Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 03, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-34221 | |
Entity Registrant Name | Providence Service Corp | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 86-0845127 | |
Entity Address, Address Line One | 1275 Peachtree Street | |
Entity Address, Address Line Two | Sixth Floor | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30309 | |
City Area Code | 404 | |
Local Phone Number | 888-5800 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | PRSC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 14,183,634 | |
Entity Central Index Key | 0001220754 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 183,277 | $ 61,365 |
Accounts receivable, net of allowance of $2,794 and $5,933, respectively | 164,944 | 180,416 |
Other receivables | 7,310 | 3,396 |
Prepaid expenses and other | 20,266 | 10,942 |
Restricted cash | 3,182 | 153 |
Current assets of discontinued operations | 357 | 155 |
Total current assets | 379,336 | 256,427 |
Operating lease right-of-use assets | 18,814 | 20,095 |
Property and equipment, net | 21,048 | 23,243 |
Goodwill | 135,216 | 135,216 |
Intangible assets, net | 87,358 | 19,911 |
Equity investment | 141,292 | 130,869 |
Other assets | 8,571 | 11,620 |
Total assets | 791,635 | 597,381 |
Current liabilities: | ||
Current portion of finance lease liabilities | 148 | 308 |
Accounts payable | 26,677 | 9,805 |
Current portion of operating lease liabilities | 6,680 | 6,730 |
Accrued expenses | 143,033 | 38,733 |
Accrued transportation costs | 81,558 | 87,063 |
Deferred revenue | 681 | 227 |
Self-funded insurance programs | 10,083 | 5,890 |
Current liabilities of discontinued operations | 1,734 | 1,430 |
Total current liabilities | 270,594 | 150,186 |
Finance lease liabilities, less current portion | 0 | 45 |
Operating lease liabilities, less current portion | 13,015 | 14,502 |
Long-term contract payables | 50,244 | 0 |
Other long-term liabilities | 12,195 | 15,029 |
Deferred tax liabilities | 35,520 | 22,907 |
Total liabilities | 381,568 | 202,669 |
Commitments and contingencies (Note 13) | ||
Redeemable convertible preferred stock | ||
Convertible preferred stock, net: Authorized 10,000,000 shares; $0.001 par value; 0 and 798,788, respectively, issued and outstanding; 5.5%/8.5% dividend rate | 0 | 77,120 |
Stockholders’ equity | ||
Common stock: Authorized 40,000,000 shares; $0.001 par value; 19,468,591 and 18,073,763, respectively, issued and outstanding (including treasury shares) | 20 | 18 |
Additional paid-in capital | 416,504 | 351,529 |
Retained earnings | 221,509 | 183,733 |
Treasury shares, at cost, 5,285,666 and 5,088,782 shares, respectively | (227,966) | (217,688) |
Total stockholders’ equity | 410,067 | 317,592 |
Total liabilities, redeemable convertible preferred stock and stockholders’ equity | $ 791,635 | $ 597,381 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Allowance for doubtful accounts | $ 2,794 | $ 5,933 | |
Temporary equity, shares authorized (in shares) | 10,000,000 | 10,000,000 | |
Temporary equity, par (in usd per share) | $ 0.001 | $ 0.001 | |
Temporary equity, shares issued (in shares) | 0 | 0 | |
Temporary equity, shares outstanding (in shares) | 798,788 | 798,788 | |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 | |
Common stock, par (in USD per share) | $ 0.001 | $ 0.001 | |
Common stock, shares, issued (in shares) | 19,468,591 | 18,073,763 | |
Common stock, shares, outstanding (in shares) | 19,468,591 | 18,073,763 | |
Treasury stock, shares (in shares) | 5,285,666 | 5,088,782 | |
Cash Dividends | |||
Convertible preferred stock, dividend rate | 5.50% | ||
Paid-in-kind Dividends | |||
Convertible preferred stock, dividend rate | 8.50% |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Service revenue, net | $ 320,619 | $ 393,385 | $ 970,166 | $ 1,125,111 |
Operating expenses: | ||||
Service expense | 235,543 | 356,271 | 764,310 | 1,042,717 |
General and administrative expense | 34,441 | 15,979 | 86,435 | 52,241 |
Depreciation and amortization | 7,301 | 4,148 | 17,199 | 12,976 |
Total operating expenses | 277,285 | 376,398 | 867,944 | 1,107,934 |
Operating income | 43,334 | 16,987 | 102,222 | 17,177 |
Other expenses (income): | ||||
Interest expense, net | 379 | 188 | 2,118 | 793 |
Other income | 0 | (66) | 0 | (199) |
Equity in net (income) loss of investee | (10,325) | 3,188 | (12,200) | 6,159 |
Income from continuing operations before income taxes | 53,280 | 13,677 | 112,304 | 10,424 |
Provision for income taxes | 14,360 | 5,097 | 19,785 | 3,940 |
Income from continuing operations, net of tax | 38,920 | 8,580 | 92,519 | 6,484 |
(Loss) income from discontinued operations, net of tax | (115) | (426) | (618) | 540 |
Net income | 38,805 | 8,154 | 91,901 | 7,024 |
Net income available to common stockholders | $ 35,346 | $ 6,104 | $ 34,563 | $ 3,230 |
Basic earnings (loss) per common share: | ||||
Continuing operations (in dollars per share) | $ 2.53 | $ 0.50 | $ 2.63 | $ 0.21 |
Discontinued operations (in dollars per share) | (0.01) | (0.03) | (0.05) | 0.04 |
Basic earnings per common share (in dollars per share) | 2.52 | 0.47 | 2.58 | 0.25 |
Diluted earnings (loss) per common share: | ||||
Continuing operations (in dollars per share) | 2.51 | 0.50 | 2.62 | 0.21 |
Discontinued operations (in dollars per share) | (0.01) | (0.03) | (0.05) | 0.04 |
Diluted (loss) earnings per common share (in dollars per share) | $ 2.50 | $ 0.47 | $ 2.57 | $ 0.25 |
Weighted-average number of common shares outstanding: | ||||
Basic (in shares) | 14,026,039 | 12,993,934 | 13,367,605 | 12,956,222 |
Diluted (in shares) | 14,133,904 | 13,004,449 | 13,415,344 | 12,977,598 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Preferred Stock Conversion Agreement | Common Stock | Common StockPreferred Stock Conversion Agreement | Additional Paid-in Capital | Additional Paid-in CapitalPreferred Stock Conversion Agreement | Retained Earnings | Retained EarningsPreferred Stock Conversion Agreement | Treasury Stock | |||
Beginning Balance (in shares) at Dec. 31, 2018 | 17,784,769 | 4,970,093 | ||||||||||
Beginning Balance at Dec. 31, 2018 | $ 310,998 | $ 18 | $ 334,744 | $ 187,127 | $ (210,891) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 582 | 582 | ||||||||||
Stock-based compensation | 2,103 | 2,103 | ||||||||||
Exercise of employee stock options (in shares) | 57,022 | |||||||||||
Exercise of employee stock options | 2,557 | $ 0 | 2,557 | |||||||||
Restricted stock issued (in shares) | 25,357 | 3,459 | ||||||||||
Restricted stock issued | (217) | $ (217) | ||||||||||
Shares issued for bonus settlement and director stipends (in shares) | 599 | |||||||||||
Shares issued for bonus settlement and director stipends | 0 | |||||||||||
Convertible preferred stock dividends | [1] | (1,087) | (1,087) | |||||||||
Ending Balance (in shares) at Mar. 31, 2019 | 17,867,747 | 4,973,552 | ||||||||||
Ending Balance at Mar. 31, 2019 | 314,936 | $ 18 | 339,404 | 186,622 | $ (211,108) | |||||||
Beginning Balance (in shares) at Dec. 31, 2018 | 17,784,769 | 4,970,093 | ||||||||||
Beginning Balance at Dec. 31, 2018 | 310,998 | $ 18 | 334,744 | 187,127 | $ (210,891) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 7,024 | |||||||||||
Ending Balance (in shares) at Sep. 30, 2019 | 17,967,996 | 5,081,434 | ||||||||||
Ending Balance at Sep. 30, 2019 | 319,655 | $ 18 | 346,034 | 190,857 | $ (217,254) | |||||||
Beginning Balance (in shares) at Mar. 31, 2019 | 17,867,747 | 4,973,552 | ||||||||||
Beginning Balance at Mar. 31, 2019 | 314,936 | $ 18 | 339,404 | 186,622 | $ (211,108) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | (1,712) | (1,712) | ||||||||||
Stock-based compensation | 1,289 | 1,289 | ||||||||||
Exercise of employee stock options (in shares) | 67,931 | |||||||||||
Exercise of employee stock options | 3,826 | 3,826 | ||||||||||
Restricted stock issued (in shares) | 7,088 | 2,419 | ||||||||||
Restricted stock issued | (155) | $ (155) | ||||||||||
Shares issued for bonus settlement and director stipends (in shares) | 202 | |||||||||||
Shares issued for bonus settlement and director stipends | 0 | |||||||||||
Conversion of convertible preferred stock to common stock (in shares) | 4,104 | |||||||||||
Conversion of convertible preferred stock to common stock | 157 | 157 | ||||||||||
Convertible preferred stock dividends | [1] | (1,098) | (1,098) | |||||||||
Ending Balance (in shares) at Jun. 30, 2019 | 17,947,072 | 4,975,971 | ||||||||||
Ending Balance at Jun. 30, 2019 | 317,243 | $ 18 | 344,676 | 183,812 | $ (211,263) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 8,154 | 8,154 | ||||||||||
Stock-based compensation | 855 | 855 | ||||||||||
Exercise of employee stock options (in shares) | 17,755 | |||||||||||
Exercise of employee stock options | 503 | 503 | ||||||||||
Restricted stock issued (in shares) | 2,313 | 42 | ||||||||||
Restricted stock issued | (3) | $ (3) | ||||||||||
Shares issued for bonus settlement and director stipends (in shares) | 856 | |||||||||||
Shares issued for bonus settlement and director stipends | 0 | |||||||||||
Stock repurchase plan (in shares) | 105,421 | |||||||||||
Stock repurchase plan | (5,988) | $ (5,988) | ||||||||||
Convertible preferred stock dividends | [1] | (1,109) | (1,109) | |||||||||
Ending Balance (in shares) at Sep. 30, 2019 | 17,967,996 | 5,081,434 | ||||||||||
Ending Balance at Sep. 30, 2019 | 319,655 | $ 18 | 346,034 | 190,857 | $ (217,254) | |||||||
Beginning Balance (in shares) at Dec. 31, 2019 | 18,073,763 | 5,088,782 | ||||||||||
Beginning Balance at Dec. 31, 2019 | 317,592 | $ 18 | 351,529 | 183,733 | $ (217,688) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 16,098 | 16,098 | ||||||||||
Stock-based compensation | 1,005 | 1,005 | ||||||||||
Exercise of employee stock options (in shares) | 39,111 | |||||||||||
Exercise of employee stock options | 2,054 | 2,054 | ||||||||||
Restricted stock issued (in shares) | 79,029 | 626 | ||||||||||
Restricted stock issued | (37) | $ (37) | ||||||||||
Shares issued for bonus settlement and director stipends (in shares) | 701 | |||||||||||
Shares issued for bonus settlement and director stipends | 38 | 38 | ||||||||||
Stock repurchase plan (in shares) | 142,821 | |||||||||||
Stock repurchase plan | $ (7,299) | $ (7,299) | ||||||||||
Conversion of convertible preferred stock to common stock (in shares) | 40 | |||||||||||
Conversion of convertible preferred stock to common stock | $ 2 | 2 | ||||||||||
Convertible preferred stock dividends | [2],[3] | (1,095) | (1,095) | |||||||||
Ending Balance (in shares) at Mar. 31, 2020 | 18,192,644 | 5,232,229 | ||||||||||
Ending Balance at Mar. 31, 2020 | 328,358 | $ 18 | 354,628 | 198,736 | $ (225,024) | |||||||
Beginning Balance (in shares) at Dec. 31, 2019 | 18,073,763 | 5,088,782 | ||||||||||
Beginning Balance at Dec. 31, 2019 | 317,592 | $ 18 | 351,529 | 183,733 | $ (217,688) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 91,901 | |||||||||||
Ending Balance (in shares) at Sep. 30, 2020 | 19,468,591 | 5,285,666 | ||||||||||
Ending Balance at Sep. 30, 2020 | 410,067 | $ 20 | 416,504 | 221,509 | $ (227,966) | |||||||
Beginning Balance (in shares) at Mar. 31, 2020 | 18,192,644 | 5,232,229 | ||||||||||
Beginning Balance at Mar. 31, 2020 | 328,358 | $ 18 | 354,628 | 198,736 | $ (225,024) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 36,998 | 36,998 | ||||||||||
Stock-based compensation | 691 | 691 | ||||||||||
Exercise of employee stock options (in shares) | 129,722 | |||||||||||
Exercise of employee stock options | 9,275 | 9,275 | ||||||||||
Restricted stock forfeited (in shares) | (8,496) | |||||||||||
Shares issued for bonus settlement and director stipends (in shares) | 487 | |||||||||||
Shares issued for bonus settlement and director stipends | 38 | 38 | ||||||||||
Stock repurchase plan (in shares) | 52,856 | |||||||||||
Stock repurchase plan | (2,887) | $ (2,887) | ||||||||||
Conversion of convertible preferred stock to common stock (in shares) | 14,166 | 925,567 | ||||||||||
Conversion of convertible preferred stock to common stock | 546 | $ 31,259 | $ 1 | 546 | $ 37,255 | $ (5,997) | ||||||
Redemption of convertible preferred stock pursuant to Conversion Agreement | (42,954) | (42,954) | ||||||||||
Convertible preferred stock dividends | [2] | (866) | [3] | (866) | ||||||||
Ending Balance (in shares) at Jun. 30, 2020 | 19,254,090 | 5,285,085 | ||||||||||
Ending Balance at Jun. 30, 2020 | 360,458 | $ 19 | 402,433 | 185,917 | $ (227,911) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 38,805 | 38,805 | ||||||||||
Stock-based compensation | 1,139 | 1,139 | ||||||||||
Exercise of employee stock options (in shares) | 145,124 | |||||||||||
Exercise of employee stock options | 10,251 | $ 1 | 10,250 | |||||||||
Restricted stock issued (in shares) | 330 | 581 | ||||||||||
Restricted stock issued | (55) | $ (55) | ||||||||||
Shares issued for bonus settlement and director stipends (in shares) | 414 | |||||||||||
Shares issued for bonus settlement and director stipends | 38 | 38 | ||||||||||
Conversion of convertible preferred stock to common stock (in shares) | 68,633 | |||||||||||
Conversion of convertible preferred stock to common stock | 2,644 | 2,644 | ||||||||||
Redemption of convertible preferred stock pursuant to Conversion Agreement | (3,186) | (3,186) | ||||||||||
Dividends paid pursuant to the Conversion Agreement | [4] | $ (27) | $ (27) | [3] | ||||||||
Ending Balance (in shares) at Sep. 30, 2020 | 19,468,591 | 5,285,666 | ||||||||||
Ending Balance at Sep. 30, 2020 | $ 410,067 | $ 20 | $ 416,504 | $ 221,509 | $ (227,966) | |||||||
[1] | Cash dividends on redeemable convertible preferred stock of $1.36, $1.37, and $1.38 per share were distributed to convertible preferred stockholders for the three months ended March 31, 2019, June 30, 2019, and September 30, 2019, respectively. | |||||||||||
[2] | Cash dividends on redeemable convertible preferred stock of $1.37 per share were distributed to convertible preferred stockholders for the three months ended March 31, 2020 and June 30, 2020. | |||||||||||
[3] | Cash dividends on redeemable convertible preferred stock of $1.37 per share were distributed to convertible preferred stockholders for the three months ended March 31, 2020 and June 30, 2020. (2) On September 3, 2020, accrued cash dividends of $1.37 per share were paid to Coliseum Capital Partners, L.P. and certain funds and accounts managed by Coliseum Capital Management, LLC pursuant to the Preferred Stock Conversion Agreement as discussed in Note 10, Stock-Based Compensation and Similar Arrangements. | |||||||||||
[4] | On September 3, 2020, accrued cash dividends of $1.37 per share were paid to Coliseum Capital Partners, L.P. and certain funds and accounts managed by Coliseum Capital Management, LLC pursuant to the Preferred Stock Conversion Agreement as discussed in Note 10, Stock-Based Compensation and Similar Arrangements. |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Preferred stock, dividends per share (in USD per share) | $ 1.37 | $ 1.37 | $ 1.37 | $ 1.38 | $ 1.37 | $ 1.36 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating activities | ||
Net income | $ 91,901 | $ 7,024 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 6,980 | 8,300 |
Amortization | 10,219 | 4,676 |
Provision for doubtful accounts | (3,139) | 533 |
Stock-based compensation | 2,949 | 4,247 |
Deferred income taxes | 12,612 | 1,993 |
Amortization of deferred financing costs and debt discount | 292 | 272 |
Equity in net (income) loss of investee | (12,200) | 6,159 |
Reduction of right of use assets | 6,769 | 7,668 |
Changes in operating assets and liabilities: | ||
Accounts receivable and other receivables | 20,017 | (44,374) |
Prepaid expenses and other | (28,216) | (8,779) |
Income tax refunds on sale of business | 17,789 | 37,271 |
Self-funded insurance programs | 1,259 | 2,511 |
Accounts payable and accrued expenses | 121,408 | (9,384) |
Accrued transportation costs | (5,506) | 27,522 |
Deferred revenue | 453 | (486) |
Long-term contract payables and other long-term liabilities | 43,639 | (5,084) |
Net cash provided by operating activities | 287,226 | 40,069 |
Investing activities | ||
Purchase of property and equipment | (4,786) | (7,302) |
Acquisition, net of cash acquired | (77,665) | 0 |
Net cash used in investing activities | (82,451) | (7,302) |
Financing activities | ||
Proceeds from debt | 162,000 | 12,000 |
Repayment of debt | (162,000) | (12,000) |
Preferred stock redemption payment | (88,743) | 0 |
Preferred stock dividends | (1,988) | (3,295) |
Repurchase of common stock, for treasury | (10,186) | (6,363) |
Proceeds from common stock issued pursuant to stock option exercise | 21,581 | 6,885 |
Restricted stock surrendered for employee tax payment | (92) | 0 |
Other financing activities | (204) | (641) |
Net cash used in financing activities | (79,632) | (3,414) |
Net change in cash, cash equivalents and restricted cash | 125,143 | 29,353 |
Cash, cash equivalents and restricted cash at beginning of period | 61,673 | 12,367 |
Cash, cash equivalents and restricted cash at end of period | $ 186,816 | $ 41,720 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Cash Flows [Abstract] | ||
Cash paid for interest | $ 1,775 | $ 1,090 |
Cash paid (received) for income taxes, net of refunds | 11,805 | (30,456) |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 5,488 | $ 4,770 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Description of Business The Providence Service Corporation (“we”, the “Company” or “Providence”) is the largest benefits manager of non-emergency medical transportation (“NEMT” or "NET") programs for state governments and managed care organizations (“MCOs”) in the United States (“U.S.”) through the wholly-owned subsidiary, LogistiCare Solutions, LLC, a Delaware limited liability company and the brands “LogistiCare” and “Circulation”. The technology-enabled operating model includes core competencies in risk underwriting, call center management, network credentialing, vendor payment management and non-emergency medical transport management. Through this model, the Company provides a suite of integrated supportive care solutions for our payor customers and end-users, focused on addressing the social determinates of health (“SDoH”) and enabling greater access to healthcare and improved outcomes. The Company also own a 43.6% minority investment in CCHN Group Holdings, Inc. and its subsidiaries (“Matrix”). Matrix is a nationwide provider of a broad array of assessment and care management services that improve health outcomes for individuals and financial performance for health plans. Matrix’s national network of community-based clinicians delivers in-home and on-site services while its fleet of mobile health clinics provides community-based care with advanced diagnostic capabilities. In 2020, Matrix launched its Employee Health and Wellness solution focused on improving employee health with worksite solutions that reinforce business resilience and safe return-to-work outcomes. These solutions combined with Matrix’s advanced engagement approach, help health plans manage risks, close care gaps and connect members to care. In 2018, the Company acquired Circulation to provide additional technological improvements through their digital transportation platform. Circulation’s technology allows for real time notifications to members on their mobile devices, integration with a wide variety of ATMS and transportation network companies, real time ride tracking, network management and analytics. During 2019, the Company consolidated all activities and functions performed at the corporate holding company level into its NET Services segment (“Organizational Consolidation”). As a result of the Organizational Consolidation, the Company incurred restructuring and related organization costs. See Note 8, Restructuring and Related Reorganization Costs, for further information. On May 6, 2020, LogistiCare entered into an Equity Purchase Agreement (the “Purchase Agreement”) with Specialty Benefits, LLC., a Delaware corporation (the “Seller”), National MedTrans, LLC, a New York limited liability company (“NMT”) and for limited purposes therein, United Healthcare Services, Inc., a Minnesota corporation. NMT services contractual relationships to provide non-emergency medical transportation. Pursuant to the terms of the Purchase Agreement, LogistiCare acquired all of the outstanding capital stock of NMT. See Note 15, Acquisitions, for further information. Basis of Presentation The Company follows accounting standards set by the Financial Accounting Standards Board (“FASB”). The FASB establishes accounting principles generally accepted in the United States (“GAAP”). Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification (“ASC”), which serves as the single source of authoritative accounting and applicable reporting standards to be applied for non-governmental entities. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for the fair presentation of the results of the interim periods have been included. The Company has made estimates relating to the reporting of assets and liabilities, revenues and expenses and certain disclosures in the preparation of these unaudited condensed consolidated financial statements in conformity with GAAP. Actual results could differ from those estimates. Operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020. Management has evaluated events and transactions that occurred after the balance sheet date and through the date these unaudited condensed consolidated financial statements were filed with the SEC and considered the effect of such events in the preparation of these condensed consolidated financial statements. The condensed consolidated balance sheet at December 31, 2019 included in this Form 10-Q has been derived from audited financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements contained herein should be read in conjunction with the audited financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The Company accounts for its investment in Matrix using the equity method, as the Company does not control the decision-making process or business management practices of Matrix. While the Company has access to certain information and performs certain procedures to review the reasonableness of information, the Company relies on the management of Matrix to provide accurate financial information prepared in accordance with GAAP. The Company receives audit reports relating to such financial information from Matrix’s independent auditors on an annual basis. The Company is not aware of any errors in or possible misstatements of the financial information provided by Matrix that would have a material effect on the Company’s condensed consolidated financial statements. See Note 5, Equity Investment , for further information. Uncertainties due to COVID-19 In December 2019, an outbreak of a new strain of a coronavirus causing a coronavirus disease ("COVID-19"), began in Wuhan, Hubei Province, China. In March 2020, the World Health Organization declared COVID-19 a pandemic. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. COVID-19, as well as measures taken by governmental authorities and private actors to limit the spread of this virus, has and is likely to continue to interfere with the ability of the Company's employees, suppliers, transportation providers and other business providers to carry out their assigned tasks at ordinary levels of performance relative to the conduct of the Company’s business which may cause the Company to materially curtail certain business operations. While the Company is monitoring the impact of COVID-19 on its business and financial results, at this time the Company is unable to accurately predict the extent to which the COVID-19 pandemic impacts its business, operations and financial results. On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) which includes modifications to the limitation on business interest expense and net operating loss provisions, and provides a delay in the payment of employer federal payroll taxes during 2020 after the date of enactment. Due to the favorable impact of the CARES Act on the Company’s 2018 U.S. net operating losses ("NOLs"), the effective tax rate of 17.6% was lower than the U.S. federal statutory rate of 21.0% for the nine months ended September 30, 2020. The 27.0% effective tax rate for the three months ended September 30, 2020 was not impacted by the CARES Act. See Note 12, Income Taxes , for further information. The accompanying unaudited condensed consolidated financial statements reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and reported amounts of revenue and expenses. It is possible that the Company's assumptions and estimates may materially change due to these uncertainties. Reclassifications During the nine months ended September 30, 2020, the Company has separately classified the reduction of right-of-use assets in its unaudited condensed consolidated statement of cash flows and conformed the prior period. |
Significant Accounting Policies
Significant Accounting Policies and Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies and Recent Accounting Pronouncements | Significant Accounting Policies and Recent Accounting Pronouncements The Company adopted the following accounting pronouncements during the nine months ended September 30, 2020: In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”). The amendments in ASU 2016-13 superseded much of the existing guidance for reporting credit losses for assets held at amortized cost basis and available for sale debt securities. The amendments in ASU 2016-13 affected loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The Company adopted ASU 2016-13 on January 1, 2020. As of September 30, 2020, this guidance did not have a material impact on the unaudited condensed consolidated financial statements or disclosures nor is it expected to have a material impact in the future. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”) which removed, modified, and added additional disclosures related to fair value measurements. The Company adopted ASU 2018-13 on January 1, 2020. As of September 30, 2020, this guidance did not have an impact on the unaudited condensed consolidated financial statements or disclosures nor is it expected to have a material impact in the future. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (“ASU 2018-15”). ASU 2018-15 aligned the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company elected to apply the prospective transition approach and therefore applied the transition requirements to any eligible costs incurred after adoption. The Company adopted ASU 2018-15 on January 1, 2020. As of September 30, 2020, the Company has not incurred any material implementation costs associated with new service contracts since the date of adoption. In February 2020, the FASB issued ASU No. 2020-02, Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASU 2020-02"). ASU 2020-02 provides interpretive guidance on methodologies and supporting documentation for measuring credit losses, with a focus on the documentation the SEC would normally expect registrants engaged in lending transactions to prepare and maintain to support estimates of current expected credit losses for loan transactions. The Company adopted ASU 2020-02 on February 6, 2020, as the ASU was effective upon issuance. As of September 30, 2020, this guidance did not have an impact on the unaudited condensed consolidated financial statements or disclosures nor is it expected to have a material impact in the future. In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments ("ASU 2020-03") to make improvements to ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") . Public business entities that meet the definition of an SEC filer, excluding eligible smaller reporting companies as defined by the SEC, should adopt ASU 2020-03 during 2020. The Company adopted ASU 2020-03 on April 1, 2020. This guidance did not have an impact on the unaudited condensed consolidated financial statements or disclosures nor is it expected to have a material impact in the future. Recent accounting pronouncements that the Company has yet to adopt are as follows: In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). The ASU removes certain exceptions to the general principles in ASC 740, Income Taxes , and also clarifies and amends existing guidance to improve consistent application. The ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year, with early adoption permitted. The Company is currently evaluating the impact of this ASU, but does not expect a material impact to the financial statements upon adoption. In January 2020, the FASB issued ASU 2020-01, Clarifying the Interactions Between Topic 321, Topic 323, and Topic 81 5 ("ASU 2020-01"), to clarify the interaction among the accounting standards for equity securities, equity method investments and certain derivatives. ASU 2020-01 is effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Company is currently evaluating the impact ASU 2020-01 will have on its consolidated financial statements or disclosures; however, does not expect the adoption to have a material impact. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04") which provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to reference rate reform. The relief granted in ASC 848, Reference Rate Reform ("ASC 848"), is applicable only to legacy contracts if the amendments made to the agreements are solely for reference rate reform activities. The provisions of ASC 848 must be applied for all transactions other than derivatives, which may be applied at a hedging relationship level. Entities may apply the provisions as of the beginning of the reporting period when the election is made (i.e. as early as the first quarter 2020). Unlike other topics, the provisions of this update are only available until December 31, 2022, when the reference rate replacement activity is expected to be completed. The Company is currently evaluating the impact ASU 2020-04 will have on its consolidated financial statements or disclosures; however, does not expect the adoption to have a material impact. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) ("ASU 2020-06") which addresses the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. The update limits the accounting models for convertible instruments resulting in fewer embedded conversion features being separately recognized from the host contract. Specifically, ASU 2020-06 removes from GAAP the separation models for convertible debt with a cash conversion feature and convertible instruments with a beneficial conversion feature. As a result, after adopting the ASU’s guidance, entities will not separately present in equity an embedded conversion feature in such debt. ASU 2020-06 is effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods therein. The Company is currently evaluating the impact ASU 2020-06 will have on its consolidated financial statements or disclosures. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenue The following table summarizes disaggregated revenue from contracts with customers by contract type (in thousands): Three months ended September 30, 2020 2019 State Medicaid agency contracts $ 154,689 $ 196,891 Managed care organization contracts 165,930 196,494 Total Service revenue, net $ 320,619 $ 393,385 Capitated contracts $ 277,908 $ 334,549 Non-capitated contracts 42,711 58,836 Total Service revenue, net $ 320,619 $ 393,385 Nine months ended September 30, 2020 2019 State Medicaid agency contracts $ 486,964 $ 551,632 Managed care organization contracts 483,202 573,479 Total Service revenue, net $ 970,166 $ 1,125,111 Capitated contracts $ 832,490 $ 947,811 Non-capitated contracts 137,676 177,300 Total Service revenue, net $ 970,166 $ 1,125,111 During the three months ended September 30, 2020 and 2019, the Company recognized $0.6 million and $15.3 million of service revenue respectively, from adjustments relating to performance obligations satisfied in previous periods to which the customer agreed. During the nine months ended September 30, 2020 and 2019, the Company recogniz e d $0.4 million and $8.5 million, of service revenue respectively, from contractual adjustments relating to performance obligations satisfied in previous periods to which the customer agreed. Related Balance Sheet Accounts The following table provides information about accounts receivable, net (in thousands): September 30, 2020 December 31, 2019 Accounts receivable $ 118,101 $ 124,868 Reconciliation contracts receivable 49,637 61,481 Allowance for doubtful accounts (2,794) (5,933) Accounts receivable, net $ 164,944 $ 180,416 The following table provides information about other accounts included on the accompanying condensed consolidated balance sheets (in thousands): September 30, 2020 December 31, 2019 Accrued contract payables, current, included in “Accrued expenses” (1) $ 88,347 $ 15,706 Long-term contract payables (2) 50,244 — Deferred revenue, current 681 227 Deferred revenue, long-term, included in “Other long-term liabilities” 629 758 During the nine months ended September 30, 2020 and 2019, the Company recognized $0.2 million and $0.4 million of deferred revenue, respectively. (1) Accrued contract payables, current, primarily represents overpayments and liability reserves on certain profit corridor and reconciliation contracts due to lower activity as a result of COVID-19. (2) Long-term contract payables primarily represents liability reserves on certain profit corridor and reconciliation contracts due to lower activity as a result of COVID-19 that may be repaid in greater than 12 months. |
Cash, Cash Equivalents and Rest
Cash, Cash Equivalents and Restricted Cash | 9 Months Ended |
Sep. 30, 2020 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows (in thousands): As of September 30, 2020 2019 Cash and cash equivalents $ 183,277 $ 40,637 Restricted cash, current 3,182 833 Current assets of discontinued operations 357 250 Cash, cash equivalents and restricted cash $ 186,816 $ 41,720 Restricted cash as of September 30, 2020 relates to a security reserve obtained as part of the NMT acquisition. Restricted cash as of September 30, 2019 primarily relates to amounts held in trusts for reinsurance claims losses under the Company’s now dissolved captive insurance operation for historical workers’ compensation, general and professional liability and auto liability reinsurance programs, as well as amounts restricted for withdrawal under our self-insured medical and benefits plans. See Note 15, Acquisition , for further information on the security reserve. The wholly-owned captive insurance subsidiary, Social Services Providers Captive Insurance Company ("SPCIC"), was dissolved during the nine months ended September 30, 2020. Current assets of discontinued operations principally reflect the cash position of WD Services operations in Saudi Arabia, which the Company is winding down. See Note 16, Discontinued Operations |
Equity Investment
Equity Investment | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investment, Summarized Financial Information [Abstract] | |
Equity Investment | Equity Investment As of September 30, 2020 and December 31, 2019, the Company owned a 43.6% non-controlling interest in Matrix. Affiliates of Frazier Healthcare Partners hold rights necessary to control the fundamental operations of Matrix. The Company accounts for this investment in Matrix under the equity method of accounting. The Company’s share of Matrix’s income or losses are recorded as “Equity in net (income) loss of investee” in the accompanying unaudited condensed consolidated statements of operations and the investment basis is recorded as "Equity investment" in the accompanying condensed consolidated balance sheets. During the fourth quarter of the year ended December 31, 2019, Matrix recorded asset impairment charges of $55.1 million. No impairment was recorded during the nine months ended September 30, 2020 or 2019. The carrying amount of the assets included in the Company’s condensed consolidated balance sheets and the maximum loss exposure related to the Company’s interest in Matrix as of September 30, 2020 and December 31, 2019 totaled $141.3 million and $130.9 million , respectively. Summary financial information for Matrix on a standalone basis is as follows (in thousands): September 30, 2020 December 31, 2019 Current assets $ 149,548 $ 64,221 Long-term assets 618,905 631,007 Current liabilities 65,808 31,256 Long-term liabilities 364,061 351,380 Three months ended September 30, 2020 2019 Revenue $ 140,728 $ 71,663 Operating income (loss) 35,489 (2,640) Net income (loss) 21,382 (6,906) Nine months ended September 30, 2020 2019 Revenue $ 292,699 $ 210,807 Operating income (loss) 49,074 (542) Net income (loss) 23,917 (15,054) |
Prepaid Expenses and Other
Prepaid Expenses and Other | 9 Months Ended |
Sep. 30, 2020 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepaid Expenses and Other | Prepaid Expenses and Other Prepaid expenses and other were comprised of the following (in thousands): September 30, 2020 December 31, 2019 Prepaid income taxes $ 8,105 $ 2,942 Prepaid insurance 3,277 1,317 Prepaid rent 849 868 Other prepaid expenses 8,035 5,815 Total prepaid expenses and other $ 20,266 $ 10,942 |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2020 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following (in thousands): September 30, 2020 December 31, 2019 Accrued compensation and related liabilities $ 28,470 $ 8,941 Accrued contract payables, current 88,347 15,706 Accrued cash settled stock-based compensation 10,021 3,282 Other accrued expenses 16,195 10,804 Total accrued expenses $ 143,033 $ 38,733 |
Restructuring and Related Reorg
Restructuring and Related Reorganization Costs | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Organization Costs | Restructuring and Related Reorganization Costs The Company completed an Organizational Consolidation in 2019 during which it closed the corporate offices in Stamford, Connecticut and Tucson, Arizona. A total of $0.6 million and $3.7 million in restructuring and related costs was incurred during the three and nine months ended September 30, 2019, respectively, related to the Organizational Consolidation. These costs include, respectively, $0.1 million and $2.4 million of retention and personnel costs, $0.0 million and $0.3 million of stock-based compensation expense, $0.0 million and $0.2 million of depreciation and $0.5 million and $0.8 million of other costs, primarily related to recruiting and legal costs. These costs are recorded as “General and administrative expense” and “Depreciation and amortization” in the accompanying condensed consolidated statements of operations. A t otal of $13.1 million in restructuring and related costs was incurred on a cumulative basis through December 31, 2019 related to the Organizational Consolidation. These costs include $7.5 million of retention and personnel costs, $2.0 million of stock-based compensation expense, $0.7 million of depreciation and $2.8 million of other costs, primarily related to recruiting and legal costs. The summary of the liability for restructuring and related reorganization costs is as follows (in thousands): As of January 1, 2019 Costs Cash Payments As of December 31, 2019 Retention and personnel liability $ 1,956 $ 2,418 $ (4,374) $ — Other liability 398 1,308 (1,706) — Total $ 2,354 $ 3,726 $ (6,080) $ — No restructuring or related costs were incurred related to the Organizational Consolidation during the three and nine months ended September 30, 2020. There was no restructuring liability as of September 30, 2020. During the nine months ended September 30, 2020, the Company incurred approximately $0.7 million of restructuring expense for the closure of its Las Vegas contact center. The majority of these costs were recorded to “Service expense” and the remainder were recorded to "General and administrative expense". |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company is a party to the amended and restated credit and guaranty agreement, dated as of August 2, 2013 (as amended, the “Credit Agreement”), with Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, and the other lenders party thereto. On May 6, 2020, the Company entered into the Seventh Amendment to the Amended and Restated Credit and Guaranty Agreement (the “Seventh Amendment”) which, among other things, extended the maturity date to August 1, 2021, expanded the amount available under the revolving credit facility (the “Credit Facility”) from $200.0 million to $225.0 million, and increased the sub-facility for letters of credits from $25.0 million to $40.0 million. Interest on the loans is payable quarterly in arrears. In addition, the Company is obligated to pay a quarterly commitment fee based on a percentage of the unused portion of each lender’s commitment under the Credit Facility and quarterly letter of credit fees based on a percentage of the maximum amount available to be drawn under each outstanding letter of credit. As of September 30, 2020, the Company had no borrowings outstanding on the Credit Facility; however, had letters of credit outstanding in the amount of $16.9 million. The Company’s available credit under the Credit Facility was $208.1 million. Under the Credit Agreement, the Company has an option to request an increase in the amount of the revolving credit facility from time to time (on substantially the same terms as apply to the existing facilities) in an aggregate amount of up to $75.0 million with either additional commitments from lenders under the Credit Agreement at such time or new commitments from financial institutions acceptable to the administrative agent in its reasonable discretion, so long as no default or event of default exists at the time of any such increase. The Company may not be able to access additional funds under this increase option as no lender is obligated to participate in any such increase under the Credit Facility. On October 16, 2020, the Company entered into the Eighth Amendment to the Amended and Restated Credit and Guaranty Agreement (the “Eighth Amendment”), which among other things, amended the Credit Facility to permit the incurrence of additional debt to finance the acquisition (the "Simplura Acquisition") of OEP AM, Inc., a Delaware corporation, doing business as Simplura Health Group (“Simplura” and, together with its subsidiaries, the “Simplura Group”), permit borrowing under the Credit Facility to partially fund the Simplura Acquisition with limited conditions to such borrowing, increase the top interest rate margin that may apply to loans thereunder, and revise our permitted ratio of EBITDA to indebtedness. In addition, the Eighth Amendment extended the maturity date to August 2, 2023. See Note 18, Subsequent Events , for further information on the acquisition. |
Stock-Based Compensation and Si
Stock-Based Compensation and Similar Arrangements | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Stock-Based Compensation and Similar Arrangements | Stock-Based Compensation and Similar ArrangementsThe Company provides stock-based compensation to employees and non-employee directors under the Company’s 2006 Long-Term Incentive Plan (“2006 Plan”). The 2006 Plan allows the flexibility to grant or award stock options, stock appreciation rights, restricted stock, unrestricted stock, stock units including restricted stock units and performance awards to eligible persons. The following table reflects the amount of stock-based compensation, for share settled grants or awards, recorded in each financial statement line item for the three and nine months ended September 30, 2020 and 2019 (in thousands): Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Service expense $ 55 $ 162 $ 174 $ 488 General and administrative expense 1,122 693 2,775 3,759 Total stock-based compensation $ 1,177 $ 855 $ 2,949 $ 4,247 At September 30, 2020, the Company had 358,953 stock options outstanding with a weighted-average exercise price of $63.02. T he Company also had 55,469 unvested restricted stock awards ("RSAs") and 46,021 unvested restricted stock units ("RSUs") outstanding at September 30, 2020 with a weighted-average grant date fair value of $62.78 and $63.17 , re spectively. Cash-Settled Awards The Company also grants stock equivalent unit awards (“SEUs”) and stock option equivalent units that are cash-settled awards and are not included as part of the 2006 Plan. During the three months ended September 30, 2020 and 2019, the Company r ecorded expense of $2.9 million a nd $0.4 million for cash-settled awards, respectively. During the nine months ended September 30, 2020 and 2019, the Company r ecorded expense of $6.9 million a nd income of $0.2 million for cash-settled awards, respectively. The expense and benefit for cash-settled awards is included as “General and administrative expense” in the accompanying condensed consolidated statements of operations. As the instruments are accounted for as liability awards, the income or expense recorded for the three and nine months ended September 30, 2020 and 2019 are attributable to the Company’s change in stock price from the previous reporting peri od. The liability for unexercised cash-settled share-based payment awards of $10.0 million a nd $3.3 million at September 30, 2020 and December 31, 2019, respectively, is reflected in “Accrued expenses” in the condensed consolidated balance sheets. At September 30, 2020, the Company had 3,862 SEUs and 200,000 s tock option equivalent units outstanding. Long-Term Incentive Plans In connection with the acquisition of Circulation during 2018, the Company established a management incentive plan (“MIP”) intended to motivate key employees of Circulation. During the three months ended March 31, 2019, the MIP was amended to remove the previously included performance requirements and to provide for a total fixed payment of $12.0 million to the group of MIP participants. During the year ended December 31, 2019, the MIP was further amended to a total fixed payment of $2.7 million. The payout date is within 30 days following the finalization of the Company’s audited financial statements for the fiscal year ending December 31, 2021 and is subject to the participant remaining employed by the Company through December 31, 2021, except for certain termination scenarios. As of September 30, 2020 and December 31, 2019, the Company has accrued $1.8 million and $1.1 million, respectively, related to the MIP, which is primarily reflected in “Other long-term liabilities” in the condensed consolidated balance sheets. Preferred Stock Conversion On June 8, 2020, the Company entered into a Preferred Stock Conversion Agreement (the “Conversion Agreement”) with Coliseum Capital Partners, L.P. and certain funds and accounts managed by Coliseum Capital Management, LLC (collectively, the “Holders”), pursuant to which, among other things, (a) the Company agreed to purchase 369,120 shares of Series A Convertible Preferred Stock, par value $0.001 per share, held by the Holders in the aggregate, in exchange for (i) $209.88 in cash per share of Series A Preferred Stock, plus (ii) a cash amount equal to accrued but unpaid dividends on such shares of Series A Preferred Stock through the day prior to June 11, 2020, and (b) the Holders converted 369,120 shares of Series A Preferred Stock into (i) 2.5075 shares of Common Stock of the Company for each share of Series A Preferred Stock, plus (ii) a cash payment equal to accrued but unpaid dividends on such shares of Series A Preferred Stock through the day prior to June 11, 2020, plus (iii) a cash payment of $8.82 per share of Series A Preferred Stock. The Conversion Agreement was considered to be an induced conversion in which a premium consideration was provided by the Company to Holders of the Series A Preferred Stock. On September 3, 2020, the Company elected to effect the conversion (the “Conversion”) of all of the outstanding Series A Convertible Preferred Stock. In accordance with the Preferred Stock Conversion Agreement dated June 8, 2020, the Company repurchased 27,509 shares of Series A Preferred Stock from the Holders for (i) a cash amount equal to $209.88 per share of Series A Preferred Stock, plus (ii) a cash amount equal to accrued but unpaid dividends on such shares through the day prior to the Conversion. In connection with the Conversion, all remaining outstanding shares of Series A Preferred Stock were converted into Common Stock at the conversion rate of 2.5075 shares of Common Stock for each share of Series A Preferred Stock and cash-in-lieu of fractional shares. The following table summarizes the convertible preferred stock activity in 2020 (in thousands, except share count): Dollar Value Share Count Balance at January 1, 2020 $ 77,120 798,788 Conversion to common stock (572) (5,666) Conversion to common stock pursuant to Conversion Agreement (37,256) (369,120) Preferred stock redemption pursuant to Conversion Agreement (37,256) (369,120) Reduction of unamortized issuance cost 3,263 — Balance at June 30, 2020 $ 5,299 54,882 Conversion to common stock (2,763) (27,373) Preferred stock redemption pursuant to Conversion Agreement (2,777) (27,509) Reduction of unamortized issuance cost 241 — Balance at September 30, 2020 $ — — In accordance with ASC 260 Earnings Per Share, retained earnings was reduced by the excess of the fair value of the consideration transferred over the carrying amount of the shares surrendered. The impact to retained earnings of the excess consideration transferred, including the direct costs incurred, and write-off of any unamortized issuance costs was $52.1 million as of September 30, 2020. As of September 30, 2020, there were no outstanding shares of convertible preferred stock. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table details the computation of basic and diluted earnings per share (in thousands, except share and per share data): Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Numerator: Net income $ 38,805 $ 8,154 $ 91,901 $ 7,024 Dividends on convertible preferred stock outstanding — (1,109) (1,171) (3,295) Dividends paid pursuant to the Conversion Agreement (27) — (817) — Consideration paid in excess of preferred cost basis pursuant to the Conversion Agreement (3,186) — (52,137) — Income allocated to participating securities (246) (941) (3,213) (499) Net income available to common stockholders $ 35,346 $ 6,104 $ 34,563 $ 3,230 Continuing operations $ 35,461 $ 6,473 $ 35,181 $ 2,762 Discontinued operations (115) (369) (618) 468 Net income available to common stockholders $ 35,346 $ 6,104 $ 34,563 $ 3,230 Denominator: Denominator for basic earnings per share -- weighted-average shares 14,026,039 12,993,934 13,367,605 12,956,222 Effect of dilutive securities: Common stock options 61,312 10,515 15,730 21,376 Restricted stock 46,553 — 32,009 — Denominator for diluted earnings per share -- adjusted weighted-average shares assumed conversion 14,133,904 13,004,449 13,415,344 12,977,598 Basic earnings (loss) per share: Continuing operations $ 2.53 $ 0.50 $ 2.63 $ 0.21 Discontinued operations (0.01) (0.03) (0.05) 0.04 Basic earnings per share $ 2.52 $ 0.47 $ 2.58 $ 0.25 Diluted earnings (loss) per share: Continuing operations $ 2.51 $ 0.50 $ 2.62 $ 0.21 Discontinued operations (0.01) (0.03) (0.05) 0.04 Diluted earnings per share $ 2.50 $ 0.47 $ 2.57 $ 0.25 Income allocated to participating securities is calculated by allocating a portion of net income attributable to Providence, less dividends on convertible stock, to the convertible preferred stockholders on a pro-rata, as converted basis; however, the convertible preferred stockholders are not allocated losses. In accordance with ASC 260, Earnings Per Share , and as related to the Conversion Agreement discussed in Note 10, Stock-Based Compensation and Similar Arrangements, the numerator was adjusted by the excess of the fair value of consideration paid over the carrying amount of the shares surrendered, net of issuance costs. The following weighted-average shares were not included in the computation of diluted earnings per share as the effect of their inclusion would have been anti-dilutive: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Stock options to purchase common stock 3,481 420,846 170,076 499,611 Convertible preferred stock 38,851 799,969 487,576 800,983 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective tax rate for continuing operations for the three and nine months ended September 30, 2020 was 27.0% and 17.6%, respectively. The effective tax rate for continuing operations for the three and nine months ended September 30, 2019 was 37.3% and 37.8%, respectively. For the nine months ended September 30, 2020, the effective tax rate was lower than the U.S. federal statutory rate of 21.0% primarily due to the favorable impact of the CARES Act on the Company’s 2018 U.S. net operating losses ("NOLs"). For the nine months ended September 30, 2019, t he effective tax rate was higher th an the U.S. federal statutory rate of 21.0% primarily due to state income taxes and certain non-deductible expenses. During 2019, the Company received refunds from the Internal Revenue Service (“IRS”) totaling $30.8 million resulting from the loss on the 2018 workforce development segment sale. As a result of the size of the refunds received, in October 2019, the IRS commenced a mandatory review by a joint committee of Congress. The review is still ongoing. The 2017 Tax Reform Act reduced the U.S. corporate income tax rate from 35% to 21% and provided that U.S. NOLs incurred after 2017 could only be carried forward to offset future taxable income. Pursuant to the CARES Act, which was enacted on March 27, 2020, the Company carried its 2018 NOL back five years. As a result, during the nine months ended September 30, 2020, the Company recorded a $27.3 million receivable for the 2018 U.S. NOL carryback, and a $11.0 million tax benefit from the favorable carryback tax rate of 35% compared to a carryforward tax rate of 21%. The Company also recorded an additional income tax payable of $3.5 million for 2019 as a result of the 2018 NOL being carried back instead of carried forward. As of September 30, 2020, the Company has received $17.0 million of the $27.3 million receivable for the 2018 U.S. NOL carryback. It is anticipated that the remaining $10.3 million refund will be received by year end. This $27.3 million is also subject to the ongoing IRS mandatory review. As discussed in Note 16, Discontinued Operations , the Company transferred its operations in Saudi Arabia to its contractual counterparties on January 1, 2019. In connection with the dissolution of its Saudi Arabia legal entity, the Company is protesting withholding tax and income tax assessments for the years 2012 through 2017. The Company does not believe the ultimate determination of the assessments will have a material adverse effect on its financial condition or results of discontinued operations. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal proceedings In the ordinary course of business, the Company is a party to various lawsuits. Management does not expect these lawsuits to have a material impact on the liquidity, results of operations, or financial condition of the Company. On January 21, 2019, the United States District Court for the Southern District of Ohio unsealed a qui tam complaint, filed in December 2015, against Mobile Care Group, Inc., Mobile Care Group of Ohio, LLC, Mobile Care EMS & Transport, Inc. and LogistiCare by Brandee White, Laura Cunningham, and Jeffery Wisier (the “Relators”) alleging violations of the federal False Claims Act by presenting claims for payment to government healthcare programs knowing that the prerequisites for such claims to be paid had not been met. The Relators seek to recover damages, fees and costs under the federal False Claims Act including treble damages, civil penalties and attorneys’ fees. In addition, the Relators seek reinstatement to their jobs with the Mobile Care entities. None of the Relators were employed by LogistiCare. Prior to January 21, 2019, LogistiCare had no knowledge of the complaint. The federal government has declined to intervene against LogistiCare. The Company filed a motion to dismiss the Complaint on April 22, 201 9. Although the outcome of such matter is inherently uncertain and may be materially adverse, based on current information, the Company does not expect the case to have a material adverse effect on our business, financial condition or results of operations. On April 1, 2019, a purported class action was filed against LogistiCare in Texas alleging that the Company’s policy with respect to timekeeping for hourly employees constituted violations of the federal Fair Labor Standards Act (“FLSA”), as well as wage and hour laws in South Carolina and Texas. Plaintiffs filed a motion for conditional certification on a nationwide basis, which LogistiCare contested. The court granted the conditional certification motion on January 22, 2020 and the Company filed an appeal of the conditional certification order. If this case goes forward as either a class action or individual claims, the Company plans to vigorously contest the allegations on the merits as the plaintiffs have mischaracterized the method by which employees clock into work. At this stage of the litigation, it is impossible to predict with any certainty whether plaintiffs will prevail on their claims, or what they might recover. On June 10, 2020, Gateway Insurance Company (“Gateway”), doing business in California as Alano Insurance Company, a subsidiary of Atlas Financial Holdings, Inc., entered liquidation. On August 11, 2020, American Service Insurance Company and American Country Insurance Company, subsidiaries of Atlas Financial, also entered liquidation. Gateway, American Service and American Country previously insured many of LogistiCare’s subcontracted transportation providers. LogistiCare is listed as an additional insured on these policies. LogistiCare currently has 26 active lawsuits involving Gateway, American Country Insurance Company and American Service Insurance Company. As a result of the liquidation, these suits will now be taken over by the state guaranty fund in which the suit is pending. LogistiCare will likely lose its additional insured status and be required to defend itself under its own insurance policies, which involve a self-insured retention. All of the lawsuits are currently stayed for a time period varying by state in order for the guaranty fund to take over the case. The Company has accrued reserves related to these lawsuits in accordance with ASC 450, Contingencies. Indemnifications The Company provided certain standard indemnifications in connection with the sale of the Human Services segment to Molina Healthcare Inc. (“Molina”) effective November 1, 2015. Certain representations made by the Company in the related Membership Interest Purchase Agreement (the “Molina Purchase Agreement”) including tax representations, survive until the expiration of applicable statutes of limitation. Molina and the Company entered into a settlement agreement regarding indemnification claims by Molina with respect to Rodriguez v. Providence Community Corrections (the “Rodriguez Litigation”), a complaint filed in the District Court for the Middle District of Tennessee, Nashville Division, against Providence Community Corrections, Inc. (“PCC”), an entity sold under the Molina Purchase Agreement. In 2019, the Company recovered a portion of the settlement through insurance coverage. The Company has provided certain standard indemnifications in connection with its Matrix stock subscription transaction whereby Mercury Fortuna Buyer, LLC (“Subscriber”), Providence and Matrix entered into a stock subscription agreement (the “Subscription Agreement”), dated August 28, 2016. The representations and warranties made by the Company in the Subscription Agreement ended January 19, 2018; however, certain fundamental representations survived through October 19, 2019. The covenants and agreements of the parties to be performed prior to the closing ended January 19, 2018, and all other covenants and agreements survived until the expiration of the applicable statute of limitations in the event of a breach, or for such lesser periods specified therein. The Company is not aware of any indemnification liabilities with respect to Matrix that require accrual at September 30, 2020. The Company has provided certain standard indemnifications in connection with the sale of substantially all of its WD Services segment to Advanced Personnel Management Global Pty Ltd of Australia (“APM”), which closed on December 21, 2018. The non-title warranties made by the Company in the related Share Purchase Agreement survive for 18 months following the closing date, and the title-related warranties and tax warranties survive five years from the closing date (i.e., December 21, 2023). The Company is not aware of any indemnification liabilities with respect to the former WD Services segment that require accrual at September 30, 2020 . On May 9, 2018, the Company entered into a registration indemnification agreement with Coliseum Capital Partners, L.P., Coliseum Capital Partners II, L.P., Blackwell Partners, LLC - Series A and Coliseum Capital Co-Invest, L.P. (collectively, the “Coliseum Stockholders”), who as of September 30, 2020 collectively held approximately 12.7% of the Company’s outstanding common stock, pursuant to which the Company has agreed to indemnify the Coliseum Stockholders, and the Coliseum Stockholders have agreed to indemnify the Company, against certain matters relating to the registration of the selling stockholders’ securities for resale under the Securities Act of 1933, as amended (the “Securities Act”). Significant Lease Not Yet Commenced In August 2020, the Company entered into an 11-1/2 year operating lease agreement for new corporate office space in Denver, Colorado. The lease is expected to commence when construction of the asset is completed in the second quarter of 2021. Total estimated base rent payments over the life of the lease are approximately $29.7 million |
Transactions with Related Parti
Transactions with Related Parties | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | Transactions with Related Parties As discussed in Note 10, Stock-Based Compensation and Similar Arrangements , on June 8, 2020, the Company entered into a Preferred Stock Conversion Agreement with Coliseum Capital Partners, L.P. and certain funds and accounts managed by Coliseum Capital Management, LLC. Pursuant to the Conversion Agreement, the Company purchased 369,120 shares of Series A Convertible Preferred Stock, par value $0.001 per share, in exchange for $209.88 in cash per share of Series A Preferred Stock, plus a cash amount equal to accrued but unpaid dividends on such shares of Series A Preferred Stock through the day prior to June 11, 2020. Further, the Holders converted 369,120 shares of Series A Preferred Stock into 925,567 shares of common stock, a cash payment equal to accrued but unpaid dividends on such shares of Series A Preferred Stock through June 11, 2020, and a cash payment of $8.82 per share of Series A Preferred Stock. The amount of accrued dividends paid pursuant to the Conversion Agreement was equal to $0.8 million. Further, on September 3, 2020, the Company elected to effect the conversion (the “Conversion”) of all of the outstanding Series A Convertible Preferred Stock. In accordance with the Preferred Stock Conversion Agreement dated June 8, 2020 (as amended), immediately prior to the Conversion, the Company repurchased 27,509 shares of Series A Preferred Stock from the Holders for a cash amount equal to $209.88 per share of Series A Preferred Stock and a cash amount equal to accrued but unpaid dividends on such shares through the day prior to the Conversion. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions On May 6, 2020, LogistiCare entered into an equity purchase agreement with the Seller and NMT, acquiring all of the outstanding capital stock. NMT’s contractual relationships, which are approximately 85% capitated, provide more than five million trips annually to approximately two million members on behalf of state Medicaid agencies and MCOs across twelve states. NMT was acquired for approximately $80.0 million in an all cash transaction. The transaction was accounted for as an asset acquisition in accordance with ASC 805, Business Combinations . The Company obtained an analysis from an independent third-party valuation specialist to assist in determining the purchase price allocation. The Company incurred transaction costs for the acquisition of $0.8 million during the nine months ended September 30, 2020. These costs were capitalized as a component of the purchase price. The consideration paid for the acquisition is as follows (in thousands): Value Consideration paid $ 80,000 Transaction costs 774 Restricted cash received (3,109) Net consideration $ 77,665 Restricted cash acquired was related to a security reserve for a contract. No liabilities were assumed. The fair value allocation of the net consideration is as follows (in thousands, except useful lives): Type Useful Life (yrs) Value Customer relationships Amortizable 6 $ 75,514 Trade names and trademarks Amortizable 3 2,151 $ 77,665 |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On December 21, 2018, the Company completed the sale of substantially all of the operating subsidiaries of its WD Services segment to APM and APM UK Holdings Limited, an affiliate of APM, except for the segment’s employment services operations in Saudi Arabia. The Company’s contractual counterparties in Saudi Arabia, including an entity owned by the Saudi Arabian government, assumed these operations beginning January 1, 2019. The Company is winding down its Saudi Arabian entity. On June 11, 2018, the Company entered into a Share Purchase Agreement to sell the shares of Ingeus France, its WD Services operation in France, for a de minimis amount. The sale was effective on July 17, 2018. On November 1, 2015, the Company completed the sale of its Human Services segment. During the three and nine months ended September 30, 2020 and 2019, the Company recorded additional expenses related to the Human Services segment, principally related to previously disclosed legal proceedings and professional fees. Results of Operations The following tables summarize the results of operations classified as discontinued operations for the three and nine months ended September 30, 2020 and 2019 (in thousands): Three months ended September 30, 2020 Human Services WD Services Total Discontinued Operating expenses: General and administrative (income) expense $ (7) $ 160 $ 153 Total operating (income) expense (7) 160 153 Operating income (loss) 7 (160) (153) Income (loss) from discontinued operations before income taxes 7 (160) (153) (Provision) benefit for income taxes (2) 40 38 Income (loss) from discontinued operations, net of tax $ 5 $ (120) $ (115) Nine months ended September 30, 2020 Human Services Segment WD Services Segment Total Discontinued Operations Operating expenses: General and administrative expense $ 327 $ 470 $ 797 Total operating expense 327 470 797 Operating loss (327) (470) (797) Loss from discontinued operations before income taxes (327) (470) (797) Benefit for income taxes 62 117 179 Loss from discontinued operations, net of tax $ (265) $ (353) $ (618) Three months ended September 30, 2019 Human Services WD Services Total Discontinued Operating expenses: General and administrative (income) expense $ (12) $ 480 $ 468 Total operating (income) loss (12) 480 468 Operating income (loss) 12 (480) (468) Income (loss) from discontinued operations before income taxes 12 (480) (468) (Provision) benefit for income taxes (3) 45 42 Income (loss) from discontinued operations, net of tax $ 9 $ (435) $ (426) Nine months ended September 30, 2019 Human Services Segment WD Services Segment Total Discontinued Operations Operating expenses: General and administrative expense (income) $ 205 $ (1,617) $ (1,412) Total operating loss (income) 205 (1,617) (1,412) Operating (loss) income (205) 1,617 1,412 (Loss) income from discontinued operations before income taxes (205) 1,617 1,412 Benefit (provision) for income taxes 50 (922) (872) (Loss) income from discontinued operations, net of tax $ (155) $ 695 $ 540 Assets and liabilities The following table summarizes the carrying amounts of the major classes of assets and liabilities of discontinued operations in the condensed consolidated balance sheets as o f September 30, 2020 a nd December 31, 2019. Amounts represent the accounts of WD Services operations in Saudi Arabia, which were not sold as part of the WD Services sale (in thousands): September 30, 2020 December 31, 2019 Cash and cash equivalents $ 357 $ 155 Current assets of discontinued operations $ 357 $ 155 Accounts payable $ 41 $ 16 Accrued expenses 1,693 1,414 Current liabilities of discontinued operations $ 1,734 $ 1,430 Cash Flow Information There were $0.8 million in cash flow payments related to operating expenses for WD Services and Human Services Segment for the nine months ended September 30, 2020. There we |
Segments
Segments | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segments | Segments The Company’s chief operating decision maker reviews financial performance and allocates resources based on two segments as follows: • NET Services - which operates primarily under the brands LogistiCare and Circulation, is the largest manager of NEMT programs for state governments and MCOs in the U.S and includes the Company’s activities for executive, accounting, finance, internal audit, tax, legal, certain strategic and development functions and the Company's now dissolved captive insurance company. • Matrix Investment ("Matrix") - which consists of a minority investment in Matrix, provides a broad array of assessment and care management services that improve health outcomes for individuals and financial performance for health plans. Matrix’s national network of community-based clinicians delivers in-home and on-site services while its fleet of mobile health clinics provides community-based care with advance diagnostic capabilities. The following tables set forth certain financial information from continuing operations attributable to the Company’s business segments (in thousands): Three months ended September 30, 2020 NET Services Matrix Total Service revenue, net $ 320,619 $ — $ 320,619 Service expense 235,543 — 235,543 General and administrative expense 34,441 — 34,441 Depreciation and amortization 7,301 — 7,301 Operating income $ 43,334 $ — $ 43,334 Equity in net income of investee $ — $ 10,325 $ 10,325 Investment in equity method investee $ — $ 141,292 $ 141,292 Total assets (continuing operations) $ 649,986 $ 141,292 $ 791,278 Nine months ended September 30, 2020 NET Services Matrix Total Service revenue, net $ 970,166 $ — $ 970,166 Service expense 764,310 — 764,310 General and administrative expense 86,435 — 86,435 Depreciation and amortization 17,199 — 17,199 Operating income $ 102,222 $ — $ 102,222 Equity in net income of investee $ — $ 12,200 $ 12,200 Investment in equity method investee $ — $ 141,292 $ 141,292 Total assets (continuing operations) $ 649,986 $ 141,292 $ 791,278 Three months ended September 30, 2019 NET Services Matrix Total Service revenue, net $ 393,385 $ — $ 393,385 Service expense 356,271 — 356,271 General and administrative expense 15,979 — 15,979 Depreciation and amortization 4,148 — 4,148 Operating income $ 16,987 $ — $ 16,987 Equity in net loss of investee $ — $ (3,188) $ (3,188) Investment in equity method investee $ — $ 154,532 $ 154,532 Total assets (continuing operations) $ 465,688 $ 154,532 $ 620,220 Nine months ended September 30, 2019 NET Services Matrix Total Service revenue, net $ 1,125,111 $ — $ 1,125,111 Service expense 1,042,717 — 1,042,717 General and administrative expense 52,241 — 52,241 Depreciation and amortization 12,976 — 12,976 Operating income $ 17,177 $ — $ 17,177 Equity in net loss of investee $ — $ (6,159) $ (6,159) Investment in equity method investee $ — $ 154,532 $ 154,532 Total assets (continuing operations) $ 465,688 $ 154,532 $ 620,220 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On September 28, 2020, the Company entered into a stock purchase agreement (the “Simplura Purchase Agreement”) with OEP AM, Inc., a Delaware corporation, doing business as Simplura Health Group. Pursuant to the Simplura Purchase Agreement, the Company plans to acquire all of the issued and outstanding capital stock of Simplura for $575.0 million in cash, subject to certain adjustments, including adjustments based on a determination of net working capital, cash, transaction expenses and indebtedness, as provided in the Simplura Purchase Agreement. The Company intends to close the transaction in the fourth quarter of 2020. Founded in 1955, Simplura is a home care services provider offering placements of personal care assistants, home health aides, and skilled nurses for senior citizens, disabled adults and other high-needs patients. Simplura operates from its headquarters in Valley Stream, New York, with approximately 57 branches across seven states, including in several of the nation’s largest home care markets. As of June 30, 2020, Simplura had approximately 14,000 trained caregivers throughout all locations serving, on average, approximately 12,500 patients and providing approximately 21 million hours of patient care annually. Simplura’s services are reimbursed by Medicaid, other governmental payors, and major insurance carriers. On October 22, 2020, the Company agreed to issue and sell $500.0 million in aggregate principal amount of senior notes due on November 15, 2025, which will bear interest at a rate of 5.875% per annum (the “notes”). Completion of the notes offering occurred on November 4, 2020, and the gross proceeds of the sale of the notes were deposited into an escrow account for the benefit of the holders of the notes pending consummation of the Simplura Acquisition. The Company intends to use the proceeds from the notes, together with borrowings under its credit facility and cash on hand, to (i) pay the consideration in connection with the Simplura Acquisition, (ii) repay in full substantially all debt for borrowed money of the Simplura Group (together with the termination of all commitments and the release and discharge of all security interests and guarantees related thereto), and (iii) pay fees and expenses incurred in connection with the transactions. |
Significant Accounting Polici_2
Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Presentation The Company follows accounting standards set by the Financial Accounting Standards Board (“FASB”). The FASB establishes accounting principles generally accepted in the United States (“GAAP”). Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification (“ASC”), which serves as the single source of authoritative accounting and applicable reporting standards to be applied for non-governmental entities. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for the fair presentation of the results of the interim periods have been included. The Company has made estimates relating to the reporting of assets and liabilities, revenues and expenses and certain disclosures in the preparation of these unaudited condensed consolidated financial statements in conformity with GAAP. Actual results could differ from those estimates. Operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020. Management has evaluated events and transactions that occurred after the balance sheet date and through the date these unaudited condensed consolidated financial statements were filed with the SEC and considered the effect of such events in the preparation of these condensed consolidated financial statements. The condensed consolidated balance sheet at December 31, 2019 included in this Form 10-Q has been derived from audited financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements contained herein should be read in conjunction with the audited financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The Company accounts for its investment in Matrix using the equity method, as the Company does not control the decision-making process or business management practices of Matrix. While the Company has access to certain information and performs certain procedures to review the reasonableness of information, the Company relies on the management of Matrix to provide accurate financial information prepared in accordance with GAAP. The Company receives audit reports relating to such financial information from Matrix’s independent auditors on an annual basis. The Company is not aware of any errors in or possible misstatements of the financial information provided by Matrix that would have a material effect on the Company’s condensed consolidated financial statements. See Note 5, Equity Investment , for further information. Uncertainties due to COVID-19 In December 2019, an outbreak of a new strain of a coronavirus causing a coronavirus disease ("COVID-19"), began in Wuhan, Hubei Province, China. In March 2020, the World Health Organization declared COVID-19 a pandemic. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. COVID-19, as well as measures taken by governmental authorities and private actors to limit the spread of this virus, has and is likely to continue to interfere with the ability of the Company's employees, suppliers, transportation providers and other business providers to carry out their assigned tasks at ordinary levels of performance relative to the conduct of the Company’s business which may cause the Company to materially curtail certain business operations. While the Company is monitoring the impact of COVID-19 on its business and financial results, at this time the Company is unable to accurately predict the extent to which the COVID-19 pandemic impacts its business, operations and financial results. On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) which includes modifications to the limitation on business interest expense and net operating loss provisions, and provides a delay in the payment of employer federal payroll taxes during 2020 after the date of enactment. Due to the favorable impact of the CARES Act on the Company’s 2018 U.S. net operating losses ("NOLs"), the effective tax rate of 17.6% was lower than the U.S. federal statutory rate of 21.0% for the nine months ended September 30, 2020. The 27.0% effective tax rate for the three months ended September 30, 2020 was not impacted by the CARES Act. See Note 12, Income Taxes , for further information. The accompanying unaudited condensed consolidated financial statements reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and reported amounts of revenue and expenses. It is possible that the Company's assumptions and estimates may materially change due to these uncertainties. Reclassifications During the nine months ended September 30, 2020, the Company has separately classified the reduction of right-of-use assets in its unaudited condensed consolidated statement of cash flows and conformed the prior period. |
New Accounting Pronouncements | The Company adopted the following accounting pronouncements during the nine months ended September 30, 2020: In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”). The amendments in ASU 2016-13 superseded much of the existing guidance for reporting credit losses for assets held at amortized cost basis and available for sale debt securities. The amendments in ASU 2016-13 affected loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The Company adopted ASU 2016-13 on January 1, 2020. As of September 30, 2020, this guidance did not have a material impact on the unaudited condensed consolidated financial statements or disclosures nor is it expected to have a material impact in the future. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”) which removed, modified, and added additional disclosures related to fair value measurements. The Company adopted ASU 2018-13 on January 1, 2020. As of September 30, 2020, this guidance did not have an impact on the unaudited condensed consolidated financial statements or disclosures nor is it expected to have a material impact in the future. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (“ASU 2018-15”). ASU 2018-15 aligned the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company elected to apply the prospective transition approach and therefore applied the transition requirements to any eligible costs incurred after adoption. The Company adopted ASU 2018-15 on January 1, 2020. As of September 30, 2020, the Company has not incurred any material implementation costs associated with new service contracts since the date of adoption. In February 2020, the FASB issued ASU No. 2020-02, Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASU 2020-02"). ASU 2020-02 provides interpretive guidance on methodologies and supporting documentation for measuring credit losses, with a focus on the documentation the SEC would normally expect registrants engaged in lending transactions to prepare and maintain to support estimates of current expected credit losses for loan transactions. The Company adopted ASU 2020-02 on February 6, 2020, as the ASU was effective upon issuance. As of September 30, 2020, this guidance did not have an impact on the unaudited condensed consolidated financial statements or disclosures nor is it expected to have a material impact in the future. In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments ("ASU 2020-03") to make improvements to ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") . Public business entities that meet the definition of an SEC filer, excluding eligible smaller reporting companies as defined by the SEC, should adopt ASU 2020-03 during 2020. The Company adopted ASU 2020-03 on April 1, 2020. This guidance did not have an impact on the unaudited condensed consolidated financial statements or disclosures nor is it expected to have a material impact in the future. Recent accounting pronouncements that the Company has yet to adopt are as follows: In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). The ASU removes certain exceptions to the general principles in ASC 740, Income Taxes , and also clarifies and amends existing guidance to improve consistent application. The ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year, with early adoption permitted. The Company is currently evaluating the impact of this ASU, but does not expect a material impact to the financial statements upon adoption. In January 2020, the FASB issued ASU 2020-01, Clarifying the Interactions Between Topic 321, Topic 323, and Topic 81 5 ("ASU 2020-01"), to clarify the interaction among the accounting standards for equity securities, equity method investments and certain derivatives. ASU 2020-01 is effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Company is currently evaluating the impact ASU 2020-01 will have on its consolidated financial statements or disclosures; however, does not expect the adoption to have a material impact. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04") which provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to reference rate reform. The relief granted in ASC 848, Reference Rate Reform ("ASC 848"), is applicable only to legacy contracts if the amendments made to the agreements are solely for reference rate reform activities. The provisions of ASC 848 must be applied for all transactions other than derivatives, which may be applied at a hedging relationship level. Entities may apply the provisions as of the beginning of the reporting period when the election is made (i.e. as early as the first quarter 2020). Unlike other topics, the provisions of this update are only available until December 31, 2022, when the reference rate replacement activity is expected to be completed. The Company is currently evaluating the impact ASU 2020-04 will have on its consolidated financial statements or disclosures; however, does not expect the adoption to have a material impact. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) ("ASU 2020-06") which addresses the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. The update limits the accounting models for convertible instruments resulting in fewer embedded conversion features being separately recognized from the host contract. Specifically, ASU 2020-06 removes from GAAP the separation models for convertible debt with a cash conversion feature and convertible instruments with a beneficial conversion feature. As a result, after adopting the ASU’s guidance, entities will not separately present in equity an embedded conversion feature in such debt. ASU 2020-06 is effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods therein. The Company is currently evaluating the impact ASU 2020-06 will have on its consolidated financial statements or disclosures. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes disaggregated revenue from contracts with customers by contract type (in thousands): Three months ended September 30, 2020 2019 State Medicaid agency contracts $ 154,689 $ 196,891 Managed care organization contracts 165,930 196,494 Total Service revenue, net $ 320,619 $ 393,385 Capitated contracts $ 277,908 $ 334,549 Non-capitated contracts 42,711 58,836 Total Service revenue, net $ 320,619 $ 393,385 Nine months ended September 30, 2020 2019 State Medicaid agency contracts $ 486,964 $ 551,632 Managed care organization contracts 483,202 573,479 Total Service revenue, net $ 970,166 $ 1,125,111 Capitated contracts $ 832,490 $ 947,811 Non-capitated contracts 137,676 177,300 Total Service revenue, net $ 970,166 $ 1,125,111 |
Schedule of Accounts Receivable | The following table provides information about accounts receivable, net (in thousands): September 30, 2020 December 31, 2019 Accounts receivable $ 118,101 $ 124,868 Reconciliation contracts receivable 49,637 61,481 Allowance for doubtful accounts (2,794) (5,933) Accounts receivable, net $ 164,944 $ 180,416 |
Other Account Liabilities | The following table provides information about other accounts included on the accompanying condensed consolidated balance sheets (in thousands): September 30, 2020 December 31, 2019 Accrued contract payables, current, included in “Accrued expenses” (1) $ 88,347 $ 15,706 Long-term contract payables (2) 50,244 — Deferred revenue, current 681 227 Deferred revenue, long-term, included in “Other long-term liabilities” 629 758 |
Cash, Cash Equivalents and Re_2
Cash, Cash Equivalents and Restricted Cash (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows (in thousands): As of September 30, 2020 2019 Cash and cash equivalents $ 183,277 $ 40,637 Restricted cash, current 3,182 833 Current assets of discontinued operations 357 250 Cash, cash equivalents and restricted cash $ 186,816 $ 41,720 |
Equity Investment (Tables)
Equity Investment (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investment, Summarized Financial Information [Abstract] | |
Income Statement and Balance Sheet Disclosure | Summary financial information for Matrix on a standalone basis is as follows (in thousands): September 30, 2020 December 31, 2019 Current assets $ 149,548 $ 64,221 Long-term assets 618,905 631,007 Current liabilities 65,808 31,256 Long-term liabilities 364,061 351,380 Three months ended September 30, 2020 2019 Revenue $ 140,728 $ 71,663 Operating income (loss) 35,489 (2,640) Net income (loss) 21,382 (6,906) Nine months ended September 30, 2020 2019 Revenue $ 292,699 $ 210,807 Operating income (loss) 49,074 (542) Net income (loss) 23,917 (15,054) |
Prepaid Expenses and Other (Tab
Prepaid Expenses and Other (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure | Prepaid expenses and other were comprised of the following (in thousands): September 30, 2020 December 31, 2019 Prepaid income taxes $ 8,105 $ 2,942 Prepaid insurance 3,277 1,317 Prepaid rent 849 868 Other prepaid expenses 8,035 5,815 Total prepaid expenses and other $ 20,266 $ 10,942 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses consisted of the following (in thousands): September 30, 2020 December 31, 2019 Accrued compensation and related liabilities $ 28,470 $ 8,941 Accrued contract payables, current 88,347 15,706 Accrued cash settled stock-based compensation 10,021 3,282 Other accrued expenses 16,195 10,804 Total accrued expenses $ 143,033 $ 38,733 |
Restructuring and Related Reo_2
Restructuring and Related Reorganization Costs (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The summary of the liability for restructuring and related reorganization costs is as follows (in thousands): As of January 1, 2019 Costs Cash Payments As of December 31, 2019 Retention and personnel liability $ 1,956 $ 2,418 $ (4,374) $ — Other liability 398 1,308 (1,706) — Total $ 2,354 $ 3,726 $ (6,080) $ — |
Stock-Based Compensation and _2
Stock-Based Compensation and Similar Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Disclosure of Stock-based Compensation by Line Item | The following table reflects the amount of stock-based compensation, for share settled grants or awards, recorded in each financial statement line item for the three and nine months ended September 30, 2020 and 2019 (in thousands): Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Service expense $ 55 $ 162 $ 174 $ 488 General and administrative expense 1,122 693 2,775 3,759 Total stock-based compensation $ 1,177 $ 855 $ 2,949 $ 4,247 |
Schedule of Conversions of Stock | The following table summarizes the convertible preferred stock activity in 2020 (in thousands, except share count): Dollar Value Share Count Balance at January 1, 2020 $ 77,120 798,788 Conversion to common stock (572) (5,666) Conversion to common stock pursuant to Conversion Agreement (37,256) (369,120) Preferred stock redemption pursuant to Conversion Agreement (37,256) (369,120) Reduction of unamortized issuance cost 3,263 — Balance at June 30, 2020 $ 5,299 54,882 Conversion to common stock (2,763) (27,373) Preferred stock redemption pursuant to Conversion Agreement (2,777) (27,509) Reduction of unamortized issuance cost 241 — Balance at September 30, 2020 $ — — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table details the computation of basic and diluted earnings per share (in thousands, except share and per share data): Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Numerator: Net income $ 38,805 $ 8,154 $ 91,901 $ 7,024 Dividends on convertible preferred stock outstanding — (1,109) (1,171) (3,295) Dividends paid pursuant to the Conversion Agreement (27) — (817) — Consideration paid in excess of preferred cost basis pursuant to the Conversion Agreement (3,186) — (52,137) — Income allocated to participating securities (246) (941) (3,213) (499) Net income available to common stockholders $ 35,346 $ 6,104 $ 34,563 $ 3,230 Continuing operations $ 35,461 $ 6,473 $ 35,181 $ 2,762 Discontinued operations (115) (369) (618) 468 Net income available to common stockholders $ 35,346 $ 6,104 $ 34,563 $ 3,230 Denominator: Denominator for basic earnings per share -- weighted-average shares 14,026,039 12,993,934 13,367,605 12,956,222 Effect of dilutive securities: Common stock options 61,312 10,515 15,730 21,376 Restricted stock 46,553 — 32,009 — Denominator for diluted earnings per share -- adjusted weighted-average shares assumed conversion 14,133,904 13,004,449 13,415,344 12,977,598 Basic earnings (loss) per share: Continuing operations $ 2.53 $ 0.50 $ 2.63 $ 0.21 Discontinued operations (0.01) (0.03) (0.05) 0.04 Basic earnings per share $ 2.52 $ 0.47 $ 2.58 $ 0.25 Diluted earnings (loss) per share: Continuing operations $ 2.51 $ 0.50 $ 2.62 $ 0.21 Discontinued operations (0.01) (0.03) (0.05) 0.04 Diluted earnings per share $ 2.50 $ 0.47 $ 2.57 $ 0.25 |
Schedule of Antidilutive Securities | The following weighted-average shares were not included in the computation of diluted earnings per share as the effect of their inclusion would have been anti-dilutive: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Stock options to purchase common stock 3,481 420,846 170,076 499,611 Convertible preferred stock 38,851 799,969 487,576 800,983 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The consideration paid for the acquisition is as follows (in thousands): Value Consideration paid $ 80,000 Transaction costs 774 Restricted cash received (3,109) Net consideration $ 77,665 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The fair value allocation of the net consideration is as follows (in thousands, except useful lives): Type Useful Life (yrs) Value Customer relationships Amortizable 6 $ 75,514 Trade names and trademarks Amortizable 3 2,151 $ 77,665 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Operations Classified as Discontinued Operations | The following tables summarize the results of operations classified as discontinued operations for the three and nine months ended September 30, 2020 and 2019 (in thousands): Three months ended September 30, 2020 Human Services WD Services Total Discontinued Operating expenses: General and administrative (income) expense $ (7) $ 160 $ 153 Total operating (income) expense (7) 160 153 Operating income (loss) 7 (160) (153) Income (loss) from discontinued operations before income taxes 7 (160) (153) (Provision) benefit for income taxes (2) 40 38 Income (loss) from discontinued operations, net of tax $ 5 $ (120) $ (115) Nine months ended September 30, 2020 Human Services Segment WD Services Segment Total Discontinued Operations Operating expenses: General and administrative expense $ 327 $ 470 $ 797 Total operating expense 327 470 797 Operating loss (327) (470) (797) Loss from discontinued operations before income taxes (327) (470) (797) Benefit for income taxes 62 117 179 Loss from discontinued operations, net of tax $ (265) $ (353) $ (618) Three months ended September 30, 2019 Human Services WD Services Total Discontinued Operating expenses: General and administrative (income) expense $ (12) $ 480 $ 468 Total operating (income) loss (12) 480 468 Operating income (loss) 12 (480) (468) Income (loss) from discontinued operations before income taxes 12 (480) (468) (Provision) benefit for income taxes (3) 45 42 Income (loss) from discontinued operations, net of tax $ 9 $ (435) $ (426) Nine months ended September 30, 2019 Human Services Segment WD Services Segment Total Discontinued Operations Operating expenses: General and administrative expense (income) $ 205 $ (1,617) $ (1,412) Total operating loss (income) 205 (1,617) (1,412) Operating (loss) income (205) 1,617 1,412 (Loss) income from discontinued operations before income taxes (205) 1,617 1,412 Benefit (provision) for income taxes 50 (922) (872) (Loss) income from discontinued operations, net of tax $ (155) $ 695 $ 540 Assets and liabilities The following table summarizes the carrying amounts of the major classes of assets and liabilities of discontinued operations in the condensed consolidated balance sheets as o f September 30, 2020 a nd December 31, 2019. Amounts represent the accounts of WD Services operations in Saudi Arabia, which were not sold as part of the WD Services sale (in thousands): September 30, 2020 December 31, 2019 Cash and cash equivalents $ 357 $ 155 Current assets of discontinued operations $ 357 $ 155 Accounts payable $ 41 $ 16 Accrued expenses 1,693 1,414 Current liabilities of discontinued operations $ 1,734 $ 1,430 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Financial Information Attributable to the Company's Business Segments | The following tables set forth certain financial information from continuing operations attributable to the Company’s business segments (in thousands): Three months ended September 30, 2020 NET Services Matrix Total Service revenue, net $ 320,619 $ — $ 320,619 Service expense 235,543 — 235,543 General and administrative expense 34,441 — 34,441 Depreciation and amortization 7,301 — 7,301 Operating income $ 43,334 $ — $ 43,334 Equity in net income of investee $ — $ 10,325 $ 10,325 Investment in equity method investee $ — $ 141,292 $ 141,292 Total assets (continuing operations) $ 649,986 $ 141,292 $ 791,278 Nine months ended September 30, 2020 NET Services Matrix Total Service revenue, net $ 970,166 $ — $ 970,166 Service expense 764,310 — 764,310 General and administrative expense 86,435 — 86,435 Depreciation and amortization 17,199 — 17,199 Operating income $ 102,222 $ — $ 102,222 Equity in net income of investee $ — $ 12,200 $ 12,200 Investment in equity method investee $ — $ 141,292 $ 141,292 Total assets (continuing operations) $ 649,986 $ 141,292 $ 791,278 Three months ended September 30, 2019 NET Services Matrix Total Service revenue, net $ 393,385 $ — $ 393,385 Service expense 356,271 — 356,271 General and administrative expense 15,979 — 15,979 Depreciation and amortization 4,148 — 4,148 Operating income $ 16,987 $ — $ 16,987 Equity in net loss of investee $ — $ (3,188) $ (3,188) Investment in equity method investee $ — $ 154,532 $ 154,532 Total assets (continuing operations) $ 465,688 $ 154,532 $ 620,220 Nine months ended September 30, 2019 NET Services Matrix Total Service revenue, net $ 1,125,111 $ — $ 1,125,111 Service expense 1,042,717 — 1,042,717 General and administrative expense 52,241 — 52,241 Depreciation and amortization 12,976 — 12,976 Operating income $ 17,177 $ — $ 17,177 Equity in net loss of investee $ — $ (6,159) $ (6,159) Investment in equity method investee $ — $ 154,532 $ 154,532 Total assets (continuing operations) $ 465,688 $ 154,532 $ 620,220 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Effective income tax rate | 27.00% | 37.30% | 17.60% | 37.80% |
Matrix | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Equity method investment, ownership percentage | 43.60% | 43.60% |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (NET Services) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total Service revenue, net | $ 320,619 | $ 393,385 | $ 970,166 | $ 1,125,111 |
NET Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Service revenue, net | 320,619 | 393,385 | 970,166 | 1,125,111 |
NET Services | State Medicaid agency contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Service revenue, net | 154,689 | 196,891 | 486,964 | 551,632 |
NET Services | Managed care organization contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Service revenue, net | 165,930 | 196,494 | 483,202 | 573,479 |
NET Services | Capitated contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Service revenue, net | 277,908 | 334,549 | 832,490 | 947,811 |
NET Services | Non-capitated contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Service revenue, net | $ 42,711 | $ 58,836 | $ 137,676 | $ 177,300 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Deferred Revenue | ||||
Revenue recognized | $ 200 | $ 400 | ||
NET Services | ||||
Deferred Revenue | ||||
Performance obligation satisfied in previous period | $ 600 | $ 15,300 | $ 400 | $ 8,500 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable | $ 118,101 | $ 124,868 |
Reconciliation contracts receivable | 49,637 | 61,481 |
Allowance for doubtful accounts | (2,794) | (5,933) |
Accounts receivable, net | $ 164,944 | $ 180,416 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Other Accounts (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Accrued contract payables, current, included in “Accrued expenses” (1) | $ 88,347 | $ 15,706 |
Long-term contract payables (2) | 50,244 | 0 |
Deferred revenue, current | 681 | 227 |
Deferred revenue, long-term, included in “Other long-term liabilities” | $ 629 | $ 758 |
Cash, Cash Equivalents and Re_3
Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |||
Cash and cash equivalents | $ 183,277 | $ 61,365 | $ 40,637 |
Restricted cash | 3,182 | 153 | 833 |
Current assets of discontinued operations | 357 | $ 155 | 250 |
Cash, cash equivalents and restricted cash | $ 186,816 | $ 41,720 |
Equity Investment - Narrative (
Equity Investment - Narrative (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||
Equity investment | $ 141,292,000 | $ 130,869,000 |
Matrix | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investment, ownership percentage | 43.60% | 43.60% |
Impairment | $ 0 | $ 55,100,000 |
Equity investment | $ 141,300,000 | $ 130,900,000 |
Equity Investment - Summary of
Equity Investment - Summary of Financial Information for Matrix (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Schedule of Investments [Line Items] | |||||||||
Current assets | $ 379,336 | $ 379,336 | $ 256,427 | ||||||
Current liabilities | 270,594 | 270,594 | 150,186 | ||||||
Service revenue, net | 320,619 | $ 393,385 | 970,166 | $ 1,125,111 | |||||
Operating income (loss) | 43,334 | 16,987 | 102,222 | 17,177 | |||||
Net income (loss) | 38,805 | $ 36,998 | $ 16,098 | 8,154 | $ (1,712) | $ 582 | 91,901 | 7,024 | |
Matrix | |||||||||
Schedule of Investments [Line Items] | |||||||||
Current assets | 149,548 | 149,548 | 64,221 | ||||||
Long-term assets | 618,905 | 618,905 | 631,007 | ||||||
Current liabilities | 65,808 | 65,808 | 31,256 | ||||||
Long-term liabilities | 364,061 | 364,061 | $ 351,380 | ||||||
Service revenue, net | 140,728 | 71,663 | 292,699 | 210,807 | |||||
Operating income (loss) | 35,489 | (2,640) | 49,074 | (542) | |||||
Net income (loss) | $ 21,382 | $ (6,906) | $ 23,917 | $ (15,054) |
Prepaid Expenses and Other (Det
Prepaid Expenses and Other (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid income taxes | $ 8,105 | $ 2,942 |
Prepaid insurance | 3,277 | 1,317 |
Prepaid rent | 849 | 868 |
Other prepaid expenses | 8,035 | 5,815 |
Total prepaid expenses and other | $ 20,266 | $ 10,942 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Accrued Liabilities, Current [Abstract] | ||
Accrued compensation and related liabilities | $ 28,470 | $ 8,941 |
Accrued contract payables, current | 88,347 | 15,706 |
Accrued cash settled stock-based compensation | 10,021 | 3,282 |
Other accrued expenses | 16,195 | 10,804 |
Total accrued expenses | $ 143,033 | $ 38,733 |
Restructuring and Related Reo_3
Restructuring and Related Reorganization Costs - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring cost | $ 13,100,000 | |||||
Facility Closing | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 700,000 | |||||
Corporate Restructuring Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring cost | $ 600,000 | $ 3,700,000 | ||||
Severance costs | $ 0 | 0 | 3,726,000 | |||
Restructuring reserve | $ 0 | $ 0 | 0 | $ 2,354,000 | ||
Corporate Restructuring Plan | Retention and Personnel Costs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring cost | 100,000 | 2,400,000 | 7,500,000 | |||
Severance costs | 2,418,000 | |||||
Restructuring reserve | 0 | 1,956,000 | ||||
Corporate Restructuring Plan | Acceleration of Stock-Based Compensation | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring cost | 0 | 300,000 | 2,000,000 | |||
Corporate Restructuring Plan | Accelerated Depreciation | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring cost | 0 | 200,000 | 700,000 | |||
Corporate Restructuring Plan | Other Restructuring | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring cost | $ 500,000 | $ 800,000 | 2,800,000 | |||
Severance costs | 1,308,000 | |||||
Restructuring reserve | $ 0 | $ 398,000 |
Restructuring and Related Reo_4
Restructuring and Related Reorganization Costs - Reserve (Details) - Corporate Restructuring Plan - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Restructuring Reserve [Roll Forward] | |||
Balance at beginning of period | $ 0 | $ 2,354,000 | |
Costs Incurred | $ 0 | 0 | 3,726,000 |
Cash Payments | (6,080,000) | ||
Balance at end of period | $ 0 | 0 | 0 |
Retention and personnel liability | |||
Restructuring Reserve [Roll Forward] | |||
Balance at beginning of period | 0 | 1,956,000 | |
Costs Incurred | 2,418,000 | ||
Cash Payments | (4,374,000) | ||
Balance at end of period | 0 | ||
Other liability | |||
Restructuring Reserve [Roll Forward] | |||
Balance at beginning of period | $ 0 | 398,000 | |
Costs Incurred | 1,308,000 | ||
Cash Payments | (1,706,000) | ||
Balance at end of period | $ 0 |
Debt (Details)
Debt (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | May 06, 2020 | |
Line of Credit Facility [Line Items] | ||
Line of credit facility, outstanding | $ 0 | |
Letters of credit outstanding, amount | 16,900,000 | |
Remaining borrowing capacity | 208,100,000 | |
Line of credit facility additional maximum borrowing capacity | 75,000,000 | |
Credit Facility, Fourth Amendment, Term Loan Tranche | ||
Line of Credit Facility [Line Items] | ||
Line of credit available | $ 40,000,000 | $ 25,000,000 |
Credit Facility, Second Amendment, Term Loan Tranche | Minimum | ||
Line of Credit Facility [Line Items] | ||
Unused capacity, commitment fee percentage | 0.35% | |
Credit Facility, Second Amendment, Term Loan Tranche | Maximum | ||
Line of Credit Facility [Line Items] | ||
Unused capacity, commitment fee percentage | 0.50% | |
Credit Facility, Eighth Amendment, Term Loan Tranche | London Interbank Offered Rate (LIBOR) | ||
Line of Credit Facility [Line Items] | ||
Base rate for variable rate | 1.00% | |
Credit Facility, Eighth Amendment, Term Loan Tranche | Minimum | London Interbank Offered Rate (LIBOR) | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 2.25% | |
Credit Facility, Eighth Amendment, Term Loan Tranche | Minimum | Base Rate | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.25% | |
Credit Facility, Eighth Amendment, Term Loan Tranche | Maximum | London Interbank Offered Rate (LIBOR) | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 3.50% | |
Credit Facility, Eighth Amendment, Term Loan Tranche | Maximum | Base Rate | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 2.50% | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Debt amount | $ 225,000,000 | $ 200,000,000 |
Revolving Credit Facility | Minimum | ||
Line of Credit Facility [Line Items] | ||
Unused capacity, commitment fee percentage | 2.25% | |
Revolving Credit Facility | Maximum | ||
Line of Credit Facility [Line Items] | ||
Unused capacity, commitment fee percentage | 3.50% |
Stock-Based Compensation and _3
Stock-Based Compensation and Similar Arrangements - Stock-based Compensation Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 1,177 | $ 855 | $ 2,949 | $ 4,247 |
Service expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | 55 | 162 | 174 | 488 |
General and administrative expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 1,122 | $ 693 | $ 2,775 | $ 3,759 |
Stock-Based Compensation and _4
Stock-Based Compensation and Similar Arrangements - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 11, 2020 | Jun. 08, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Sep. 03, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock options outstanding (in shares) | 358,953 | 358,953 | ||||||||
Weighted-average exercise price (in usd per share) | $ 63.02 | $ 63.02 | ||||||||
Stock equivalent units outstanding (in shares) | 3,862 | 3,862 | ||||||||
Stock option equivalent units outstanding (in shares) | 200,000 | 200,000 | ||||||||
Temporary equity, shares outstanding (in shares) | 798,788 | 798,788 | 798,788 | |||||||
Temporary equity, par (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201711Member | |||||||||
Retained earnings | $ (221,509) | $ (221,509) | $ (183,733) | |||||||
Convertible shares (in shares) | 0 | |||||||||
Cumulative Effect, Period of Adoption, Adjustment | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Retained earnings | $ (52,100) | $ (52,100) | ||||||||
Series A Preferred Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Temporary equity, shares outstanding (in shares) | 369,120,000 | |||||||||
Temporary equity, par (in usd per share) | $ 0.001 | |||||||||
Cash paid, per share (in usd per share) | 209.88 | |||||||||
Cash payment for shares (in usd per share) | $ 8.82 | |||||||||
Treasury Stock, Preferred, Shares | 27,509 | |||||||||
Preferred Stock, Redemption Price Per Share | $ 209.88 | |||||||||
Common Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Conversion to common stock (in shares) | 925,567 | 2.5075 | 27,373,000 | 5,666,000 | ||||||
Convertible Preferred Stock, Shares Issued upon Conversion | 2.5075 | |||||||||
Management Incentive Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Fixed payment | $ 12,000 | 2,700 | ||||||||
Deferred compensation liability | $ 1,800 | $ 1,800 | 1,100 | |||||||
Restricted Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares of unvested RSAs outstanding (in shares) | 55,469 | 55,469 | ||||||||
Weighted-average grant date fair value (in usd per share) | $ 62.78 | $ 62.78 | ||||||||
Stock Equivalent Unit Awards and Stock Option Equivalent Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares of unvested RSAs outstanding (in shares) | 46,021 | 46,021 | ||||||||
Weighted-average grant date fair value (in usd per share) | $ 63.17 | $ 63.17 | ||||||||
Stock Equivalent Unit Awards and Stock Option Equivalent Units | Accrued Expenses | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Liability for unexercised cash settled share-based payment awards | $ 10,000 | $ 10,000 | $ 3,300 | |||||||
Stock Equivalent Unit Awards and Stock Option Equivalent Units | General and administrative expense | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Allocated share-based compensation expense (benefit) | $ 2,900 | $ 400 | $ 6,900 | $ (200) |
Stock-Based Compensation and _5
Stock-Based Compensation and Similar Arrangements - Conversion of Stock (Details) - USD ($) $ in Thousands | Jun. 11, 2020 | Jun. 08, 2020 | Sep. 30, 2020 | Jun. 30, 2020 |
Increase (Decrease) in Convertible Preferred Stock [Roll Forward] | ||||
Preferred stock, value, issued, beginning balance | $ 5,299 | $ 77,120 | ||
Reduction of unamortized issuance cost | 241 | 3,263 | ||
Preferred stock, value, issued, ending balance | $ 0 | $ 5,299 | ||
Increase (Decrease) in Convertible Preferred Stock [Roll Forward] | ||||
Preferred stock, shares outstanding, beginning balance (in shares) | 54,882,000 | 798,788,000 | ||
Preferred stock, shares outstanding, ending balance (in shares) | 0 | 54,882,000 | ||
Common Stock | ||||
Increase (Decrease) in Convertible Preferred Stock [Roll Forward] | ||||
Conversion to common stock pursuant to Conversion Agreement | $ (2,763) | $ (572) | ||
Conversion of stock, amount converted | $ (37,256) | |||
Increase (Decrease) in Convertible Preferred Stock [Roll Forward] | ||||
Conversion to common stock (in shares) | (925,567) | (2.5075) | (27,373,000) | (5,666,000) |
Conversion of stock, shares converted (in shares) | (369,120,000) | |||
Redeemable Preferred Stock | ||||
Increase (Decrease) in Convertible Preferred Stock [Roll Forward] | ||||
Conversion of stock, amount converted | $ (2,777) | $ (37,256) | ||
Increase (Decrease) in Convertible Preferred Stock [Roll Forward] | ||||
Conversion of stock, shares converted (in shares) | (27,509,000) | (369,120,000) |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||||||
Net income (loss) | $ 38,805 | $ 36,998 | $ 16,098 | $ 8,154 | $ (1,712) | $ 582 | $ 91,901 | $ 7,024 |
Dividends on convertible preferred stock outstanding | 0 | (1,109) | (1,171) | (3,295) | ||||
Consideration paid in excess of preferred cost basis pursuant to the Conversion Agreement | (3,186) | 0 | (52,137) | 0 | ||||
Income allocated to participating securities | (246) | (941) | (3,213) | (499) | ||||
Net income available to common stockholders | $ 35,346 | $ 6,104 | $ 34,563 | $ 3,230 | ||||
Denominator: | ||||||||
Denominator for basic earnings per share -- weighted-average shares | 14,026,039 | 12,993,934 | 13,367,605 | 12,956,222 | ||||
Effect of dilutive securities: | ||||||||
Denominator for diluted earnings per share -- adjusted weighted-average shares assumed conversion (in shares) | 14,133,904 | 13,004,449 | 13,415,344 | 12,977,598 | ||||
Basic earnings (loss) per share: | ||||||||
Continuing operations (in dollars per share) | $ 2.53 | $ 0.50 | $ 2.63 | $ 0.21 | ||||
Discontinued operations (in dollars per share) | (0.01) | (0.03) | (0.05) | 0.04 | ||||
Basic earnings per common share (in dollars per share) | 2.52 | 0.47 | 2.58 | 0.25 | ||||
Diluted earnings (loss) per share: | ||||||||
Continuing operations (in dollars per share) | 2.51 | 0.50 | 2.62 | 0.21 | ||||
Discontinued operations (in dollars per share) | (0.01) | (0.03) | (0.05) | 0.04 | ||||
Diluted (loss) earnings per common share (in dollars per share) | $ 2.50 | $ 0.47 | $ 2.57 | $ 0.25 | ||||
Preferred Stock Conversion Agreement | ||||||||
Numerator: | ||||||||
Dividends paid pursuant to the Conversion Agreement | $ (27) | $ 0 | $ (817) | $ 0 | ||||
Common stock options | ||||||||
Effect of dilutive securities: | ||||||||
Common stock options (in shares) | 61,312 | 10,515 | 15,730 | 21,376 | ||||
Restricted stock | ||||||||
Effect of dilutive securities: | ||||||||
Common stock options (in shares) | 46,553 | 0 | 32,009 | 0 | ||||
Continuing operations | ||||||||
Numerator: | ||||||||
Net income available to common stockholders | $ 35,461 | $ 6,473 | $ 35,181 | $ 2,762 | ||||
Discontinued operations | ||||||||
Numerator: | ||||||||
Net income available to common stockholders | $ (115) | $ (369) | $ (618) | $ 468 |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Antidilutive Securities (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Stock options to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 3,481 | 420,846 | 170,076 | 499,611 |
Convertible preferred stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 38,851 | 799,969 | 487,576 | 800,983 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate | 27.00% | 37.30% | 17.60% | 37.80% | |
Proceeds from income tax refunds | $ 30,800 | ||||
Income taxes receivable | $ 27,300 | $ 27,300 | |||
Tax benefit | $ 11,000 | ||||
Increase income taxes payable | $ 3,500 | ||||
Income taxes receivable, amount collected | 17,000 | 17,000 | |||
Income taxes receivable, current | $ 10,300 | $ 10,300 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020USD ($)numberOfLawsuits | Sep. 30, 2020numberOfLawsuits | Aug. 31, 2020 | |
Loss Contingencies [Line Items] | |||
Class action lawsuits | numberOfLawsuits | 26 | 26 | |
Non-title related warranty, term | 18 months | ||
Title-related warranty, term | 5 years | ||
Term of contract | 11 years 6 months | ||
Future estimated base rent payments | $ | $ 29.7 | ||
Common Stock | Affiliated Entity | Stockholders | |||
Loss Contingencies [Line Items] | |||
Related party, percentage of stock in company | 12.70% | 12.70% |
Transactions with Related Par_2
Transactions with Related Parties (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 11, 2020 | Jun. 08, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||||||||
Temporary equity, shares outstanding (in shares) | 798,788 | 798,788 | 798,788 | |||||
Temporary equity, par (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Payments of dividends to related parties | $ 800 | |||||||
Series A Preferred Stock | ||||||||
Related Party Transaction [Line Items] | ||||||||
Temporary equity, shares outstanding (in shares) | 369,120,000 | |||||||
Temporary equity, par (in usd per share) | $ 0.001 | |||||||
Cash paid, per share (in usd per share) | 209.88 | |||||||
Cash payment for shares (in usd per share) | $ 8.82 | |||||||
Common Stock | ||||||||
Related Party Transaction [Line Items] | ||||||||
Conversion of stock, shares issued (in shares) | 925,567 | 2.5075 | 27,373,000 | 5,666,000 | ||||
Coliseum Capital Partners, L.P. | Preferred Stock Dividends Earned by Related Party | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party transaction amount | $ 30 | $ 1,100 | $ 1,900 | $ 3,200 |
Acquisitions (Details)
Acquisitions (Details) - National MedTrans - USD ($) $ in Thousands | May 06, 2020 | Sep. 30, 2020 |
Business Acquisition, Contingent Consideration [Line Items] | ||
Consideration paid | $ 80,000 | |
Transaction costs | $ 774 | $ 800 |
Acquisitions - Consideration Tr
Acquisitions - Consideration Transferred (Details) - National MedTrans - USD ($) $ in Thousands | May 06, 2020 | Sep. 30, 2020 |
Business Acquisition, Contingent Consideration [Line Items] | ||
Consideration paid | $ 80,000 | |
Transaction costs | 774 | $ 800 |
Restricted cash received | (3,109) | |
Net consideration | $ 77,665 |
Acquisitions - Fair Value of In
Acquisitions - Fair Value of Intangible Assets (Details) - National MedTrans $ in Thousands | May 06, 2020USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | $ 77,665 |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Acquired finite-lived intangible assets, weighted average useful life | 6 years |
Finite-lived intangible assets acquired | $ 75,514 |
Trade names and trademarks | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Acquired finite-lived intangible assets, weighted average useful life | 3 years |
Finite-lived intangible assets acquired | $ 2,151 |
Discontinued Operations - Resul
Discontinued Operations - Results of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Operating expenses: | ||||
Income (loss) from discontinued operations, net of tax | $ (115) | $ (426) | $ (618) | $ 540 |
Discontinued Operations, Disposed of by Sale | ||||
Operating expenses: | ||||
General and administrative (income) expense | 153 | 468 | 797 | (1,412) |
Total operating (income) loss | 153 | 468 | 797 | (1,412) |
Operating income (loss) | (153) | (468) | (797) | 1,412 |
Income (loss) from discontinued operations before income taxes | (153) | (468) | (797) | 1,412 |
(Provision) benefit for income taxes | 38 | (42) | 179 | (872) |
Income (loss) from discontinued operations, net of tax | (115) | (426) | (618) | 540 |
Human Services | Discontinued Operations, Disposed of by Sale | ||||
Operating expenses: | ||||
General and administrative (income) expense | (7) | (12) | 327 | 205 |
Total operating (income) loss | (7) | (12) | 327 | 205 |
Operating income (loss) | 7 | 12 | (327) | (205) |
Income (loss) from discontinued operations before income taxes | 7 | 12 | (327) | (205) |
(Provision) benefit for income taxes | (2) | 3 | 62 | 50 |
Income (loss) from discontinued operations, net of tax | 5 | 9 | (265) | (155) |
WD Services | Discontinued Operations, Disposed of by Sale | ||||
Operating expenses: | ||||
General and administrative (income) expense | 160 | 480 | 470 | (1,617) |
Total operating (income) loss | 160 | 480 | 470 | (1,617) |
Operating income (loss) | (160) | (480) | (470) | 1,617 |
Income (loss) from discontinued operations before income taxes | (160) | (480) | (470) | 1,617 |
(Provision) benefit for income taxes | 40 | (45) | 117 | (922) |
Income (loss) from discontinued operations, net of tax | $ (120) | $ (435) | $ (353) | $ 695 |
Discontinued Operations - Asset
Discontinued Operations - Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Current assets of discontinued operations | $ 357 | $ 155 | $ 250 |
Current liabilities of discontinued operations | 1,734 | 1,430 | |
WD Services | Discontinued Operations, Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash and cash equivalents | 357 | 155 | |
Current assets of discontinued operations | 357 | 155 | |
Accounts payable | 41 | 16 | |
Accrued expenses | 1,693 | 1,414 | |
Current liabilities of discontinued operations | $ 1,734 | $ 1,430 |
Discontinued Operations - Cash
Discontinued Operations - Cash Flow (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Deferred income taxes | $ 12,612 | $ 1,993 |
Discontinued Operations, Disposed of by Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net cash provided by (used in) discontinued operations | $ 800 | |
Human Services | Discontinued operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Deferred income taxes | $ 600 |
Segments - Narrative (Details)
Segments - Narrative (Details) | 9 Months Ended |
Sep. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segments - Segments (Details)
Segments - Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||
Service revenue, net | $ 320,619 | $ 393,385 | $ 970,166 | $ 1,125,111 | |
Service expense | 235,543 | 356,271 | 764,310 | 1,042,717 | |
General and administrative expense | 34,441 | 15,979 | 86,435 | 52,241 | |
Depreciation and amortization | 7,301 | 4,148 | 17,199 | 12,976 | |
Operating income | 43,334 | 16,987 | 102,222 | 17,177 | |
Equity in net income of investee | 10,325 | (3,188) | 12,200 | (6,159) | |
Equity investment | 141,292 | 141,292 | $ 130,869 | ||
Total assets (continuing operations) | 791,635 | 791,635 | $ 597,381 | ||
NET Services | |||||
Segment Reporting Information [Line Items] | |||||
Service revenue, net | 320,619 | 393,385 | 970,166 | 1,125,111 | |
Continuing operations | |||||
Segment Reporting Information [Line Items] | |||||
Service revenue, net | 320,619 | 393,385 | 970,166 | 1,125,111 | |
Service expense | 235,543 | 356,271 | 764,310 | 1,042,717 | |
General and administrative expense | 34,441 | 15,979 | 86,435 | 52,241 | |
Depreciation and amortization | 7,301 | 4,148 | 17,199 | 12,976 | |
Operating income | 43,334 | 16,987 | 102,222 | 17,177 | |
Equity in net income of investee | 10,325 | (3,188) | 12,200 | (6,159) | |
Equity investment | 141,292 | 154,532 | 141,292 | 154,532 | |
Total assets (continuing operations) | 791,278 | 620,220 | 791,278 | 620,220 | |
Continuing operations | NET Services | |||||
Segment Reporting Information [Line Items] | |||||
Service revenue, net | 320,619 | 393,385 | 970,166 | 1,125,111 | |
Service expense | 235,543 | 356,271 | 764,310 | 1,042,717 | |
General and administrative expense | 34,441 | 15,979 | 86,435 | 52,241 | |
Depreciation and amortization | 7,301 | 4,148 | 17,199 | 12,976 | |
Operating income | 43,334 | 16,987 | 102,222 | 17,177 | |
Equity in net income of investee | 0 | 0 | 0 | 0 | |
Equity investment | 0 | 0 | 0 | 0 | |
Total assets (continuing operations) | 649,986 | 465,688 | 649,986 | 465,688 | |
Continuing operations | Matrix | |||||
Segment Reporting Information [Line Items] | |||||
Service revenue, net | 0 | 0 | 0 | 0 | |
Service expense | 0 | 0 | 0 | 0 | |
General and administrative expense | 0 | 0 | 0 | 0 | |
Depreciation and amortization | 0 | 0 | 0 | 0 | |
Operating income | 0 | 0 | 0 | 0 | |
Equity in net income of investee | 10,325 | (3,188) | 12,200 | (6,159) | |
Equity investment | 141,292 | 154,532 | 141,292 | 154,532 | |
Total assets (continuing operations) | $ 141,292 | $ 154,532 | $ 141,292 | $ 154,532 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event numberOfCaregivers in Thousands, $ in Thousands | 3 Months Ended | ||
Dec. 31, 2020USD ($) | Nov. 05, 2020numberOfStatesnumberOfPatientHoursnumberOfBranchesnumberOfCaregiversnumberOfPatients | Nov. 04, 2020USD ($) | |
Simplura Health Group | |||
Subsequent Event [Line Items] | |||
Branches | numberOfBranches | 57 | ||
Number of states in which entity operates | numberOfStates | 7 | ||
Number of employees | numberOfCaregivers | 14 | ||
Number of patients | numberOfPatients | 12,500 | ||
Number of patient hours | numberOfPatientHours | 21,000,000 | ||
Simplura Health Group | Forecast | |||
Subsequent Event [Line Items] | |||
Consideration paid | $ 575,000 | ||
Senior Notes | |||
Subsequent Event [Line Items] | |||
Debt amount | $ 500,000 | ||
Interest rate, stated percentage | 5.875% |