Document Information
Document Information (USD $) | |
12 Months Ended
Dec. 31, 2008 | |
Document Information [Line Items] | |
Document Type | 10-K |
Amendment Flag | false |
Document Period End Date | 2008-12-31 |
Document Fiscal Year Focus | 2,008 |
Document Fiscal Period Focus | FY |
Entity Information
Entity Information (USD $) | |
12 Months Ended
Dec. 31, 2008 | |
Entity Information [Line Items] | |
Entity Registrant Name | Amedisys, Inc. |
Entity Central Index Key | 0000896262 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Public Float | $1,326,155,613 |
Entity Common Stock, Shares Outstanding | 27,247,737 |
Entity Listings [Line Items] | |
Trading Symbol | AMED |
Notes to Financial Statements
Notes to Financial Statements | |
12 Months Ended
Dec. 31, 2008 USD / shares | |
Notes to Financial Statements [Abstract] | |
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Amedisys, Inc., a Delaware corporation, and its consolidated subsidiaries (“Amedisys,” “we,” “us,” or “our”) is a multi-state provider of home health and hospice services with approximately 87%, 89% and 93% of our net service revenue derived from Medicare for 2008, 2007 and 2006, respectively. As of December31, 2008, we had 480 Medicare-certified home health and 48 Medicare-certified hospice agencies in 37 states within the United States, the District of Columbia and Puerto Rico. Use of Estimates Our accounting and reporting policies conform with U.S. generally accepted accounting principles (“U.S. GAAP”). In preparing the consolidated financial statements, we are required to make estimates and assumptions that impact the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Reclassifications and Comparability Certain reclassifications have been made to prior periods’ financial statements in order to conform to the current periods’ presentation. For instance, we have reclassified $20.3 million and $16.7 million from our general and administrative expenses to our cost of service for health care insurance costs and other miscellaneous expenses, which are associated with our direct care employees for 2007 and 2006, respectively. Finally, as a result of our rapid growth, primarily through acquisitions, including the TLC Health Care Services, Inc. (“TLC”) acquisition, our operating results are not comparable for the periods that are presented. Principles of Consolidation These consolidated financial statements include the accounts of Amedisys, Inc. and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in our accompanying consolidated financial statements, and business combinations accounted for as purchases have been included in our consolidated financial statements from their respective dates of acquisition. In addition to our wholly owned subsidiaries, we also have certain equity investments that are accounted for as set forth below. Equity Investments We consolidate subsidiaries and/or joint ventures when the entity is a variable interest entity and we are the primary beneficiary, as defined in the Financial Accounting Standards Board Interpretation No.46 (Revised), Consolidation of Variable Interest Entities (“FIN 46R”), or if we have controlling interests in the entity, which is generally ownership in excess of 50%. Third party equity interests in our consolidated joint ventures are reflected as minority interests in our consolidated financial statements. For subsidiaries or joint ventures in which we do not have a controlling interest or for which we are not the primary beneficiary as defined by FIN 46R, we record such investments under the equity method of accounting. Revenue Recognition We earn net service revenue through our home health and hospice agencies by providing a variety of services almost exclusively in the homes of our patients. This net service revenue is earned and billed either |
2. ACQUISITIONS | 2. ACQUISITIONS Each of the following acquisitions was completed in order to pursue our strategy of increasing our market presence by expanding our service base and enhancing our position in certain geographic areas as a leading provider of home health and hospice services. The purchase price of each acquisition was determined based on our analysis of, among other things, comparable acquisitions and expected cash flows. Each of the following acquisitions was accounted for as a purchase and is included in our consolidated financial statements from the respective acquisition date. Goodwill generated from the acquisitions was recognized for the excess of the purchase price over tangible and identifiable intangible assets because of the expected contributions of each acquisition to our overall corporate strategy. Summary of 2008 Acquisitions The following table presents details of our acquisitions (dollars in millions): (2) Date Acquired Entity (location of assets) Purchase Price (1) Purchase Price Allocation Number of Agencies Number of States Cash Promissory Note Goodwill Other Intangible Assets Home Health Hospice † October 1, 2008 Home Health Corporation of America (“HHCA”) $ 25.8 $ — $ 24.8 $ 1.5 6 — 3 Washington agencies 0.3 — — 0.3 3 3 1 † † October 1, 2008 May 9, 2008 Health Management Associates, Inc. 6.7 — 6.1 1.0 5 — 3 * June 20, 2008 and March 26, 2008 TLC 396.4 — 335.9 11.7 92 11 22 * February 28, 2008 Family Home Health Care, Inc. Comprehensive Home Healthcare Services, Inc. (“HMA”) 41.0 6.6 40.4 7.1 24 — 2 † January 1, 2008 Carolina, Puerto Rico agency (3) 1.1 0.2 1.0 0.3 1 — N/A $ 471.3 $ 6.8 $ 408.2 $ 21.9 131 14 (1) The total purchase price does not include such items as closing costs or other miscellaneous amounts that have been included in the value recorded for goodwill and other intangible assets. (2) The acquisitions marked with the cross symbol (†) were asset purchases and those marked with an asterisk symbol (*)were stock purchases. (3) The home health location purchased was located in Carolina, Puerto Rico and not located within the United States. On March26, 2008, we acquired 100% of the stock of TLC, a privately-held provider of home nursing and hospice services with 92 home health and 11 hospice agencies located in 22 states and the District of Columbia for a total purchase price of $396.4 million (subject to certain adjustments), of which $16.7 million was placed in escrow with $15.8 million for indemnification purposes and working capital price adjustments and $0.9 million for the delayed acquisition of TLC’s West Virginia agencies, discussed below. As of December31, 2008, $3.0 million has been released from escrow and paid to the selling stockholders under the working capital price adjustment provisions of the acquisition agreemen |
3. GOODWILL AND OTHER INTANGIBLE ASSETS, NET | 3. GOODWILL AND OTHER INTANGIBLE ASSETS, NET The following table summarizes the activity related to our goodwill and our other intangible assets, net for 2008, 2007 and 2006 (amounts in thousands): Goodwill Other Intangible Assets, Net Certificates ofNeedand Licenses Acquired Name of Business Non-Compete Agreements Reacquired Franchise Rights Total Balances at December31, 2005 $ 197,002 $ 7,150 $ 1,311 $ 2,986 $ 11,447 Additions 16,317 1,200 — 1,063 2,263 Adjustments related to acquisitions (287 ) (575 ) 1,989 (475 ) 939 Amortization — — — (1,791 ) (1,791 ) Impairment — (125 ) — — (125 ) Balances at December31, 2006 213,032 7,650 3,300 1,783 12,733 Additions 119,587 1,030 — 1,900 2,930 Adjustments related to acquisitions (85 ) — — — — Amortization — — — (1,362 ) (1,362 ) Balances at December31, 2007 332,534 8,680 3,300 2,321 14,301 Additions 408,221 20,942 — 5,973 26,915 Adjustments related to acquisitions (6,874 ) 3,060 — (205 ) 2,855 Amortization — — — (1,683 ) (1,683 ) Balances at December31, 2008 $ 733,881 $ 32,682 $ 3,300 $ 6,406 $ 42,388 During 2008, we adjusted goodwill by $6.9 million primarily in association with our completion of purchase accounting adjustments for our 2007 acquisition of IntegriCare, Inc., where we allocated an additional $4.1 million in value to our investment in unconsolidated joint ventures and $2.9 million was allocated to other intangible assets. Additionally, we reacquired $4.0 million in certain franchise rights and $1.0 million in non-compete agreements in association with licensing agreements we assumed as part of our TLC acquisition. The weighted-average amortization period for the assets is 5 years. During 2006, we allocated $2.0 million to acquired name of business in association with our finalization of the Housecall Medical Resources, Inc. acquisition. See “Note 2, Acquisitions” for further details on additions to goodwill and other intangible assets, net. The estimated aggregate amortization expense for each of the five succeeding years is as follows (amounts in thousands): 2009 $ 2,064 2010 1,460 2011 1,130 2012 1,029 2013 723 $ 6,406 |
4. DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS | 4. DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS Additional information regarding certain balance sheet accounts is presented below (amounts in thousands): AsofDecember31, 2008 2007 Other current assets: Payroll tax escrow $ 4,079 $ 3,113 Medicare withholds 1,771 — Other 1,869 2,878 $ 7,719 $ 5,991 Other current assets at December31, 2008 included $1.8 million in Medicare withholds related to the filing of cost reports for recent acquisitions. As of December31, 2008 2007 Other assets: Workers’ compensation deposits $ 2,515 $ 2,550 Health insurance deposits 940 801 Other miscellaneous deposits 2,270 967 Deferred financing fees 6,942 448 Investment in unconsolidated joint ventures 4,642 423 Other 3,008 2,261 $ 20,317 $ 7,450 Other assets included an increase in our deferred financing fees and investment in unconsolidated joint ventures. Our deferred financing fees in 2008 included $8.1 million recorded in deferred debt issuance costs that were incurred in connection with our debt associated with our TLC acquisition (see “Note 5, Long-Term Obligations” for more details on this debt), and our investment in unconsolidated joint ventures included our finalization of the purchase accounting for our 2007 IntegriCare, Inc. acquisition. As a result of this finalization, we allocated an additional $4.1 million to our investment in unconsolidated joint ventures and recorded an offsetting decrease in the recorded goodwill (see “Note 3, Goodwill and Other Intangible Assets, Net” for additional details on the purchase accounting adjustment to goodwill). As of December31, 2008 2007 Accrued expenses: Payroll and payroll taxes $ 90,299 $ 43,322 Self insurance 17,132 11,418 Legal and other settlements 1,314 876 Income taxes payable 824 2,392 Charity care 6,324 1,032 Other 18,156 7,627 $ 134,049 $ 66,667 As of December31, 2008, our accrued expenses included increases of $47.0 million in payroll and payroll taxes and $5.7 million in self insurance as we increased our headcount by 65% as a result of our start-up and acquisition activities. Additionally, accrued expenses included a $5.3 million increase in charity care. This amount includes a reserve for amounts owed to the State of Georgia for the difference between charity care commitments and the actual amount of charity care provided. The increase was primarily due to the addition of TLC’s agencies and our growth in revenue. |
5. LONG-TERM OBLIGATIONS | 5. LONG-TERM OBLIGATIONS Long-term debt, including capital lease obligations, consisted of the following for the periods indicated (amounts in thousands): As of December31, 2008 2007 Senior Notes: $35.0 million Series A Notes; semi-annual interest only payments; interest rate at 6.07%per annum; due March25, 2013 $ 35,000 $ — $30.0 million Series B Notes; semi-annual interest only payments; interest rate at 6.28%per annum; due March25, 2014 30,000 — $35.0 million Series C Notes; semi-annual interest only payments; interest rate at 6.49%per annum; due March25, 2015 35,000 — $150.0 million Term Loan; $7.5 million principal payments plus accrued interest payable quarterly; interest rate at ABR Rate plus applicable percentage or Eurodollar Rate plus the applicable percentage (3.08% at December31, 2008); due March26, 2013 127,500 — $250.0 million Revolving Credit Facility; interest only quarterly payments; interest rate at ABR Rate plus applicable percentage or Eurodollar Rate plus the applicable percentage (1.72% at December31, 2008); due March26, 2013 80,500 — Promissory notes 20,337 23,645 Capital leases 237 395 328,574 24,040 Current portion of long-term obligations (42,632 ) (11,049 ) Total $ 285,942 $ 12,991 Maturities of debt as of December31, 2008 are as follows (amounts in thousands): Long-term obligations Capital leases Total 2009 $ 42,528 $ 120 $ 42,648 2010 37,809 95 37,904 2011 30,000 47 30,047 2012 30,000 — 30,000 2013 123,000 — 123,000 Future years 65,000 — 65,000 Total 328,337 262 328,599 Less amounts representing interest — (25 ) (25 ) Long-term obligations and present value of future lease payments $ 328,337 $ 237 $ 328,574 Senior Notes, Term Loan and Revolving Credit Facility In connection with our March 2008 acquisition of TLC, we incurred additional indebtedness by (i)issuing $100.0 million in Senior notes and (ii)entering into a $400.0 million Credit Agreement that provided for a $150.0 million term loan and a $250.0 million revolving credit facility, all of which are described in detail below. On March25, 2008, we entered into a new $100.0 million Note Purchase Agreement (the “Note Purchase Agreement”), pursuant to which we issued and sold on March26, 2008, three series of Senior Notes (the “Senior Notes”) in an aggregate principal amount of $100.0 million. Interest on the Senior Notes is payable at the prescribed rates semi-annually on March25 and September25 of each year beginning September25, 2008. The Senior Notes are unsecured, but are guaranteed by all of our material subsidiaries. On March26, 2008, we entered into a new $400.0 million Credit Agreement (the “Credit Agreement”), which consists of: (i)a $150.0 million, five-year Term Loan (the “Term Loan”) and |
6. INCOME TAXES | 6. INCOME TAXES We utilize the asset and liability approach to measuring deferred tax assets and liabilities based on temporary differences existing at each balance sheet date using currently enacted tax rates in accordance with SFAS No.109, Accounting for Income Taxes (“SFAS 109”). Deferred tax assets are reduced by a valuation allowance when we believe it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The total provision for income taxes consist of the following (amounts in thousands): For the Years Ended December31, 2008 2007 2006 Current income tax expense: Federal $ 18,085 $ 31,641 $ 5,659 State and local 7,193 4,128 1,484 25,278 35,769 7,143 Deferred income tax expense: Federal 28,300 1,098 15,216 State and local 1,136 1,431 1,283 29,436 2,529 16,499 Income tax expense $ 54,714 $ 38,298 $ 23,642 Net deferred tax liabilities consist of the following components (amounts in thousands): As of December31, 2008 2007 Current portion of deferred tax assets (liabilities): NOL carry forward $ 3,917 $ — Allowance for doubtful accounts 10,150 5,022 Accrued expenses 1,774 4,684 Self insurance reserve 2,006 — Workers’ compensation 4,963 — Deferred revenue (27,172 ) (16,158 ) Other (301 ) (319 ) Current portion of deferred tax assets (liabilities) (4,663 ) (6,771 ) Noncurrent portion of deferred tax assets (liabilities): Amortization of intangible assets (7,924 ) (14,205 ) Property and equipment (15,418 ) (11,056 ) Share-based compensation 3,065 1,380 Workers’ compensation — 3,775 Other 815 — Capital loss carry forward 9,091 9,091 NOL carry forward, expiring beginning in 2010 13,649 5,731 Less: valuation allowance (14,826 ) (13,211 ) Noncurrent portion of deferred tax assets (liabilities) (11,548 ) (18,495 ) Net deferred tax liabilities $ (16,211 ) $ (25,266 ) As of December31, 2008, we had a Federal net operating loss carry forward of $22.3 million, which we acquired as part of the TLC acquisition and begins to expire in 2025. We have a capital loss carry forward of $23.3 million that expires in 2010. Both our Federal net operating loss carry forward and capital loss carry forward are available to offset future taxable income. In addition, we had state net operating loss carry forwards of approximately $244.0 million, of which $101.5 million were acquired as part of the TLC acquisition, which begin to expire in 2010. Our recorded valuation allowance above was established against the deferre |
7. CAPITAL STOCK AND SHARE-BASED COMPENSATION | 7. CAPITAL STOCK AND SHARE-BASED COMPENSATION We are authorized by our Certificate of Incorporation to issue 60,000,000 shares of common stock, $0.001 par value and 5,000,000 shares of preferred stock, $0.001 par value, of which 27,083,231 shares of common stock and no shares of preferred stock were issued and outstanding at December31, 2008. Our Board of Directors is authorized to fix the dividend rights and terms, conversion and voting rights, redemption rights and other privileges and restrictions applicable to our preferred stock. On August20, 2007, we filed a $250.0 million shelf registration statement with the availability for the issuance of any combination of preferred and common stock, which became effective on August31, 2007. As of December31, 2008 all $250.0 million was available. Share-Based Awards In 2008, both our 1998 Stock Option Plan and Directors’ Stock Option Plan expired and were replaced with the 2008 Omnibus Incentive Compensation Plan (the “Plan”), which was approved by our stockholders on June 5, 2008. The Plan authorizes the grant of various types of equity-based awards, such as stock awards, restricted stock units, stock appreciation rights and stock options, to eligible participants, which include all of our employees and all employees of our 50% or more owned subsidiaries, our non-employee directors and certain consultants. The vesting terms of the awards may be tied to continued employment (or, for our non-employee directors, continued service on the Board of Directors) and/or the achievement of certain pre-determined performance goals. We refer to stock awards subject to service-based vesting conditions as “non-vested stock” and restricted stock units subject to service-based and/or performance-based vesting conditions as “non-vested stock units.” Cash bonuses may also be granted under the Plan to certain eligible senior employees. The Plan is administered by the Compensation Committee of our Board of Directors, which determines, within the provisions of the Plan, those eligible employees to whom, and the times at which, awards shall be granted. The Compensation Committee, in its discretion, may delegate its authority and duties under the Plan to specified officers; however, only the Compensation Committee may approve the terms of awards to our executive officers. Equity-based awards may be granted for a number of shares not to exceed, in the aggregate, approximately 1.9million shares of common stock and we had 1,740,310 shares available at December 31, 2008. The price per share for stock options shall be of no less than the greater of (a)100% of the fair value of a share of common stock on the date the option is granted or (b)the aggregate par value of the shares of our common stock on the date the option is granted. If a stock option is granted to any owner of 10% or more of our total combined voting power of us and our subsidiaries, the price is to be at least 110% of the fair value of a share of our common stock on the date the award is granted. Each equity-based award vests ratably over a 12 month-to-five year period, withthe exception of those issued under contractual arrangements that spec |
8. DEFERRED COMPENSATION PLAN | 8. DEFERRED COMPENSATION PLAN We have a Deferred Compensation Plan for additional tax-deferred savings to a select group of management or highly compensated employees. The Deferred Compensation Plan permits participants to defer up to 75% of compensation that would otherwise be payable to them for the calendar year and up to 100% of their annual bonus. In addition, we will credit to the participants’ accounts such amounts as would have been contributed to our 401(k)/Profit Sharing Plan, but for the limitations that are imposed under the Internal Revenue Code based upon the participants’ status as highly compensated employees. We may also make additional discretionary allocations as determined by the Compensation Committee. Amounts credited under the Deferred Compensation Plan are funded into a rabbi trust, which is managed by a trustee. The trustee has the discretion to manage the assets of the Deferred Compensation Plan as deemed fit, thus the assets are not necessarily reflective of the same investment choices made by the participants. We maintain accounts to reflect the amounts owed to each participant. Daily, the accounts are credited with earnings or losses calculated on the basis of the investment choices made by each participant. Differences between the value of the assets of the Deferred Compensation Plan and the liability recorded for amounts due to participants is recorded as compensation expense for the period for realized gains/losses and is recorded as accumulated other comprehensive income for unrealized gains/losses. The total liability recorded in our consolidated financial statements at December31, 2008 and 2007 related to the Deferred Compensation Plan was$2.2 million and the unrealized gains/losses on plan assets recorded in accumulated other comprehensive (loss) income was $(0.5) million and less than $0.1 million at December31, 2008 and 2007. |
9. COMMITMENTS AND CONTINGENCIES | 9. COMMITMENTS AND CONTINGENCIES Legal Proceedings We are involved in legal actions in the normal course of business, some of which seek monetary damages, including claims for punitive damages. We do not believe that these actions, when finally concluded and determined, will have a material impact on our consolidated financial condition, results of operations and cash flows. Home Health Corporation of America (“HHCA”) Corporate Integrity Agreement We acquired certain assets and assumed certain liabilities of HHCA on October1, 2008, which was subject to a five-year CIA with the Office of Inspector General for the United States Department of Health and Human Services (“OIG”) as of the date of the transaction. HHCA entered into the CIA in 2005 as a result of the settlement of claims arising out of an alleged kickback scheme dating from February 1997 through May 1998. Although the ownership of the HHCA agencies has changed, the provisions of the CIA remain binding on us as HHCA’s successor and remain in effect until May17, 2010, or until such time thereafter as the OIG reviews the final annual report submitted. Based on our review of the CIA and discussions with both outside counsel and representatives of the OIG, we believe that these contractual obligations and the associated risks are applicable solely to the six home health agencies acquired from HHCA in Pennsylvania, Maryland and Delaware. The CIA requires that we maintain HHCA’s existing compliance program and provides for additional training requirements for certain staff involved in business development functions, the implementation of certain tracking and reporting processes related to financial relationships with referral sources, an annual, independent review of financial relationships with referral sources, and regular reporting to the OIG. The agreement also provides for stipulated penalties in the event of non-compliance by us, including the possibility of exclusion from the Medicare program. We believe that these obligations will not materially impact our consolidated financial condition, results of operations and cash flows over the period of the agreement and we believe that we are currently in compliance with the agreement. Alliance Home Health, Inc. Alliance Home Health, Inc. (“Alliance”), one of our wholly owned subsidiaries (which was acquired in 1998 and ceased operations in 1999), filed for Chapter 7 Federal bankruptcy protection with the United States Bankruptcy Court in the Northern District of Oklahoma in September 2000. A trustee was appointed for Alliance in 2001. On September28, 2007, a Federal judge from the United States Bankruptcy Court in the Northern District of Oklahoma (“bankruptcy court”) overseeing the Chapter 7 Federal bankruptcy proceedings for Alliance finalized its order on the distribution of funds to creditors. As a result of the ruling by the bankruptcy court, the liabilities of $4.2 million attributable to Alliance would not be paid because Alliance had insufficient assets to discharge the liabilities. These liabilities, however, were recorded on our consolidated financial statements because of Alliance’s being a wholly-owned co |
10. 401(k) BENEFIT PLAN | 10. 401(k) BENEFIT PLAN We maintain a plan qualified under Section401(k) of the Internal Revenue Code for all employees who have reached 21 years of age, effective the first month after hire date. Under the plan, eligible employees may elect to defer a portion of their compensation, subject to Internal Revenue Service limits. During 2008, 2007 and 2006, our match of contributions made to each eligible employee contribution was $0.75 for every $1.00 of contribution made up to the first 6% of their salary. The match is discretionary and thus is subject to change at the discretion of management. These contributions are made in the form of our common stock, valued based upon the fair value of the stock as of the end of each calendar quarter end. We expensed approximately $14.1 million, $8.9 million and $6.0 million for 2008, 2007 and 2006, respectively. |
11. AMOUNTS DUE TO MEDICARE | 11. AMOUNTS DUE TO MEDICARE As of December31, 2008 and 2007, we owed Medicare the following amounts for outstanding cost reports and Medicare PPS related claims inclusive of $1.8 million assumed in the TLC acquisition during 2008 (amounts in thousands): As of December31, 2008 2007 Cost reports $ 2,078 $ 1,978 Medicare PPS related claims 2,553 833 $ 4,631 $ 2,811 The estimated amounts due to Medicare for cost reports relates to both settled and open cost reports that are still subject to the completion of audits and the issuance of final assessments.The Medicare PPS related claims are estimated amounts due to Medicare for a notification received from CMS that it intended to make certain recoveries of amounts overpaid to providers for the periods dating from the inception of PPS on October1, 2000 through particular dates in 2003 and 2004.We believe that the estimated amounts above reflect the amounts that we will ultimately owe Medicare, but we cannot assure you that different amounts will not be ultimately claimed by Medicare.Additionally, we have recorded these amounts as current liabilities on the accompanying consolidated balance sheets as these amounts could become due, if mandated by Medicare, at any time. |
12. VALUATION AND QUALIFYING ACCOUNTS | 12. VALUATION AND QUALIFYING ACCOUNTS The following table summarizes the activity and ending balances in our allowance for doubtful accounts (amounts in thousands): Year end Balanceat beginning of Year Provision for doubtful accounts Write offs Acquired through acquisitions Balanceat endofYear 2008 $ 12,968 $ 23,998 $ (13,094 ) $ 3,180 $ 27,052 2007 9,870 11,975 (8,970 ) 93 12,968 2006 12,387 11,390 (13,989 ) 82 9,870 |
13. UNAUDITED SUMMARIZED QUARTERLY FINANCIAL INFORMATION | 13. UNAUDITED SUMMARIZED QUARTERLY FINANCIAL INFORMATION The following is a summary of our unaudited quarterly results of operations. See accompanying accountants’ review report on unaudited information included in this filing (amounts in thousands, except per share data): Revenue Netincome Net income per share (1) Basic Diluted 2008: 1st Quarter $ 213,087 $ 16,464 $ 0.63 $ 0.62 2nd Quarter (2) 312,671 20,384 0.77 0.76 3rd Quarter (2) 321,561 23,493 0.88 0.87 4th Quarter (2) 340,096 26,341 0.99 0.97 $ 1,187,415 $ 86,682 3.28 3.22 2007: 1st Quarter $ 153,581 $ 13,265 $ 0.52 $ 0.51 2nd Quarter 169,457 14,917 0.58 0.57 3rd Quarter (3) 180,910 20,216 0.78 0.77 4th Quarter 193,986 16,715 0.64 0.63 $ 697,934 $ 65,113 2.52 2.48 (1) Because of the method used in calculating per share data, the quarterly per share data may not necessarily total to the per share data as computed for the entire year. (2) During the second, third and fourth quarters of 2008, certain TLC integration costs were incurred primarily for the payment of severance for TLC employees and for the conversion of the acquired TLC agencies to our operating systems including our Point of Care network. Net of income taxes, these costs amounted to $1.6 million, $0.7 million and $0.1 million for the three-month periods ended June30, 2008,September30, 2008 and December31, 2008, respectively. (3) Our results for the three-month period ended September30, 2007 include the extinguishment of $4.2 million liabilities associated with Alliance, which was a non-taxable event. See “Note 9, Commitments and Contingencies” to the consolidated financial statements for further details. |
14. LIQUIDITY | 14. LIQUIDITY As part of our cash management process, we pay down our outstanding debt with any available cash generated from operations and rely on availability of funds under our Revolving Credit Agreement for our liquidity and acquisition needs. As of December31, 2008, we have made our minimum required payments of $22.5 million on our Term Loan and have reduced our Revolving Credit Facility by $64.5 million. As of the date of this filing, we do not believe our availability of funds under our Revolving Credit Facility is at risk; however, if our availability under our Revolving Credit Facility were to decrease, in light of the credit market conditions, we may need to consider adjusting our strategy to meet our operating forecasts, debt service requirements and acquisition and start-up activity needs. Such changes could include, but would not be limited to, meeting our minimum debt service requirements and meeting our forecasted operating needs with operating cash flows, while retaining any surplus in operating cash flows, as deemed necessary. As we experience over a 99% collection rate on our Medicare claims, which represents 87% of our net service revenue, we believe that we could adjust our cash management strategy, as deemed necessary. |
Statement Of Cash Flows Indirec
Statement Of Cash Flows Indirect (USD $) | |||
In Thousands | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 | 12 Months Ended
Dec. 31, 2006 |
Cash Flows from Operating Activities: | |||
Net income | $86,682 | $65,113 | $38,255 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 20,406 | 13,749 | 10,106 |
Provision for doubtful accounts | 23,998 | 11,975 | 11,390 |
Non-cash compensation | 6,372 | 3,188 | 2,560 |
401(k) employer match | 12,384 | 6,605 | 6,955 |
Loss on disposal of property and equipment | 673 | 339 | 596 |
Deferred income taxes | 29,436 | 2,529 | 16,499 |
Write off of deferred debt issuance costs | 406 | 0 | 1,297 |
Minority interests | (40) | 7 | 0 |
Equity in earnings of unconsolidated joint ventures | (890) | (122) | 0 |
Amortization of deferred debt issuance costs | 1,207 | 25 | 452 |
Return on equity investment | 337 | 0 | 0 |
Gain on release of Alliance's net liabilities (see Note 9) | 0 | (4,212) | 0 |
Impairment of intangible assets | 0 | 0 | 125 |
Release of shares from escrow | 0 | 0 | (327) |
Changes in operating assets and liabilities, net of impact of acquisitions: | |||
Patient accounts receivable | (60,478) | (32,013) | (18,564) |
Other current assets | (4,095) | 2,766 | (7,803) |
Other assets | 228 | 1,484 | 692 |
Accounts payable | (11,124) | (1,089) | (16,531) |
Accrued expenses | 45,349 | 22,664 | (270) |
Other long-term obligations | (110) | 293 | 892 |
Obligations due Medicare | 0 | (216) | (3,244) |
Net cash provided by operating activities | 150,741 | 93,085 | 43,080 |
Cash Flows from Investing Activities: | |||
Purchases of short-term investments | 0 | (89,000) | 0 |
Proceeds from sales of short-term investments | 0 | 89,000 | 0 |
Proceeds from sale of deferred compensation plan assets | 600 | 697 | 0 |
Proceeds from the sale of property and equipment | 32 | 3,140 | 85 |
Deposits into restricted cash | 0 | 0 | (4,797) |
Withdrawals from restricted cash | 0 | 4,797 | 0 |
Purchase of deferred compensation plan assets | (1,849) | (2,028) | 0 |
Purchases of property and equipment | (28,385) | (28,633) | (29,271) |
Acquisitions of businesses, net of cash acquired | (471,319) | (102,297) | (14,077) |
Acquisitions of reacquired franchise rights | (4,730) | 0 | 0 |
Net cash (used in) investing activities | (505,651) | (124,324) | (48,060) |
Cash Flows from Financing Activities: | |||
Outstanding checks in excess of bank balance | 4,548 | 0 | 0 |
Proceeds from issuance of stock upon exercise of stock options and warrants | 2,848 | 3,840 | 2,812 |
Proceeds from issuance of stock to employee stock purchase plan | 3,806 | 2,487 | 1,988 |
Tax benefit from stock option exercises | 2,909 | 2,129 | 1,238 |
Proceeds from equity offering | 0 | 0 | 124,500 |
Issuance cost related to equity offering | 0 | 0 | (6,546) |
Proceeds from short-term revolving line of credit | 0 | 0 | 10,000 |
Principal payments of short-term revolving line of credit | 0 | 0 | (10,000) |
Proceeds from swingline facility (a portion of Revolving Credit Facility) | 27,200 | 0 | 0 |
Repayments from swingline facility (a portion of Revolving Credit Facility) | (27,200) | 0 | 0 |
Proceeds from issuance of long-term obligations | 457,000 | 0 | 0 |
Payment of deferred financing fees | (8,124) | (473) | 0 |
Principal payments of long-term obligations | (161,420) | (4,775) | (52,022) |
Net cash provided by financing activities | 301,567 | 3,208 | 71,970 |
Net (decrease) increase in cash and cash equivalents | (53,343) | (28,031) | 66,990 |
Cash and cash equivalents at beginning of period | 56,190 | 84,221 | 17,231 |
Cash and cash equivalents at end of period | 2,847 | 56,190 | 84,221 |
Supplemental Disclosures of Cash Flow Information: | |||
Cash paid for interest | 12,950 | 507 | 3,990 |
Cash paid for income taxes, net of refunds received | 20,138 | 26,105 | 10,027 |
Cash paid for 2005 payroll taxes under Hurricane Relief Act extended deadlines | 0 | 0 | 18,773 |
Supplemental Disclosures of Non-Cash Financing and Investing Activities: | |||
Notes payable issued for acquisitions | 6,827 | 18,195 | 3,770 |
Notes payable issued for software licenses | $2,126 | $5,501 | $0 |
Statement Of Financial Position
Statement Of Financial Position Classified (USD $) | ||
In Thousands, except Share data | Dec. 31, 2008
| Dec. 31, 2007
|
Current assets: | ||
Cash and cash equivalents | $2,847 | $56,190 |
Patient accounts receivable, net of allowance for doubtful accounts | 175,698 | 96,309 |
Allowance for doubtful accounts | 27,052 | 12,968 |
Prepaid expenses | 8,086 | 6,023 |
Other current assets | 7,719 | 5,991 |
Total current assets | 194,350 | 164,513 |
Property and equipment, net of accumulated depreciation | 79,258 | 68,313 |
Accumulated depreciation | 39,208 | 24,766 |
Goodwill | 733,881 | 332,534 |
Intangible assets, net of accumulated amortization | 42,388 | 14,301 |
Accumulated amortization | 7,944 | 6,261 |
Other assets, net | 20,317 | 7,450 |
Total assets | 1,070,194 | 587,111 |
Current liabilities: | ||
Accounts payable | 18,652 | 14,438 |
Accrued expenses | 134,049 | 66,667 |
Obligations due Medicare | 4,631 | 2,811 |
Current portion of long-term obligations | 42,632 | 11,049 |
Current portion of deferred income taxes | 4,663 | 6,771 |
Total current liabilities | 204,627 | 101,736 |
Long-term obligations, less current portion | 285,942 | 12,991 |
Deferred income taxes | 11,548 | 18,495 |
Other long-term obligations | 5,959 | 6,069 |
Total liabilities | 508,076 | 139,291 |
Commitments and Contingencies - Note 9 | 0 | 0 |
Minority interests | 783 | 849 |
Stockholders' equity: | ||
Preferred stock | 0 | 0 |
Par value | 0.001 | 0.001 |
Authorized | 5,000,000 | 5,000,000 |
Issued | 0 | 0 |
Outstanding | 0 | 0 |
Common stock | 27 | 26 |
Par value | 0.001 | 0.001 |
Authorized | 60,000,000 | 60,000,000 |
Issued | 27,191,946 | 26,473,762 |
Outstanding | 27,083,231 | 26,368,644 |
Additional paid-in capital | 326,120 | 297,802 |
Treasury stock at cost | (617) | (437) |
Shares of common stock | 108,715 | 105,118 |
Accumulated other comprehensive (loss) income | (447) | 10 |
Retained earnings | 236,252 | 149,570 |
Total stockholders' equity | 561,335 | 446,971 |
Total liabilities and stockholders' equity | $1,070,194 | $587,111 |
Statement Of Income Alternative
Statement Of Income Alternative (USD $) | |||
In Thousands, except Per Share data | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 | 12 Months Ended
Dec. 31, 2006 |
Net service revenue | $1,187,415 | $697,934 | $541,148 |
Cost of service, excluding depreciation and amortization | 562,633 | 329,008 | 252,239 |
General and administrative expenses: | |||
Salaries and benefits | 264,029 | 150,972 | 116,534 |
Non-cash compensation | 6,372 | 3,188 | 2,560 |
Other | 152,876 | 92,480 | 82,663 |
Provision for doubtful accounts | 23,998 | 11,975 | 11,390 |
Depreciation and amortization | 20,406 | 13,749 | 10,106 |
Operating expenses | 1,030,314 | 601,372 | 475,492 |
Operating income | 157,101 | 96,562 | 65,656 |
Other (expense) income: | |||
Interest income | 1,027 | 3,985 | 1,197 |
Interest expense | (16,627) | (835) | (4,907) |
Gain on release of Alliance's net liabilities (see Note 9) | 0 | 4,212 | 0 |
Miscellaneous, net | (145) | (506) | (49) |
Total other (expense) income | (15,745) | 6,856 | (3,759) |
Income before income taxes and minority interest | 141,356 | 103,418 | 61,897 |
Income tax expense | (54,714) | (38,298) | (23,642) |
Minority interests | 40 | (7) | 0 |
Net income | $86,682 | $65,113 | $38,255 |
Net income per common share: | |||
Basic | 3.28 | 2.52 | 1.75 |
Diluted | 3.22 | 2.48 | 1.72 |
Weighted average shares outstanding: | |||
Basic | 26,445 | 25,842 | 21,809 |
Diluted | 26,903 | 26,275 | 22,289 |
Statement Of Shareholders Equit
Statement Of Shareholders Equity And Other Comprehensive Income (USD $) | ||||||||
In Thousands, except Share data | Common Stock Amount
| Additional Paid-in Capital
| Treasury Stock
| Unearned Compensation
| Accumulated Other Comprehensive (Loss) Income
| Retained Earnings
| Total
| |
Beginning Balance at Dec. 31, 2005 | $16 | $146,684 | ($25) | ($628) | $0 | $46,552 | $192,599 | |
Beginning Balance at Dec. 31, 2005 | 15,877,524 | |||||||
Net income | 38,255 | 38,255 | ||||||
Issuance of stock for employee stock purchase plan | 64,623 | |||||||
Issuance of stock for employee stock purchase plan | 1,988 | 1,988 | ||||||
Issuance of stock in connection with 401(k) plan | 181,594 | |||||||
Issuance of stock in connection with 401(k) plan | 6,955 | 6,955 | ||||||
Exercise of stock options | 160,026 | |||||||
Exercise of stock options | 2,812 | 2,812 | ||||||
Issuance of non-vested stock | 60,500 | |||||||
Non-cash compensation | 2,560 | 2,560 | ||||||
Tax benefit from stock option exercises | 1,238 | 1,238 | ||||||
Reclassification of unearned compensation to additional paid-in capital | (628) | 628 | 0 | |||||
Surrendered shares | (27) | (27) | ||||||
Release of shares from escrow | (327) | (327) | ||||||
Issuance of stock in connection with public offering, net | 3,000,000 | |||||||
Issuance of stock in connection with public offering, net | 3 | 117,951 | 117,954 | |||||
Four-for-three stock split effected in form of 33 1/3 stock dividend | 6,454,456 | |||||||
Four-for-three stock split effected in form of 33 1/3 stock dividend | 7 | (7) | 0 | |||||
Ending Balance at Dec. 31, 2006 | 25,798,723 | |||||||
Ending Balance at Dec. 31, 2006 | 26 | 279,553 | (379) | 0 | 0 | 84,807 | 364,007 | |
Net income | 65,113 | 65,113 | ||||||
Unrealized (loss) on deferred compensation plan assets | 10 | 10 | ||||||
Adjustment for cumulative effect of change in accounting principle-FIN 48 | (350) | (350) | ||||||
Issuance of stock for employee stock purchase plan | 84,089 | |||||||
Issuance of stock for employee stock purchase plan | 2,487 | 2,487 | ||||||
Issuance of stock in connection with 401(k) plan | 186,446 | |||||||
Issuance of stock in connection with 401(k) plan | 6,605 | 6,605 | ||||||
Exercise of stock options | 246,101 | |||||||
Exercise of stock options | 3,840 | 3,840 | ||||||
Issuance of non-vested stock | 53,285 | |||||||
Non-cash compensation | 3,188 | 3,188 | ||||||
Tax benefit from stock option exercises | 2,129 | 2,129 | ||||||
Surrendered shares | (58) | (58) | ||||||
Ending Balance at Dec. 31, 2007 | 26,368,644 | |||||||
Ending Balance at Dec. 31, 2007 | 26 | 297,802 | (437) | 0 | 10 | 149,570 | 446,971 | |
Net income | 86,682 | 86,682 | ||||||
Unrealized (loss) on deferred compensation plan assets | (457) | (457) | ||||||
Issuance of stock for employee stock purchase plan | 96,036 | |||||||
Issuance of stock for employee stock purchase plan | 3,806 | 3,806 | ||||||
Issuance of stock in connection with 401(k) plan | 265,094 | |||||||
Issuance of stock in connection with 401(k) plan | 1 | 12,383 | 12,384 | |||||
Exercise of stock options | 223,237 | |||||||
Exercise of stock options | 2,848 | 2,848 | ||||||
Issuance of non-vested stock | 130,220 | |||||||
Non-cash compensation | 6,372 | 6,372 | ||||||
Tax benefit from stock option exercises | 2,909 | 2,909 | ||||||
Surrendered shares | (180) | (180) | ||||||
Ending Balance at Dec. 31, 2008 | 27,083,231 | |||||||
Ending Balance at Dec. 31, 2008 | $27 | $326,120 | ($617) | $0 | ($447) | $236,252 | $561,335 |