Almost Family (AFAM) 10-Q 8 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 07, 2016
Document and Entity Information
Entity Registrant Name	ALMOST FAMILY INC
Entity Central Index Key	799,231
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-30
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		10,373,198
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2016	Jan. 01, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 6,827	$ 7,522
Accounts receivable - net	95,616	92,909
Prepaid expenses and other current assets	14,090	9,033
TOTAL CURRENT ASSETS	116,533	109,464
PROPERTY AND EQUIPMENT - NET	9,753	10,000
GOODWILL	320,794	277,061
OTHER INTANGIBLE ASSETS	69,909	64,629
OTHER ASSETS	4,143	3,615
TOTAL ASSETS	521,132	464,769
CURRENT LIABILITIES:
Accounts payable	14,007	11,297
Accrued other liabilities	36,054	40,742
TOTAL CURRENT LIABILITIES	50,061	52,039
LONG-TERM LIABILITIES:
Revolving credit facility	133,824	113,790
Deferred tax liabilities	18,494	13,094
Sellers Notes	12,500	6,556
Other liabilities	6,335	5,390
TOTAL LONG-TERM LIABILITIES	171,153	138,830
TOTAL LIABILITIES	221,214	190,869
Redeemable Noncontrolling Interest, Carrying Amount
HEALTHCARE INNOVATIONS	2,256	3,639
STOCKHOLDERS' EQUITY:
Common stock, par value $0.10; authorized 25,000; 10,489 and 10,125 issued and outstanding	1,050	1,013
Treasury stock, at cost, 116 and 103 shares	(3,214)	(2,731)
Additional paid-in capital	140,351	127,253
Noncontrolling interest - nonredeemable	(766)	(730)
Retained earnings	160,241	145,456
TOTAL STOCKHOLDERS' EQUITY	297,662	270,261
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 521,132	$ 464,769

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2016	Jan. 01, 2016
CONSOLIDATED BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.05	$ 0.05
Preferred stock, authorized shares	2,000,000	2,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, authorized shares	25,000,000	25,000,000
Common stock, issued shares	10,489,000	10,125,000
Common stock, outstanding shares	10,489,000	10,125,000
Treasury stock, shares	116,000	103,000

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2016	Oct. 02, 2015	Jul. 03, 2015	Sep. 30, 2016
CONSOLIDATED STATEMENTS OF INCOME
Net service revenues	$ 160,421	$ 131,232	$ 386,997	$ 470,114
Cost of service revenues (excluding depreciation & amortization)	86,074	69,475	204,134	251,998
Gross margin	74,347	61,757	182,863	218,116
General and administrative expenses:
Salaries and benefits	42,952	36,767	108,993	126,134
Other	18,167	15,598	47,772	56,323
Deal, transition and other costs	2,257	(1,306)	(696)	7,455
Total general and administrative expenses	63,376	51,059	156,069	189,912
Operating income	10,971	10,698	26,794	28,204
Interest expense, net	(1,399)	(559)	(1,463)	(4,335)
Income before income taxes	9,572	10,139	25,331	23,869
Income tax expense	(3,194)	(2,078)	(8,458)	(9,120)
Net income from continuing operations	6,378	8,061		14,749
Net income	6,378	8,061	16,873	14,749
Net loss attributable to noncontrolling interest	(1,012)	(262)	330	(689)
Net income attributable to Almost Family, Inc	$ 5,366	$ 7,799	$ 17,203	$ 14,060
Per share amounts-basic:
Average shares outstanding (in shares)	10,172	9,604	9,432	10,150
Net income attributable to Almost Family, Inc. (in dollars per share)	$ 0.53	$ 0.81	$ 1.82	$ 1.39
Per share amounts-diluted:
Average shares outstanding (in shares)	10,310	9,822	9,649	10,328
Net income attributable to Almost Family, Inc. (in dollars per share)	$ 0.52	$ 0.79	$ 1.78	$ 1.36

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Oct. 02, 2015
Cash flows of operating activities:
Net income	$ 14,749	$ 16,873
Net income from continuing operations	14,749	16,873
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	3,020	2,625
Provision for uncollectible accounts	10,626	9,322
Stock-based compensation	2,013	1,455
Deferred income taxes	6,081	3,108
Net cash provided by operating activities	36,489	33,383
Change in certain net assets and liabilities, net of the effects of acquisitions:
Accounts receivable	(12,831)	(13,444)
Prepaid expenses and other current assets	(4,451)	(4,038)
Other assets	(620)	(46)
Accounts payable and accrued expenses	(3,302)	(2,535)
Net cash provided by operating activities	15,285	13,320
Cash flows of investing activities:
Capital expenditures	(4,364)	(1,753)
Cost basis investment		(1,000)
Acquisitions, net of cash acquired	(31,256)	(55,701)
Net cash used in investing activities	(35,620)	(58,454)
Cash flows of financing activities:
Credit facility borrowings	215,430	163,904
Credit facility repayments	(195,396)	(118,053)
Debt issuance fees	(102)	(1,161)
Proceeds from stock option exercises	(9)	141
Purchase of common stock in connection with share awards	(484)	(338)
Tax impact of share awards	257	227
Payment of special dividend		(50)
Principal payments on notes payable and capital leases	(56)	(54)
Net cash provided by (used in) provided by financing activities	19,640	44,616
Net change in cash and cash equivalents	(695)	(518)
Cash and cash equivalents at beginning of period	7,522
Cash and cash equivalents at end of period	$ 6,827	$ 6,368

Summary of Accounting Policies

Summary of Accounting Policies	9 Months Ended
	Sep. 30, 2016
Accounting Policies
Accounting Policies	1. Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements for the periods ended September 30, 2016 and October 2, 2015, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to such rules and regulations. Accordingly, the reader of this Form 10-Q is referred to Almost Family, Inc.’s (the “Company”) Annual Report on Form 10-K for the year ended January 1, 2016 for further information. In the opinion of management of the Company, the accompanying unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position at September 30, 2016, and the results of operations and cash flows for the periods ended September 30, 2016 and October 2, 2015. The results of operations for the period ended September 30, 2016 are not necessarily indicative of the operating results for the year. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Recently Issued Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments . ASU 2016-15 clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. It also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. ASU 2016-15 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted. The Company is currently evaluating the impact ASU 2016-15 will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation . ASU 2016-09 is intended to simplify several aspects of the accounting for share-based payments. The guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within that year. The Company is in the process of evaluating the impact of the adoption of this ASU. In February 2016, the FASB issued ASU 2016-02, Leases . ASU 2016-02 requires lessees to recognize assets and liabilities on their balance sheet related to the rights and obligations created by most leases, while continuing to recognize expenses on their income statements over the lease term. It will also require disclosures designed to give financial statement users information regarding the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. The Company is currently evaluating the impact ASU 2016-02 will have on its consolidated financial statements and associated disclosures. In April 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . In certain instances, Subtopic 835-30 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. Subtopic 835-30 is effective for annual and interim periods beginning after December 15, 2015. With the adoption of ASU No. 2015-03, amortization of debt issuance costs were reclassified from amortization expense to interest expense in all periods presented. In April 2015, the FASB issued ASU No. 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . Subtopic 350-40 provides guidance that all software licenses included in cloud computing arrangement be accounted for consistent with other licenses of intangible assets. However, if a cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract, the accounting for which did not change. Subtopic 350-40 is effective for annual and interim periods beginning after December 15, 2015. The adoption of ASU No. 2015-05 did not affect the Company’s financial position and results of operations.

Segment Data

Segment Data	9 Months Ended
	Sep. 30, 2016
Segment Data
Segment Data	Three months ended Nine months ended Consolidated September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Home Health Operations Net service revenues: Visiting Nurse $ $ $ $ Personal Care Operating income before corporate expenses: Visiting Nurse Personal Care Healthcare Innovations Operations Revenue Operating income (loss) Corporate expenses Deal, transition and other costs Operating income Interest expense, net (1) Income tax expense Net income $ $ $ $ (1) Allocation of interest for the three month period ended September 30, 2016 was $384, $384 and $248 to Visiting Nurse, Personal Care and Healthcare Innovations, respectively and $1,183, $1,183, and $960 to Visiting Nurse, Personal Care and Healthcare Innovations, respectively for the nine month period ended September 30, 2016. Substantially all interest in 2015 was in the Visiting Nurse segment.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	9 Months Ended
	Sep. 30, 2016
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets	3. Goodwill and Other Intangible Assets The Company conducts annual reviews of goodwill and other indefinite-lived intangible assets for impairment, or more frequently if circumstances indicate impairment may have occurred. Other intangible assets consist of certificates of need and licenses, trade names and non-compete agreements. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. Licenses, provider numbers, certificates of need and trade names have indefinite lives and are reviewed at least annually for possible impairment, or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. The Company completed its most recent annual impairment test of goodwill and other indefinite-lived intangible assets as of January 1, 2016 and determined that no impairment existed. The following table summarizes the activity related to goodwill and other intangible assets for 2016: Other Intangible Assets Certificates of Need and Trade Non-compete Goodwill Licenses Names Agreements Total Balances at December 31, 2014 $ $ $ $ $ Acquisitions Amortization — — Balances at January 1, 2016 $ $ $ $ $ Acquisitions — — Amortization — — Balance at September 30, 2016 $ $ $ $ $ Acquisitions in the table relate to the acquisitions discussed further in Note 8, “Acquisitions.” The following table summarizes the Company’s goodwill and other intangible assets at September 30, 2016 by segment: Other Intangible Assets Certificates of Need and Trade Non-compete Goodwill Licenses Names Agreements Total Visiting Nurse $ $ $ $ $ Personal Care Healthcare Innovations — — — — September 30, 2016 balance $ $ $ $ $

Revolving Credit Facility

Revolving Credit Facility	9 Months Ended
	Sep. 30, 2016
Revolving Credit Facility
Revolving Credit Facility	4. Revolving Credit Facility The Company has a senior secured revolving credit facility with JP Morgan Chase Bank, NA, as Administrative Agent, Bank of America, as Syndication Agent, and certain other lenders (the “Facility”). The Facility consists of a $175 million credit line with a maturity date of November 15, 2020 and an “accordion” feature providing for potential future expansion of the Facility to $250 million. Borrowings (other than letters of credit) under the credit facility generally will bear interest at a rate varying from the London Interbank Offered Rate (LIBOR) plus 1.75% to LIBOR rate plus 3.00%, depending on leverage. The Facility is secured by substantially all of the Company’s assets and the stock of its subsidiaries. Debt issuance costs net of amortization were $1.0 million at September 30, 2016, are recorded in prepaid and other assets and are being amortized to interest expense through November 15, 2020. Borrowings under the Facility are subject to various covenants including a multiple of 3.5 times earnings before interest, taxes, depreciation and amortization (“EBITDA”). “EBITDA” may include “Acquired EBITDA” from pro-forma acquisitions, as defined. Borrowings under the Facility may be used for general corporate purposes, including acquisitions. The Company had irrevocable letters of credit totaling $14.7 million outstanding in connection with the Company’s self-insurance programs. Application of the Facility’s borrowing formula as of September 30, 2016, permitted an additional $14.0 million to be used. As of September 30, 2016, the Company was in compliance with the various financial covenants. Under the most restrictive of its covenants, the Company was required to maintain minimum net worth of at least $180.6 million at September 30, 2016. At such date, the Company’s net worth was approximately $297.7 million. The effective interest rates on the Company’s borrowings were 3.50% and 2.62% for the three month periods ended September 30, 2016 and October 2, 2015, respectively.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2016
Fair Value Measurements
Fair Value Measurements	5. Fair Value Measurements The Company’s financial instruments consist of cash, accounts receivable, payables and debt instruments. The carrying values of cash, accounts receivable and payables are considered representative of their respective fair values due to the short-term nature of these instruments. The fair value of the Company’s debt instruments approximates their carrying values as substantially all of such debt instruments have rates which fluctuate with changes in market rates. The Company does not have any assets or liabilities carried at fair value that are measured on a recurring basis.

Earnings per Common Share

Earnings per Common Share	9 Months Ended
	Sep. 30, 2016
Earnings per Common Share
Earnings per Common Share	6. Earnings per Common Share A reconciliation of the weighted average shares outstanding used in the calculation of basic and diluted earnings per common share is as follows: Three months ended Nine months ended September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Basic weighted average outstanding shares Add common equivalent shares representing shares issuable upon exercise of dilutive awards Diluted weighted average number of shares Anti-dilutive shares excluded from calculation —

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2016
Commitments and Contingencies
Commitments and Contingencies	7. Commitments and Contingencies Insurance Programs The Company bears significant insurance risk under its large-deductible workers’ compensation insurance program and its self-insured employee health program. Under the workers’ compensation insurance program, the Company bears risk up to $400 per incident, after which stop-loss coverage is maintained. The Company purchases stop-loss insurance for the employee health plan that places a specific limit, generally $300, on its exposure for any individual covered life. Malpractice and general patient liability claims for incidents which may give rise to litigation have been asserted against the Company by various claimants. The claims are in various stages of processing and some may ultimately be brought to trial. The Company is aware of incidents that have occurred through September 30, 2016 that may result in the assertion of additional claims. The Company currently carries professional and general liability insurance coverage (on a claims made basis) for this exposure with no deductible. The Company also carries D&O coverage (also on a claims made basis) for potential claims against the Company’s directors and officers, including securities actions, with deductibles ranging from $175 to $500 per claim. The Company records estimated liabilities for its insurance programs based on information provided by the third-party plan administrators, historical claims experience, the life cycle of claims, expected costs of claims incurred but not paid, and expected costs to settle unpaid claims. The Company monitors its estimated insurance-related liabilities and recoveries, if any, on a monthly basis and records amounts due under insurance policies in other current assets, while recording the estimated carrier liability in other current liabilities. As facts change, it may become necessary to make adjustments that could be material to the Company’s results of operations and financial condition. Legal Proceedings The Company is currently, and from time to time, subject to claims and suits arising in the ordinary course of its business, including claims for damages for personal injuries. In the opinion of management, after discussions with legal counsel, the ultimate resolution of any of these ordinary course pending claims and legal proceedings will not have a material effect on the Company’s financial position or results of operations.

Acquisitions

Acquisitions	9 Months Ended
	Sep. 30, 2016
Acquisitions
Acquisitions	8. Acquisitions 2016 Acquisitions During the third quarter, one of our HCI subsidiaries redeemed certain outstanding shares increasing the Company's ownership percentage to 72.04% from 61.50%. On June 18, 2016, the Company acquired certain home health agency assets primarily in Wisconsin, but also in Connecticut and Kentucky (collectively, the Wisconsin acquisition). The purchase price was $6.1 million, funded through borrowings on the Company’s bank credit facility. The post-acquisition operating results of these agencies are primarily reported in the Company’s PC segment. No accounts receivable were acquired. Thus, accounts receivable need to accumulate to normal levels post close. On January 5, 2016, the Company acquired 100% of the equity of Long Term Solutions, Inc. (LTS). LTS is a provider of in-home nursing assessments for the long-term care insurance industry. LTS provides assessments in all 50 U.S. states and a number of foreign countries. The purchase price of $37 million was funded through borrowings on the Company’s bank credit facility, seller notes and issuance of the Company’s common stock. LTS’s post-acquisition operating results are reported in the Company’s HCI business segment. On January 5, 2016, the Company purchased the assets of a Medicare-certified home health agency owned by Bayonne Visiting Nurse Association (Bayonne) located in New Jersey. The purchase price was $4.1 million. Bayonne’s post-acquisition operating results are reported in the Company’s VN segment. 2015 Acquisitions On November 5, 2015, the Company acquired the stock of Black Stone Operations, LLC (Black Stone). Black Stone is a provider of in-home personal care and skilled home health services in western Ohio and operates under the name “Home Care by Black Stone.” The purchase price of $40 million was funded through borrowings on the Company’s bank credit facility, seller notes and issuance of the Company’s common stock. Black Stone’s post-acquisition operating results are primarily reported in the VN and PC segments. On August 29, 2015, the Company acquired 100% of the equity of Bracor, Inc. (dba WillCare). The purchase price for the New York and Connecticut operations was $50.8 million. The transaction was funded by borrowings under the Company’s bank credit facility. On March 1, 2015, the Company acquired the stock of WillCare’s Ohio operations for $3.0 million. WillCare’s post-acquisition operating results are reported in the VN and PC segments. On July 22, 2015, the Company acquired 100% of the equity of Ingenios Health Co. (Ingenios) for $11.4 million of the Company’s common stock plus $2.0 million in cash. Ingenios is a leading provider of technology enabled in-home clinical assessments for Medicare Advantage, Managed Medicaid and Commercial Exchange lives in 7 states and Washington, D.C. The operating results of Ingenios are reported in the HCI business segment. On January 29, 2015, the Company acquired a noncontrolling interest in a development stage analytics and software company, NavHealth, Inc. (NavHealth). The investment is an asset of the Company’s HCI segment. The following table summarizes the fair value of the respective acquisition dates of the assets acquired and liabilities assumed for the WillCare (final), Ingenios (final), Black Stone (preliminary), LTS (preliminary), Bayonne (preliminary)and Wisconsin (preliminary) acquisitions: Purchase Price Allocation Accounts receivable $ Property, plant & equipment Other assets Goodwill Other intangibles Assets acquired Liabilities assumed Net assets acquired $ Deal and transition costs incurred in conjunction with the 2015 and 2016 acquisitions were $2.0 million for the quarter ended September 30, 2016. Similar amounts for the prior year period were $962. Such amounts are included in Deal, transition and other costs in the Consolidated Statements of Income.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2016
Income Taxes
Income Taxes	9. Income Taxes The Company’s effective income tax rate for the nine month periods ended September 30, 2016 and October 2, 2015 was approximately 39.3% and 32.9%, respectively. The lower 2015 effective income tax rate was primarily related to the tax treatment of a legal settlement benefit of $4.2 million in the third quarter of 2015. Accounting principles generally accepted in the United States prescribe a recognition threshold and measurement attribute for the accounting and financial statement disclosure of tax positions taken or expected to be taken in a tax return. The evaluation of a tax position is a two-step process. The first step requires the Company to determine whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. The second step requires the Company to recognize in the financial statements each tax position that meets the more likely than not criteria, measured at the amount of benefit that has a greater than 50% likelihood of being realized. The Company had $3.3 million of unrecognized tax benefits at September 30, 2016, the total amount of which, if recognized, would affect the tax rate. The Company includes the full amount of unrecognized tax benefits in other liabilities in the Consolidated Balance Sheets. Additionally, the Company may from time to time be assessed interest and penalties by tax jurisdictions. Any such assessments historically have been immaterial to the Company’s financial results and are classified as other general and administrative expenses in the consolidated statements of income.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2016
Subsequent Events
Subsequent Events	10. Subsequent Events On October 14, 2016, the Company signed a definitive agreement to acquire a controlling interest in the entity holding the home health and hospice assets of Community Health Systems, Inc. for $128.0 million, subject to a working capital adjustment. Financing for the transaction has been fully committed by JPMorgan. The transaction is expected to be completed during the fourth quarter, subject to regulatory approvals and the satisfaction of customary closing conditions. The Company expects the transaction will add approximately $200 million in revenue, all of which will be classified in the Company’s VN segment. The transaction will expand the Company’s geographic service territory to a total of 26 states.

Accounting Policies (Policies)

Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2016
Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements for the periods ended September 30, 2016 and October 2, 2015, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to such rules and regulations. Accordingly, the reader of this Form 10-Q is referred to Almost Family, Inc.’s (the “Company”) Annual Report on Form 10-K for the year ended January 1, 2016 for further information. In the opinion of management of the Company, the accompanying unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position at September 30, 2016, and the results of operations and cash flows for the periods ended September 30, 2016 and October 2, 2015. The results of operations for the period ended September 30, 2016 are not necessarily indicative of the operating results for the year.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments . ASU 2016-15 clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. It also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. ASU 2016-15 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted. The Company is currently evaluating the impact ASU 2016-15 will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation . ASU 2016-09 is intended to simplify several aspects of the accounting for share-based payments. The guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within that year. The Company is in the process of evaluating the impact of the adoption of this ASU. In February 2016, the FASB issued ASU 2016-02, Leases . ASU 2016-02 requires lessees to recognize assets and liabilities on their balance sheet related to the rights and obligations created by most leases, while continuing to recognize expenses on their income statements over the lease term. It will also require disclosures designed to give financial statement users information regarding the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. The Company is currently evaluating the impact ASU 2016-02 will have on its consolidated financial statements and associated disclosures. In April 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . In certain instances, Subtopic 835-30 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. Subtopic 835-30 is effective for annual and interim periods beginning after December 15, 2015. With the adoption of ASU No. 2015-03, amortization of debt issuance costs were reclassified from amortization expense to interest expense in all periods presented. In April 2015, the FASB issued ASU No. 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . Subtopic 350-40 provides guidance that all software licenses included in cloud computing arrangement be accounted for consistent with other licenses of intangible assets. However, if a cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract, the accounting for which did not change. Subtopic 350-40 is effective for annual and interim periods beginning after December 15, 2015. The adoption of ASU No. 2015-05 did not affect the Company’s financial position and results of operations. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). Topic 606 affects virtually all aspects of an entity’s revenue recognition, including determining the measurement of revenue and the timing of when it is recognized for the transfer of goods or services to customers. Topic 606 is effective for annual reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact of the adoption of Topic 606 on its financial position and results of operations.

Segment Data (Tables)

Segment Data (Tables)	9 Months Ended
	Sep. 30, 2016
Segment Data
Summary of segment data	Three months ended Nine months ended Consolidated September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Home Health Operations Net service revenues: Visiting Nurse $ $ $ $ Personal Care Operating income before corporate expenses: Visiting Nurse Personal Care Healthcare Innovations Operations Revenue Operating income (loss) Corporate expenses Deal, transition and other costs Operating income Interest expense, net (1) Income tax expense Net income $ $ $ $ (1) Allocation of interest for the three month period ended September 30, 2016 was $384, $384 and $248 to Visiting Nurse, Personal Care and Healthcare Innovations, respectively and $1,183, $1,183, and $960 to Visiting Nurse, Personal Care and Healthcare Innovations, respectively for the nine month period ended September 30, 2016. Substantially all interest in 2015 was in the Visiting Nurse segment.

Goodwill and Other Intangible18

Goodwill and Other Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2016
Goodwill and Other Intangible Assets
Schedule of activity summary related to goodwill and intangible assets	The following table summarizes the activity related to goodwill and other intangible assets for 2016: Other Intangible Assets Certificates of Need and Trade Non-compete Goodwill Licenses Names Agreements Total Balances at December 31, 2014 $ $ $ $ $ Acquisitions Amortization — — Balances at January 1, 2016 $ $ $ $ $ Acquisitions — — Amortization — — Balance at September 30, 2016 $ $ $ $ $ Acquisitions in the table relate to the acquisitions discussed further in Note 8, “Acquisitions.”
Summary of the activity and segment-wise information related to goodwill and other intangible assets	The following table summarizes the Company’s goodwill and other intangible assets at September 30, 2016 by segment: Other Intangible Assets Certificates of Need and Trade Non-compete Goodwill Licenses Names Agreements Total Visiting Nurse $ $ $ $ $ Personal Care Healthcare Innovations — — — — September 30, 2016 balance $ $ $ $ $

Earnings per Common Share (Tabl

Earnings per Common Share (Tables)	9 Months Ended
	Sep. 30, 2016
Earnings per Common Share
Schedule of reconciliation of the weighted average shares outstanding used in the calculation of basic and diluted earnings per common share	Three months ended Nine months ended September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Basic weighted average outstanding shares Add common equivalent shares representing shares issuable upon exercise of dilutive awards Diluted weighted average number of shares Anti-dilutive shares excluded from calculation —

Acquisitions (Tables)

Acquisitions (Tables)	9 Months Ended
	Sep. 30, 2016
Acquisitions
Summary of estimated fair values of the assets acquired and liabilities assumed	Purchase Price Allocation Accounts receivable $ Property, plant & equipment Other assets Goodwill Other intangibles Assets acquired Liabilities assumed Net assets acquired $

Segment Data (Details)

Segment Data (Details) $ in Thousands	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2016USD ($)	Oct. 02, 2015USD ($)	Jul. 03, 2015USD ($)	Sep. 30, 2016USD ($)segment	Oct. 02, 2015USD ($)
Segment data
Number of divisions | segment				2
Number of reportable segments | segment				2
Sales revenue
Net service revenues	$ 160,421	$ 131,232	$ 386,997	$ 470,114
Operating income before corporate expenses	15,158	15,141		52,178	$ 46,536
Operating income (loss) before noncontrolling interest	9,572	10,139	25,331	23,869
Corporate expenses	6,981	6,234		21,617	20,004
Deal transition and other	2,257	(1,306)		7,455	(696)
Operating income	10,971	10,698	26,794	28,204	26,794
Interest expense, net	(1,399)	(559)	(1,463)	(4,335)	(1,463)
Income tax expense	(3,194)	(2,078)	$ (8,458)	(9,120)	(8,458)
Net income from continuing operations	6,378	8,061		14,749	16,873
Home Health Care division
Sales revenue
Net service revenues	150,113	129,181		449,771	384,713
Visiting Nurse
Sales revenue
Interest expense, net	384			1,183
Visiting Nurse | Reportable segments
Sales revenue
Net service revenues	108,425	98,344		328,697	295,627
Operating income before corporate expenses	12,618	12,074		42,905	36,956
Personal Care
Sales revenue
Interest expense, net	384			1,183
Personal Care | Reportable segments
Sales revenue
Net service revenues	41,688	30,837		121,074	89,086
Operating income before corporate expenses	2,540	3,067		9,273	9,580
Healthcare Innovations
Sales revenue
Interest expense, net	248			960
Healthcare Innovations | Reportable segments
Sales revenue
Net service revenues	10,308	2,051		20,343	2,284
Operating income before corporate expenses	$ 5,051	$ 485		$ 5,098	$ (434)
Medicare program | Visiting Nurse
Segment data
Segment revenues (as a percent)	94.00%			94.00%
Medicaid and other government programs | Personal Care
Segment data
Segment revenues (as a percent)	83.00%			83.00%

Goodwill and Other Intangible22

Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Jan. 01, 2016	Jan. 01, 2016
Activity related to goodwill and other intangible assets
Impairment loss on goodwill and other intangible assets		$ 0
Goodwill
Balance at the beginning of the period	$ 277,061		$ 192,523
Additions	43,733		84,538
Balance at the end of the period	320,794	277,061	277,061
Other Intangible Assets
Balance at the beginning of the period	64,629		54,402
Additions	5,292		10,253
Amortization	(12)	(26)	(26)
Balance at the end of the period	69,909	64,629	64,629
Visiting Nurse
Goodwill
Balance at the end of the period	193,667
Other Intangible Assets
Balance at the end of the period	60,444
Personal Care
Goodwill
Balance at the end of the period	74,764
Other Intangible Assets
Balance at the end of the period	9,465
Healthcare Innovations
Goodwill
Balance at the end of the period	52,363
Non-compete Agreements
Other Intangible Assets
Balance at the beginning of the period	184		20
Additions			180
Amortization	(4)	(16)	(16)
Balance at the end of the period	180	184	184
Non-compete Agreements | Visiting Nurse
Other Intangible Assets
Balance at the end of the period	90
Non-compete Agreements | Personal Care
Other Intangible Assets
Balance at the end of the period	90
Certificates of Need and Licenses
Other Intangible Assets
Balance at the beginning of the period	46,044		39,611
Additions	5,292		6,433
Balance at the end of the period	51,336	46,044	46,044
Certificates of Need and Licenses | Visiting Nurse
Other Intangible Assets
Balance at the end of the period	47,156
Certificates of Need and Licenses | Personal Care
Other Intangible Assets
Balance at the end of the period	4,180
Trade Names
Other Intangible Assets
Balance at the beginning of the period	18,401		14,771
Additions			3,640
Amortization	(8)	(10)	(10)
Balance at the end of the period	18,393	$ 18,401	$ 18,401
Trade Names | Visiting Nurse
Other Intangible Assets
Balance at the end of the period	13,198
Trade Names | Personal Care
Other Intangible Assets
Balance at the end of the period	$ 5,195

Revolving Credit Facility (Deta

Revolving Credit Facility (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)item	Oct. 02, 2015USD ($)
Revolving credit facility
Debt issuance fees	$ 102	$ 1,161
Companies net worth	$ 297,700
Effective interest rate (as a percent)	3.50%	2.62%
Prepaid Assets]
Revolving credit facility
Debt issuance fees	$ 1,000
Revolving Credit Facility.
Revolving credit facility
Revolving credit limit	175,000
Potential future expansion of the Facility under accordion feature	$ 250,000
EBITDA multiplier | item	3.5
Borrowing capacity permitted to be used per formula	$ 14,000
Irrevocable letters of credit outstanding	14,700
Minimum net worth required to be maintained	$ 180,600
Revolving Credit Facility. | LIBOR
Revolving credit facility
Variable rate basis	LIBOR
Revolving Credit Facility. | LIBOR | Minimum
Revolving credit facility
Interest rate margin per debt instrument (as a percent)	1.75%
Revolving Credit Facility. | LIBOR | Maximum
Revolving credit facility
Interest rate margin per debt instrument (as a percent)	3.00%

Earnings per Common Share (Deta

Earnings per Common Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2016	Oct. 02, 2015	Jul. 03, 2015	Sep. 30, 2016	Oct. 02, 2015
Earnings per Common Share
Basic weighted average outstanding shares	10,172	9,604	9,432	10,150	9,432
Dilutive effect of outstanding compensation awards	138	218		178	217
Diluted weighted average number of shares	10,310	9,822	9,649	10,328	9,649
Anti-dilutive shares excluded from calculation	20			20	20

Commitments and Contingencies (

Commitments and Contingencies (Details) $ in Thousands	Sep. 30, 2016USD ($)
Large-deductible workers' compensation insurance program | Maximum
Insurance Programs
Insurance program, Company's risk per incident	$ 400
Self-insured employee health program
Insurance Programs
Insurance program, Company's risk per individual covered life	300
Professional liability
Insurance Programs
Insurance program, Company's risk per claim	0
General liability
Insurance Programs
Insurance program, Company's risk per claim	0
D&O coverage | Minimum
Insurance Programs
Insurance program, Company's risk per claim	175
D&O coverage | Maximum
Insurance Programs
Insurance program, Company's risk per claim	$ 500

Acquisitions (Details)

Acquisitions (Details)	Jun. 18, 2016USD ($)	Jan. 05, 2016USD ($)	Nov. 05, 2015USD ($)	Aug. 29, 2015USD ($)	Jul. 22, 2015USD ($)item	Mar. 01, 2015USD ($)	Sep. 30, 2016USD ($)state	Oct. 02, 2015USD ($)	Sep. 30, 2016USD ($)	Oct. 02, 2015USD ($)	Jul. 01, 2016	Jan. 01, 2016USD ($)	Dec. 31, 2014USD ($)
Acquisitions
Cash paid									$ 31,256,000	$ 55,701,000
Approximate fair value estimates of the assets acquired and liabilities assumed
Goodwill							$ 320,794,000		320,794,000			$ 277,061,000	$ 192,523,000
Deal and transition costs incurred							$ 2,000,000	$ 962,000
Ingenios
Acquisitions
Interest acquired (as a percent)					100.00%
Purchase price					$ 11,400,000
Cash consideration					$ 2,000,000
Number of States | item					7
Black Stone
Acquisitions
Purchase price			$ 40,000,000
LTS
Acquisitions
Interest acquired (as a percent)		100.00%
Purchase price		$ 37,000,000
Number of states that the entity provides assesments in | state							50
Bayonne
Acquisitions
Purchase price		$ 4,100,000
The Wisconsin acquisition
Acquisitions
Purchase price	$ 6,100,000
Approximate fair value estimates of the assets acquired and liabilities assumed
Accounts receivable	$ 0
WillCare, Ingenios, Black Stone), LTS, Bayonne and Wisconsin
Approximate fair value estimates of the assets acquired and liabilities assumed
Accounts receivable							$ 14,146,000		14,146,000
Property, plant & equipment							2,964,000		2,964,000
Other assets							2,074,000		2,074,000
Goodwill							128,137,000		128,137,000
Other intangibles							15,740,000		15,740,000
Assets acquired							163,061,000		163,061,000
Liabilities assumed							(9,933,000)		(9,933,000)
Net assets acquired							$ 153,128,000		$ 153,128,000
WillCare
Acquisitions
Purchase price				$ 50,800,000
Ohio | WillCare
Acquisitions
Cash paid						$ 3,000,000
Healthcare Innovations
Acquisitions
Interest acquired (as a percent)							72.04%		72.04%		61.50%
Approximate fair value estimates of the assets acquired and liabilities assumed
Goodwill							$ 52,363,000		$ 52,363,000

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Oct. 02, 2015
Income Taxes
Effective income tax rates (as a percent)	39.30%	32.90%
Unrecognized Tax Benefits	$ 3.3

Subsequent Events (Details)

Subsequent Events (Details) - Community Health Systems Inc. - Subsequent event $ in Millions	Oct. 14, 2016USD ($)state
Subsequent Events
Purchase price	$ 128
Number of states the acquired entity operates in | state	26
Visiting Nurse
Subsequent Events
Approximate revenue addition	$ 200