525 | 185,494 | 169,975 | 158,777 | 157,014 | 108,990 | ||
Shareholders' equity, excluding treasury stock | 484,192 | 485,919 | 492,706 | 486,279 | 491,969 | 475,382 | 457,379 | 442,694 | ||||
Treasury stock at cost, 141,154 shares | $ (656) | $ (656) | $ (656) | $ (656) | $ (656) | $ (656) | $ (656) | $ (656) | ||||
Treasury stock, shares | 141,154 | 141,154 | 141,154 | 141,154 | 141,154 | 141,154 | 141,154 | 141,154 | ||||
Total shareholders' equity | $ 483,536 | $ 485,263 | $ 492,050 | $ 485,623 | $ 491,313 | $ 474,726 | $ 456,723 | $ 442,038 | 437,055 | 378,031 | ||
Total liabilities and shareholders' equity | $ 1,302,305 | $ 1,288,956 | 1,278,736 | 1,285,920 | 1,214,988 | 1,196,595 | 1,199,473 | 1,186,216 | ||||
As Previously Reported | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | 4,902 | 55,624 | 9,860 | 7,216 | 5,766 | 15,033 | 19,211 | 42,896 | ||||
Accounts Receivable, net | 205,325 | 183,548 | 185,769 | 176,663 | 170,601 | 156,813 | ||||||
Inventories | 158,957 | 153,952 | 141,518 | 144,374 | 137,557 | 132,492 | ||||||
Other current assets | 21,147 | 27,678 | 15,519 | 14,560 | 21,453 | 22,911 | ||||||
Deferred income taxes | 30,381 | 30,366 | 30,298 | 31,115 | 30,920 | 28,043 | ||||||
Total current assets | 420,712 | 451,168 | 382,964 | 373,928 | 366,297 | 355,292 | ||||||
Non-current assets: | ||||||||||||
Property, plant and equipment, net | 142,650 | 131,419 | 126,798 | 115,963 | 115,242 | 111,901 | ||||||
Goodwill | 715,656 | 702,455 | 681,547 | 678,215 | 676,190 | 674,416 | ||||||
Other intangible assets, net | 62,517 | 61,367 | 58,021 | 58,638 | 61,262 | 62,661 | ||||||
Debt issuance costs, net | 7,703 | 8,134 | 8,564 | 8,994 | 9,424 | 13,169 | ||||||
Other assets | 15,321 | 15,142 | 13,766 | 12,261 | 11,209 | 11,482 | ||||||
Total assets | 1,364,559 | 1,369,685 | 1,271,660 | 1,247,999 | 1,239,624 | 1,228,921 | ||||||
Current liabilities: | ||||||||||||
Current portion of long-term debt | 23,638 | 20,869 | 15,998 | 13,673 | 13,802 | 11,528 | ||||||
Accounts payable | 31,815 | 41,789 | 36,729 | 32,339 | 34,314 | 26,345 | ||||||
Accrued expenses and other current liabilities | 26,339 | 22,734 | 24,923 | 30,391 | 24,496 | 23,089 | ||||||
Accrued interest payable | 2,049 | 5,534 | 1,898 | 5,772 | 2,205 | 6,516 | ||||||
Accrued compensation related costs | 23,051 | 21,605 | 36,331 | 33,991 | 24,940 | 22,134 | ||||||
Total current liabilities | 106,892 | 112,531 | 115,879 | 116,166 | 99,757 | 89,612 | ||||||
Long-term liabilities: | ||||||||||||
Long-term debt, less current portion | 516,251 | 541,066 | 452,261 | 457,384 | 490,672 | 506,958 | ||||||
Deferred income taxes | 76,784 | 76,971 | 76,545 | 76,480 | 76,509 | 77,730 | ||||||
Other liabilities | 58,589 | 48,615 | 46,755 | 40,869 | 39,638 | 38,989 | ||||||
Total liabilities | 758,516 | 779,183 | 691,440 | 690,899 | 706,576 | 713,289 | ||||||
Shareholders' Equity: | ||||||||||||
Common stock, $.01 par value; 60,000,000 shares authorized | 364 | 363 | 361 | 360 | 360 | 359 | ||||||
Additional paid-in capital | 299,927 | 297,006 | 292,722 | 288,860 | 286,467 | 283,130 | ||||||
Accumulated other comprehensive loss | (1,020) | (1,020) | (1,020) | (1,919) | (1,919) | (1,919) | ||||||
Retained earnings | 307,428 | 294,809 | 288,813 | 270,455 | 248,796 | 234,718 | 225,229 | 161,537 | ||||
Shareholders' equity, excluding treasury stock | 606,699 | 591,158 | 580,876 | 557,756 | 533,704 | 516,288 | ||||||
Treasury stock at cost, 141,154 shares | (656) | (656) | (656) | (656) | (656) | (656) | ||||||
Total shareholders' equity | 606,043 | 590,502 | 580,220 | 557,100 | 533,048 | 515,632 | $ 428,582 | |||||
Total liabilities and shareholders' equity | 1,364,559 | 1,369,685 | 1,271,660 | 1,247,999 | 1,239,624 | 1,228,921 | ||||||
Restatement Adjustments | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | (3,272) | (9,788) | (8,247) | (5,970) | (2,908) | (8,760) | $ (6,081) | $ 427 | ||||
Accounts Receivable, net | (45,854) | (37,488) | (31,030) | (26,711) | (20,325) | (17,057) | ||||||
Inventories | (68,451) | (68,169) | (59,261) | (61,081) | (56,343) | (52,917) | ||||||
Other current assets | 11,950 | (212) | 6,087 | 8,301 | 7,484 | 6,402 | ||||||
Deferred income taxes | 40,408 | 41,203 | 45,318 | 33,094 | 33,233 | 33,012 | ||||||
Total current assets | (65,219) | (74,454) | (47,133) | (52,367) | (38,859) | (39,320) | ||||||
Non-current assets: | ||||||||||||
Property, plant and equipment, net | (22,973) | (11,194) | (10,509) | (2,819) | (5,767) | (5,652) | ||||||
Goodwill | (646) | 314 | 1,081 | 1,506 | 2,558 | 1,035 | ||||||
Other intangible assets, net | 83 | (1,015) | (1,781) | (1,732) | (2,742) | (3,350) | ||||||
Debt issuance costs, net | (131) | (100) | (68) | (36) | (4) | |||||||
Other assets | 3,063 | 2,684 | 1,738 | 4,044 | 4,663 | 4,582 | ||||||
Total assets | (85,823) | (83,765) | (56,672) | (51,404) | (40,151) | (42,705) | ||||||
Current liabilities: | ||||||||||||
Current portion of long-term debt | 867 | 1,037 | 1,730 | 1,764 | 1,850 | 1,701 | ||||||
Accounts payable | 13,827 | 2,175 | 7,790 | 12,582 | 13,484 | 9,844 | ||||||
Accrued expenses and other current liabilities | 21,097 | 21,774 | 19,510 | 10,652 | 17,109 | 17,007 | ||||||
Accrued interest payable | 225 | 112 | 121 | 162 | 146 | 129 | ||||||
Accrued compensation related costs | 1,613 | (188) | 2,275 | 1,313 | 974 | (50) | ||||||
Total current liabilities | 37,629 | 24,910 | 31,426 | 26,473 | 33,563 | 28,631 | ||||||
Long-term liabilities: | ||||||||||||
Long-term debt, less current portion | 18,842 | 18,030 | 17,557 | 16,684 | 15,079 | 15,231 | ||||||
Deferred income taxes | (14,446) | (15,331) | (11,216) | (10,574) | (10,574) | (11,241) | ||||||
Other liabilities | (13,855) | (6,495) | (5,532) | (1,613) | (1,894) | (1,732) | ||||||
Total liabilities | 28,170 | 21,114 | 32,235 | 30,970 | 36,174 | 30,889 | ||||||
Shareholders' Equity: | ||||||||||||
Common stock, $.01 par value; 60,000,000 shares authorized | (9) | (8) | (10) | (8) | (8) | (9) | ||||||
Additional paid-in capital | 2,654 | 2,378 | 2,391 | 2,595 | 2,504 | 2,356 | ||||||
Retained earnings | (116,638) | (107,249) | (91,288) | (84,961) | (78,821) | (75,941) | ||||||
Shareholders' equity, excluding treasury stock | (113,993) | (104,879) | (88,907) | (82,374) | (76,325) | (73,594) | ||||||
Total shareholders' equity | (113,993) | (104,879) | (88,907) | (82,374) | (76,325) | (73,594) | ||||||
Total liabilities and shareholders' equity | $ (85,823) | $ (83,765) | $ (56,672) | $ (51,404) | $ (40,151) | $ (42,705) |
QUARTERLY FINANCIAL INFORMAT105
QUARTERLY FINANCIAL INFORMATION - STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Net revenue | $ 278,910 | $ 261,699 | $ 255,574 | $ 215,917 | $ 255,048 | $ 253,217 | $ 253,667 | $ 213,837 | $ 471,491 | $ 467,504 | $ 733,190 | $ 720,721 | $ 1,012,100 | $ 975,769 | $ 923,521 |
Material costs | 86,365 | 86,238 | 81,109 | 70,572 | 77,831 | 78,933 | 77,273 | 67,966 | 151,681 | 145,239 | 237,919 | 224,172 | 324,284 | 302,003 | 285,873 |
Personnel costs | 93,516 | 89,104 | 88,738 | 82,228 | 83,742 | 82,071 | 82,836 | 77,131 | 170,966 | 159,967 | 260,070 | 242,038 | 353,586 | 325,780 | 299,004 |
Other operating costs | 35,636 | 34,621 | 34,291 | 32,337 | 27,398 | 28,526 | 28,620 | 31,223 | 66,628 | 59,843 | 101,249 | 88,369 | 136,885 | 115,767 | 110,881 |
General and administrative expenses | 22,383 | 21,794 | 22,545 | 19,616 | 21,841 | 19,137 | 21,204 | 16,476 | 42,161 | 37,680 | 63,955 | 56,817 | 86,338 | 78,658 | 81,182 |
Professional accounting and legal fees | 19,768 | 20,973 | 2,600 | 1,457 | 1,205 | 1,715 | 1,501 | 1,400 | 4,057 | 2,901 | 25,030 | 4,616 | 44,798 | 5,821 | 4,907 |
Depreciation and amortization | 9,978 | 9,818 | 9,826 | 9,307 | 8,487 | 8,526 | 8,805 | 8,367 | 19,133 | 17,172 | 28,951 | 25,698 | 38,929 | 34,185 | 32,589 |
Income from operations | 11,264 | (849) | 16,465 | 400 | 34,544 | 34,309 | 33,428 | 11,274 | 16,865 | 44,702 | 16,016 | 79,011 | 27,280 | 113,555 | 109,085 |
Interest expense, net | 7,191 | 7,255 | 7,063 | 6,768 | 6,372 | 6,942 | 8,616 | 8,646 | 13,831 | 17,262 | 21,086 | 24,204 | 28,277 | 30,576 | 34,620 |
Extinguishment of debt | 6,645 | 6,645 | 6,645 | 6,645 | |||||||||||
(Loss) income from continuing operations before income taxes | 4,073 | (8,104) | 9,402 | (6,368) | 28,172 | 27,367 | 18,167 | 2,628 | 3,034 | 20,795 | (5,070) | 48,162 | (997) | 76,334 | 74,465 |
(Benefit) provision for income taxes | 1,267 | (10,054) | 10,832 | (22) | 13,077 | 9,815 | 6,688 | 875 | 10,810 | 7,563 | 756 | 17,378 | 2,023 | 30,455 | 26,206 |
(Loss) income from continuing operations | 2,806 | 1,950 | (1,430) | (6,346) | 15,095 | 17,552 | 11,479 | 1,753 | (7,776) | 13,232 | (5,826) | 30,784 | (3,020) | 45,879 | 48,259 |
Loss from discontinued operations, net of income taxes | (6,235) | (10,751) | 4,661 | (3,621) | (3,063) | (2,034) | (282) | 11 | 1,040 | (271) | (9,711) | (2,305) | (15,946) | (5,368) | (235) |
Net (loss) income | (3,429) | (8,801) | 3,231 | (9,967) | 12,032 | 15,518 | 11,197 | 1,764 | (6,736) | 12,961 | (15,537) | 28,479 | (18,966) | 40,511 | 48,024 |
Other comprehensive (loss) income: | |||||||||||||||
Unrealized gain (loss) on SERP, net of income tax provision (benefit) | (868) | 899 | (868) | 899 | (734) | ||||||||||
Unrealized (loss) gain on SERP, tax (benefit) provision | 525 | 531 | (525) | 531 | (439) | ||||||||||
Total other comprehensive (loss) income | (868) | 899 | (868) | 899 | (734) | ||||||||||
Comprehensive (loss) income | $ (4,297) | $ (8,801) | $ 3,231 | $ (9,967) | $ 12,931 | $ 15,518 | $ 11,197 | $ 1,764 | $ (6,736) | $ 12,961 | $ (15,537) | $ 28,479 | $ (19,834) | $ 41,410 | $ 47,290 |
Basic Per Common Share Data | |||||||||||||||
Net (loss) income from continuing operations | $ 0.08 | $ 0.05 | $ (0.04) | $ (0.18) | $ 0.43 | $ 0.50 | $ 0.33 | $ 0.05 | $ (0.22) | $ 0.38 | $ (0.17) | $ 0.89 | $ (0.09) | $ 1.32 | $ 1.41 |
Net (loss) income from discontinued operations | (0.18) | (0.30) | 0.13 | (0.10) | (0.09) | (0.06) | (0.01) | 0.03 | (0.01) | (0.27) | (0.07) | (0.45) | (0.16) | (0.01) | |
Basic (loss) income per share (in dollars per share) | $ (0.10) | $ (0.25) | $ 0.09 | $ (0.28) | $ 0.34 | $ 0.44 | $ 0.32 | $ 0.05 | $ (0.19) | $ 0.37 | $ (0.44) | $ 0.82 | $ (0.54) | $ 1.16 | $ 1.40 |
Shares used to compute basic per common share amounts (in shares) | 35,397,195 | 35,388,862 | 35,377,939 | 35,056,902 | 34,945,120 | 34,927,373 | 34,872,430 | 34,570,836 | 35,209,849 | 34,710,269 | 35,275,046 | 34,782,207 | 35,309,478 | 34,825,867 | 34,273,621 |
Diluted Per Common Share Data | |||||||||||||||
Net (loss) income from continuing operations | $ 0.08 | $ 0.05 | $ (0.04) | $ (0.18) | $ 0.43 | $ 0.50 | $ 0.33 | $ 0.05 | $ (0.22) | $ 0.38 | $ (0.17) | $ 0.88 | $ (0.09) | $ 1.30 | $ 1.39 |
Net (loss) income from discontinued operations | (0.18) | (0.30) | 0.13 | (0.10) | (0.09) | (0.06) | (0.01) | 0.03 | (0.01) | (0.27) | (0.07) | (0.45) | (0.15) | (0.01) | |
Diluted (loss) income per share (in dollars per share) | $ (0.10) | $ (0.25) | $ 0.09 | $ (0.28) | $ 0.34 | $ 0.44 | $ 0.32 | $ 0.05 | $ (0.19) | $ 0.37 | $ (0.44) | $ 0.81 | $ (0.54) | $ 1.15 | $ 1.38 |
Shares used to compute diluted per common share amounts (in shares) | 35,615,092 | 35,571,188 | 35,377,939 | 35,056,902 | 35,364,729 | 35,298,046 | 35,211,878 | 35,062,115 | 35,209,849 | 35,124,223 | 35,275,046 | 35,180,990 | 35,309,478 | 35,208,754 | 34,737,420 |
As Previously Reported | |||||||||||||||
Net revenue | $ 275,854 | $ 235,605 | $ 278,237 | $ 271,053 | $ 267,798 | $ 229,350 | $ 511,459 | $ 497,148 | $ 768,201 | $ 1,046,438 | $ 974,429 | ||||
Material costs | 81,822 | 67,345 | 92,461 | 79,401 | 79,446 | 67,739 | 149,167 | 147,184 | 226,585 | 319,046 | 296,193 | ||||
Personnel costs | 102,755 | 96,431 | 91,841 | 94,768 | 93,176 | 89,953 | 199,186 | 183,129 | 277,897 | 369,738 | 335,328 | ||||
Other operating costs | 52,741 | 45,600 | 49,870 | 47,754 | 49,022 | 39,657 | 98,341 | 88,680 | 136,434 | 186,304 | 178,918 | ||||
Depreciation and amortization | 12,133 | 10,199 | 9,467 | 9,224 | 9,510 | 9,285 | 22,332 | 18,795 | 28,019 | 37,486 | 34,652 | ||||
Income from operations | 26,403 | 16,030 | 34,598 | 39,906 | 36,644 | 22,716 | 42,433 | 59,360 | 99,266 | 133,864 | 129,338 | ||||
Interest expense, net | 6,201 | 6,098 | 4,973 | 6,017 | 7,708 | 7,777 | 12,299 | 15,485 | 21,502 | 26,475 | 31,169 | ||||
Extinguishment of debt | 6,645 | 6,645 | 6,645 | 6,645 | |||||||||||
(Loss) income from continuing operations before income taxes | 20,202 | 9,932 | 29,625 | 33,889 | 22,291 | 14,939 | 30,134 | 37,230 | 71,119 | 100,744 | 98,169 | ||||
(Benefit) provision for income taxes | 7,583 | 3,935 | 11,269 | 12,230 | 8,212 | 5,449 | 11,518 | 13,661 | 25,891 | 37,160 | 34,477 | ||||
(Loss) income from continuing operations | 12,619 | 5,997 | 18,356 | 21,659 | 14,079 | 9,490 | 18,616 | 23,569 | 45,228 | 63,584 | 63,692 | ||||
Net (loss) income | 12,619 | 5,997 | 18,356 | 21,659 | 14,079 | 9,490 | 18,616 | 23,569 | 45,228 | 63,584 | 63,692 | ||||
Other comprehensive (loss) income: | |||||||||||||||
Unrealized gain (loss) on SERP, net of income tax provision (benefit) | 899 | 899 | (734) | ||||||||||||
Total other comprehensive (loss) income | 899 | 899 | (734) | ||||||||||||
Comprehensive (loss) income | $ 12,619 | $ 5,997 | $ 19,255 | $ 21,659 | $ 14,079 | $ 9,490 | $ 18,616 | $ 23,569 | $ 45,228 | $ 64,483 | $ 62,958 | ||||
Basic Per Common Share Data | |||||||||||||||
Net (loss) income from continuing operations | $ 0.36 | $ 0.17 | $ 0.53 | $ 0.62 | $ 0.40 | $ 0.27 | $ 0.53 | $ 0.68 | $ 1.30 | $ 1.83 | $ 1.86 | ||||
Basic (loss) income per share (in dollars per share) | $ 0.36 | $ 0.17 | $ 0.53 | $ 0.62 | $ 0.40 | $ 0.27 | $ 0.53 | $ 0.68 | $ 1.30 | $ 1.83 | $ 1.86 | ||||
Shares used to compute basic per common share amounts (in shares) | 35,469,769 | 35,076,828 | 34,922,599 | 34,902,103 | 34,849,659 | 34,598,494 | 35,319,944 | 34,724,077 | 34,783,419 | 34,818,214 | 34,282,591 | ||||
Diluted Per Common Share Data | |||||||||||||||
Net (loss) income from continuing operations | $ 0.35 | $ 0.17 | $ 0.52 | $ 0.61 | $ 0.40 | $ 0.27 | $ 0.52 | $ 0.67 | $ 1.28 | $ 1.80 | $ 1.83 | ||||
Diluted (loss) income per share (in dollars per share) | $ 0.35 | $ 0.17 | $ 0.52 | $ 0.61 | $ 0.40 | $ 0.27 | $ 0.52 | $ 0.67 | $ 1.28 | $ 1.80 | $ 1.83 | ||||
Shares used to compute diluted per common share amounts (in shares) | 35,591,764 | 35,415,018 | 35,463,539 | 35,401,273 | 35,307,697 | 35,066,032 | 35,470,170 | 35,225,871 | 35,315,897 | 35,394,721 | 34,832,830 | ||||
Restatement Adjustments (excluding reclassification adjustments and discontinued operations) | |||||||||||||||
Net revenue | $ (8,794) | $ (9,134) | $ (12,049) | $ (8,383) | $ (2,963) | $ (4,581) | $ (17,928) | $ (7,544) | $ (15,927) | $ (27,976) | $ (11,629) | ||||
Material costs | 3,855 | 8,016 | (8,949) | 3,417 | 2,023 | 4,247 | 11,871 | 6,271 | 9,688 | 738 | 2,686 | ||||
Personnel costs | 1,712 | 2,679 | 6,673 | (552) | 1,462 | 1,681 | 4,391 | 3,143 | 2,591 | 9,264 | 9,255 | ||||
Other operating costs | 688 | 485 | (4,185) | (2,015) | (2,452) | 1,475 | 1,173 | (978) | (2,993) | (7,178) | (2,047) | ||||
Depreciation and amortization | (1,898) | (483) | (580) | (317) | (344) | (578) | (2,381) | (922) | (1,239) | (1,819) | (1,044) | ||||
Income from operations | (13,151) | (19,831) | (5,008) | (8,916) | (3,652) | (11,406) | (32,982) | (15,058) | (23,974) | (28,981) | (20,479) | ||||
Interest expense, net | 892 | 667 | 1,411 | 932 | 926 | 884 | 1,559 | 1,810 | 2,742 | 4,154 | 3,540 | ||||
(Loss) income from continuing operations before income taxes | (14,043) | (20,498) | (6,419) | (9,848) | (4,578) | (12,290) | (34,541) | (16,868) | (26,716) | (33,135) | (24,019) | ||||
(Benefit) provision for income taxes | (4,655) | (4,534) | (95) | (3,707) | (1,696) | (4,564) | (9,189) | (6,260) | (9,967) | (10,062) | (8,351) | ||||
(Loss) income from continuing operations | (9,388) | (15,964) | (6,324) | (6,141) | (2,882) | (7,726) | (25,352) | (10,608) | (16,749) | (23,073) | (15,668) | ||||
Net (loss) income | (9,388) | (15,964) | (6,324) | (6,141) | (2,882) | (7,726) | (25,352) | (10,608) | (16,749) | (23,073) | (15,668) | ||||
Other comprehensive (loss) income: | |||||||||||||||
Comprehensive (loss) income | $ (9,388) | $ (15,964) | $ (6,324) | $ (6,141) | $ (2,882) | $ (7,726) | $ (25,352) | $ (10,608) | $ (16,749) | $ (23,073) | $ (15,668) | ||||
Basic Per Common Share Data | |||||||||||||||
Net (loss) income from continuing operations | $ (0.27) | $ (0.45) | $ (0.19) | $ (0.18) | $ (0.08) | $ (0.22) | $ (0.72) | $ (0.31) | $ (0.48) | $ (0.67) | $ (0.46) | ||||
Basic (loss) income per share (in dollars per share) | $ (0.27) | $ (0.45) | $ (0.19) | $ (0.18) | $ (0.08) | $ (0.22) | $ (0.72) | $ (0.31) | $ (0.48) | $ (0.67) | $ (0.46) | ||||
Shares used to compute basic per common share amounts (in shares) | (91,830) | (19,926) | 22,521 | 25,270 | 22,771 | (27,658) | (110,095) | (13,808) | (1,212) | 7,653 | (8,970) | ||||
Diluted Per Common Share Data | |||||||||||||||
Net (loss) income from continuing operations | $ (0.26) | $ (0.45) | $ (0.18) | $ (0.17) | $ (0.08) | $ (0.22) | $ (0.71) | $ (0.30) | $ (0.47) | $ (0.65) | $ (0.45) | ||||
Diluted (loss) income per share (in dollars per share) | $ (0.26) | $ (0.45) | $ (0.18) | $ (0.17) | $ (0.08) | $ (0.22) | $ (0.71) | $ (0.30) | $ (0.47) | $ (0.65) | $ (0.45) | ||||
Shares used to compute diluted per common share amounts (in shares) | (213,825) | (358,116) | (98,810) | (103,227) | (95,819) | (3,917) | (260,321) | (101,648) | (134,907) | (185,967) | (95,410) | ||||
Reclassification Adjustments | |||||||||||||||
Personnel costs | $ (10,017) | $ (11,046) | $ (8,861) | $ (6,775) | $ (6,604) | $ (9,565) | $ (21,063) | $ (16,169) | $ (22,944) | ||||||
Other operating costs | (15,128) | (10,027) | (14,185) | (14,077) | (16,101) | (8,311) | (25,155) | (24,412) | (38,489) | ||||||
General and administrative expenses | 22,545 | 19,616 | 21,841 | 19,137 | 21,204 | 16,476 | 42,161 | 37,680 | 56,817 | ||||||
Professional accounting and legal fees | 2,600 | 1,457 | 1,205 | 1,715 | 1,501 | 1,400 | 4,057 | 2,901 | 4,616 | ||||||
Discontinued Operations | |||||||||||||||
Net revenue | (11,486) | (10,554) | (11,140) | (9,453) | (11,168) | (10,932) | (22,040) | (22,100) | (31,553) | $ (42,693) | $ (39,279) | ||||
Material costs | (4,568) | (4,789) | (5,681) | (3,885) | (4,196) | (4,020) | (9,357) | (8,216) | (12,101) | (17,781) | (13,006) | ||||
Personnel costs | (5,712) | (5,836) | (5,911) | (5,370) | (5,198) | (4,938) | (11,548) | (10,136) | (15,506) | (21,417) | (18,446) | ||||
Other operating costs | (4,010) | (3,721) | (4,102) | (3,136) | (1,849) | (1,598) | (7,731) | (3,447) | (6,583) | (10,685) | (7,034) | ||||
Depreciation and amortization | (409) | (409) | (400) | (381) | (361) | (340) | (818) | (701) | (1,082) | (1,482) | (1,019) | ||||
Income from operations | 3,213 | 4,201 | 4,954 | 3,319 | 436 | (36) | 7,414 | 400 | 3,719 | 8,672 | 226 | ||||
Interest expense, net | (30) | 3 | (12) | (7) | (18) | (15) | (27) | (33) | (40) | (53) | (89) | ||||
(Loss) income from continuing operations before income taxes | 3,243 | 4,198 | 4,966 | 3,326 | 454 | (21) | 7,441 | 433 | 3,759 | 8,725 | 315 | ||||
(Benefit) provision for income taxes | 7,904 | 577 | 1,903 | 1,292 | 172 | (10) | 8,481 | 162 | 1,454 | 3,357 | 80 | ||||
(Loss) income from continuing operations | (4,661) | 3,621 | 3,063 | 2,034 | 282 | (11) | (1,040) | 271 | 2,305 | 5,368 | 235 | ||||
Loss from discontinued operations, net of income taxes | $ 4,661 | $ (3,621) | $ (3,063) | $ (2,034) | $ (282) | $ 11 | $ 1,040 | $ (271) | $ (2,305) | $ (5,368) | $ (235) | ||||
Basic Per Common Share Data | |||||||||||||||
Net (loss) income from continuing operations | $ (0.13) | $ 0.10 | $ 0.09 | $ 0.06 | $ 0.01 | $ (0.03) | $ 0.01 | $ 0.07 | $ 0.16 | $ 0.01 | |||||
Net (loss) income from discontinued operations | 0.13 | (0.10) | (0.09) | (0.06) | (0.01) | 0.03 | (0.01) | (0.07) | (0.16) | (0.01) | |||||
Diluted Per Common Share Data | |||||||||||||||
Net (loss) income from continuing operations | (0.13) | 0.10 | 0.09 | 0.06 | 0.01 | (0.03) | 0.01 | 0.07 | 0.15 | 0.01 | |||||
Net (loss) income from discontinued operations | $ 0.13 | $ (0.10) | $ (0.09) | $ (0.06) | $ (0.01) | $ 0.03 | $ (0.01) | $ (0.07) | $ (0.15) | $ (0.01) |
QUARTERLY FINANCIAL INFORMAT106
QUARTERLY FINANCIAL INFORMATION - STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities: | |||||||||||||||
Net (loss) income | $ (3,429) | $ (8,801) | $ 3,231 | $ (9,967) | $ 12,032 | $ 15,518 | $ 11,197 | $ 1,764 | $ (6,736) | $ 12,961 | $ (15,537) | $ 28,479 | $ (18,966) | $ 40,511 | $ 48,024 |
(Loss) income from discontinued operations, net of income taxes | (6,235) | (10,751) | 4,661 | (3,621) | (3,063) | (2,034) | (282) | 11 | 1,040 | (271) | (9,711) | (2,305) | (15,946) | (5,368) | (235) |
(Loss) income from continuing operations | 2,806 | 1,950 | (1,430) | (6,346) | 15,095 | 17,552 | 11,479 | 1,753 | (7,776) | 13,232 | (5,826) | 30,784 | (3,020) | 45,879 | 48,259 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||||||||||
Depreciation and amortization | 9,978 | 9,818 | 9,826 | 9,307 | 8,487 | 8,526 | 8,805 | 8,367 | 19,133 | 17,172 | 28,951 | 25,698 | 38,929 | 34,185 | 32,589 |
Provision for doubtful accounts | 1,989 | 474 | 4,463 | 1,705 | 9,094 | 3,441 | 11,639 | 5,053 | 4,423 | ||||||
Impairment of long-lived assets and intangible assets | 1,503 | 2,425 | |||||||||||||
Compensation expense on restricted stock units | 2,356 | 2,093 | 5,152 | 4,599 | 7,138 | 7,004 | 9,642 | 9,346 | 8,213 | ||||||
Provision (benefit) for deferred income taxes | 358 | 1,836 | (2,564) | 2,535 | (2,564) | (39,214) | (14,499) | (13,812) | |||||||
Amortization of debt issuance costs | 617 | 1,038 | 1,306 | 1,975 | 1,987 | 2,607 | 2,663 | 3,218 | 3,891 | ||||||
Loss on extinguishment of debt | 6,645 | 6,645 | 6,645 | 6,645 | |||||||||||
(Gain) loss on sale of property, plant and equipment | (553) | (277) | (620) | (900) | (1,412) | (6,369) | (293) | (6,258) | (2,019) | ||||||
Contingent consideration gains | (57) | (49) | (702) | (85) | (1,461) | (1,388) | |||||||||
Changes in operating assets and liabilities, net of effects of acquired companies: | |||||||||||||||
Net accounts receivable | 9,521 | 9,332 | (5,076) | 747 | (16,599) | 791 | (28,797) | (8,855) | (15,534) | ||||||
Inventories | (2,293) | (1,449) | (5,897) | (2,258) | (2,212) | (3,740) | 6,917 | (3,493) | 322 | ||||||
Other current assets and income taxes | (3,966) | (2,845) | (8,560) | (953) | (21,566) | 2,130 | 9,351 | 7,009 | 1,498 | ||||||
Accounts payable | (4,335) | (639) | (2,971) | 11,141 | (751) | 5,940 | (777) | 5,096 | 1,264 | ||||||
Accrued expenses, other current liabilities and accrued interest payable | 2,117 | 3,990 | 1,172 | (269) | 25,499 | 3,158 | 40,186 | 687 | 3,451 | ||||||
Accrued compensation related costs | (17,779) | (23,186) | (15,050) | (18,900) | (3,618) | (9,952) | (483) | (6,566) | 2,807 | ||||||
Other liabilities | (144) | 198 | 1,511 | 572 | (750) | 1,969 | 978 | 4,148 | (169) | ||||||
Net cash provided by operating activities - continuing operations | (9,151) | (1,151) | (11,377) | 31,887 | 23,924 | 66,840 | 50,061 | 80,134 | 73,795 | ||||||
Net cash (used in) provided by operating activities - discontinued operations | (1,479) | 109 | 3,482 | (2,227) | (1,774) | (2,261) | (442) | (3,102) | (3,037) | ||||||
Net cash provided by operating activities | (10,630) | (1,042) | (7,895) | 29,660 | 22,150 | 64,579 | 49,619 | 77,032 | 70,758 | ||||||
Cash flows from investing activities: | |||||||||||||||
Purchase of property, plant and equipment, net of acquisitions | (8,526) | (3,450) | (14,805) | (13,741) | (18,924) | (19,174) | (27,096) | (25,907) | (24,503) | ||||||
Purchase of equipment leased to third parties under operating leases | (564) | (660) | (1,663) | (1,849) | (2,609) | (2,889) | (4,012) | (4,103) | (2,763) | ||||||
Acquisitions, net of cash acquired | (19,142) | (65) | (33,934) | (5,776) | (36,784) | (6,621) | (38,097) | (10,295) | (61,401) | ||||||
Change in restricted cash associated with workers' compensation program | 3,120 | 3,120 | (3,120) | ||||||||||||
Purchase of company-owned life insurance investment | (2,294) | (2,294) | (2,294) | (2,294) | (2,000) | ||||||||||
Proceeds from sale of property, plant and equipment | 595 | 663 | 1,674 | 1,644 | 2,331 | 4,717 | 2,518 | 9,066 | 3,231 | ||||||
Net cash used in investing activities - continuing operations | (29,931) | (3,512) | (51,022) | (19,722) | (58,280) | (20,847) | (68,981) | (28,119) | (90,556) | ||||||
Net cash provided by (used in) investing activities - discontinued operations | (265) | (256) | (464) | (604) | (532) | (944) | 2,507 | (1,438) | (1,118) | ||||||
Net cash used in investing activities | (30,196) | (3,768) | (51,486) | (20,326) | (58,812) | (21,791) | (66,474) | (29,557) | (91,674) | ||||||
Cash flows from financing activities: | |||||||||||||||
Borrowings under term loan | 225,000 | 225,000 | 225,000 | ||||||||||||
Repayment of term loan | (1,406) | (750) | (2,813) | (293,300) | (5,625) | (294,706) | (8,438) | (296,113) | (3,700) | ||||||
Borrowings under revolving credit agreement | 125,000 | 50,000 | 228,000 | 120,000 | 252,000 | 163,000 | 331,000 | 249,000 | |||||||
Repayments under revolving credit agreement | (38,000) | (50,000) | (163,000) | (65,000) | (203,000) | (137,000) | (286,000) | (224,000) | |||||||
Payment of seller notes | (1,631) | (1,411) | (3,569) | (3,117) | (6,845) | (6,449) | (9,435) | (8,656) | (4,904) | ||||||
Payment of contingent consideration | (375) | (675) | (626) | (925) | (700) | (1,965) | (825) | (2,590) | (2,915) | ||||||
Payment of financing obligations | (426) | (324) | (866) | (658) | (1,491) | (997) | (1,687) | (1,367) | (1,104) | ||||||
Payment of fees associated with debt modifications and extinguishments | (3,665) | (3,665) | (3,665) | ||||||||||||
Excess tax benefit from stock-based compensation | 1,803 | 1,054 | 2,191 | 2,005 | 2,197 | 2,058 | 2,249 | 3,348 | 1,489 | ||||||
Proceeds from issuance of common stock | 87 | 62 | 87 | 1,628 | 87 | 1,629 | 87 | 2,437 | 3,560 | ||||||
Purchase and retirement of common stock | (1,567) | (1,567) | (2,374) | (1,350) | |||||||||||
Net cash provided by (used in) financing activities - continuing operations | 85,052 | (2,044) | 59,404 | (19,599) | 36,623 | (54,662) | 26,951 | (58,980) | (8,924) | ||||||
Net cash used in financing activities - discontinued operations | (3) | (3) | (6) | (7) | (9) | (10) | (10) | (12) | (353) | ||||||
Net cash provided by (used in) financing activities | 85,049 | (2,047) | 59,398 | (19,606) | 36,614 | (54,672) | 26,941 | (58,992) | (9,277) | ||||||
Increase (decrease) in cash and cash equivalents | 44,223 | (6,857) | 17 | (10,272) | (48) | (11,884) | 10,086 | (11,517) | (30,193) | ||||||
Cash and cash equivalents, at beginning of year | 1,565 | 1,630 | 45,836 | 1,613 | 1,246 | 2,858 | 6,273 | 13,130 | 1,613 | 13,130 | 1,613 | 13,130 | 1,613 | 13,130 | 43,323 |
Cash and cash equivalents, at end of year | $ 11,699 | 1,565 | 1,630 | 45,836 | 1,613 | 1,246 | 2,858 | 6,273 | 1,630 | 2,858 | 1,565 | 1,246 | 11,699 | 1,613 | 13,130 |
Cash paid during the period for: | |||||||||||||||
Interest | 2,537 | 4,221 | 12,344 | 16,314 | 15,283 | 19,144 | 25,341 | 28,938 | 31,122 | ||||||
Income taxes (net of refunds) | 11,159 | 5,591 | 11,538 | 15,558 | 19,095 | 21,033 | 25,433 | 34,409 | 34,468 | ||||||
Non-cash financing and investing activities: | |||||||||||||||
Issuance of seller notes in connection with acquisitions | 8,450 | 11,901 | 268 | 13,172 | 614 | 13,964 | 2,344 | 20,223 | |||||||
Additions to property, plant and equipment acquired through financing obligations | 1,266 | 386 | 1,973 | 740 | 3,001 | 2,797 | 3,461 | 3,958 | 3,094 | ||||||
Retirements of financed property, plant and equipment | 7 | 7 | 150 | 2,097 | 529 | 2,071 | 399 | 2,095 | |||||||
Purchase of property, plant and equipment in accounts payable | 2,184 | 357 | 1,169 | 574 | 1,793 | 638 | 1,588 | 1,109 | 416 | ||||||
As Previously Reported | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net (loss) income | 12,619 | 5,997 | 18,356 | 21,659 | 14,079 | 9,490 | 18,616 | 23,569 | 45,228 | 63,584 | 63,692 | ||||
(Loss) income from continuing operations | 12,619 | 5,997 | 18,356 | 21,659 | 14,079 | 9,490 | 18,616 | 23,569 | 45,228 | 63,584 | 63,692 | ||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||||||||||
Depreciation and amortization | 12,133 | 10,199 | 9,467 | 9,224 | 9,510 | 9,285 | 22,332 | 18,795 | 28,019 | 37,486 | 34,652 | ||||
Provision for doubtful accounts | 3,754 | 1,657 | 8,808 | 4,591 | 8,545 | 14,330 | 9,589 | ||||||||
Compensation expense on restricted stock units | 2,418 | 1,667 | 5,265 | 4,060 | 6,398 | 9,080 | 8,061 | ||||||||
Provision (benefit) for deferred income taxes | 358 | 358 | (2,564) | (2,564) | (1,602) | (4,303) | |||||||||
Amortization of debt issuance costs | 430 | 864 | 861 | 8,273 | 8,703 | 2,488 | 3,452 | ||||||||
Loss on extinguishment of debt | 6,645 | 6,645 | 6,645 | 6,645 | |||||||||||
(Gain) loss on sale of property, plant and equipment | (547) | 52 | (939) | 169 | (5,570) | (5,914) | 64 | ||||||||
Contingent consideration gains | (318) | (57) | (363) | (1,032) | (993) | ||||||||||
Changes in operating assets and liabilities, net of effects of acquired companies: | |||||||||||||||
Net accounts receivable | 1,537 | 7,216 | (23,564) | (7,712) | (14,586) | (32,060) | (30,259) | ||||||||
Inventories | (10,589) | (5,197) | (14,467) | (7,940) | (14,676) | (11,329) | (12,827) | ||||||||
Other current assets and income taxes | (12,736) | (3,860) | (5,104) | (2,746) | 5,028 | 4,689 | 3,867 | ||||||||
Accounts payable | 2,126 | (2,006) | (6,430) | 7,611 | 4,581 | 6,235 | (2,114) | ||||||||
Accrued expenses, other current liabilities and accrued interest payable | 2,384 | 3,883 | 1,080 | (202) | 5,421 | (223) | 3,501 | ||||||||
Accrued compensation related costs | (15,040) | (19,544) | (13,772) | (18,612) | (9,584) | (7,379) | 4,348 | ||||||||
Other liabilities | (253) | (1,314) | (211) | 409 | 3,946 | 1,262 | 589 | ||||||||
Net cash provided by operating activities - continuing operations | (9,962) | 2,193 | (7,485) | 27,644 | 68,526 | 86,260 | 81,319 | ||||||||
Net cash provided by operating activities | (9,962) | 2,193 | (7,485) | 27,644 | 68,526 | 86,260 | 81,319 | ||||||||
Cash flows from investing activities: | |||||||||||||||
Purchase of property, plant and equipment, net of acquisitions | (8,297) | (5,110) | (20,248) | (15,939) | (24,429) | (34,236) | (29,492) | ||||||||
Purchase of equipment leased to third parties under operating leases | (564) | (288) | (1,438) | (2,106) | (3,041) | (4,210) | (3,671) | ||||||||
Acquisitions, net of cash acquired | (19,167) | (34,201) | (4,741) | (5,695) | (9,296) | (62,500) | |||||||||
Change in restricted cash associated with workers' compensation program | 3,120 | 3,120 | (3,120) | ||||||||||||
Purchase of company-owned life insurance investment | (2,294) | (2,294) | (2,000) | ||||||||||||
Proceeds from sale of property, plant and equipment | 522 | 91 | 1,079 | 894 | 4,595 | 8,684 | 1,732 | ||||||||
Net cash used in investing activities - continuing operations | (29,800) | (5,307) | (57,102) | (21,892) | (25,450) | (35,938) | (99,051) | ||||||||
Net cash used in investing activities | (29,800) | (5,307) | (57,102) | (21,892) | (25,450) | (35,938) | (99,051) | ||||||||
Cash flows from financing activities: | |||||||||||||||
Borrowings under term loan | 225,000 | 225,000 | 225,000 | ||||||||||||
Repayment of term loan | (1,406) | (750) | (2,813) | (293,300) | (294,706) | (296,113) | (3,700) | ||||||||
Borrowings under revolving credit agreement | 125,000 | 228,000 | 120,000 | 163,000 | 249,000 | ||||||||||
Repayments under revolving credit agreement | (38,000) | (163,000) | (65,000) | (137,000) | (224,000) | ||||||||||
Payment of seller notes | (1,594) | (1,410) | (3,765) | (4,042) | (9,168) | (12,410) | (5,255) | ||||||||
Payment of financing obligations | (340) | (180) | (754) | (411) | (808) | (1,047) | (713) | ||||||||
Payment of fees associated with debt modifications and extinguishments | (3,665) | (3,665) | (3,667) | ||||||||||||
Excess tax benefit from stock-based compensation | 1,780 | 1,214 | 1,875 | 2,159 | 2,214 | 3,501 | 1,505 | ||||||||
Proceeds from issuance of common stock | 86 | 62 | 86 | 1,628 | 1,628 | 2,437 | 3,560 | ||||||||
Purchase and retirement of common stock | (1,566) | (1,566) | (2,374) | (1,350) | |||||||||||
Net cash provided by (used in) financing activities - continuing operations | 85,526 | (1,064) | 59,629 | (19,197) | (55,071) | (59,673) | (5,953) | ||||||||
Net cash provided by (used in) financing activities | 85,526 | (1,064) | 59,629 | (19,197) | (55,071) | (59,673) | (5,953) | ||||||||
Increase (decrease) in cash and cash equivalents | 45,764 | (4,178) | (4,958) | (13,445) | (11,995) | (9,351) | (23,685) | ||||||||
Cash and cash equivalents, at beginning of year | 4,902 | 55,624 | 9,860 | 7,216 | 5,766 | 15,033 | 19,211 | 9,860 | 19,211 | 9,860 | 19,211 | 9,860 | 19,211 | 42,896 | |
Cash and cash equivalents, at end of year | 4,902 | 55,624 | 9,860 | 7,216 | 5,766 | 15,033 | 4,902 | 5,766 | 7,216 | 9,860 | 19,211 | ||||
Cash paid during the period for: | |||||||||||||||
Interest | 1,629 | 3,290 | 10,537 | 13,105 | 16,299 | ||||||||||
Income taxes (net of refunds) | 11,159 | 5,591 | 11,538 | 14,973 | 21,033 | ||||||||||
Non-cash financing and investing activities: | |||||||||||||||
Issuance of seller notes in connection with acquisitions | 9,300 | 12,900 | 300 | 675 | |||||||||||
Additions to property, plant and equipment acquired through financing obligations | 10,717 | 220 | |||||||||||||
Restatement Adjustments | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net (loss) income | (15,964) | (7,726) | (25,352) | (10,608) | (16,749) | (23,073) | (15,668) | ||||||||
(Loss) income from discontinued operations, net of income taxes | (3,621) | 11 | 1,040 | (271) | (2,305) | (5,368) | (235) | ||||||||
(Loss) income from continuing operations | (12,343) | (7,737) | (26,392) | (10,337) | (14,444) | (17,705) | (15,433) | ||||||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||||||||||
Depreciation and amortization | (892) | (918) | (3,199) | (1,623) | (2,321) | (3,301) | (2,063) | ||||||||
Provision for doubtful accounts | (1,765) | (1,183) | (4,345) | (2,886) | (5,104) | (9,277) | (5,166) | ||||||||
Compensation expense on restricted stock units | (62) | 426 | (113) | 539 | 606 | 266 | 152 | ||||||||
Provision (benefit) for deferred income taxes | 1,478 | (12,897) | (9,509) | ||||||||||||
Amortization of debt issuance costs | 187 | 174 | 445 | (6,298) | (6,096) | 730 | 439 | ||||||||
Loss on extinguishment of debt | 6,645 | 6,645 | |||||||||||||
(Gain) loss on sale of property, plant and equipment | (6) | (329) | 319 | (1,069) | (799) | (344) | (2,083) | ||||||||
Contingent consideration gains | 318 | (339) | (429) | (395) | |||||||||||
Changes in operating assets and liabilities, net of effects of acquired companies: | |||||||||||||||
Net accounts receivable | 7,984 | 2,116 | 18,488 | 8,459 | 15,377 | 23,205 | 14,725 | ||||||||
Inventories | 8,296 | 3,748 | 8,570 | 5,682 | 10,936 | 7,836 | 13,149 | ||||||||
Other current assets and income taxes | 8,770 | 1,015 | (3,456) | 1,793 | (2,898) | 2,320 | (2,369) | ||||||||
Accounts payable | (6,461) | 1,367 | 3,459 | 3,530 | 1,359 | (1,139) | 3,378 | ||||||||
Accrued expenses, other current liabilities and accrued interest payable | (267) | 107 | 92 | (67) | (2,263) | 910 | (50) | ||||||||
Accrued compensation related costs | (2,739) | (3,642) | (1,278) | (288) | (368) | 813 | (1,541) | ||||||||
Other liabilities | 109 | 1,512 | 1,722 | 163 | (1,977) | 2,886 | (758) | ||||||||
Net cash provided by operating activities - continuing operations | 811 | (3,344) | (3,892) | 4,243 | (1,686) | (6,126) | (7,524) | ||||||||
Net cash (used in) provided by operating activities - discontinued operations | (1,479) | 109 | 3,482 | (2,227) | (2,261) | (3,102) | (3,037) | ||||||||
Net cash provided by operating activities | (668) | (3,235) | (410) | 2,016 | (3,947) | (9,228) | (10,561) | ||||||||
Cash flows from investing activities: | |||||||||||||||
Purchase of property, plant and equipment, net of acquisitions | (229) | 1,660 | 5,443 | 2,198 | 5,255 | 8,329 | 4,989 | ||||||||
Purchase of equipment leased to third parties under operating leases | (372) | (225) | 257 | 152 | 107 | 908 | |||||||||
Acquisitions, net of cash acquired | 25 | (65) | 267 | (1,035) | (926) | (999) | 1,099 | ||||||||
Proceeds from sale of property, plant and equipment | 73 | 572 | 595 | 750 | 122 | 382 | 1,499 | ||||||||
Net cash used in investing activities - continuing operations | (131) | 1,795 | 6,080 | 2,170 | 4,603 | 7,819 | 8,495 | ||||||||
Net cash provided by (used in) investing activities - discontinued operations | (265) | (256) | (464) | (604) | (944) | (1,438) | (1,118) | ||||||||
Net cash used in investing activities | (396) | 1,539 | 5,616 | 1,566 | 3,659 | 6,381 | 7,377 | ||||||||
Cash flows from financing activities: | |||||||||||||||
Borrowings under revolving credit agreement | 50,000 | ||||||||||||||
Repayments under revolving credit agreement | (50,000) | ||||||||||||||
Payment of seller notes | (37) | (1) | 196 | 925 | 2,719 | 3,754 | 351 | ||||||||
Payment of contingent consideration | (375) | (675) | (626) | (925) | (1,965) | (2,590) | (2,915) | ||||||||
Payment of financing obligations | (86) | (144) | (112) | (247) | (189) | (320) | (391) | ||||||||
Payment of fees associated with debt modifications and extinguishments | 2 | ||||||||||||||
Excess tax benefit from stock-based compensation | 23 | (160) | 316 | (154) | (156) | (153) | (16) | ||||||||
Proceeds from issuance of common stock | 1 | 1 | 1 | ||||||||||||
Purchase and retirement of common stock | (1) | (1) | |||||||||||||
Net cash provided by (used in) financing activities - continuing operations | (474) | (980) | (225) | (402) | 409 | 693 | (2,971) | ||||||||
Net cash used in financing activities - discontinued operations | (3) | (3) | (6) | (7) | (10) | (12) | (353) | ||||||||
Net cash provided by (used in) financing activities | (477) | (983) | (231) | (409) | 399 | 681 | (3,324) | ||||||||
Increase (decrease) in cash and cash equivalents | (1,541) | (2,679) | 4,975 | 3,173 | 111 | (2,166) | (6,508) | ||||||||
Cash and cash equivalents, at beginning of year | $ (3,272) | (9,788) | (8,247) | (5,970) | (2,908) | (8,760) | (6,081) | (8,247) | (6,081) | $ (8,247) | (6,081) | $ (8,247) | (6,081) | 427 | |
Cash and cash equivalents, at end of year | $ (3,272) | (9,788) | $ (8,247) | $ (5,970) | $ (2,908) | (8,760) | (3,272) | (2,908) | (5,970) | $ (8,247) | $ (6,081) | ||||
Cash paid during the period for: | |||||||||||||||
Interest | 908 | 931 | 1,807 | 3,209 | 2,845 | ||||||||||
Income taxes (net of refunds) | 585 | ||||||||||||||
Non-cash financing and investing activities: | |||||||||||||||
Issuance of seller notes in connection with acquisitions | (850) | (999) | (32) | (61) | |||||||||||
Additions to property, plant and equipment acquired through financing obligations | 1,266 | 386 | (8,744) | 520 | 2,797 | ||||||||||
Retirements of financed property, plant and equipment | 7 | 7 | 150 | 529 | |||||||||||
Purchase of property, plant and equipment in accounts payable | $ 2,184 | $ 357 | $ 1,169 | $ 574 | $ 638 |
QUARTERLY FINANCIAL INFORMAT107
QUARTERLY FINANCIAL INFORMATION - RESTATEMENT (Details) - Restatement Adjustments $ in Millions | 3 Months Ended |
Jun. 30, 2014USD ($) | |
Loss on firm purchase commitment | |
Summary impact of restatement adjustments | |
Restatement adjustments | $ 3.4 |
Demo equipment | |
Summary impact of restatement adjustments | |
Restatement adjustments | $ 1.4 |