Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 | |
Entity Registrant Name | Addus HomeCare Corp | |
Entity Central Index Key | 1,468,328 | |
Trading Symbol | adus | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 11,631,659 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash | $ 45,688 | $ 8,013 |
Accounts receivable, net of allowances of $10,361 and $7,363 at September 30, 2017 and December 31, 2016, respectively | 96,335 | 116,999 |
Prepaid expenses and other current assets | 6,267 | 5,998 |
Total current assets | 148,290 | 131,010 |
Property and equipment, net of accumulated depreciation and amortization | 7,494 | 6,648 |
Other assets | ||
Goodwill | 91,821 | 73,906 |
Intangibles, net of accumulated amortization | 16,243 | 15,413 |
Deferred tax assets, net | 3,153 | 3,153 |
Investments in joint ventures | 900 | 900 |
Total other assets | 112,117 | 93,372 |
Total assets | 267,901 | 231,030 |
Current Liabilities | ||
Accounts payable | 4,910 | 4,486 |
Current portion of long-term debt, net of debt issuance costs | 3,407 | 2,531 |
Accrued expenses | 46,942 | 42,603 |
Total current liabilities | 55,259 | 49,620 |
Long-term liabilities | ||
Long-term debt, less current portion, net of debt issuance costs | 40,372 | 22,482 |
Total liabilities | 95,631 | 72,102 |
Stockholders' equity | ||
Common stock-$.001 par value; 40,000 authorized and 11,634 and 11,527 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 12 | 12 |
Additional paid-in capital | 95,229 | 92,253 |
Retained earnings | 77,029 | 66,663 |
Total stockholders' equity | 172,270 | 158,928 |
Total liabilities and stockholders' equity | $ 267,901 | $ 231,030 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Condensed Consolidated Balance Sheets [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 10,361 | $ 7,363 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 11,634,000 | 11,527,000 |
Common stock, shares outstanding | 11,634,000 | 11,527,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Consolidated Statements of Income [Abstract] | ||||
Net service revenues | $ 108,592 | $ 103,502 | $ 313,758 | $ 297,032 |
Cost of service revenues | 79,539 | 76,079 | 228,877 | 219,594 |
Gross margin | 29,053 | 27,423 | 84,881 | 77,438 |
General and administrative expenses | 19,359 | 21,299 | 57,239 | 59,864 |
Gain on sale of adult day services centers | (2,065) | |||
Depreciation and amortization | 1,781 | 1,721 | 4,811 | 4,943 |
Provision for doubtful accounts | 2,106 | 1,908 | 6,208 | 5,089 |
Total operating expenses | 23,246 | 24,928 | 66,193 | 69,896 |
Operating income | 5,807 | 2,495 | 18,688 | 7,542 |
Interest income | (30) | (16) | (50) | (46) |
Interest expense | 870 | 648 | 3,629 | 1,760 |
Total interest expense, net | 840 | 632 | 3,579 | 1,714 |
Other income | 64 | 126 | 165 | 126 |
Income before income taxes | 5,031 | 1,989 | 15,274 | 5,954 |
Income tax expense | 1,623 | 290 | 4,908 | 1,498 |
Net income | $ 3,408 | $ 1,699 | $ 10,366 | $ 4,456 |
Net income per common share | ||||
Basic income per share | $ 0.30 | $ 0.15 | $ 0.90 | $ 0.40 |
Diluted income per share | $ 0.29 | $ 0.15 | $ 0.89 | $ 0.40 |
Weighted average number of common shares and potential common shares outstanding: | ||||
Basic | 11,486 | 11,367 | 11,464 | 11,190 |
Diluted | 11,631 | 11,417 | 11,616 | 11,227 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Equity - 9 months ended Sep. 30, 2017 - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2016 | $ 12 | $ 92,253 | $ 66,663 | $ 158,928 |
Balance, shares at Dec. 31, 2016 | 11,527 | |||
Issuance of shares of common stock under restricted stock award agreements, Shares | 90 | |||
Forfeiture of shares of common stock under restricted stock award agreements, shares | (11) | |||
Stock-based compensation | 1,818 | 1,818 | ||
Shares issued for exercise of stock options | 1,158 | 1,158 | ||
Shares issued for exercise of stock options, shares | 28 | |||
Net income | 10,366 | 10,366 | ||
Balance at Sep. 30, 2017 | $ 12 | $ 95,229 | $ 77,029 | $ 172,270 |
Balance, shares at Sep. 30, 2017 | 11,634 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 10,366 | $ 4,456 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 4,811 | 4,943 |
Non-cash restructuring | 383 | 2,554 |
Stock-based compensation | 1,818 | 1,263 |
Amortization and write-off of debt issuance costs under the terminated credit facility | 1,484 | 261 |
Amortization of debt issuance costs under the new credit facility | 235 | |
Provision for doubtful accounts | 6,208 | 5,089 |
Gain on sale of adult day services centers | (2,065) | |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | 15,451 | 5,540 |
Prepaid expenses and other current assets | (281) | 1,136 |
Accounts payable | 418 | (577) |
Accrued expenses | 3,750 | 6,326 |
Net cash provided by operating activities | 42,578 | 30,991 |
Cash flows from investing activities: | ||
Proceeds from the sale of adult day services centers | 2,400 | |
Acquisitions of businesses, net of cash acquired | (22,419) | (20,449) |
Purchases of property and equipment | (3,089) | (1,168) |
Net cash used in investing activities | (23,108) | (21,617) |
Cash flows from financing activities: | ||
Cash received from exercise of stock options | 1,158 | 3,016 |
Borrowings on revolver-new credit facility | 30,000 | |
Borrowings on term loan - new credit facility | 45,000 | |
Borrowings on revolver - terminated credit facility | 20,000 | 27,000 |
Borrowings on term loan - terminated credit facility | 25,000 | |
Payments on revolver-new credit facility | (30,000) | |
Payments on revolver-terminated credit facility | (20,000) | (27,000) |
Payments on term loan - terminated credit facility | (24,063) | (625) |
Payments for debt issuance costs under the new credit facility | (2,823) | |
Payments for debt issuance costs under the terminated credit facility | (495) | |
Payments on capital lease obligations | (1,067) | (828) |
Payments on contingent earn-out obligation | (100) | |
Net cash provided by financing activities | 18,205 | 25,968 |
Net change in cash | 37,675 | 35,342 |
Cash, at beginning of period | 8,013 | 4,104 |
Cash, at end of period | 45,688 | 39,446 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 1,538 | 1,748 |
Cash paid for income taxes | $ 5,357 | 3,236 |
Supplemental disclosures of non-cash investing and financing activities | ||
Tax benefit related to the amortization of tax goodwill in excess of book basis | $ 120 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Basis of Presentation and Description of Business The condensed consolidated financial statements include the accounts of Addus HomeCare Corporation ("Holdings") and its subsidiaries (together with Holdings, the "Company," "we," "us," or "our"). The Company operates as one 35,000 114 24 Principles of Consolidation All intercompany balances and transactions have been eliminated in consolidation. As of September 30, 2017, the Company used the cost method to account for its investments in joint ventures in which it owned 10% Revenue Recognition The Company generates net service revenues by providing services directly to consumers. The Company receives payments for providing services from federal, state and local governmental agencies, managed care organizations, commercial insurers and private consumers. The Company's operations are principally provided based on authorized hours, determined by the relevant agency, at an hourly rate specified in agreements or fixed by legislation and recognized as revenues at the time services are rendered. Personal care service revenues are reimbursed by state, local and other governmental programs which are partially funded by Medicaid or Medicaid waiver programs, with the remainder reimbursed through insurance programs and private pay. Allowance for Doubtful Accounts The Company establishes its allowance for doubtful accounts to the extent it is probable that a portion or all of a particular account will not be collected. The Company establishes its provision for doubtful accounts primarily by analyzing historical trends and the aging of receivables. In its evaluation, the Company considers other factors including: delays in payment trends in individual states due to budget or funding issues; billing conversions related to acquisitions or internal systems; resubmission of bills with required documentation and disputes with specific payors. An allowance for doubtful accounts is maintained at a level that the Company's management believes is sufficient to cover potential losses. However, actual collections could differ from the Company's estimates. Property and Equipment Property and equipment are recorded at cost and depreciated over the estimated useful lives of the related assets by use of the straight-line method. Maintenance and repairs are charged to expense as incurred. The estimated useful lives of the property and equipment are as follows: Computer equipment 3 – 5 years Furniture and equipment 5 – 7 years Transportation equipment 5 years Computer software 5 – 10 years Leasehold improvements Lesser of useful life or lease term, unless probability of lease renewal is likely Goodwill The Company's carrying value of goodwill is the excess of the purchase price over the fair value of the net assets acquired from various acquisitions including the acquisition of Addus HealthCare, Inc. ("Addus HealthCare"). In accordance with Accounting Standards Codification ("ASC") Topic 350, "Goodwill and Other Intangible Assets ," goodwill and intangible assets with indefinite useful lives are not amortized. The Company tests goodwill for impairment at the reporting unit level on an annual basis, as of October 1, or whenever potential impairment triggers occur, such as a significant change in business climate or regulatory changes that would indicate that an impairment may have occurred. The Company may use a qualitative test, known as "Step 0," or a two no No Intangible Assets The Company's identifiable intangible assets consist of customer and referral relationships, trade names, trademarks, state licenses and non-compete agreements. Amortization is computed using straight-line and accelerated methods based upon the estimated useful lives of the respective assets, which range from two twenty-five Intangible assets with finite lives are amortized using the estimated economic benefit method over the useful life and assessed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company would recognize an impairment loss when the estimated future non-discounted cash flows associated with the intangible asset is less than the carrying value. An impairment charge would then be recorded for the excess of the carrying value over the fair value. The Company estimates the fair value of these intangible assets using the income approach. No The income approach, which the Company uses to estimate the fair value of its intangible assets (other than goodwill), is dependent on a number of factors including estimates of future market growth and trends, forecasted revenue and costs, expected periods over which the assets will be utilized, appropriate discount rates and other variables. The Company bases its fair value estimates on assumptions the Company believes to be reasonable but which are unpredictable and inherently uncertain. Actual future results may differ from those estimates. The Company also has indefinite-lived intangible assets that are not subject to amortization expense such as certificates of need and licenses to conduct specific operations within geographic markets. The Company's management has concluded that certificates of need and licenses have indefinite lives, as management has determined that there are no legal, regulatory, contractual, economic or other factors that would limit the useful life of these intangible assets, and the Company intends to renew and operate the certificates of need and licenses indefinitely. The certificates of need and licenses are tested annually for impairment, or whenever potential impairment triggers occur. No Debt Issuance Costs The Company amortizes debt issuance costs on a straight-line method over the term of the related debt. This method approximates the effective interest method. The Company has classified the debt issuance costs as current portion of long-term debt or long-term debt, less current portion as of September 30, 2017 and December 31, 2016. Workers' Compensation Program The Company's workers' compensation insurance program has a $ 0.4 As of September 30, 2017 and December 31, 2016, the Company recorded $ 0.6 0.7 Interest Income Illinois law entitles designated service program providers to receive a prompt payment interest penalty based on qualifying services approved for payment that remain unpaid after a designated period of time. As the amount and timing of the receipt of these payments are not certain, the interest income is recognized when received and reported in the statement of income as interest income. For the three and nine months ended September 30, 2017 and 2016 no Interest Expense The Company's interest expense consists of interest and unused credit line fees on its credit facilities, interest on its capital lease obligations, and amortization and write-off of debt issuance costs, which is reported in the statement of income when incurred. Other Income Other income consisted of income distributions received from investments in joint ventures. The Company accounted for this income in accordance with ASC Topic 325, "Investments—Other." The Company recognized the net accumulated earnings only to the extent distributed by the joint ventures on the date received. The Company subsequently sold these equity investments on October 1, 2017 (see Note 12). Income Tax Expense The Company accounts for income taxes under the provisions of ASC Topic 740, "Income Taxes." The objective of accounting for income taxes is to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in its financial statements or tax returns. Deferred taxes, resulting from differences between the financial and tax basis of the Company's assets and liabilities, are also adjusted for changes in tax rates and tax laws when changes are enacted. ASC Topic 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. ASC Topic 740 also prescribes a recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return. In addition, ASC Topic 740 provides guidance on derecognition, classification, accounting in interim periods and disclosure requirements for uncertain tax positions. In March 2016, the FASB issued Accounting Standards Update ("ASU") 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 allows for simplification of several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under ASU 2016-09, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement. ASU 2016-09 also requires recognition of excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. ASU 2016-09 further permits the withholding of an amount up to employees' maximum individual tax rate in the relevant jurisdiction without resulting in a liability classification. ASU 2016-09 also requires any excess tax benefits be classified along with other income tax cash flows as an operating activity and cash paid by an employer when directly withholding shares for tax-withholding purposes to be classified as a financing activity. The Company adopted this standard on January 1, 2017 on a prospective basis. As a result, for the three and nine months ended September 30, 2017, the Company recorded an excess tax benefit of $ 0 118,000 Stock-based Compensation The Company currently has two Stock Compensation ." Compensation expense is recognized on a straight-line basis under the Plans over the vesting period of the equity awards based on the grant date fair value of the options and restricted stock awards. From October 28, 2009 to December 31, 2016, the Company utilized the Enhanced Hull-White Trinomial Model to value the Company's options. Beginning January 1, 2017, the Company began utilizing the Black-Scholes Option Pricing Model to value the Company's options, as the Company believes it is a more widely accepted and understood valuation model. The determination of the fair value of stock-based payments utilizing the Black-Scholes Model and the Enhanced Hull-White Trinomial Model is affected by the Company's stock price and a number of assumptions, including expected volatility, risk-free interest rate, expected term, expected dividends yield, expected forfeiture rate, expected turn-over rate and the expected exercise multiple. Diluted Net Income Per Common Share Diluted net income per common share, calculated under the treasury stock method, is based on the weighted average number of shares outstanding during the period. The Company's outstanding securities that may potentially dilute the common stock are stock options and restricted stock awards. Included in the Company's calculation of diluted earnings per share for the three and nine months ended September 30, 2017 were approximately 479,000 102,000 102,000 148,000 43,000 50,000 Included in the Company's calculation of diluted earnings per share for the three and nine months ended September 30, 2016 were approximately 469,000 39,000 29,000 97,000 11,000 7,000 Estimates The financial statements are prepared by management in conformity with U.S. Generally Accepted Accounting Principles ("GAAP") and include estimated amounts and certain disclosures based on assumptions about future events. The Company's critical accounting estimates include the following areas: the allowance for doubtful accounts, reserve for self-insurance claims, accounting for stock-based compensation, accounting for income taxes, business combinations and when required, the quantitative assessment of goodwill. Actual results could differ from those estimates. Fair Value Measurements The Company's financial instruments consist of cash, accounts receivable, payables and debt. The carrying amounts reported on the Company's Unaudited Condensed Consolidated Balance Sheets for cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short-term nature of these instruments. The carrying value of the Company's long-term debt with variable interest rates approximates fair value based on instruments with similar terms. The Company applies fair value techniques on a non-recurring basis associated with valuing potential impairment losses related to goodwill, if required, and indefinite-lived intangible assets and also when determining the fair value of contingent consideration, if applicable. To determine the fair value in these situations, the Company uses Level 3 inputs, defined as unobservable inputs in which little or no market data exists; therefore requiring an entity to develop its own assumptions, such as discounted cash flows, or if available, what a market participant would pay on the measurement date. The Company utilizes the income approach to estimate the fair value of its intangible assets derived from acquisitions. Going Concern In connection with the preparation of the financial statements for the three and nine months ended September 30, 2017, the Company conducted an evaluation as to whether there were conditions and events, considered in the aggregate, which raised substantial doubt as to the entity's ability to continue as a going concern within one year after the date of the issuance, or the date of availability, of the financial statements to be issued. The evaluation concluded that there did not appear to be evidence of substantial doubt of the entity's ability to continue as a going concern. New Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP and will be effective for the Company as of January 1, 2018. The standard permits the use of either the retrospective or modified retrospective (cumulative effect) transition method and the Company has selected the modified retrospective approach. The FASB has issued and may issue in the future, interpretative guidance, which may cause the Company's evaluation to change. The Company has completed the initial review to determine the impact ASU 2014-09 and its subsequent updates will have on the Company's consolidated financial statements or financial statement disclosures upon adoption. Based on the Company's continued review of contracts and revenue streams, it believes that the timing and measurement of revenue for its customers will be similar to its current revenue recognition model due to the structure of payor contracts which consists of a fixed reimbursement rate that is deemed earned upon completion of a defined service. In addition, the Company has made ongoing progress around process changes and system enhancements to ensure adherence to the new standard. During the third quarter of 2017, additional resources were retained to assist in the completion of the assessment, prepare specific contract analysis and document policy changes. The Company expects that the final evaluation of the impact and implementation of system enhancements will be completed during the fourth quarter of 2017 . In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which replaces existing leasing rules with a comprehensive lease measurement and recognition standard and expanded disclosure requirements. ASU 2016-02 will require lessees to recognize most leases on their balance sheets as liabilities, with corresponding "right-of-use" assets and is effective for annual reporting periods beginning after December 15, 2018, subject to early adoption. For income statement recognition purposes, leases will be classified as either a finance or an operating lease. The Company will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Upon initial evaluation, the Company believes that the new standard will have a material impact on its Consolidated Balance Sheets but it will not affect its liquidity. It has been determined that the Company will need to secure new software to account for the change in accounting for leases and is currently reviewing the software options available. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. Under the new standard, entities holding financial assets and net investment in leases that are not accounted for at fair value through net income are to be presented at the net amount expected to be collected. An allowance for credit losses will be a valuation account that will be deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 is effective as of January 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2016-13. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." This standard amends and adjusts how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, and will require adoption on a retrospective basis unless impracticable. If impracticable the Company would be required to apply the amendments prospectively as of the earliest date possible. The Company is currently evaluating the impact that ASU 2016-15 will have on its statement of cash flows but does not expect it to have a material impact. In January 2017, the FASB issued ASU 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." The new guidance eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the current goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value (i.e., measure the charge based on the current Step 1). ASU 2017-04 is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. The Company is currently evaluating the provisions of ASU 2017-04 to determine how its goodwill impairment testing will be impacted and whether it may elect to adopt ASU 2017-04 prior to the stated effective date. In May 2017, the FASB issued ASU 2017-09, " Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting." ASU 2017-19 clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. This pronouncement is effective for annual periods, and for interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted, and is applied prospectively to changes in terms or conditions of awards occurring on or after the adoption date. The Company is evaluating the impact of the adoption of this guidance on its financial statements but does not expect it to have a material impact. Reclassification of Prior Period Balances Certain reclassifications have been made to prior period amounts to conform to the current-year presentation including the reporting of provision for doubtful accounts as a separate line item on the Unaudited Condensed Consolidated Statements of Income. These reclassifications have no effect on the reported net income for the three and nine months ended September 30, 2017 and 2016. |
Sale of Adult Day Services Cent
Sale of Adult Day Services Centers | 9 Months Ended |
Sep. 30, 2017 | |
Sale of Adult Day Services Centers [Abstract] | |
Sale of Adult Day Services Centers | 2. Sale of Adult Day Services Centers In order to focus on providing services to consumers in their homes, effective March 1, 2017, the Company ceased the adult day services business and completed its sale of substantially all of the assets used in three $2.4 $2.1 three |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Acquisitions [Abstract] | |
Acquisitions | 3. Acquisitions On April 24, 2017, the Company entered into a definitive securities purchase agreement with HB Management Group, Inc. to purchase Options Services, Inc. d/b/a Options Home Care ("Options Home Care"). On August 1, 2017, the Company completed its acquisition of all the outstanding securities of Options Home Care for a total purchase price of $22.6 20 $0.7 The Company's acquisition of Options Home Care has been accounted for in accordance with ASC Topic 805, " Business Combinations, " and the resulting goodwill and other intangible assets was accounted for under ASC Topic 350, " Goodwill and Other Intangible Assets ." The acquisition was recorded at its fair value as of August 1, 2017. Under business combination accounting, the Options Purchase Price was $22.6 million and was allocated to Options Home Care's net tangible and identifiable intangible assets based on their estimated fair values. Based upon management's valuation, which is preliminary and subject to completion of valuation analysis, the total purchase price has been allocated as follows: Total (Amounts in Thousands) Goodwill $ 17,915 Identifiable intangible assets 4,163 Accounts receivable 995 Cash 205 Other assets 41 Accrued liabilities (695 ) Total purchase price allocation $ 22,624 Management's assessment of qualitative factors affecting goodwill for Options Home Care includes: estimates of market share at the date of purchase; ability to grow in the market; synergy with existing Company operations and the presence of managed care payors in the market. Identifiable intangible assets acquired consist of trade name and customer relationships (see Note 1 for estimated useful lives of the Company's identifiable intangible assets). The estimated fair value of identifiable intangible assets was determined with the assistance of a valuation specialist. The goodwill and intangible assets acquired are deductible for tax purposes. The Options Home Care acquisition accounted for $ 3.3 0.2 The following table contains unaudited pro forma condensed consolidated income statement information of the Company had the acquisition of Options Home Care closed on January 1, 2016. For the Three Months Ended September 30, (Amounts in Thousands) 2017 2016 Net service revenues $ 110,288 $ 108,859 Operating income 5,964 2,563 Net income 3,509 1,765 Net income per common share Basic income per share $ 0.31 $ 0.16 Diluted income per share $ 0.30 $ 0.15 For the Nine Months Ended September 30, (Amounts in Thousands) 2017 2016 Net service revenues $ 326,028 $ 313,425 Operating income 19,785 8,116 Net income 11,083 4,880 Net income per common share Basic income per share $ 0.97 $ 0.44 Diluted income per share $ 0.95 $ 0.43 The pro forma disclosures in the table above include adjustments for amortization of intangible assets, tax expense, and acquisition costs to reflect results that are more representative of the combined results of the transactions as if Options Home Care had been acquired effective January 1, 2016. This pro forma information is presented for illustrative purposes only and may not be indicative of the results of operations that would have actually occurred. In addition, future results may vary significantly from the results reflected in the pro forma information. The unaudited pro forma financial information does not reflect the impact of future events that may occur after the acquisition, such as anticipated cost savings from operating synergies. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | 4. Goodwill and Intangible Assets A summary of the goodwill activity for the nine months ended September 30, 2017 is provided below: Goodwill (Amounts in Thousands) Goodwill, at December 31, 2016 $ 73,906 Additions for acquisitions 17,915 Adjustments to previously recorded goodwill — Goodwill, at September 30, 2017 $ 91,821 The carrying amount and accumulated amortization of each identifiable intangible asset category consisted of the following as of September 30, 2017 and December 31, 2016: Customer Trade Non - and referral names and State competition relationships trademarks licenses agreements Total (Amounts in Thousands) Gross balance at December 31, 2016 $ 34,672 $ 13,261 $ 150 $ 2,155 $ 50,238 Accumulated amortization (26,766 ) (6,296 ) — (1,763 ) (34,825 ) Net Balance at December 31, 2016 $ 7,906 $ 6,965 $ 150 $ 392 $ 15,413 Gross balance at January 1, 2017 $ 34,672 $ 13,261 $ 150 $ 2,155 $ 50,238 Additions for acquisitions 3,291 872 — — 4,163 Accumulated amortization (28,640 ) (7,673 ) — (1,845 ) (38,158 ) Net Balance at September 30, 2017 $ 9,323 $ 6,460 $ 150 $ 310 $ 16,243 Amortization expense related to the identifiable intangible assets amounted to $ 1.2 $3.3 1.3 3.6 |
Details of Certain Balance Shee
Details of Certain Balance Sheet Accounts | 9 Months Ended |
Sep. 30, 2017 | |
Details of Certain Balance Sheet Accounts [Abstract] | |
Details of Certain Balance Sheet Accounts | 5. Details of Certain Balance Sheet Accounts Prepaid expenses and other current assets consisted of the following: September 30, 2017 December 31, 2016 (Amounts in Thousands) Prepaid health insurance (1) $ 3,124 $ 2,238 Prepaid workers' compensation and liability insurance 833 1,190 Prepaid rent 489 568 Workers' compensation insurance receivable 592 747 Other 1,229 1,255 $ 6,267 $ 5,998 Accrued expenses consisted of the following: September 30, 2017 December 31, 2016 (Amounts in Thousands) Accrued payroll $ 21,708 $ 17,509 Accrued workers' compensation insurance 13,008 12,823 Accrued health insurance (1) 6,106 4,092 Indemnification reserve (2) 419 419 Accrued payroll taxes 1,403 1,747 Accrued professional fees 971 1,485 Accrued severance (3) 879 1,326 Accrued restructuring (4) 1,099 1,786 Other 1,349 1,416 $ 46,942 $ 42,603 (1) The Company provides health insurance coverage to qualified union employees providing personal care services in Illinois through a Taft-Hartley multi-employer health and welfare plan under Section 302(c)(5) of the Labor Management Relations Act of 1947. The Company's insurance contributions equal the amount reimbursed by the State of Illinois. Contributions are due within five $2.6 2.2 (2) As a condition of the sale of substantially all of the assets used in the Company's home health business to subsidiaries of LHC Group, Inc. ("LHCG") in February 2013, the Company is responsible for any adjustments to Medicare and Medicaid billings prior to the closing. In connection with an internal evaluation of the Company's billing processes, the Company discovered documentation errors in a number of claims that it had submitted to Medicare. Consistent with applicable law, the Company voluntarily remitted $ 1.8 0.4 (3) Accrued severance represents amounts payable to terminated employees with employment and/or separation agreements with the Company. (4) Accrued restructuring includes reserves for lease commitments related to the closure of three |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2017 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | 6. Long-Term Debt Long-term debt consisted of the following: September 30, 2017 December 31, 2016 (Amounts in Thousands) Term loan under the new credit facility $ 45,000 $ — Term loan under the terminated credit facility — 24,063 Capital leases 1,366 2,433 Less unamortized issuance costs (2,587 ) (1,483 ) Total $ 43,779 $ 25,013 Less current maturities (3,407 ) (2,531 ) Long-term debt $ 40,372 $ 22,482 In accordance with ASU 2015-03, " Simplifying the Presentation of Debt Issuance Costs ," the Company has classified the debt issuance costs as current portion of long-term debt or long-term debt, less current portion as of September 30, 2017 and December 31, 2016. Senior Secured Credit Facility On May 8, 2017, the Company entered into a credit agreement (the "Credit Agreement") to obtain a new credit facility with certain lenders and Capital One, N.A., as a lender and swing lender and as agent for all lenders. This credit facility totals $250.0 $125.0 125.0 45.0 80.0 five $100.0 4.25 $2.8 Addus HealthCare is the borrower, with the Company and substantially all of the subsidiaries of the Company as guarantors under the new credit facility. The new credit facility is secured by a first priority security interest in all of the Company's and the other credit parties' current and future tangible and intangible assets, including the shares of stock of the borrower and subsidiaries. Interest on the Company's new credit facility may be payable at (x) the sum of (i) an applicable margin ranging from 1.50 2.25 0.50 0.00 1.00% 2.50 3.25 The Company pays a fee ranging from 0.25 0.50 In July 2017, the Company drew a total of $30.0 $45.0 $97.9 The Credit Agreement contains customary affirmative covenants regarding, among other things, the maintenance of records, compliance with laws, maintenance of permits, maintenance of insurance and property and payment of taxes. The Credit Agreement also contains certain customary financial covenants and negative covenants that, among other things, include a requirement to maintain a minimum fixed charge coverage ratio, a requirement to stay below a maximum senior leverage ratio and a requirement to stay below a maximum permitted amount of capital expenditures, as well as restrictions on guarantees, indebtedness, liens, investments and loans, subject to customary carve outs, a restriction on dividends (provided that Addus HealthCare may make distributions to the Company in an amount that does not exceed $5.0 $60.0 $80.0 year (in each case, without the consent of the lenders), restrictions on mergers, dispositions of assets, and affiliate transactions, and restrictions on fundamental changes and lines of business. As of September 30, 2017, the Company was in compliance with all of its Credit Agreement covenants. Terminated Senior Secured Credit Facility Prior to May 8, 2017, the Company was a party to the Terminated Senior Secured Credit Facility with certain lenders and Fifth Third Bank, as agent and letters of credit issuer. The Terminated Senior Secured Credit Facility provided a $100.0 $ 25.0 $50.0 November 10, 2020 $35.0 3.25 3.75 3.50 4.00 The availability of funds under the revolving credit portion of the Company's Terminated Senior Secured Credit Facility was based on the lesser of (i) the product of adjusted EBITDA, as defined in the terminated credit agreement, for the most recent 12-month period for which financial statements had been delivered under the credit agreement multiplied by the specified advance multiple, up to 3.75 100.0 2.00 2.50 0.50 3.00 3.00 3.50 3.00 3.50 0.25 0.50 On May 8, 2017, the Company repaid the outstanding debt balance of $ 23.8 $0.1 $1.3 For the period January 1, 2017 through May 7, 2017, the Company drew and subsequently repaid $20.0 $24.1 $79.7 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | 7. Income Taxes A reconciliation of the statutory federal tax rate of 35.0% for the three and nine months ended September 30, 2017 and 34.3% for the three and nine months ended September 30, 2016 is summarized as follows: Three Months Ended September 30, 2017 2016 Federal income tax at statutory rate 35.0 % 34.3 % State and local taxes, net of federal benefit 4.4 5.2 Jobs tax credits, net (7.7 ) (27.5 ) Nondeductible permanent items 0.5 2.6 Other 0.0 0.0 Effective income tax rate 32.2 % 14.6 % Nine Months Ended September 30, 2017 2016 Federal income tax at statutory rate 35.0 % 34.3 % State and local taxes, net of federal benefit 4.9 5.2 Jobs tax credits, net (7.5 ) (16.5 ) Nondeductible meals and entertainment 0.5 2.2 Other (0.8 ) 0.0 Effective income tax rate 32.1 % 25.2 % |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Legal Proceedings From time to time, the Company is subject to legal and/or administrative proceedings incidental to its business. It is the opinion of management that the outcome of pending legal and/or administrative proceedings will not have a material effect on the Company's financial position and results of operations. On January 20, 2016, the Company was served with a lawsuit filed in the United States District Court for the Northern District of Illinois against the Company and Cigna Corporation by Stop Illinois Marketing Fraud, LLC, a qui tam relator formed for the purpose of bringing this action. In the action, the plaintiff alleges, inter alia, violations of the federal False Claims Act relating primarily to allegations of violations of the federal Anti-Kickback Statute and allegedly improper referrals of patients from the Company's home care division to the Company's home health business, substantially all of which was sold in 2013. The plaintiff seeks to recover damages, fees and costs under the federal False Claims Act including treble damages, civil penalties and its attorneys' fees. The U.S. government has declined to intervene at this time. Plaintiff amended its complaint on April 4, 2016 to include additional allegations in support of its False Claims Act claims, including alleged violations of the federal Anti-Kickback Statute. The Company and Cigna Corporation filed a motion to dismiss the amended complaint on June 6, 2016. On February 3, 2017, the Court granted Cigna Corporation's motion to dismiss in full, and granted the Company's motion to dismiss in part allowing Plaintiff another chance to amend its complaint. Plaintiff timely filed a second amended complaint on March 10, 2017, withdrawing its conspiracy claim under the Federal False Claims Act and adding an explicit claim under the Illinois False Claims Act for the same underlying kickback allegations. On April 7, 2017, the Company filed a partial motion to dismiss the Second Amended Complaint, which has not yet been ruled on by the court. On May 24, 2017, the State of Illinois filed notice that it was declining to intervene in the plaintiff's claim under the Illinois False Claims Act. The Company intends to defend the litigation vigorously and believes the case will not have a material adverse effect on its business, financial condition or results of operations. On May 4, 2016, the Company, together with 59 other social service and healthcare providers in the State of Illinois, filed an action in the Circuit Court of Cook County, Illinois against certain individuals in their official capacities as agents of the Illinois Department of Human Services, the Illinois Department on Aging, the Illinois Department of Public Health, the Illinois Department of HealthCare and Family Services, the Illinois Criminal Justice Information Authority, the Illinois Department of Corrections and the Illinois Department of Central Management Services, including the Governor of Illinois. On July 20, 2016, a third amended complaint was filed by the plaintiffs, who now comprise 97 similarly situated providers and provider organizations. In the action, the plaintiffs, including the Company, allege to have entered into contracts with the various defendants based in part on the Governor's proposed budget, which provided for funding for the services to be provided by plaintiffs thereunder. The Governor subsequently vetoed all of the relevant appropriations bills on June 25, 2015 and again vetoed an appropriations bill that included funding for the contracts on June 10, 2016. While the defendant officer and agency heads have continued to enforce such contracts, since August 1, 2016, the Company received an aggregate of approximately $ 65.4 Employment Agreements The Company has entered into employment agreements with certain members of senior management. The terms of these agreements are up to four A substantial percentage of the Company's workforce is represented by the Service Employees International Union ("SEIU"). The Company has a national agreement with the SEIU which is currently under negotiation, as well as numerous agreements with local SEIU affiliates which are renegotiated from time to time. These negotiations are often initiated when the Company receives increases in hourly rates from various state agencies. Upon expiration of these collective bargaining agreements, the Company may not be able to negotiate labor agreements on satisfactory terms with these labor unions. |
Severance and Restructuring
Severance and Restructuring | 9 Months Ended |
Sep. 30, 2017 | |
Severance and Restructuring [Abstract] | |
Severance and Restructuring | 9. Severance and Restructuring In 2016, the Company initiated steps to streamline its operations. The Company incurred total expenses related to these initiatives of approximately $0.6 1.5 4.0 8.3 The following provides the components of and changes in our severance and restructuring accruals: Employee Restructuring Termination and Other Costs Costs (Amounts in Thousands) Balance at December 31, 2016 $ 1,326 $ 1,786 Provision 993 551 Utilization (1,440 ) (1,238 ) Balance at September 30, 2017 $ 879 $ 1,099 Employee termination costs represent accrued severance payable to terminated employees with employment and/or separation agreements with the Company. The terminations resulted mainly from changes made to the executive leadership team during the nine months ended September 30, 2017 and 2016. Restructuring and other costs for the nine months ended September 30, 2017 primarily consisted of fees for the termination of professional services relationships, other contract termination costs and asset write-offs. For the nine months ended September 30, 2016, restructuring and other costs consisted of fees for the termination of an employee incentive program, costs related to lease commitments and write-offs of leasehold improvements, unused office space and property and equipment resulting from the closure of three The aforementioned accruals are included in Accrued Expenses on the Unaudited Condensed Consolidated Balance Sheets and the aforementioned expenses are included in General and Administrative Expenses on the Unaudited Condensed Consolidated Statements of Income. |
Significant Payors
Significant Payors | 9 Months Ended |
Sep. 30, 2017 | |
Significant Payors [Abstract] | |
Significant Payors | 10. Significant Payors A substantial portion of the Company's net service revenues and accounts receivable are derived from services performed for federal, state and local governmental agencies. The Illinois Department on Aging accounted for 36.6 42.6 36.6 43.6 The related receivables due from the Illinois Department on Aging represented 36.6 55.4 The State of Illinois's payments have been delayed in the past and may continue to be delayed in the future due to budget disputes that began in 2015. The State of Illinois did not adopt a comprehensive budget for fiscal year 2016, which ended on June 30, 2016, or a comprehensive budget for fiscal year 2017, which ended on June 30, 2017. On July 6, 2017, the State of Illinois passed a balanced state budget for fiscal year 2018, which began on July 1, 2017. With this budget, the Illinois Department on Aging is authorized to pay for the Non-Medicaid consumers the Company served in prior fiscal years. In July 2017, the Company began receiving delayed payments. As of September 30, 2017, the Company has been paid for substantially all claims from prior state fiscal years. |
Concentration of Cash
Concentration of Cash | 9 Months Ended |
Sep. 30, 2017 | |
Concentration of Cash [Abstract] | |
Concentration of Cash | 11. Concentration of Cash Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash. The Company maintains cash with financial institutions which, at times, may exceed federally insured limits. The Company believes it is not exposed to any significant credit risk on cash. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events On October 1, 2017, the Company sold its 10% two On October 1, 2017, the Company entered into an Asset Purchase Agreement with Community Partnered Resources, Inc. d/b/a Sun Cities CareGivers/Sun Cities Homecare ("Sun Cities") pursuant to which the Company acquired substantially all of the assets of Sun Cities. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policy) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation and Description of Business | Basis of Presentation and Description of Business The condensed consolidated financial statements include the accounts of Addus HomeCare Corporation ("Holdings") and its subsidiaries (together with Holdings, the "Company," "we," "us," or "our"). The Company operates as one 35,000 114 24 |
Principles of Consolidation | Principles of Consolidation All intercompany balances and transactions have been eliminated in consolidation. As of September 30, 2017, the Company used the cost method to account for its investments in joint ventures in which it owned 10% |
Revenue Recognition | Revenue Recognition The Company generates net service revenues by providing services directly to consumers. The Company receives payments for providing services from federal, state and local governmental agencies, managed care organizations, commercial insurers and private consumers. The Company's operations are principally provided based on authorized hours, determined by the relevant agency, at an hourly rate specified in agreements or fixed by legislation and recognized as revenues at the time services are rendered. Personal care service revenues are reimbursed by state, local and other governmental programs which are partially funded by Medicaid or Medicaid waiver programs, with the remainder reimbursed through insurance programs and private pay. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company establishes its allowance for doubtful accounts to the extent it is probable that a portion or all of a particular account will not be collected. The Company establishes its provision for doubtful accounts primarily by analyzing historical trends and the aging of receivables. In its evaluation, the Company considers other factors including: delays in payment trends in individual states due to budget or funding issues; billing conversions related to acquisitions or internal systems; resubmission of bills with required documentation and disputes with specific payors. An allowance for doubtful accounts is maintained at a level that the Company's management believes is sufficient to cover potential losses. However, actual collections could differ from the Company's estimates. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated over the estimated useful lives of the related assets by use of the straight-line method. Maintenance and repairs are charged to expense as incurred. The estimated useful lives of the property and equipment are as follows: Computer equipment 3 – 5 years Furniture and equipment 5 – 7 years Transportation equipment 5 years Computer software 5 – 10 years Leasehold improvements Lesser of useful life or lease term, unless probability of lease renewal is likely |
Goodwill | Goodwill The Company's carrying value of goodwill is the excess of the purchase price over the fair value of the net assets acquired from various acquisitions including the acquisition of Addus HealthCare, Inc. ("Addus HealthCare"). In accordance with Accounting Standards Codification ("ASC") Topic 350, "Goodwill and Other Intangible Assets ," goodwill and intangible assets with indefinite useful lives are not amortized. The Company tests goodwill for impairment at the reporting unit level on an annual basis, as of October 1, or whenever potential impairment triggers occur, such as a significant change in business climate or regulatory changes that would indicate that an impairment may have occurred. The Company may use a qualitative test, known as "Step 0," or a two no No |
Intangible Assets | Intangible Assets The Company's identifiable intangible assets consist of customer and referral relationships, trade names, trademarks, state licenses and non-compete agreements. Amortization is computed using straight-line and accelerated methods based upon the estimated useful lives of the respective assets, which range from two twenty-five Intangible assets with finite lives are amortized using the estimated economic benefit method over the useful life and assessed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company would recognize an impairment loss when the estimated future non-discounted cash flows associated with the intangible asset is less than the carrying value. An impairment charge would then be recorded for the excess of the carrying value over the fair value. The Company estimates the fair value of these intangible assets using the income approach. No The income approach, which the Company uses to estimate the fair value of its intangible assets (other than goodwill), is dependent on a number of factors including estimates of future market growth and trends, forecasted revenue and costs, expected periods over which the assets will be utilized, appropriate discount rates and other variables. The Company bases its fair value estimates on assumptions the Company believes to be reasonable but which are unpredictable and inherently uncertain. Actual future results may differ from those estimates. The Company also has indefinite-lived intangible assets that are not subject to amortization expense such as certificates of need and licenses to conduct specific operations within geographic markets. The Company's management has concluded that certificates of need and licenses have indefinite lives, as management has determined that there are no legal, regulatory, contractual, economic or other factors that would limit the useful life of these intangible assets, and the Company intends to renew and operate the certificates of need and licenses indefinitely. The certificates of need and licenses are tested annually for impairment, or whenever potential impairment triggers occur. No |
Debt Issuance Costs | Debt Issuance Costs The Company amortizes debt issuance costs on a straight-line method over the term of the related debt. This method approximates the effective interest method. The Company has classified the debt issuance costs as current portion of long-term debt or long-term debt, less current portion as of September 30, 2017 and December 31, 2016. |
Workers' Compensation Program | Workers' Compensation Program The Company's workers' compensation insurance program has a $ 0.4 As of September 30, 2017 and December 31, 2016, the Company recorded $ 0.6 0.7 |
Interest Income | Interest Income Illinois law entitles designated service program providers to receive a prompt payment interest penalty based on qualifying services approved for payment that remain unpaid after a designated period of time. As the amount and timing of the receipt of these payments are not certain, the interest income is recognized when received and reported in the statement of income as interest income. For the three and nine months ended September 30, 2017 and 2016, the Company did not receive any prompt payment interest. While the Company may be owed additional prompt payment interest, the amount and timing of receipt of such payments remain uncertain, and the Company has determined that it will continue to recognize prompt payment interest income when received. |
Interest Expense | Interest Expense The Company's interest expense consists of interest and unused credit line fees on its credit facilities, interest on its capital lease obligations, and amortization and write-off of debt issuance costs, which is reported in the statement of income when incurred. |
Other Income | Other Income Other income consisted of income distributions received from investments in joint ventures. The Company accounted for this income in accordance with ASC Topic 325, "Investments—Other." The Company recognized the net accumulated earnings only to the extent distributed by the joint ventures on the date received. The Company subsequently sold these equity investments on October 1, 2017 (see Note 12). |
Income Tax Expenses | Income Tax Expense The Company accounts for income taxes under the provisions of ASC Topic 740, "Income Taxes." The objective of accounting for income taxes is to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in its financial statements or tax returns. Deferred taxes, resulting from differences between the financial and tax basis of the Company's assets and liabilities, are also adjusted for changes in tax rates and tax laws when changes are enacted. ASC Topic 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. ASC Topic 740 also prescribes a recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return. In addition, ASC Topic 740 provides guidance on derecognition, classification, accounting in interim periods and disclosure requirements for uncertain tax positions. In March 2016, the FASB issued Accounting Standards Update ("ASU") 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 allows for simplification of several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under ASU 2016-09, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement. ASU 2016-09 also requires recognition of excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. ASU 2016-09 further permits the withholding of an amount up to employees' maximum individual tax rate in the relevant jurisdiction without resulting in a liability classification. ASU 2016-09 also requires any excess tax benefits be classified along with other income tax cash flows as an operating activity and cash paid by an employer when directly withholding shares for tax-withholding purposes to be classified as a financing activity. The Company adopted this standard on January 1, 2017 on a prospective basis. As a result, for the three and nine months ended September 30, 2017, the Company recorded an excess tax benefit of $ 0 118,000 |
Stock-Based Compensation | Stock-based Compensation The Company currently has two active stock incentive plans, the 2009 Stock Incentive Plan, as amended and restated (the "2009 Plan") and the 2017 Omnibus Incentive Plan (the "2017 Plan", and together with the 2009 Plan, the "Plans"), that provide for stock-based employee compensation. The Company accounts for stock-based compensation in accordance with ASC Topic 718, " Stock Compensation ." Compensation expense is recognized on a straight-line basis under the Plans over the vesting period of the equity awards based on the grant date fair value of the options and restricted stock awards. From October 28, 2009 to December 31, 2016, the Company utilized the Enhanced Hull-White Trinomial Model to value the Company's options. Beginning January 1, 2017, the Company began utilizing the Black-Scholes Option Pricing Model to value the Company's options, as the Company believes it is a more widely accepted and understood valuation model. The determination of the fair value of stock-based payments utilizing the Black-Scholes Model and the Enhanced Hull-White Trinomial Model is affected by the Company's stock price and a number of assumptions, including expected volatility, risk-free interest rate, expected term, expected dividends yield, expected forfeiture rate, expected turn-over rate and the expected exercise multiple. |
Diluted Net Income Per Common Share | Diluted Net Income Per Common Share Diluted net income per common share, calculated under the treasury stock method, is based on the weighted average number of shares outstanding during the period. The Company's outstanding securities that may potentially dilute the common stock are stock options and restricted stock awards. Included in the Company's calculation of diluted earnings per share for the three and nine months ended September 30, 2017 were approximately 479,000 102,000 102,000 148,000 43,000 50,000 Included in the Company's calculation of diluted earnings per share for the three and nine months ended September 30, 2016 were approximately 469,000 39,000 29,000 97,000 11,000 7,000 |
Estimates | Estimates The financial statements are prepared by management in conformity with U.S. Generally Accepted Accounting Principles ("GAAP") and include estimated amounts and certain disclosures based on assumptions about future events. The Company's critical accounting estimates include the following areas: the allowance for doubtful accounts, reserve for self-insurance claims, accounting for stock-based compensation, accounting for income taxes, business combinations and when required, the quantitative assessment of goodwill. Actual results could differ from those estimates. |
Fair Value Measurements | Fair Value Measurements The Company's financial instruments consist of cash, accounts receivable, payables and debt. The carrying amounts reported on the Company's Unaudited Condensed Consolidated Balance Sheets for cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short-term nature of these instruments. The carrying value of the Company's long-term debt with variable interest rates approximates fair value based on instruments with similar terms. The Company applies fair value techniques on a non-recurring basis associated with valuing potential impairment losses related to goodwill, if required, and indefinite-lived intangible assets and also when determining the fair value of contingent consideration, if applicable. To determine the fair value in these situations, the Company uses Level 3 inputs, defined as unobservable inputs in which little or no market data exists; therefore requiring an entity to develop its own assumptions, such as discounted cash flows, or if available, what a market participant would pay on the measurement date. The Company utilizes the income approach to estimate the fair value of its intangible assets derived from acquisitions. |
Going Concern | Going Concern In connection with the preparation of the financial statements for the three and nine months ended September 30, 2017, the Company conducted an evaluation as to whether there were conditions and events, considered in the aggregate, which raised substantial doubt as to the entity's ability to continue as a going concern within one year after the date of the issuance, or the date of availability, of the financial statements to be issued. The evaluation concluded that there did not appear to be evidence of substantial doubt of the entity's ability to continue as a going concern. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP and will be effective for the Company as of January 1, 2018. The standard permits the use of either the retrospective or modified retrospective (cumulative effect) transition method and the Company has selected the modified retrospective approach. The FASB has issued and may issue in the future, interpretative guidance, which may cause the Company's evaluation to change. The Company has completed the initial review to determine the impact ASU 2014-09 and its subsequent updates will have on the Company's consolidated financial statements or financial statement disclosures upon adoption. Based on the Company's continued review of contracts and revenue streams, it believes that the timing and measurement of revenue for its customers will be similar to its current revenue recognition model due to the structure of payor contracts which consists of a fixed reimbursement rate that is deemed earned upon completion of a defined service. In addition, the Company has made ongoing progress around process changes and system enhancements to ensure adherence to the new standard. During the third quarter of 2017, additional resources were retained to assist in the completion of the assessment, prepare specific contract analysis and document policy changes. The Company expects that the final evaluation of the impact and implementation of system enhancements will be completed during the fourth quarter of 2017 . In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which replaces existing leasing rules with a comprehensive lease measurement and recognition standard and expanded disclosure requirements. ASU 2016-02 will require lessees to recognize most leases on their balance sheets as liabilities, with corresponding "right-of-use" assets and is effective for annual reporting periods beginning after December 15, 2018, subject to early adoption. For income statement recognition purposes, leases will be classified as either a finance or an operating lease. The Company will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Upon initial evaluation, the Company believes that the new standard will have a material impact on its Consolidated Balance Sheets but it will not affect its liquidity. It has been determined that the Company will need to secure new software to account for the change in accounting for leases and is currently reviewing the software options available. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. Under the new standard, entities holding financial assets and net investment in leases that are not accounted for at fair value through net income are to be presented at the net amount expected to be collected. An allowance for credit losses will be a valuation account that will be deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 is effective as of January 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2016-13. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." This standard amends and adjusts how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, and will require adoption on a retrospective basis unless impracticable. If impracticable the Company would be required to apply the amendments prospectively as of the earliest date possible. The Company is currently evaluating the impact that ASU 2016-15 will have on its statement of cash flows but does not expect it to have a material impact. In January 2017, the FASB issued ASU 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." The new guidance eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the current goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value (i.e., measure the charge based on the current Step 1). ASU 2017-04 is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. The Company is currently evaluating the provisions of ASU 2017-04 to determine how its goodwill impairment testing will be impacted and whether it may elect to adopt ASU 2017-04 prior to the stated effective date. In May 2017, the FASB issued ASU 2017-09, " Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting." ASU 2017-19 clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. This pronouncement is effective for annual periods, and for interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted, and is applied prospectively to changes in terms or conditions of awards occurring on or after the adoption date. The Company is evaluating the impact of the adoption of this guidance on its financial statements but does not expect it to have a material impact. |
Reclassification of Prior Period Balances | Reclassification of Prior Period Balances Certain reclassifications have been made to prior period amounts to conform to the current-year presentation including the reporting of provision for doubtful accounts as a separate line item on the Unaudited Condensed Consolidated Statements of Income. These reclassifications have no effect on the reported net income for the three and nine months ended September 30, 2017 and 2016. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Estimated Useful Lives of Property and Equipment | Computer equipment 3 – 5 years Furniture and equipment 5 – 7 years Transportation equipment 5 years Computer software 5 – 10 years Leasehold improvements Lesser of useful life or lease term, unless probability of lease renewal is likely |
Acquisitions (Tables)
Acquisitions (Tables) - Options Home Care [Member] | 9 Months Ended |
Sep. 30, 2017 | |
Business Acquisition [Line Items] | |
Schedule of Purchase Price Allocation | Total (Amounts in Thousands) Goodwill $ 17,915 Identifiable intangible assets 4,163 Accounts receivable 995 Cash 205 Other assets 41 Accrued liabilities (695 ) Total purchase price allocation $ 22,624 |
Unaudited Pro Forma Condensed Consolidated Income Statement Information | For the Three Months Ended September 30, (Amounts in Thousands) 2017 2016 Net service revenues $ 110,288 $ 108,859 Operating income 5,964 2,563 Net income 3,509 1,765 Net income per common share Basic income per share $ 0.31 $ 0.16 Diluted income per share $ 0.30 $ 0.15 For the Nine Months Ended September 30, (Amounts in Thousands) 2017 2016 Net service revenues $ 326,028 $ 313,425 Operating income 19,785 8,116 Net income 11,083 4,880 Net income per common share Basic income per share $ 0.97 $ 0.44 Diluted income per share $ 0.95 $ 0.43 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets [Abstract] | |
Summary of Goodwill Activity | Goodwill (Amounts in Thousands) Goodwill, at December 31, 2016 $ 73,906 Additions for acquisitions 17,915 Adjustments to previously recorded goodwill — Goodwill, at September 30, 2017 $ 91,821 |
Schedule of Carrying Amount and Accumulated Amortization of Intangible Asset | Customer Trade Non - and referral names and State competition relationships trademarks licenses agreements Total (Amounts in Thousands) Gross balance at December 31, 2016 $ 34,672 $ 13,261 $ 150 $ 2,155 $ 50,238 Accumulated amortization (26,766 ) (6,296 ) — (1,763 ) (34,825 ) Net Balance at December 31, 2016 $ 7,906 $ 6,965 $ 150 $ 392 $ 15,413 Gross balance at January 1, 2017 $ 34,672 $ 13,261 $ 150 $ 2,155 $ 50,238 Additions for acquisitions 3,291 872 — — 4,163 Accumulated amortization (28,640 ) (7,673 ) — (1,845 ) (38,158 ) Net Balance at September 30, 2017 $ 9,323 $ 6,460 $ 150 $ 310 $ 16,243 |
Details of Certain Balance Sh23
Details of Certain Balance Sheet Accounts (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Details of Certain Balance Sheet Accounts [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | September 30, 2017 December 31, 2016 (Amounts in Thousands) Prepaid health insurance (1) $ 3,124 $ 2,238 Prepaid workers' compensation and liability insurance 833 1,190 Prepaid rent 489 568 Workers' compensation insurance receivable 592 747 Other 1,229 1,255 $ 6,267 $ 5,998 |
Schedule of Accrued Expenses | September 30, 2017 December 31, 2016 (Amounts in Thousands) Accrued payroll $ 21,708 $ 17,509 Accrued workers' compensation insurance 13,008 12,823 Accrued health insurance (1) 6,106 4,092 Indemnification reserve (2) 419 419 Accrued payroll taxes 1,403 1,747 Accrued professional fees 971 1,485 Accrued severance (3) 879 1,326 Accrued restructuring (4) 1,099 1,786 Other 1,349 1,416 $ 46,942 $ 42,603 (1) The Company provides health insurance coverage to qualified union employees providing personal care services in Illinois through a Taft-Hartley multi-employer health and welfare plan under Section 302(c)(5) of the Labor Management Relations Act of 1947. The Company's insurance contributions equal the amount reimbursed by the State of Illinois. Contributions are due within five (2) As a condition of the sale of substantially all of the assets used in the Company's home health business to subsidiaries of LHC Group, Inc. ("LHCG") in February 2013, the Company is responsible for any adjustments to Medicare and Medicaid billings prior to the closing. In connection with an internal evaluation of the Company's billing processes, the Company discovered documentation errors in a number of claims that it had submitted to Medicare. Consistent with applicable law, the Company voluntarily remitted $ 1.8 0.4 (3) Accrued severance represents amounts payable to terminated employees with employment and/or separation agreements with the Company. (4) Accrued restructuring includes reserves for lease commitments related to the closure of three |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Long-Term Debt [Abstract] | |
Schedule of Long-Term Debt | September 30, 2017 December 31, 2016 (Amounts in Thousands) Term loan under the new credit facility $ 45,000 $ — Term loan under the terminated credit facility — 24,063 Capital leases 1,366 2,433 Less unamortized issuance costs (2,587 ) (1,483 ) Total $ 43,779 $ 25,013 Less current maturities (3,407 ) (2,531 ) Long-term debt $ 40,372 $ 22,482 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Income Taxes [Abstract] | |
Reconciliation of Statutory Federal Tax Rate | Three Months Ended September 30, 2017 2016 Federal income tax at statutory rate 35.0 % 34.3 % State and local taxes, net of federal benefit 4.4 5.2 Jobs tax credits, net (7.7 ) (27.5 ) Nondeductible permanent items 0.5 2.6 Other 0.0 0.0 Effective income tax rate 32.2 % 14.6 % Nine Months Ended September 30, 2017 2016 Federal income tax at statutory rate 35.0 % 34.3 % State and local taxes, net of federal benefit 4.9 5.2 Jobs tax credits, net (7.5 ) (16.5 ) Nondeductible meals and entertainment 0.5 2.2 Other (0.8 ) 0.0 Effective income tax rate 32.1 % 25.2 % |
Severance and Restructuring (Ta
Severance and Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Severance and Restructuring [Abstract] | |
Components of and Changes in Severance and Restructuring Accruals | Employee Restructuring Termination and Other Costs Costs (Amounts in Thousands) Balance at December 31, 2016 $ 1,326 $ 1,786 Provision 993 551 Utilization (1,440 ) (1,238 ) Balance at September 30, 2017 $ 879 $ 1,099 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Narrative) (Details) shares in Thousands, $ in Thousands | Oct. 01, 2017 | Sep. 30, 2017USD ($)stateshares | Sep. 30, 2016USD ($)shares | Sep. 30, 2017USD ($)statesegmentitemshares | Sep. 30, 2016USD ($)shares | Dec. 31, 2016USD ($) |
Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of reportable business segments | segment | 1 | |||||
Number of consumers | item | 35,000 | |||||
Number of locations | item | 114 | |||||
Number of states in which the company operates | state | 24 | 24 | ||||
Goodwill impairment charge | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |
Impairment of finite-lived intangible assets | 0 | 0 | 0 | 0 | ||
Impairment of intangible assets, indefinite-lived (Excluding Goodwill) | 0 | 0 | 0 | 0 | ||
Deductible component of workers' compensation | 400 | |||||
Increase in workers' compensation liabilities | 600 | $ 700 | ||||
Interest income received | 0 | 0 | 0 | 0 | ||
Income tax expense (benefit) | 1,623 | $ 290 | $ 4,908 | $ 1,498 | ||
Number of stock incentive plans | item | 2 | |||||
Accounting Standards Update 2016-09 [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Income tax expense (benefit) | $ 0 | $ 118 | ||||
Subsequent Event [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Equity ownership percentage sold in joint venture | 10.00% | |||||
Stock Options [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of stock options included in calculation | shares | 479 | 469 | 479 | 469 | ||
Number of dilutive shares outstanding | shares | 102 | 39 | 102 | 29 | ||
Restricted Stock [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of dilutive shares outstanding | shares | 43 | 11 | 50 | 7 | ||
Shares of restricted stock awards included in calculation | shares | 148 | 97 | 148 | 97 | ||
Minimum [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Intangible assets, estimated useful lives | 2 years | |||||
Maximum [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Intangible assets, estimated useful lives | 25 years |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Estimated Useful Lives of Property and Equipment) (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Transportation Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 5 years |
Minimum [Member] | Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 3 years |
Minimum [Member] | Furniture and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 5 years |
Minimum [Member] | Computer Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 5 years |
Maximum [Member] | Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 5 years |
Maximum [Member] | Furniture and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 7 years |
Maximum [Member] | Computer Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 10 years |
Sale of Adult Day Services Ce29
Sale of Adult Day Services Centers (Narrative) (Details) $ in Millions | Oct. 01, 2017 | Mar. 01, 2017USD ($)item |
Subsequent Event [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Equity ownership percentage sold in joint venture | 10.00% | |
Illinois [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of adult day centers sold | item | 3 | |
Proceeds from sale of adult day service centers | $ 2.4 | |
Pre-tax gain from sale of adult day service centers | $ 2.1 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) $ in Thousands | Aug. 01, 2017USD ($)item | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) |
Business Acquisition [Line Items] | |||||
Net service revenues | $ 108,592 | $ 103,502 | $ 313,758 | $ 297,032 | |
Options Home Care [Member] | |||||
Business Acquisition [Line Items] | |||||
Total purchase price for business acquisition | $ 22,600 | ||||
Acquisition related costs | $ 700 | ||||
Net service revenues | 3,300 | 3,300 | |||
Net income from continuing operations | $ 200 | $ 200 | |||
Options Home Care [Member] | Minimum [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of counties under personal care services | item | 20 |
Acquisitions (Schedule of Purch
Acquisitions (Schedule of Purchase Price Allocation) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Aug. 01, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||
Goodwill | $ 91,821 | $ 73,906 | |
Options Home Care [Member] | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 17,915 | ||
Identifiable intangible assets | 4,163 | ||
Accounts receivable | 995 | ||
Cash | 205 | ||
Other assets | 41 | ||
Accrued liabilities | (695) | ||
Total purchase price allocation | $ 22,624 |
Acquisitions (Unaudited Pro For
Acquisitions (Unaudited Pro Forma Condensed Consolidated Income Statement Information) (Details) - Options Home Care [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | ||||
Net service revenues | $ 110,288 | $ 108,859 | $ 326,028 | $ 313,425 |
Operating income | 5,964 | 2,563 | 19,785 | 8,116 |
Net income | $ 3,509 | $ 1,765 | $ 11,083 | $ 4,880 |
Basic income per share | $ 0.31 | $ 0.16 | $ 0.97 | $ 0.44 |
Diluted income per share | $ 0.30 | $ 0.15 | $ 0.95 | $ 0.43 |
Goodwill and Intangible Asset33
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill and Intangible Assets [Abstract] | ||||
Amortization expense | $ 1.2 | $ 1.3 | $ 3.3 | $ 3.6 |
Goodwill and Intangible Asset34
Goodwill and Intangible Assets (Summary of Goodwill Activity) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill, at Beginning of Period | $ 73,906 |
Additions for Acquisitions | 17,915 |
Adjustments to previously recorded goodwill | |
Goodwill, at End of Period | $ 91,821 |
Goodwill and Intangible Asset35
Goodwill and Intangible Assets (Schedule of Carrying Amount and Accumulated Amortization of Intangible Asset) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross balance | $ 50,238 | $ 50,238 |
Additions for acquisitions | 4,163 | |
Accumulated amortization | (38,158) | (34,825) |
Net Balance | 16,243 | 15,413 |
Customer And Referral Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross balance | 34,672 | 34,672 |
Additions for acquisitions | 3,291 | |
Accumulated amortization | (28,640) | (26,766) |
Net Balance | 9,323 | 7,906 |
Trade Names And Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross balance | 13,261 | 13,261 |
Additions for acquisitions | 872 | |
Accumulated amortization | (7,673) | (6,296) |
Net Balance | 6,460 | 6,965 |
State Licenses [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross balance | 150 | 150 |
Net Balance | 150 | 150 |
Non-competition Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross balance | 2,155 | 2,155 |
Accumulated amortization | (1,845) | (1,763) |
Net Balance | $ 310 | $ 392 |
Details of Certain Balance Sh36
Details of Certain Balance Sheet Accounts (Schedule of Prepaid Expenses and Other Current Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Details of Certain Balance Sheet Accounts [Abstract] | |||
Prepaid health insurance | [1] | $ 3,124 | $ 2,238 |
Prepaid workers' compensation and liability insurance | 833 | 1,190 | |
Prepaid rent | 489 | 568 | |
Workers' compensation insurance receivable | 592 | 747 | |
Other | 1,229 | 1,255 | |
Prepaid expenses and other current assets | $ 6,267 | $ 5,998 | |
[1] | The Company provides health insurance coverage to qualified union employees providing personal care services in Illinois through a Taft-Hartley multi-employer health and welfare plan under Section 302(c)(5) of the Labor Management Relations Act of 1947. The Company's insurance contributions equal the amount reimbursed by the State of Illinois. Contributions are due within five business days from the date the funds are received from the State of Illinois. Amounts due of $2.6 million and $2.2 million for health insurance reimbursements and contributions were reflected in prepaid insurance and accrued insurance as of September 30, 2017 and December 31, 2016, respectively. |
Details of Certain Balance Sh37
Details of Certain Balance Sheet Accounts (Schedule of Accrued Expenses) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016item | Mar. 31, 2014USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016item | Dec. 31, 2016USD ($) | ||
Accrued payroll | $ 21,708 | $ 17,509 | ||||
Accrued workers' compensation insurance | 13,008 | 12,823 | ||||
Accrued health insurance | [1] | 6,106 | 4,092 | |||
Indemnification reserve | [2] | 419 | 419 | |||
Accrued payroll taxes | 1,403 | 1,747 | ||||
Accrued professional fees | 971 | 1,485 | ||||
Accrued severance | [3] | 879 | 1,326 | |||
Accrued restructuring | [4] | 1,099 | 1,786 | |||
Other | 1,349 | 1,416 | ||||
Accrued expenses | $ 46,942 | 42,603 | ||||
Contributions due after fund received, period | 5 days | |||||
Health insurance reimbursement and contribution due | $ 2,600 | $ 2,200 | ||||
Illinois [Member] | ||||||
Number of adult day centers closed | item | 3 | 3 | ||||
LHC Group, Inc. [Member] | ||||||
Amount voluntarily remitted to government | $ 1,800 | |||||
Estimated billing adjustments for remittance payment | $ 400 | |||||
[1] | The Company provides health insurance coverage to qualified union employees providing personal care services in Illinois through a Taft-Hartley multi-employer health and welfare plan under Section 302(c)(5) of the Labor Management Relations Act of 1947. The Company's insurance contributions equal the amount reimbursed by the State of Illinois. Contributions are due within five business days from the date the funds are received from the State of Illinois. Amounts due of $2.6 million and $2.2 million for health insurance reimbursements and contributions were reflected in prepaid insurance and accrued insurance as of September 30, 2017 and December 31, 2016, respectively. | |||||
[2] | As a condition of the sale of substantially all of the assets used in the Company's home health business to subsidiaries of LHC Group, Inc. ("LHCG") in February 2013, the Company is responsible for any adjustments to Medicare and Medicaid billings prior to the closing. In connection with an internal evaluation of the Company's billing processes, the Company discovered documentation errors in a number of claims that it had submitted to Medicare. Consistent with applicable law, the Company voluntarily remitted $1.8 million to the U.S. government in March 2014. As of September 30, 2017, the Company, using its best judgment, has estimated a total of $0.4 million for billing adjustments for 2013, 2012 and 2011 services which may be subject to Medicare audits. | |||||
[3] | Accrued severance represents amounts payable to terminated employees with employment and/or separation agreements with the Company. | |||||
[4] | Accrued restructuring includes reserves for lease commitments related to the closure of three adult day services centers in Illinois during the third quarter of 2016. |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) $ in Thousands | May 08, 2017USD ($) | May 07, 2017USD ($) | May 24, 2016 | May 23, 2016 | Jul. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | ||||||||
Proceeds from line of credit | $ 20,000 | $ 27,000 | ||||||
Repayment of credit facility | 30,000 | |||||||
Repayment of accrued interest | $ 1,538 | $ 1,748 | ||||||
Senior Secured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum aggregate loan amount available | $ 125,000 | |||||||
Terminated Senior Secured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit outstanding amount | $ 24,100 | |||||||
Debt instrument, maturity date | Nov. 10, 2020 | |||||||
Revolving Credit Loan [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum aggregate loan amount available | $ 79,700 | |||||||
Revolving Credit Loan [Member] | Terminated Senior Secured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum aggregate loan amount available | 100,000 | $ 100,000 | ||||||
Repayment of credit facility | $ 23,800 | 20,000 | ||||||
Repayment of accrued interest | 100 | |||||||
Write off of unamortized debt issuance cost | 1,300 | |||||||
Specified advance multiple used to determine funds availability under credit facility | 3.75 | 3.25 | 3.75 | |||||
Debt instrument leverage ratio | 4.00% | 3.50% | ||||||
Delayed Draw Term Loan [Member] | Terminated Senior Secured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum aggregate loan amount available | 25,000 | |||||||
Uncommitted Incremental Term Loan [Member] | Terminated Senior Secured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum aggregate loan amount available | 50,000 | |||||||
Letters of Credit [Member] | Terminated Senior Secured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum aggregate loan amount available | $ 35,000 | |||||||
Minimum [Member] | Revolving Credit Loan [Member] | Terminated Senior Secured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Fee charged on unused portion of revolving credit facility | 0.25% | |||||||
Maximum [Member] | Revolving Credit Loan [Member] | Terminated Senior Secured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Fee charged on unused portion of revolving credit facility | 0.50% | |||||||
One Month LIBOR [Member] | Revolving Credit Loan [Member] | Terminated Senior Secured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable interest rate margin | 3.00% | |||||||
Federal Funds Rate [Member] | Revolving Credit Loan [Member] | Terminated Senior Secured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable interest rate margin | 0.50% | |||||||
New Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum aggregate loan amount available | 250,000 | |||||||
Credit facility maturity period | 5 years | |||||||
Debt issuance costs | 2,800 | |||||||
New Credit Facility [Member] | Revolving Credit Loan [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum aggregate loan amount available | 125,000 | $ 97,900 | ||||||
Proceeds from line of credit | $ 30,000 | |||||||
New Credit Facility [Member] | Term Loan [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum aggregate loan amount available | 45,000 | |||||||
Line of credit outstanding amount | $ 45,000 | |||||||
New Credit Facility [Member] | Delayed Draw Term Loan [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum aggregate loan amount available | 80,000 | |||||||
New Credit Facility [Member] | Uncommitted Incremental Term Loan [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum aggregate loan amount available | $ 100,000 | |||||||
New Credit Facility [Member] | Minimum [Member] | Revolving Credit Loan [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Fee charged on unused portion of revolving credit facility | 0.25% | |||||||
New Credit Facility [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum ratio used to determine availability of additional draws | 4.25% | |||||||
New Credit Facility [Member] | Maximum [Member] | Revolving Credit Loan [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Fee charged on unused portion of revolving credit facility | 0.50% | |||||||
New Credit Facility [Member] | One Month LIBOR [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable interest rate margin | 1.00% | |||||||
New Credit Facility [Member] | One Month LIBOR [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable interest rate margin | 0.00% | |||||||
New Credit Facility [Member] | Federal Funds Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable interest rate margin | 0.50% | |||||||
Basis for Availability of Funds Debt Covenant One [Member] | Minimum [Member] | Revolving Credit Loan [Member] | Terminated Senior Secured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable interest rate margin | 2.00% | |||||||
Basis for Availability of Funds Debt Covenant One [Member] | Maximum [Member] | Revolving Credit Loan [Member] | Terminated Senior Secured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable interest rate margin | 2.50% | |||||||
Basis for Availability of Funds Debt Covenant Two [Member] | Minimum [Member] | Revolving Credit Loan [Member] | Terminated Senior Secured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable interest rate margin | 3.00% | |||||||
Basis for Availability of Funds Debt Covenant Two [Member] | Maximum [Member] | Revolving Credit Loan [Member] | Terminated Senior Secured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable interest rate margin | 3.50% | |||||||
Basis for Availability of Funds Debt Covenant Three [Member] | Minimum [Member] | Revolving Credit Loan [Member] | Terminated Senior Secured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable interest rate margin | 3.00% | |||||||
Basis for Availability of Funds Debt Covenant Three [Member] | Maximum [Member] | Revolving Credit Loan [Member] | Terminated Senior Secured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable interest rate margin | 3.50% | |||||||
Restriction on Dividends [Member] | New Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate amount of dividends and distributions | $ 5,000 | |||||||
Restriction on Ability to Consummate Acquisitions [Member] | New Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum single acquisition price | 60,000 | |||||||
Maximum total purchase price allowed | $ 80,000 | |||||||
Based On Applicable Senior Leverage Ratio [Member] | New Credit Facility [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable interest rate margin | 1.50% | |||||||
Based On Applicable Senior Leverage Ratio [Member] | New Credit Facility [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable interest rate margin | 2.25% | |||||||
Based On Applicable Leverage Ratio [Member] | New Credit Facility [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable interest rate margin | 2.50% | |||||||
Based On Applicable Leverage Ratio [Member] | New Credit Facility [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable interest rate margin | 3.25% |
Long-Term Debt (Schedule of Lon
Long-Term Debt (Schedule of Long-Term Debt) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Less unamortized issuance costs | $ (2,587) | $ (1,483) |
Total | 43,779 | 25,013 |
Less current maturities | (3,407) | (2,531) |
Long-term debt | 40,372 | 22,482 |
Term Loan [Member] | New Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt gross | 45,000 | |
Term Loan [Member] | Terminated Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt gross | 24,063 | |
Capital Leases [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt gross | $ 1,366 | $ 2,433 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Statutory Federal Tax Rate) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Components of Income Tax Expense (Benefit), Continuing Operations [Abstract] | ||||
Federal income tax at statutory rate | 35.00% | 34.30% | 35.00% | 34.30% |
State and local taxes, net of federal benefit | 4.40% | 5.20% | 4.90% | 5.20% |
Jobs tax credits, net | (7.70%) | (27.50%) | (7.50%) | (16.50%) |
Nondeductible permanent items | 0.50% | 2.60% | ||
Nondeductible meals and entertainment | 0.50% | 2.20% | ||
Other | 0.00% | 0.00% | (0.80%) | 0.00% |
Effective income tax rate | 32.20% | 14.60% | 32.10% | 25.20% |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | 11 Months Ended |
Sep. 30, 2017 | Jun. 30, 2017 | |
Commitments and Contingencies [Abstract] | ||
Payments received from the State of Illinois | $ 65.4 | |
Maximum term of employment agreements | 4 years |
Severance and Restructuring (Na
Severance and Restructuring (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($)item | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($)item | |
Total expenses related to streamlining initiatives | $ | $ 0.6 | $ 4 | $ 1.5 | $ 8.3 |
Illinois [Member] | ||||
Number of adult day centers closed | item | 3 | 3 |
Severance and Restructuring (Co
Severance and Restructuring (Components of and Changes in Severance and Restructuring Accruals) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Employee Termination Costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Balance | $ 1,326 |
Provision | 993 |
Utilization | (1,440) |
Balance | 879 |
Restructuring and Other Costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Balance | 1,786 |
Provision | 551 |
Utilization | (1,238) |
Balance | $ 1,099 |
Significant Payors (Narrative)
Significant Payors (Narrative) (Details) - Illinois Department On Aging [Member] | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Service Revenues, Net [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 36.60% | 42.60% | 36.60% | 43.60% | |
Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 36.60% | 55.40% |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - Subsequent Event [Member] | Oct. 01, 2017item |
Subsequent Events [Line Items] | |
Equity ownership percentage sold in joint venture with LHCG | 10.00% |
Number Of Joint Ventures | 2 |