NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
1. BASIS OF PRESENTATION
The condensed consolidated balance sheets and related condensed consolidated statements of comprehensive income and cash flows contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”), which are unaudited, include the accounts of AMN Healthcare Services, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all entries necessary for a fair presentation of such unaudited condensed consolidated financial statements have been included. These entries consisted of all normal recurring items. The results of operations for the interim period are not necessarily indicative of the results to be expected for any other interim period or for the entire fiscal year or for any future period.
The unaudited condensed consolidated financial statements do not include all information and notes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States. Please refer to the Company’s audited consolidated financial statements and the related notes for the fiscal year ended
December 31, 2017
, contained in the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2017
, filed with the Securities and Exchange Commission on February 16, 2018 (“
2017
Annual Report”).
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates, including those related to asset impairments, accruals for self-insurance, compensation and related benefits, accounts receivable, contingencies and litigation, earn-out liabilities, and income taxes. Actual results could differ from those estimates under different assumptions or conditions.
Recently Adopted Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606).” The FASB also issued a series of other ASUs, which update ASU 2014-09 (collectively, the “new revenue recognition standard”). This new standard replaces all previous U.S. GAAP guidance on this topic and eliminates all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The Company adopted this standard effective January 1, 2018, using the modified retrospective transition method applied to those contracts which were not completed as of that date. Revenue from substantially all of our contracts with customers continues to be recognized over time as services are rendered. The Company recognized the cumulative effect of adopting this guidance as an adjustment to its opening balance of retained earnings of
$2,089
, net of tax, primarily related to capitalization of contract costs. Prior period amounts are not retrospectively adjusted and continue to be reported in accordance with the accounting standards in effect for those periods. The impact of the adoption of the new standard was not material to the Company’s condensed consolidated financial statements for the quarter ended
March 31, 2018
. The Company expects the impact to be immaterial on an ongoing basis. See additional information regarding revenue recognition and disaggregated revenue in Note (2), “Revenue Recognition” and Note (4), “Segment Information,” respectively.
In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” The standard provides guidance on how certain cash receipts and payments are presented and classified in the statement of cash flows. For public entities, ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those annual periods, and requires a retrospective approach. The Company adopted this standard effective January 1, 2018 and the adoption did not have a material effect on the Company’s consolidated financial statements.
In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” The standard requires that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents (collectively, "restricted cash"). Therefore, restricted cash should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for interim and annual periods beginning after December 15, 2017. The Company adopted this standard retrospectively effective January 1, 2018 and included certain
restricted cash amounts for the period ended March 31, 2017 within the accompanying condensed consolidated statements of cash flows. These adjustments had no effect on previously reported results of operations or retained earnings. The following table provides a summary of the adjustments from amounts previously reported.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2017
|
|
As Previously Reported
|
|
Adjustments
|
|
As Adjusted
|
Cash flows from operating activities:
|
|
|
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
Other Current Assets
|
2,945
|
|
|
(2,679
|
)
|
|
266
|
|
Restricted cash, cash equivalents and investments balance
|
4,951
|
|
|
(4,951
|
)
|
|
—
|
|
Net cash provided by operating activities
|
52,314
|
|
|
(7,630
|
)
|
|
44,684
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
Change in restricted cash, cash equivalents and investments balance
|
(1
|
)
|
|
1
|
|
|
—
|
|
Net cash used in investing activities
|
(13,301
|
)
|
|
1
|
|
|
(13,300
|
)
|
|
|
|
|
|
|
Net increase in cash, cash equivalents and restricted cash
|
$
|
27,089
|
|
|
$
|
(7,629
|
)
|
|
$
|
19,460
|
|
Cash, cash equivalents and restricted cash at the beginning of period
|
10,622
|
|
|
40,406
|
|
|
51,028
|
|
Cash, cash equivalents and restricted cash at the end of period
|
$
|
37,711
|
|
|
$
|
32,777
|
|
|
$
|
70,488
|
|
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated balance sheets and related notes to the amounts presented in the accompanying condensed consolidated statements of cash flows.
|
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
Cash and cash equivalents
|
$
|
54,499
|
|
|
$
|
15,147
|
|
Restricted cash and cash equivalents (included in other current assets)
|
24,579
|
|
|
25,506
|
|
Restricted cash, cash equivalents and investments
|
60,236
|
|
|
64,315
|
|
Total cash, cash equivalents and restricted cash and investments
|
139,314
|
|
|
104,968
|
|
Less restricted investments
|
(5,287
|
)
|
|
(6,074
|
)
|
Total cash, cash equivalents and restricted cash
|
$
|
134,027
|
|
|
$
|
98,894
|
|
There were no other material impacts to the Company's consolidated financial statements as a result of adopting these updated standards.
2. REVENUE RECOGNITION
Revenue primarily consists of fees earned from the temporary and permanent placement of healthcare professionals and executives as well as from the Company’s SaaS-based technology, including its vendor management systems and its scheduling software. Revenue is recognized when control of these services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Revenue from temporary staffing services is recognized as the services are rendered by clinical and non-clinical healthcare professionals. Under the Company’s managed services program arrangements, the Company manages all or a part of a customer’s supplemental workforce needs utilizing its own network of healthcare professionals along with those of third-party subcontractors. Revenue and the related direct costs under MSP arrangements are recorded in accordance with the accounting guidance on reporting revenue gross as a principal versus net as an agent. When the Company uses subcontractors and acts as an agent, revenue is recorded net of the related subcontractor’s expense. Revenue from executive search, physician permanent placement, and recruitment process outsourcing services is recognized as the services are rendered. The Company’s SaaS-based revenue is recognized ratably over the applicable arrangement’s service period.
The Company’s customers are primarily billed as services are rendered. Any fees billed in advance of being earned are recorded as deferred revenue. During the
three months ended March 31, 2018
, the amount recognized as revenue that was previously deferred was not material.
Under the new revenue standard, the Company has elected to apply the following practical expedients and optional exemptions:
|
|
•
|
Recognize incremental costs of obtaining a contract with amortization periods of one year or less as expense when incurred. These costs are recorded within selling, general and administrative expenses.
|
|
|
•
|
Recognize revenue in the amount of consideration to which the Company has a right to invoice the customer if that amount corresponds directly with the value to the customer of the Company’s services completed to date.
|
|
|
•
|
Exemptions from disclosing the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which revenue is recognized in the amount of consideration to which the Company has a right to invoice for services performed and (iii) contracts for which variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation.
|
See additional information regarding adoption of the new revenue standard in Note (1), “Basis of Presentation” and additional disclosures required by the new revenue standard in Note (4), “Segment Information.”
3. NET INCOME PER COMMON SHARE
Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period. The following table sets forth the computation of basic and diluted net income per common share for the
three months ended March 31, 2018
and
2017
, respectively:
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
2018
|
|
2017
|
Net income
|
$
|
42,681
|
|
|
$
|
32,008
|
|
|
|
|
|
Net income per common share - basic
|
$
|
0.89
|
|
|
$
|
0.67
|
|
Net income per common share - diluted
|
$
|
0.87
|
|
|
$
|
0.65
|
|
|
|
|
|
Weighted average common shares outstanding - basic
|
47,733
|
|
|
47,782
|
|
Plus dilutive effect of potential common shares
|
1,383
|
|
|
1,738
|
|
Weighted average common shares outstanding - diluted
|
49,116
|
|
|
49,520
|
|
Share-based awards to purchase
9
shares of common stock were not included in the above calculation of diluted net income per common share for the
three months ended March 31, 2018
because the effect of these instruments was anti-dilutive.
4. SEGMENT INFORMATION
The Company has
three
reportable segments: nurse and allied solutions, locum tenens solutions, and other workforce solutions.
The Company’s chief operating decision maker relies on internal management reporting processes that provide revenue and operating income by reportable segment for making financial decisions and allocating resources. Segment operating income represents income before income taxes plus depreciation, amortization of intangible assets, share-based compensation, interest expense, net, and other, and unallocated corporate overhead. The Company’s management does not evaluate, manage or measure performance of segments using asset information; accordingly, asset information by segment is not prepared or disclosed.
The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated results and was derived from each segment’s internal financial information as used for corporate management purposes:
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
2018
|
|
2017
|
Revenue
|
|
|
|
Nurse and allied solutions
|
$
|
338,179
|
|
|
$
|
313,523
|
|
Locum tenens solutions
|
103,117
|
|
|
102,843
|
|
Other workforce solutions
|
81,193
|
|
|
78,803
|
|
|
$
|
522,489
|
|
|
$
|
495,169
|
|
Segment operating income
|
|
|
|
Nurse and allied solutions
|
$
|
51,805
|
|
|
$
|
45,980
|
|
Locum tenens solutions
|
9,958
|
|
|
12,219
|
|
Other workforce solutions
|
19,851
|
|
|
19,857
|
|
|
81,614
|
|
|
78,056
|
|
Unallocated corporate overhead
|
15,663
|
|
|
15,672
|
|
Depreciation and amortization
|
7,886
|
|
|
7,668
|
|
Share-based compensation
|
2,864
|
|
|
2,681
|
|
Interest expense, net, and other
|
5,335
|
|
|
5,130
|
|
Income before income taxes
|
$
|
49,866
|
|
|
$
|
46,905
|
|
The Company offers a comprehensive managed services program, in which the Company manages all or a portion of a client's contingent staffing needs. This service includes both the placement of the Company's own healthcare professionals and the utilization of other staffing agencies to fulfill the client's staffing needs. See additional information in Note (2), “Revenue Recognition.” For the
three months ended March 31, 2018
and
2017
, revenue under the Company’s managed services program arrangements comprised approximately
63%
and
57%
for nurse and allied solutions revenue,
14%
and
12%
for locum tenens solutions revenue and
9%
and
7%
for other workforce solutions revenue, respectively.
On February 9, 2018, the Company entered into a credit agreement (the “New Credit Agreement”) with several lenders to provide for a
$400,000
secured revolving credit facility (the “Senior Credit Facility”) to replace its then-existing credit facilities. The Senior Credit Facility includes a
$50,000
sublimit for the issuance of letters of credit and a
$50,000
sublimit for swingline loans. The obligations of the Company under the New Credit Agreement and the Senior Credit Facility are secured by substantially all of the assets of the Company. Borrowings under the Senior Credit Facility bear interest at floating rates, at the Company’s option, based upon either LIBOR plus a spread of
1.00%
to
2.00%
or a base rate plus a spread of
0.00%
to
1.00%
. The applicable spread is determined quarterly based upon the Company’s consolidated net leverage ratio. The Senior Credit Facility is available for working capital, capital expenditures, permitted acquisitions and general corporate purposes. The maturity date of the Senior Credit Facility is February 9, 2023.
In connection with obtaining the New Credit Agreement, the Company incurred
$2,331
in fees paid to lenders and other third parties, which were capitalized and are amortized to interest expense over the term of the New Credit Facility. In addition, the Company wrote off
$574
of unamortized financing fees during the
three months ended March 31, 2018
relating to the prior credit facilities.
6. FAIR VALUE MEASUREMENT
The Company’s valuation techniques and inputs used to measure fair value and the definition of the three levels (Level 1, Level 2, and Level 3) of the fair value hierarchy are disclosed in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 4—Fair Value Measurement” of the
2017
Annual Report. The Company has not changed the valuation techniques or inputs it uses for its fair value measurement during the
three months ended March 31, 2018
.
Assets and Liabilities Measured on a Recurring Basis
The Company’s restricted cash equivalents that serve as collateral for the Company’s outstanding letters of credit
typically consist of money market funds that are measured at fair value based on quoted prices, which are Level 1 inputs.
The Company’s restricted cash equivalents and investments that serve as collateral for the Company’s captive insurance company primarily consist of commercial paper that is measured at observable market prices for identical securities that are traded in less active markets, which are Level 2 inputs. Of the
$30,911
commercial paper issued and outstanding as of
March 31, 2018
,
$5,287
had original maturities greater than three months, which were considered available-for-sale securities. As of
December 31, 2017
, the Company had
$28,708
commercial paper issued and outstanding, of which
$6,074
had original maturities greater than three months and were considered available-for-sale securities.
The Company’s contingent consideration liabilities are measured at fair value using probability-weighted discounted cash flow analysis for the acquired companies, which are Level 3 inputs.
The following tables present information about the above-referenced assets and liabilities and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements as of March 31, 2018
|
|
Total
|
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
Money market funds
|
$
|
2,720
|
|
|
$
|
2,720
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
30,911
|
|
|
—
|
|
|
30,911
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements as of December 31, 2017
|
|
Total
|
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
Money market funds
|
$
|
2,713
|
|
|
$
|
2,713
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
28,708
|
|
|
—
|
|
|
28,708
|
|
|
—
|
|
Acquisition contingent consideration earn-out liabilities
|
(2,070
|
)
|
|
—
|
|
|
—
|
|
|
(2,070
|
)
|
Level 3 Information
The following table sets forth a reconciliation of changes in the fair value of contingent consideration liabilities classified as Level 3 in the fair value hierarchy:
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
2018
|
|
2017
|
Balance as of January 1,
|
$
|
(2,070
|
)
|
|
$
|
(6,816
|
)
|
Settlement of TFS earn-out for year ended December 31, 2016
|
—
|
|
|
3,000
|
|
Settlement of HSG earn-out for year ended December 31, 2016
|
70
|
|
|
1,930
|
|
Change in fair value of contingent consideration earn-out liability from HSG acquisition
|
—
|
|
|
(23
|
)
|
Settlement of HSG earn-out for year ended December 31, 2017
|
2,000
|
|
|
—
|
|
Balance as of March 31,
|
$
|
—
|
|
|
$
|
(1,909
|
)
|
Assets Measured on a Non-Recurring Basis
The Company applies fair value techniques on a non-recurring basis associated with valuing potential impairment losses related to its goodwill, indefinite-lived intangible assets, long-lived assets, and equity investments.
The Company evaluates goodwill and indefinite-lived intangible assets annually for impairment and whenever circumstances occur indicating that goodwill might be impaired. The Company determines the fair value of its reporting units based on a combination of inputs, including the market capitalization of the Company, as well as Level 3 inputs such as
discounted cash flows, which are not observable from the market, directly or indirectly. The Company determines the fair value of its indefinite-lived intangible assets using the income approach (relief-from-royalty method) based on Level 3 inputs.
There were no triggering events identified and no indication of impairment of the Company’s goodwill, indefinite-lived intangible assets, long-lived assets, or equity investments during the
three months ended March 31, 2018
and
2017
.
Fair Value of Financial Instruments
The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate the value, even though these instruments are not recognized at fair value in the consolidated balance sheets. As of
March 31, 2018
, the Company's senior notes have a carrying amount of
$325,000
and an estimated fair value of
$323,375
. As of
December 31, 2017
, the senior notes had a carrying amount of
$325,000
and an estimated fair value of
$335,156
. Quoted market prices in active markets for identical liabilities based inputs (level 1) were used to estimate fair value. The senior notes were issued in October 2016 and have a fixed rate of
5.125%
. See additional information in “Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Notes Payable and Credit Agreement” of our
2017
Annual Report.
The fair value of the Company’s long-term self-insurance accruals cannot be estimated as the Company cannot reasonably determine the timing of future payments.
7. INCOME TAXES
The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. With few exceptions, as of
March 31, 2018
, the Company is no longer subject to state, local or foreign examinations by tax authorities for tax years before 2006, and the Company is no longer subject to U.S. federal income or payroll tax examinations for tax years before 2013. The IRS conducted, completed and settled audits of the Company’s 2007-2010 and 2011-2012 tax years related to income and employment tax issues for the Company’s treatment of certain non-taxable per diem allowances and travel benefits in July 2015 and November 2017 respectively.
The IRS began an audit of the Company’s 2013 tax year during the quarter ended June 30, 2015. The Company believes its reserve for unrecognized tax benefits and contingent tax issues is adequate with respect to all open years. Notwithstanding the foregoing, the Company could adjust its provision for income taxes and contingent tax liability based on future developments.
Immaterial Tax Correction Related to Prior Periods
During the first quarter of 2018, the Company identified an error related to the income tax treatment of fair value changes in the cash surrender value of its Company Owned Life Insurance (COLI) for prior years. These fair value changes had not previously been included as a net tax benefit in the provision for prior periods. In accordance with ASC 250,
Accounting Changes and Error Corrections
, management evaluated the materiality of the error from qualitative and quantitative perspectives, and concluded that the error was not material to the consolidated financial statements of prior years, nor is it believed to be material to 2018’s full year consolidated financial statements. As result, the Company recorded a net tax benefit of
$2,501
in the three months ended March 31, 2018 to adjust for this immaterial error correction.
Tax Cuts and Jobs Act
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, reducing the U.S. federal corporate tax rate from
35
percent to
21
percent.
The Tax Act changes that affected the Company in 2017 are primarily tax rate changes on certain deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”). The staff of the Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements.
The Tax Act also establishes new tax laws that will affect 2018 and beyond, including, but not limited to, (1) reduction of the U.S. federal corporate tax rate; (2) the repeal of the domestic production activity deduction; (3) limitations on the deductibility of certain executive compensation; and (4) limitations on various entertainment and meals deductions.
The Company's accounting for certain elements of the Tax Act is incomplete, primarily relating to executive compensation and accounting methods. However, the Company was able to make reasonable estimates of these elements and, therefore, recorded provisional adjustments for these items.
8. COMMITMENTS AND CONTINGENCIES: LEGAL PROCEEDINGS
From time to time, the Company is involved in various lawsuits, claims, investigations, and proceedings that arise in the ordinary course of business. These matters typically relate to professional liability, tax, payroll, contract, competitor disputes and employee-related matters and include individual and collective lawsuits, as well as inquiries and investigations by governmental agencies regarding the Company’s employment practices. Additionally, some of the Company’s clients may also become subject to claims, governmental inquiries and investigations, and legal actions relating to services provided by the Company’s healthcare professionals. Depending upon the particular facts and circumstances, the Company may also be subject to indemnification obligations under its contracts with such clients relating to these matters. The Company records a liability when management believes an adverse outcome from a loss contingency is both probable and the amount, or a range, can be reasonably estimated. Significant judgment is required to determine both probability of loss and the estimated amount. The Company reviews its loss contingencies at least quarterly and adjusts its accruals and/or disclosures to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, or other new information, as deemed necessary. The most significant matters for which the Company has established loss contingencies are class actions related to wage and hour claims under California and Federal law. Specifically, among other claims in these lawsuits, it is alleged that certain expense reimbursements should be included in the regular rate of pay for purposes of calculating overtime rates, and that employees were not afforded required breaks or compensated for all time worked. While the Company believes that its wage and hour practices conform with law in all material respects, litigation is always subject to inherent uncertainty, and the Company is not able to reasonably predict if any matter will be resolved in a manner that is materially adverse to the Company beyond the amounts accrued.
With regards to outstanding loss contingencies as of
March 31, 2018
, which are included in accounts payable and accrued expenses in the condensed consolidated balance sheet, the Company believes that such matters will not, either individually or in the aggregate, have a material adverse effect on its business, consolidated financial position, results of operations, or cash flows.
9. BALANCE SHEET DETAILS
The consolidated balance sheets detail is as follows as of
March 31, 2018
and
December 31, 2017
:
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
Other current assets:
|
|
|
|
|
Restricted cash and cash equivalents
|
|
$
|
24,579
|
|
|
$
|
25,506
|
|
Income tax receivable
|
|
6,017
|
|
|
15,898
|
|
Other
|
|
7,768
|
|
|
9,589
|
|
Other current assets
|
|
$
|
38,364
|
|
|
$
|
50,993
|
|
|
|
|
|
|
Fixed assets:
|
|
|
|
|
Furniture and equipment
|
|
$
|
29,758
|
|
|
$
|
29,494
|
|
Software
|
|
138,824
|
|
|
132,770
|
|
Leasehold improvements
|
|
8,130
|
|
|
9,056
|
|
|
|
176,712
|
|
|
171,320
|
|
Accumulated depreciation
|
|
(101,182
|
)
|
|
(97,889
|
)
|
Fixed assets, net
|
|
$
|
75,530
|
|
|
$
|
73,431
|
|
|
|
|
|
|
Other assets:
|
|
|
|
|
Life insurance cash surrender value
|
|
$
|
53,386
|
|
|
$
|
48,145
|
|
Other
|
|
30,726
|
|
|
26,221
|
|
Other assets
|
|
$
|
84,112
|
|
|
$
|
74,366
|
|
|
|
|
|
|
Accounts payable and accrued expenses:
|
|
|
|
|
Trade accounts payable
|
|
$
|
26,245
|
|
|
$
|
31,420
|
|
Subcontractor payable
|
|
39,659
|
|
|
41,786
|
|
Accrued expenses
|
|
45,517
|
|
|
40,403
|
|
Professional liability reserve
|
|
7,972
|
|
|
7,672
|
|
Other
|
|
3,009
|
|
|
9,038
|
|
Accounts payable and accrued expenses
|
|
$
|
122,402
|
|
|
$
|
130,319
|
|
|
|
|
|
|
Accrued compensation and benefits:
|
|
|
|
|
Accrued payroll
|
|
$
|
34,834
|
|
|
$
|
33,923
|
|
Accrued bonuses
|
|
13,768
|
|
|
19,489
|
|
Accrued travel expense
|
|
2,999
|
|
|
3,256
|
|
Health insurance reserve
|
|
3,702
|
|
|
3,658
|
|
Workers compensation reserve
|
|
8,075
|
|
|
8,553
|
|
Deferred compensation
|
|
52,115
|
|
|
49,330
|
|
Other
|
|
1,922
|
|
|
3,214
|
|
Accrued compensation and benefits
|
|
$
|
117,415
|
|
|
$
|
121,423
|
|
|
|
|
|
|
Other long-term liabilities:
|
|
|
|
|
Workers compensation reserve
|
|
$
|
18,638
|
|
|
$
|
19,074
|
|
Professional liability reserve
|
|
39,033
|
|
|
38,964
|
|
Deferred rent
|
|
14,785
|
|
|
14,744
|
|
Unrecognized tax benefits
|
|
5,695
|
|
|
5,270
|
|
Deferred revenue
|
|
1,769
|
|
|
960
|
|
Other
|
|
281
|
|
|
267
|
|
Other long-term liabilities
|
|
$
|
80,201
|
|
|
$
|
79,279
|
|
10. SUBSEQUENT EVENTS
Phillips DiPisa and Leaders For Today Acquisition
On April 6, 2018, the Company completed its acquisition of Phillips DiPisa and Leaders For Today (“PDA and LFT”) for
$30,000
and a tiered contingent earn-out payment of up to
$7,000
. PDA and LFT offer a range of leadership staffing and permanent placement solutions for the healthcare industry. The acquisition was funded out of cash on hand.
MedPartners Acquisition
On April 9, 2018, the Company completed its acquisition of MedPartners HIM, LLC (“MedPartners”) for
$195,000
in cash and a tiered contingent earn-out payment of up to
$20,000
. MedPartners provides case management, clinical documentation improvement, medical coding and registry services to hospitals and physician medical groups nationwide. On April 9, 2018, the Company borrowed
$195,000
under the New Credit Agreement to fund the acquisition. The New Credit Agreement is more fully described in Note (5), “New Credit Agreement.”