x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 20-0484934 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | ¨ | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ | Smaller reporting company | x |
Page | ||
Consolidated Balance Sheets March 31, 2018 (unaudited) and December 31, 2017 | ||
Consolidated Statements of Operations Three Months Ended March 31, 2018 and 2017 (unaudited) | ||
Consolidated Statements of Comprehensive Income (Loss) Three Months Ended March 31, 2018 and 2017 (unaudited) | ||
Consolidated Statements of Cash Flows Three Months Ended March 31, 2018 and 2017 (unaudited) | ||
Notes to Consolidated Financial Statements Three Months Ended March 31, 2018 and 2017 (unaudited) | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
March 31, 2018 | December 31, 2017 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 8,663 | $ | 21,731 | |||
Restricted cash | 1,788 | 1,788 | |||||
Trade accounts receivable, net of allowance for doubtful accounts of $70 and $35, respectively | 18,399 | 12,494 | |||||
Prepaid expenses and other current assets | 3,821 | 12,678 | |||||
Income tax receivable | 4,523 | 6,839 | |||||
Total current assets | 37,194 | 55,530 | |||||
Property, equipment, and leasehold improvements, net | 21,071 | 20,944 | |||||
Identifiable intangible assets, net | 4,661 | 4,864 | |||||
Goodwill | 81,572 | 81,572 | |||||
Deferred income taxes | 763 | 468 | |||||
Other assets | 1,018 | 1,058 | |||||
Total assets | $ | 146,279 | $ | 164,436 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Current maturities of notes payable, net of unamortized debt issuance costs of $156 and $171, respectively | $ | 2,044 | $ | 2,029 | |||
Accrued salaries and benefits | 5,986 | 4,569 | |||||
Accounts payable | 1,438 | 1,518 | |||||
Other current liabilities | 3,479 | 3,347 | |||||
Deferred revenue | 1,440 | — | |||||
Estimated liability for appeals | 885 | 18,817 | |||||
Net payable to client | — | 12,800 | |||||
Total current liabilities | 15,272 | 43,080 | |||||
Notes payable, net of current portion and unamortized debt issuance costs of $2,929 and $3,245, respectively | 38,321 | 38,555 | |||||
Deferred income taxes | 578 | — | |||||
Other liabilities | 2,872 | 2,476 | |||||
Total liabilities | 57,043 | 84,111 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.0001 par value. Authorized, 500,000 shares at March 31, 2018 and December 31, 2017; issued and outstanding 51,495 and 51,085 shares at March 31, 2018 and December 31, 2017, respectively | 5 | 5 | |||||
Additional paid-in capital | 72,915 | 72,459 | |||||
Retained earnings | 16,316 | 7,861 | |||||
Total stockholders’ equity | 89,236 | 80,325 | |||||
Total liabilities and stockholders’ equity | $ | 146,279 | $ | 164,436 |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Revenues | $ | 57,021 | $ | 33,109 | ||||
Operating expenses: | ||||||||
Salaries and benefits | 21,781 | 20,696 | ||||||
Other operating expenses | 23,020 | 13,441 | ||||||
Total operating expenses | 44,801 | 34,137 | ||||||
Income (loss) from operations | 12,220 | (1,028 | ) | |||||
Interest expense | (1,270 | ) | (1,606 | ) | ||||
Interest income | 6 | — | ||||||
Income (loss) before provision for income taxes | 10,956 | (2,634 | ) | |||||
Provision for income taxes | 2,501 | 325 | ||||||
Net income (loss) | $ | 8,455 | $ | (2,959 | ) | |||
Net income (loss) per share | ||||||||
Basic | $ | 0.16 | $ | (0.06 | ) | |||
Diluted | $ | 0.16 | $ | (0.06 | ) | |||
Weighted average shares | ||||||||
Basic | 51,320 | 50,304 | ||||||
Diluted | 53,455 | 50,304 |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Net income (loss) | $ | 8,455 | $ | (2,959 | ) | |||
Other comprehensive income: | ||||||||
Foreign currency translation adjustment | 1 | (3 | ) | |||||
Comprehensive income (loss) | $ | 8,456 | $ | (2,962 | ) |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 8,455 | $ | (2,959 | ) | ||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||||||
Loss on disposal of assets | — | 4 | |||||
Release of net payable to client related to contract termination | (9,860 | ) | — | ||||
Release of estimated liability for appeals due to termination of contract | (17,932 | ) | — | ||||
Derecognition of subcontractor receivable for appeals due to termination of contract | 5,535 | — | |||||
Derecognition of subcontractor receivable for overturned claims | 1,536 | — | |||||
Allowance for doubtful accounts for subcontractor receivable | 1,868 | — | |||||
Depreciation and amortization | 2,576 | 2,774 | |||||
Deferred income taxes | 283 | 389 | |||||
Stock-based compensation | 639 | 1,103 | |||||
Interest expense from debt issuance costs | 331 | 366 | |||||
Changes in operating assets and liabilities: | |||||||
Trade accounts receivable | (5,905 | ) | (1,333 | ) | |||
Prepaid expenses and other current assets | (82 | ) | (2,369 | ) | |||
Income tax receivable | 2,316 | 42 | |||||
Other assets | 41 | 19 | |||||
Accrued salaries and benefits | 1,417 | 1,462 | |||||
Accounts payable | (80 | ) | 346 | ||||
Deferred revenue and other current liabilities | 1,571 | 637 | |||||
Estimated liability for appeals | — | (7 | ) | ||||
Net payable to client | (2,940 | ) | (35 | ) | |||
Other liabilities | 395 | (38 | ) | ||||
Net cash (used in) provided by operating activities | (9,836 | ) | 401 | ||||
Cash flows from investing activities: | |||||||
Purchase of property, equipment, and leasehold improvements | (2,500 | ) | (2,823 | ) | |||
Net cash used in investing activities | (2,500 | ) | (2,823 | ) | |||
Cash flows from financing activities: | |||||||
Repayment of notes payable | (550 | ) | (3,348 | ) | |||
Taxes paid related to net share settlement of stock awards | (299 | ) | (254 | ) | |||
Proceeds from exercise of stock options | 116 | 3 | |||||
Net cash used in financing activities | (733 | ) | (3,599 | ) | |||
Effect of foreign currency exchange rate changes on cash | 1 | (3 | ) | ||||
Net decrease in cash, cash equivalents and restricted cash | (13,068 | ) | (6,024 | ) | |||
Cash, cash equivalents and restricted cash at beginning of period | 23,519 | 40,484 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 10,451 | $ | 34,460 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash received for income taxes | $ | (299 | ) | $ | (118 | ) | |
Cash paid for interest | $ | 939 | $ | 1,255 |
(a) | Basis of Presentation and Organization |
(b) | Revenues, Accounts Receivable, and Estimated Liability for Appeals |
• | Identification of the contract with a customer |
• | Identification of the performance obligations in the contract |
• | Determination of the transaction price |
• | Allocation of the transaction price to the performance obligations in the contract |
• | Recognition of revenue when, or as, the performance obligations are satisfied |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
(in thousands) | |||||||
Student Lending: | |||||||
Department of Education (Legacy) | $ | — | $ | 1,195 | |||
Subcontractor with Small Businesses on Department of Education | 1,229 | 492 | |||||
Guaranty Agencies and Other | 17,876 | 22,862 | |||||
Total of Student Lending | 19,105 | 24,549 | |||||
Healthcare: | |||||||
CMS RAC and MSP | 29,104 | 82 | |||||
Commercial | 2,210 | 1,565 | |||||
Total of Healthcare | 31,314 | 1,647 | |||||
Other: | 6,602 | 6,913 | |||||
Total Revenues | $ | 57,021 | $ | 33,109 |
(c) | Net Payable to Client |
(d) | Prepaid Expenses and Other Current Assets |
(e) | Impairment of Goodwill and Long-Lived Assets |
(f) | Restricted Cash |
(g) | New Accounting Pronouncements |
March 31, 2018 | December 31, 2017 | ||||||
Land | $ | 1,122 | $ | 1,122 | |||
Building and leasehold improvements | 6,540 | 6,410 | |||||
Furniture and equipment | 5,900 | 5,763 | |||||
Computer hardware and software | 74,261 | 72,044 | |||||
87,823 | 85,339 | ||||||
Less accumulated depreciation and amortization | (66,752 | ) | (64,395 | ) | |||
Property, equipment and leasehold improvements, net | $ | 21,071 | $ | 20,944 |
Year Ending December 31, | Amount | ||
Remainder of 2018 | $ | 1,650 | |
2019 | 2,200 | ||
2020 | 39,600 | ||
2021 | — | ||
2022 | — | ||
Thereafter | — | ||
Total | $ | 43,450 |
Exercise price | $ | 1.92 | |
Share price on date of issuance | $ | 1.85 | |
Volatility | 50.0 | % | |
Risk-free interest rate | 1.83 | % | |
Expected dividend yield | — | % | |
Contractual term (in years) | 5 |
March 31, 2018 | |||
Principal amount | $ | 43,450 | |
Less: unamortized discount and debt issuance costs | (3,085 | ) | |
Loan payable less unamortized discount and debt issuance costs | 40,365 | ||
Less: current maturities | (2,044 | ) | |
Long-term loan payable, net of current maturities | $ | 38,321 |
Year Ending December 31, | Amount | ||
Remainder of 2018 | $ | 2,007 | |
2019 | 3,070 | ||
2020 | 3,033 | ||
2021 | 2,139 | ||
2022 | 1,710 | ||
Thereafter | 2,190 | ||
Total | $ | 14,149 |
Outstanding Options | Weighted average exercise price per share | Weighted average remaining contractual life (Years) | Aggregate Intrinsic Value (in thousands) | |||||||||
Outstanding at December 31, 2017 | 2,936,198 | $ | 8.21 | 4.48 | $ | 360 | ||||||
Granted | — | — | ||||||||||
Forfeited | (139,593 | ) | 10.43 | |||||||||
Exercised | (212,250 | ) | 0.55 | |||||||||
Outstanding at March 31, 2018 | 2,584,355 | $ | 8.72 | 4.57 | $ | 619 | ||||||
Vested, exercisable, expected to vest (1) at March 31, 2018 | 2,579,162 | $ | 8.73 | 4.57 | $ | 617 | ||||||
Exercisable at March 31, 2018 | 2,480,522 | $ | 8.92 | 4.46 | $ | 577 |
(1) | Options expected to vest reflect an estimated forfeiture rate. |
Number of Awards | Weighted average grant date fair value per share | |||||
Outstanding at December 31, 2017 | 2,591,587 | $ | 2.39 | |||
Granted | 1,186,000 | 2.91 | ||||
Forfeited | (67,125 | ) | 2.21 | |||
Vested and converted to shares, net of units withheld for taxes | (201,091 | ) | 2.32 | |||
Units withheld for taxes | (107,282 | ) | 2.32 | |||
Outstanding at March 31, 2018 | 3,402,089 | $ | 2.59 | |||
Expected to vest at March 31, 2018 | 3,231,997 | $ | 2.59 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Weighted average shares outstanding – basic | 51,320 | 50,304 | |||||
Dilutive effect of stock options | 2,135 | — | |||||
Weighted average shares outstanding – diluted | 53,455 | 50,304 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
(in thousands) | |||||||
Student Lending: | |||||||
Department of Education (Legacy) | $ | — | $ | 1,195 | |||
Subcontractor with Small Businesses on Department of Education | 1,229 | 492 | |||||
Guaranty Agencies and Other | 17,876 | 22,862 | |||||
Total of Student Lending | 19,105 | 24,549 | |||||
Healthcare: | |||||||
CMS RAC and MSP | 29,104 | 82 | |||||
Commercial | 2,210 | 1,565 | |||||
Total of Healthcare | 31,314 | 1,647 | |||||
Other: | 6,602 | 6,913 | |||||
Total Revenues | $ | 57,021 | $ | 33,109 |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
(in thousands) | ||||||||
Student Lending Placement Volume: | ||||||||
Department of Education | $ | — | $ | — | ||||
Guaranty Agencies and Other | 913,657 | 683,273 | ||||||
Total Student Lending Placement Volume | $ | 913,657 | $ | 683,273 |
Student Loan Recovery Outcomes | ||||||||
Full Repayment | Recurring Payments | Rehabilitation | Loan Restructuring | Wage Garnishment | ||||
• Repayment in full of the loan | • Regular structured payments, typically according to a renegotiated payment plan | • After a defaulted borrower has made nine consecutive recurring payments, the loan is eligible for rehabilitation | • Restructure and consolidate a number of outstanding loans into a single loan, typically with one monthly payment and an extended maturity | • If we are unable to obtain voluntary repayment, payments may be obtained through wage garnishment after certain administrative requirements are met | ||||
• We are paid a percentage of the full payment that is made | • We are paid a percentage of each payment | • We are paid based on a percentage of the overall value of the rehabilitated loan or for the Department of Education, a fixed fee | • We are paid based on a percentage of overall value of the restructured loan | • We are paid a percentage of each payment |
• | Identification of the contract with a customer |
• | Identification of the performance obligations in the contract |
• | Determination of the transaction price |
• | Allocation of the transaction price to the performance obligations in the contract |
• | Recognition of revenue when, or as, the performance obligations are satisfied |
Three Months Ended March 31, | ||||||||||||||
2018 | 2017 | $ Change | % Change | |||||||||||
(in thousands) | ||||||||||||||
Consolidated Statement of Operations Data: | ||||||||||||||
Revenues | $ | 57,021 | $ | 33,109 | $ | 23,912 | 72 | % | ||||||
Operating expenses: | ||||||||||||||
Salaries and benefits | 21,781 | 20,696 | 1,085 | 5 | % | |||||||||
Other operating expenses | 23,020 | 13,441 | 9,579 | 71 | % | |||||||||
Total operating expenses | 44,801 | 34,137 | 10,664 | 31 | % | |||||||||
Income (loss) from operations | 12,220 | (1,028 | ) | 13,248 | 1,289 | % | ||||||||
Interest expense | (1,270 | ) | (1,606 | ) | (336 | ) | (21 | )% | ||||||
Interest income | 6 | — | 6 | 100 | % | |||||||||
Income (loss) before provision for income taxes | 10,956 | (2,634 | ) | 13,590 | 516 | % | ||||||||
Provision for income taxes | 2,501 | 325 | 2,176 | 670 | % | |||||||||
Net income (loss) | $ | 8,455 | $ | (2,959 | ) | $ | 11,414 | 386 | % |
• | although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; |
• | adjusted EBITDA does not reflect interest expense on our indebtedness; |
• | adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; |
• | adjusted EBITDA does not reflect tax payments; |
• | adjusted EBITDA and adjusted net income do not reflect the potentially dilutive impact of equity-based compensation; |
• | adjusted EBITDA and adjusted net income do not reflect the impact of certain non-operating expenses resulting from matters we do not consider to be indicative of our core operating performance; and |
• | other companies may calculate adjusted EBITDA and adjusted net income differently than we do, which reduces its usefulness as a comparative measure. |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
(in thousands) | ||||||||
Adjusted EBITDA: | ||||||||
Net income (loss) | $ | 8,455 | $ | (2,959 | ) | |||
Provision for income taxes | 2,501 | 325 | ||||||
Interest expense (1) | 1,270 | 1,606 | ||||||
Interest income | (6 | ) | — | |||||
Depreciation and amortization | 2,576 | 2,774 | ||||||
CMS Region A contract termination (5) | (18,816 | ) | — | |||||
Stock-based compensation | 639 | 1,103 | ||||||
Adjusted EBITDA | $ | (3,381 | ) | $ | 2,849 | |||
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
(in thousands) | ||||||||
Adjusted Net Income (Loss): | ||||||||
Net income (loss) | $ | 8,455 | $ | (2,959 | ) | |||
Transaction expenses | — | — | ||||||
Stock-based compensation | 639 | 1,103 | ||||||
Amortization of intangibles (2) | 203 | 271 | ||||||
Deferred financing amortization costs (3) | 331 | 366 | ||||||
CMS Region A contract termination (5) | (18,816 | ) | — | |||||
Tax adjustments (4) | 4,852 | (696 | ) | |||||
Adjusted Net Loss | $ | (4,336 | ) | $ | (1,915 | ) |
(1) | Represents interest expense and amortization of issuance costs related to the refinancing of our indebtedness. |
(2) | Represents amortization of capitalized expenses related to the acquisition of Performant by an affiliate of Parthenon Capital Partners in 2004, and also an acquisition in the first quarter of 2012 to enhance our analytics capabilities. |
(3) | Represents amortization of capitalized financing costs related to our New Credit Agreement for the first quarter of 2018, and amortization of capitalized financing costs related to our Prior Credit Agreement for the first quarter of 2017. |
(4) | Represents tax adjustments assuming a marginal tax rate of 40% for 2017 and 27.5% for 2018. |
(5) | Represents the net impact of the termination of our 2009 CMS Region A contract during the three months ended March 31, 2018, comprised of release of an aggregate of $27.8 million of the estimated liability for appeals and the net payable to client balances into revenue, net of derecognition of $9.0 million of prepaid expenses and other current assets, with a charge to other operating expenses, reflecting accrued receivables associated with amounts due from subcontractors for decided and yet-to-be decided appeals. |
Financial Covenant | Covenant Requirement | Actual Ratio at March 31, 2018 | |
Total debt to EBITDA ratio (maximum) (1) | 6.00 to 1.00 | 1.38 | |
Fixed charge coverage ratio (minimum) (2) | 0.5 to 1.0 | 4.38 |
(1) | The total debt to EBITDA ratio will apply to computation periods through August 11, 2020. |
(2) | The fixed charge coverage ratio of 0.5 to 1.0 is in effect through December 31, 2019, 1.0 to 1.0 will be in effect through June 30, 2020 (or until December 31, 2020 if the maturity date of the Loans is extended until the fourth anniversary of the Closing Date), 1.25 to 1.0 will be in effect through June 30, 2021 if the maturity date of the Loans is extended until the fourth anniversary of the Closing Date and 1.25 to 1.0 will be in effect through June 30, 2022 if the maturity date of the Loans is extended until the fifth anniversary of the Closing Date. |
• | the amount of defaulted student loans and other receivables that our clients place with us for recovery; |
• | the timing of placements of student loans and other receivables which are entirely in the discretion of our clients; |
• | the schedules of government agencies for awarding contracts, including the result of the pending protests against the Department of Education’s contract award to us; |
• | our ability to successfully identify improper Medicare claims and the number and type of potentially improper claims that CMS authorizes us to pursue under our RAC contact; |
• | the loss or gain of significant clients or changes in the contingency fee rates or other significant terms of our business arrangements with our significant clients; |
• | technological and operational issues that may affect our clients and regulatory changes in the markets we service; and |
• | general industry and macroeconomic conditions. |
• | mergers and other business combination transactions, including proposed transactions that would result in our stockholders receiving a premium price for their shares; |
• | other acquisitions or dispositions of businesses or assets; |
• | incurrence of indebtedness and the issuance of equity securities; |
• | repurchase of stock and payment of dividends; and |
• | the issuance of shares to management under our equity incentive plans. |
Exhibit No. | Description |
31.1 | |
31.2 | |
32.1(1) | |
32.2(1) | |
101.INS(2) | XBRL Instance Document |
101.SCH(2) | XBRL Taxonomy Extension Scheme |
101.CAL(2) | XBRL Taxonomy Extension Calculation Linkbase |
101.DEF(2) | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB(2) | XBRL Taxonomy Extension Label Linkbase |
101.PRE(2) | XBRL Taxonomy Extension Presentation Linkbase |
(1) | The material contained in Exhibit 32.1 and Exhibit 32.2 is not deemed “filed” with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing, except to the extent that the registrant specifically incorporates it by reference. |
(2) | In accordance with Rule 406T of Regulation S-T, the information furnished in these exhibits will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such exhibits will not be deemed to be incorporated by reference into any filing under the Securities Act or Exchange Act. |
PERFORMANT FINANCIAL CORPORATION | |||||
Date: | May 9, 2018 | ||||
By: | /s/ Lisa Im | ||||
Lisa Im | |||||
Chief Executive Officer (Principal Executive Officer) | |||||
By: | /s/ Ian Johnston | ||||
Ian Johnston | |||||
Vice President and Chief Accounting Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Performant Financial Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Lisa Im |
Lisa Im |
Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Performant Financial Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Ian Johnston |
Ian Johnston |
Vice President and Chief Accounting Officer (Principal Financial Officer) |
By: | /s/ Lisa Im |
Lisa Im | |
Chief Executive Officer |
By: | /s/ Ian Johnston |
Ian Johnston | |
Vice President and Chief Accounting Officer (Principal Financial Officer) |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
May 08, 2018 |
|
Document Documentand Entity Information [Abstract] | ||
Entity Registrant Name | Performant Financial Corporation | |
Entity Central Index Key | 0001550695 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 51,511,686 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
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Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 70 | $ 35 |
Debt issuance costs (current) | 156 | 171 |
Debt issuance costs notes payable (non current) | $ 2,929 | $ 3,245 |
Common Stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Common Stock, authorized shares (shares) | 500,000,000 | 500,000,000 |
Common Stock, issued shares (shares) | 51,495,000 | 51,085,000 |
Common Stock, outstanding shares (shares) | 51,495,000 | 51,085,000 |
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Income Statement [Abstract] | ||
Revenues | $ 57,021 | $ 33,109 |
Operating expenses: | ||
Salaries and benefits | 21,781 | 20,696 |
Other operating expenses | 23,020 | 13,441 |
Total operating expenses | 44,801 | 34,137 |
Income (loss) from operations | 12,220 | (1,028) |
Interest expense | (1,270) | (1,606) |
Interest income | 6 | 0 |
Income (loss) before provision for income taxes | 10,956 | (2,634) |
Provision for income taxes | 2,501 | 325 |
Net income (loss) | $ 8,455 | $ (2,959) |
Net income (loss) per share | ||
Basic (USD per share) | $ 0.16 | $ (0.06) |
Diluted (USD per share) | $ 0.16 | $ (0.06) |
Weighted average shares | ||
Basic (shares) | 51,320 | 50,304 |
Diluted (shares) | 53,455 | 50,304 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 8,455 | $ (2,959) |
Other comprehensive income: | ||
Foreign currency translation adjustment | 1 | (3) |
Comprehensive income (loss) | $ 8,456 | $ (2,962) |
Organization and Description of Business |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business | Organization and Description of Business
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments necessary (consisting only of normal recurring adjustments) for a fair presentation of our and our subsidiaries’ financial position at March 31, 2018, the results of our operations for the three months ended March 31, 2018 and 2017 and cash flows for the three months ended March 31, 2018 and 2017. Interim financial statements are prepared on a basis consistent with our annual consolidated financial statements. The interim financial statements included herein should be read in conjunction with the consolidated financial statements and related notes included in our annual report on Form 10-K for the years ended December 31, 2017, 2016, and 2015. The Company is a leading provider of technology-enabled audit, recovery, and analytics services in the United States. The Company's services help identify improper payments, and in some markets, restructure and recover delinquent or defaulted assets and improper payments for both government and private clients across different markets. The Company's clients typically operate in complex and regulated environments and outsource their recovery needs in order to reduce losses on billions of dollars of defaulted student loans, improper healthcare payments and delinquent state tax and federal treasury receivables. The Company generally provides services on an outsourced basis, where we handle many or all aspects of the clients’ various processes. The Company's consolidated financial statements include the operations of Performant Financial Corporation (PFC), its wholly-owned subsidiary Performant Business Services, Inc., and its wholly-owned subsidiaries Performant Recovery, Inc. (Recovery), Performant Technologies, Inc., and Performant Europe Ltd. PFC is a Delaware corporation headquartered in California and was formed in 2003. Performant Business Services, Inc. is a Nevada corporation founded in 1997. Recovery is a California corporation founded in 1976. Performant Technologies, Inc. is a California corporation that was formed in 2004. All significant intercompany balances and transactions have been eliminated in consolidation. The Company is managed and operated as one business, with a single management team that reports to the Chief Executive Officer. The preparation of the consolidated financial statements in conformity with U.S. GAAP, requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, primarily accounts receivable, intangible assets, goodwill, estimated liability for appeals, accrued expenses, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Our actual results could differ from those estimates.
The Company derives its revenues primarily from providing recovery services. Revenues are recognized when control of these services is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company determines revenue recognition through the following steps:
The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company’s contracts generally contain a single performance obligation, delivered over time as a series of services that are substantially the same and have the same pattern of transfer to the client, as the promise to transfer the individual services is not separately identifiable from other promises in the contracts and, therefore, not distinct. For contracts with multiple performance obligations, the Company would allocate the contract’s transaction price to each performance obligation using its best estimate of the standalone selling price of each distinct service in the contract. The Company determines the standalone selling prices by taking into consideration the value of the services being provided, the client type and how similar services are priced in other contracts on a standalone basis. The Company’s contracts are composed primarily of variable consideration. Fees earned under the Company’s recovery service contracts consist primarily of contingency fees based on a specified percentage of the amount the Company enables its clients to recover. The contingency fee percentage for a particular recovery depends on the type of recovery or claim facilitated. In certain contracts the Company can earn additional performance-based consideration determined based on its performance relative to the client’s other contractors providing similar services. Revenue from contingency fees earned upon recovery of funds is generally recognized as amounts are invoiced based on either the ‘as-invoiced’ practical expedient when such amounts reflect the value of the services completed to-date, or an output measure based on milestones which is used to measure progress of the satisfaction of its performance obligation. The Company estimates any performance-based variable consideration and recognizes such revenue over the performance period only if it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Under certain contracts, consideration can include periodic performance-based bonuses which can be awarded based on the Company’s performance under the specific contract. These performance-based awards are considered variable and may be constrained by the Company until there is not a risk of a material reversal. For contracts that contain a refund right, these amounts are considered variable consideration and the Company estimates its refund liability for each claim and recognizes revenue net of such estimate. The following table presents revenue disaggregated by category (in thousands) for the three months ended March 31, 2018 and 2017:
The Company generally either applies the as-invoiced practical expedient where its right to consideration corresponds directly to its right to invoice its clients, or the variable consideration allocation exception where the variable consideration is attributable to one or more, but not all, of the services promised in a series of distinct services that form part of a single performance obligation. As such the Company has elected the optional exemptions related to the as-invoiced practical expedient and the variable consideration allocation exception whereby the disclosure of the amount of transaction price allocated to the remaining performance obligations is not required. The Company has applied the as-invoiced practical expedient and the variable allocation exception to have an average remaining duration of less than a year. The Company determined that it does not have any costs related to obtaining or fulfilling a contract that are recoverable and as such, these contract costs are expensed as incurred. The Company has contract assets of $4.1 million and $1.6 million as of March 31, 2018 and December 31, 2017, respectively. The contract assets relate to the Company’s rights to consideration for services completed during the three months ended March 31, 2018 but not invoiced at the reporting date. Contract assets are recorded to accounts receivable when the rights become unconditional and amounts are invoiced. Contract assets are included in Trade accounts receivable in the consolidated balance sheets. The Company has contract liabilities of $1.4 million as of March 31, 2018 and none as of December 31, 2017. The Company’s contract liability relates to an advance recovery commission payment received from a customer during the three months ended March 31, 2018 for audit recovery services, for which the Company anticipates revenue to be recognized as services are delivered. Contract liabilities are included in Deferred revenue in the consolidated balance sheets. Revenue is recognized upon the collection of defaulted loan and debt payments. Loan rehabilitation revenue is recognized when the rehabilitated loans are sold (funded) by clients. Incentive revenue is recognized upon receipt of official notification of incentive award from customers. Under the Company’s Medicare Recovery Audit Contractor, or RAC, contract with Centers for Medicare and Medicaid Services, or CMS, the Company recognizes revenues when the healthcare provider has paid CMS for a given claim or has agreed to an offset against other claims by the provider. Providers have the right to appeal a claim and may pursue additional appeals if the initial appeal is found in favor of CMS. The Company accrues an estimated liability for appeals at the time revenue is recognized based on the Company's estimate of the amount of revenue probable of being refunded to CMS following successful appeal. In addition, if the Company's estimate of the liability for appeals with respect to revenues recognized during a prior period changes, the Company increases or decreases current period accruals based on such change in estimated liability. At March 31, 2018, a total of $0.6 million was presented as an allowance against revenue, representing the Company’s estimate of claims audited under the CMS contract that may be overturned. In addition to the $0.6 million related to the RAC contract with CMS, the Company has accrued $0.3 million of additional estimated liability for appeals related to other healthcare contracts. The total accrued liability for appeals of $0.9 million has been presented in the caption estimated liability for appeals at March 31, 2018. At December 31, 2017, the total appeals-related liability was $18.8 million. The $0.9 million balance at March 31, 2018 and $18.8 million at December 31, 2017, represent the Company’s best estimate of the probable amount of losses related to appeals of claims for which commissions were previously collected. To the extent that required payments by the Company exceed the amount accrued, revenues in the applicable period would be reduced by the amount of the excess. The company determines the allowance for doubtful accounts by specific identification. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is consider remote. The allowance for doubtful account was $70 thousand and $35 thousand at March 31, 2018 and December 31, 2017, respectively.
The Company nets outstanding accounts receivable invoices from an audit and recovery contract against payables for overturned audits. The overturned audits are netted against current fees due on the invoice to the client when they are processed by the client’s system. As a result of the 2009 CMS Region A contract termination on January 31, 2018, the “Net payable to client” balance was $0.0 million as of March 31, 2018. The "Net payable to client" balance of $12.8 million at December 31, 2017 represents the excess of payables for overturned audits.
At March 31, 2018, prepaid expenses and other current assets includes $0.3 million of amounts due from subcontractors which consists of gross receivable of $2.2 million offset by $1.9 million allowance for doubtful accounts. The Company employs subcontractors to audit claims as part of an audit & recovery contract, and to the extent that audits by these subcontractors are overturned on appeal, the fees associated with such claims are contractually refundable to the Company. At March 31, 2018, the receivable associated with estimated future overturns of subcontractor audits was $0.0 million as a result of the 2009 CMS Region A contract termination on January 31, 2018 and net receivable from subcontractor fees for already overturned audits was $0.3 million. By comparison, at December 31, 2017, prepaid expenses and other current assets included $5.6 million of estimated future overturns of subcontractor audits, as well as a net receivable of $3.7 million for subcontractor fees for already overturned audits refundable to the Company once the Company refunds its fees to the client as prime contractor.
Goodwill and long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets or intangibles may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The balance of goodwill was $81.6 million as of March 31, 2018 and December 31, 2017. There was no impairment expense for goodwill and long-lived assets for the three months ended March 31, 2018 or 2017.
At March 31, 2018 and at December 31, 2017, restricted cash included in current assets on our consolidated balance sheet was $1.8 million and $1.8 million, respectively.
Recently Adopted Accounting Standards In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments” which provides guidance on the presentation of certain cash receipts and cash payments in the statement of cash flows in order to reduce diversity in existing practice. This new guidance is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. This new standard requires retrospective adoption, with a provision for impracticability. The Company adopted this guidance and it did not have any impact on our consolidated financial statements. In May 2014, the FASB issued an ASU that amends the FASB ASC by creating a new Topic 606, "Revenue from Contracts with Customers". The new guidance supersedes the revenue recognition requirements in Topic 605, "Revenue Recognition", and most industry-specific guidance on revenue recognition throughout the Industry Topics of the Codification. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply a five-step model for recognizing and measuring revenue from contracts with customers. In addition, an entity should disclose sufficient qualitative and quantitative information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted Topic 606 as of January 1, 2018, utilizing the full retrospective method of transition. The Company applied Topic 606 retrospectively for all reporting periods presented before January 1, 2018, the date of the initial application. There was no impact of adopting Topic 606 on the Company’s 2017 and 2016 consolidated financial statements. Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02, “Leases”, which, for operating leases, requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. This new guidance is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. We have not adopted this guidance early and are currently evaluating the effect on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment" to simplify the goodwill impairment testing process. The new standard eliminates Step 2 of the goodwill impairment test. If a company determines in Step 1 of the goodwill impairment test that the carrying value of goodwill is less than the fair value, an impairment in that amount should be recorded to the income statement, rather than proceeding to Step 2. This new guidance is effective for annual reporting periods, and interim periods with goodwill impairment tests within those years, beginning after December 15, 2019, and early adoption is permitted for testing periods after January 1, 2017. We have not adopted this guidance early and are currently evaluating the effect on our consolidated financial statements. |
Property, Equipment, and Leasehold Improvements |
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Property, Equipment, and Leasehold Improvements | Property, Equipment, and Leasehold Improvements Property, equipment, and leasehold improvements consist of the following at March 31, 2018 and December 31, 2017 (in thousands):
Depreciation expense of property, equipment and leasehold improvements was $2.4 million and $2.5 million for the three months ended March 31, 2018 and 2017, respectively. |
Credit Agreement |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Agreement | Credit Agreement On March 19, 2012, we, through our wholly-owned subsidiary, entered into a $147.5 million credit agreement, as amended and restated, with Madison Capital Funding LLC as administrative agent (as amended, the "Prior Credit Agreement"). The senior credit facility consisted of (i) a $57.0 million Term A loan that matured and was fully paid in March 2017, (ii) a $79.5 million Term B loan that was to mature in June 2018, and (iii) a $11.0 million revolving credit facility that expired and was fully paid in March 2017. On June 28, 2012, we amended the Credit Agreement to increase the amount of our borrowings under our Term B loan by $19.5 million. On November 4, 2014, February 19, 2016, July 26, 2016, October 27, 2016, and March 22, 2017, the Prior Credit Agreement was further amended to, among other things, modify a number of existing covenants and add new covenants requiring the Company to maintain a minimum cash balance, comply with an interest coverage ratio and achieve minimum EBITDA levels. On May 3, 2017, we further amended the credit agreement (the "Eighth Amendment") to extend the maturity date of the Term B loan to June 19, 2018. As a result of this extension, regularly scheduled quarterly amortization payments of $247,500 were also extended through March 31, 2018, with the remaining outstanding principal amount due on the June 19, 2018 maturity date. Interest on the Term B loan charged under the credit agreement was also increased by 3.00% per annum, however the amount of such increased interest was payable in kind. Pursuant to the Eighth Amendment, the quarterly and annual financial reporting covenants were also modified to require that the Company’s financial statements not contain a qualification, if required by GAAP, with respect to our ability to continue as a going concern. On August 7, 2017, we, through our wholly-owned subsidiary Performant Business Services, Inc. (the "Borrower"), entered into a new credit agreement with ECMC Group, Inc. (the “New Credit Agreement”). The New Credit Agreement provides for a term loan facility in the initial amount of $44 million (the “Initial Term Loan”) and for up to $15 million of additional term loans (“Additional Term Loans”; and together with the Initial Term Loan, the “Loans”) which Additional Term Loans may be drawn until the second anniversary of the funding of the Initial Term Loans, subject to the satisfaction of customary conditions. On August 11, 2017, the Initial Term Loan was advanced (the "Closing Date") and the proceeds were applied to repay all outstanding amounts under the Prior Credit Agreement. On September 29, 2017, we entered into Amendment No. 1 to the New Credit Agreement to extend the initial interest payment due date to December 31, 2017. The Loans will mature on the third anniversary of the Closing Date, however we will have the option to extend the maturity of the Loans for two additional one year periods, subject to the satisfaction of customary conditions. The Loans will bear interest at the one-month LIBOR rate (subject to a 1% per annum floor) plus a margin which may vary from 5.5% per annum to 10.0% per annum based on our total debt to EBITDA ratio. The Initial Term Loans will initially bear interest at LIBOR plus 7.0% per annum. Our annual interest rate at March 31, 2018 was 8.9%. We will be required to pay 5% of the original principal balance of the Loans annually in quarterly installments beginning March 31, 2018, and to offer to make mandatory prepayments of the Loans with a percentage of our excess cash flow which may vary between 75% and 0% depending on our total debt to EBITDA ratio. In addition to mandatory prepayments for excess cash flow, we will also be required to offer to prepay the Loans with the net cash proceeds of certain asset dispositions and with the issuance of debt not otherwise permitted under the New Credit Agreement. Except in connection with a change of control and the payment of a 1% premium, we will not be permitted to voluntarily prepay the Loans until after the first anniversary of the Closing Date. We will be permitted to prepay the Loans during the second year after the Closing Date if accompanied by a prepayment premium of 1%. Thereafter, we will be permitted to prepay the Loans without any prepayment premium. The New Credit Agreement contains certain restrictive financial covenants which became effective on the Closing Date. Such covenants require, among other things, that we meet a minimum fixed charge coverage ratio of 0.5 to 1.0 through December 31, 2019, 1.0 to 1.0 through June 30, 2020 (or until December 31, 2020 if the maturity date of the Loans is extended until the fourth anniversary of the Closing Date), 1.25 to 1.0 through June 30, 2021 if the maturity date of the Loans is extended until the fourth anniversary of the Closing Date and 1.25 to 1.0 through June 30, 2022 if the maturity date of the Loans is extended until the fifth anniversary of the Closing Date. In addition, we will be required to maintain, a maximum total debt to EBITDA ratio of 6.00 to 1.00. The New Credit Agreement also contains covenants that will restrict the Company and its subsidiaries’ ability to incur certain types or amounts of indebtedness, incur liens on certain assets, make material changes in corporate structure or the nature of its business, dispose of material assets, engage in a change in control transaction, make certain foreign investments, enter into certain restrictive agreements, or engage in certain transactions with affiliates. The obligations under the New Credit Agreement are secured by substantially all of our United States domestic subsidiaries' assets and are guaranteed by the Company and its United States domestic subsidiaries, other than the Borrower. As a result of our entry into our New Credit Agreement, and the repayment of all amounts owed under the Prior Credit Agreement, we wrote off debt issuance costs related to the Prior Credit Agreement of approximately $1.0 million in August 2017. Scheduled payments under the Agreement for the next five years and thereafter are as follows (in thousands):
The Company made a principal payment of $0.6 million for the period ending March 31, 2018. In consideration for, and concurrently with, the extension of the Initial Term Loan in accordance with the terms of the New Credit Agreement, we issued a warrant to the lender to purchase up to an aggregate of 3,863,326 shares of the Company’s common stock (representing approximately up to 7.5% of our diluted common stock as calculated using the “treasury stock” method as defined under GAAP for the most recent fiscal quarter) with an exercise price of $1.92 per share. Upon our election to borrow any of the Additional Term Loans, we will be required to issue additional warrants at the same exercise price to purchase up to an aggregate of 77,267 additional shares of common stock (which represents approximately 0.15% of our diluted common stock calculated using the “treasury stock” method as defined under GAAP for the most recent fiscal quarter) for each $1,000,000 of such Additional Term Loans. The Company has accounted for this warrant as an equity instrument since the Warrant is indexed to the Company’s common shares and meets the criteria for classification in shareholders’ equity. The relative fair value of the Warrant on the date of issuance was approximately $3.3 million and is treated as a discount to the debt. This amount is being amortized to interest expense under the effective interest method over the life of the Term Loan, which is a period of 36 months. The Company estimated the value of the Warrant using the Black-Scholes model. The key assumptions used to value the Warrant are as follows:
In addition, at the closing of the Term Loan, the Company paid transaction costs of $0.6 million, which were recorded as a discount on the debt and are being amortized to interest expense using the effective interest method over the life of the initial Term Loan, which is a period of 36 months. Outstanding debt obligations are as follows (in thousands):
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies We have entered into various non-cancelable operating lease agreements for certain of our office facilities and equipment with original lease periods expiring between 2018 and 2025. Certain of these arrangements have free rent periods and /or escalating rent payment provisions, and we recognize rent expense under such arrangements on a straight-line basis. Future minimum rental commitments under non-cancelable leases as of March 31, 2018 are as follows (in thousands):
Operating lease expense was $0.9 million and $0.7 million for the three months ended March 31, 2018 and 2017, respectively. |
Stock-based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation | Stock-based Compensation (a) Stock Options Total stock-based compensation expense charged as salaries and benefits expense in the consolidated statements of operations was $0.6 million and $1.1 million for the three months ended March 31, 2018 and 2017, respectively. The following table shows stock option activity for the three months ended March 31, 2018:
The Company recognizes share-based compensation costs as expense on a straight-line basis over the option vesting period, which generally is four years. (b) Restricted Stock Units and Performance Stock Units The following table summarizes restricted stock unit and performance stock unit activity for the three months ended March 31, 2018:
Restricted stock units and performance stock units granted under the Performant Financial Corporation Amended and Restated 2012 Stock Incentive Plan generally vest over periods ranging from one to four years. |
Income Taxes |
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Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective income tax rate changed to 22.8% for the three months ended March 31, 2018 from (12.3)% for the three months ended March 31, 2017. The increase in the effective tax rate is primarily due to the increase in forecasted net deferred tax liability after valuation allowance for which an income tax expense was recorded and the resulting impact that the separate state taxes have on the forecasted rate applied to year to date income for the three months ended March 31, 2018 compared to the loss from operations for the three months ended March 31, 2017 for which no benefit was recognized. We file income tax returns with the U.S. federal government and various state jurisdictions. We operate in a number of state and local jurisdictions, most of which have never audited our records. Accordingly, we are subject to state and local income tax examinations based upon the various statutes of limitations in each jurisdiction. For tax years before 2014, the Company is no longer subject to Federal and certain other state tax examinations. We are currently being examined by the Franchise Tax Board of California for tax years 2011 through 2014. |
Earnings per Share |
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | Earnings per Share For the three months ended March 31, 2018 and 2017, basic income per share is calculated by dividing net income by the sum of the weighted average number of shares of Common Stock outstanding during the period. Diluted income per share is calculated by dividing net income by the weighted average number of shares of Common Stock and dilutive common share equivalents outstanding during the period. Common share equivalents consist of stock options, restricted stock units, and performance stock units. When there is a loss in the period, dilutive common share equivalents are excluded from the calculation of diluted earnings per share, as their effect would be anti-dilutive. For example, for the three months ended March 31, 2017, dilutive common share equivalents have been excluded, and diluted weighted average shares outstanding are the same as basic average shares outstanding. When there is net income in the period, the Company excludes stock options, restricted stock units, performance stock units and warrants from the calculation of diluted earnings per share when the combined exercise price, unamortized fair value and excess tax benefits of the options exceed the average market price of the Company's common stock because their effect would be anti-dilutive. For the three months ended March 31, 2018, the Company excluded 2,346,711 options from the calculation of diluted earnings per share because their effect would be anti-dilutive. The following table reconciles the basic to diluted weighted average shares outstanding using the treasury stock method (shares in thousands):
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Subsequent Events |
3 Months Ended |
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Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 11, 2018, the Department of Education announced that the Company’s subsidiary, Performant Recovery, Inc., and another company had been awarded contracts to provide debt-collection services on defaulted Federal student loans. Those contract awards had been the subject of protests by unsuccessful bidders at the U.S. Court of Federal Claims. On May 3, 2018, the Department of Justice, on the Department of Education’s behalf, notified the U.S. Court of Federal Claims that the Department of Education has decided to cancel this procurement and, as a result, will terminate for convenience the contracts awarded to Performant and the second awardee, the performance of which has been stayed since award due to the protests. The notice states that the Department of Education has decided to cancel the current procurement as part of its plan to make substantial changes in the collection and administrative resolution of defaulted Federal student loans, which the Department of Education concluded would eliminate the need for this procurement. We have evaluated subsequent events through the date these consolidated financial statements were issued and there are no other events that have occurred that would require adjustments or disclosures to our consolidated financial statements. |
Organization and Description of Business (Policies) |
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Organization | Basis of Presentation and Organization The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments necessary (consisting only of normal recurring adjustments) for a fair presentation of our and our subsidiaries’ financial position at March 31, 2018, the results of our operations for the three months ended March 31, 2018 and 2017 and cash flows for the three months ended March 31, 2018 and 2017. Interim financial statements are prepared on a basis consistent with our annual consolidated financial statements. The interim financial statements included herein should be read in conjunction with the consolidated financial statements and related notes included in our annual report on Form 10-K for the years ended December 31, 2017, 2016, and 2015. The Company is a leading provider of technology-enabled audit, recovery, and analytics services in the United States. The Company's services help identify improper payments, and in some markets, restructure and recover delinquent or defaulted assets and improper payments for both government and private clients across different markets. The Company's clients typically operate in complex and regulated environments and outsource their recovery needs in order to reduce losses on billions of dollars of defaulted student loans, improper healthcare payments and delinquent state tax and federal treasury receivables. The Company generally provides services on an outsourced basis, where we handle many or all aspects of the clients’ various processes. The Company's consolidated financial statements include the operations of Performant Financial Corporation (PFC), its wholly-owned subsidiary Performant Business Services, Inc., and its wholly-owned subsidiaries Performant Recovery, Inc. (Recovery), Performant Technologies, Inc., and Performant Europe Ltd. PFC is a Delaware corporation headquartered in California and was formed in 2003. Performant Business Services, Inc. is a Nevada corporation founded in 1997. Recovery is a California corporation founded in 1976. Performant Technologies, Inc. is a California corporation that was formed in 2004. All significant intercompany balances and transactions have been eliminated in consolidation. The Company is managed and operated as one business, with a single management team that reports to the Chief Executive Officer. The preparation of the consolidated financial statements in conformity with U.S. GAAP, requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, primarily accounts receivable, intangible assets, goodwill, estimated liability for appeals, accrued expenses, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Our actual results could differ from those estimates. |
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Revenues, Accounts Receivable, and Estimated Liability for Appeals | Revenues, Accounts Receivable, and Estimated Liability for Appeals The Company derives its revenues primarily from providing recovery services. Revenues are recognized when control of these services is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company determines revenue recognition through the following steps:
The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company’s contracts generally contain a single performance obligation, delivered over time as a series of services that are substantially the same and have the same pattern of transfer to the client, as the promise to transfer the individual services is not separately identifiable from other promises in the contracts and, therefore, not distinct. For contracts with multiple performance obligations, the Company would allocate the contract’s transaction price to each performance obligation using its best estimate of the standalone selling price of each distinct service in the contract. The Company determines the standalone selling prices by taking into consideration the value of the services being provided, the client type and how similar services are priced in other contracts on a standalone basis. The Company’s contracts are composed primarily of variable consideration. Fees earned under the Company’s recovery service contracts consist primarily of contingency fees based on a specified percentage of the amount the Company enables its clients to recover. The contingency fee percentage for a particular recovery depends on the type of recovery or claim facilitated. In certain contracts the Company can earn additional performance-based consideration determined based on its performance relative to the client’s other contractors providing similar services. Revenue from contingency fees earned upon recovery of funds is generally recognized as amounts are invoiced based on either the ‘as-invoiced’ practical expedient when such amounts reflect the value of the services completed to-date, or an output measure based on milestones which is used to measure progress of the satisfaction of its performance obligation. The Company estimates any performance-based variable consideration and recognizes such revenue over the performance period only if it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Under certain contracts, consideration can include periodic performance-based bonuses which can be awarded based on the Company’s performance under the specific contract. These performance-based awards are considered variable and may be constrained by the Company until there is not a risk of a material reversal. For contracts that contain a refund right, these amounts are considered variable consideration and the Company estimates its refund liability for each claim and recognizes revenue net of such estimate. The following table presents revenue disaggregated by category (in thousands) for the three months ended March 31, 2018 and 2017:
The Company generally either applies the as-invoiced practical expedient where its right to consideration corresponds directly to its right to invoice its clients, or the variable consideration allocation exception where the variable consideration is attributable to one or more, but not all, of the services promised in a series of distinct services that form part of a single performance obligation. As such the Company has elected the optional exemptions related to the as-invoiced practical expedient and the variable consideration allocation exception whereby the disclosure of the amount of transaction price allocated to the remaining performance obligations is not required. The Company has applied the as-invoiced practical expedient and the variable allocation exception to have an average remaining duration of less than a year. The Company determined that it does not have any costs related to obtaining or fulfilling a contract that are recoverable and as such, these contract costs are expensed as incurred. The Company has contract assets of $4.1 million and $1.6 million as of March 31, 2018 and December 31, 2017, respectively. The contract assets relate to the Company’s rights to consideration for services completed during the three months ended March 31, 2018 but not invoiced at the reporting date. Contract assets are recorded to accounts receivable when the rights become unconditional and amounts are invoiced. Contract assets are included in Trade accounts receivable in the consolidated balance sheets. The Company has contract liabilities of $1.4 million as of March 31, 2018 and none as of December 31, 2017. The Company’s contract liability relates to an advance recovery commission payment received from a customer during the three months ended March 31, 2018 for audit recovery services, for which the Company anticipates revenue to be recognized as services are delivered. Contract liabilities are included in Deferred revenue in the consolidated balance sheets. Revenue is recognized upon the collection of defaulted loan and debt payments. Loan rehabilitation revenue is recognized when the rehabilitated loans are sold (funded) by clients. Incentive revenue is recognized upon receipt of official notification of incentive award from customers. Under the Company’s Medicare Recovery Audit Contractor, or RAC, contract with Centers for Medicare and Medicaid Services, or CMS, the Company recognizes revenues when the healthcare provider has paid CMS for a given claim or has agreed to an offset against other claims by the provider. Providers have the right to appeal a claim and may pursue additional appeals if the initial appeal is found in favor of CMS. The Company accrues an estimated liability for appeals at the time revenue is recognized based on the Company's estimate of the amount of revenue probable of being refunded to CMS following successful appeal. In addition, if the Company's estimate of the liability for appeals with respect to revenues recognized during a prior period changes, the Company increases or decreases current period accruals based on such change in estimated liability. At March 31, 2018, a total of $0.6 million was presented as an allowance against revenue, representing the Company’s estimate of claims audited under the CMS contract that may be overturned. In addition to the $0.6 million related to the RAC contract with CMS, the Company has accrued $0.3 million of additional estimated liability for appeals related to other healthcare contracts. The total accrued liability for appeals of $0.9 million has been presented in the caption estimated liability for appeals at March 31, 2018. At December 31, 2017, the total appeals-related liability was $18.8 million. The $0.9 million balance at March 31, 2018 and $18.8 million at December 31, 2017, represent the Company’s best estimate of the probable amount of losses related to appeals of claims for which commissions were previously collected. To the extent that required payments by the Company exceed the amount accrued, revenues in the applicable period would be reduced by the amount of the excess. |
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Net Payable to Client | Net Payable to Client The Company nets outstanding accounts receivable invoices from an audit and recovery contract against payables for overturned audits. The overturned audits are netted against current fees due on the invoice to the client when they are processed by the client’s system. As a result of the 2009 CMS Region A contract termination on January 31, 2018, the “Net payable to client” balance was $0.0 million as of March 31, 2018. The "Net payable to client" balance of $12.8 million at December 31, 2017 represents the excess of payables for overturned audits. |
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Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets At March 31, 2018, prepaid expenses and other current assets includes $0.3 million of amounts due from subcontractors which consists of gross receivable of $2.2 million offset by $1.9 million allowance for doubtful accounts. The Company employs subcontractors to audit claims as part of an audit & recovery contract, and to the extent that audits by these subcontractors are overturned on appeal, the fees associated with such claims are contractually refundable to the Company. |
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Impairment of Goodwill and Long-Lived Assets | Impairment of Goodwill and Long-Lived Assets Goodwill and long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets or intangibles may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. |
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Restricted Cash | Restricted Cash At March 31, 2018 and at December 31, 2017, restricted cash included in current assets on our consolidated balance sheet was $1.8 million and $1.8 million, respectively. |
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New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Standards In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments” which provides guidance on the presentation of certain cash receipts and cash payments in the statement of cash flows in order to reduce diversity in existing practice. This new guidance is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. This new standard requires retrospective adoption, with a provision for impracticability. The Company adopted this guidance and it did not have any impact on our consolidated financial statements. In May 2014, the FASB issued an ASU that amends the FASB ASC by creating a new Topic 606, "Revenue from Contracts with Customers". The new guidance supersedes the revenue recognition requirements in Topic 605, "Revenue Recognition", and most industry-specific guidance on revenue recognition throughout the Industry Topics of the Codification. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply a five-step model for recognizing and measuring revenue from contracts with customers. In addition, an entity should disclose sufficient qualitative and quantitative information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted Topic 606 as of January 1, 2018, utilizing the full retrospective method of transition. The Company applied Topic 606 retrospectively for all reporting periods presented before January 1, 2018, the date of the initial application. There was no impact of adopting Topic 606 on the Company’s 2017 and 2016 consolidated financial statements. Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02, “Leases”, which, for operating leases, requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. This new guidance is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. We have not adopted this guidance early and are currently evaluating the effect on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment" to simplify the goodwill impairment testing process. The new standard eliminates Step 2 of the goodwill impairment test. If a company determines in Step 1 of the goodwill impairment test that the carrying value of goodwill is less than the fair value, an impairment in that amount should be recorded to the income statement, rather than proceeding to Step 2. This new guidance is effective for annual reporting periods, and interim periods with goodwill impairment tests within those years, beginning after December 15, 2019, and early adoption is permitted for testing periods after January 1, 2017. We have not adopted this guidance early and are currently evaluating the effect on our consolidated financial statements. |
Organization and Description of Business (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregated Revenue by Category | The following table presents revenue disaggregated by category (in thousands) for the three months ended March 31, 2018 and 2017:
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Property, Equipment, and Leasehold Improvements (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property, Equipment, and Leasehold Improvements | Property, equipment, and leasehold improvements consist of the following at March 31, 2018 and December 31, 2017 (in thousands):
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Credit Agreement (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Credit Agreement Payments | Scheduled payments under the Agreement for the next five years and thereafter are as follows (in thousands):
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Schedule of Warrant Valuation | The Company estimated the value of the Warrant using the Black-Scholes model. The key assumptions used to value the Warrant are as follows:
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Schedule of Outstanding Debt | Outstanding debt obligations are as follows (in thousands):
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Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Commitments under Non-Cancelable Leases | Future minimum rental commitments under non-cancelable leases as of March 31, 2018 are as follows (in thousands):
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Stock-based Compensation (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Option Activity | The following table shows stock option activity for the three months ended March 31, 2018:
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Schedule of Restricted Stock Activity | The following table summarizes restricted stock unit and performance stock unit activity for the three months ended March 31, 2018:
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Earnings per Share (Tables) |
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of Basic to Diluted Weighted Average Shares | The following table reconciles the basic to diluted weighted average shares outstanding using the treasury stock method (shares in thousands):
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Organization and Description of Business - Disaggregated Revenue by Category (Details) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Disaggregation of Revenue [Line Items] | ||
Total Revenues | $ 57,021 | $ 33,109 |
Total of Student Lending | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 19,105 | 24,549 |
Department of Education (Legacy) | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 0 | 1,195 |
Subcontractor with Small Businesses on Department of Education | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 1,229 | 492 |
Guaranty Agencies and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 17,876 | 22,862 |
Total of Healthcare | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 31,314 | 1,647 |
CMS RAC and MSP | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 29,104 | 82 |
Commercial | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 2,210 | 1,565 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | $ 6,602 | $ 6,913 |
Property, Equipment, and Leasehold Improvements - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense of property, equipment and leasehold improvements | $ 2.4 | $ 2.5 |
Property, Equipment, and Leasehold Improvements - Summary (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
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Property, Plant and Equipment [Line Items] | ||
Property, equipment and leasehold improvements, gross | $ 87,823 | $ 85,339 |
Less accumulated depreciation and amortization | (66,752) | (64,395) |
Property, equipment and leasehold improvements, net | 21,071 | 20,944 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and leasehold improvements, gross | 1,122 | 1,122 |
Building and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and leasehold improvements, gross | 6,540 | 6,410 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and leasehold improvements, gross | 5,900 | 5,763 |
Computer hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and leasehold improvements, gross | $ 74,261 | $ 72,044 |
Credit Agreement - Scheduled Payments (Details) $ in Thousands |
Mar. 31, 2018
USD ($)
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Line of Credit Facility [Line Items] | |
Total | $ 40,365 |
New Credit Agreement | |
Line of Credit Facility [Line Items] | |
Remainder of 2018 | 1,650 |
2018 | 2,200 |
2019 | 39,600 |
2020 | 0 |
2021 | 0 |
Thereafter | 0 |
Total | $ 43,450 |
Credit Agreement - Warrant Valuation (Details) |
3 Months Ended |
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Mar. 31, 2018
$ / shares
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Debt Disclosure [Abstract] | |
Exercise price (USD per share) | $ 1.92 |
Share price on date of issuance (USD per share) | $ 1.85 |
Volatility (as a percent) | 50.00% |
Risk-free interest rate (as a percent) | 1.83% |
Expected dividend yield (as a percent) | 0.00% |
Contractual term (in years) | 5 years |
Credit Agreement - Outstanding Debt Obligations (Details) $ in Thousands |
Mar. 31, 2018
USD ($)
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Debt Disclosure [Abstract] | |
Principal amount | $ 43,450 |
Less: unamortized discount and debt issuance costs | (3,085) |
Total | 40,365 |
Less: current maturities | (2,044) |
Long-term loan payable, net of current maturities | $ 38,321 |
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease expense | $ 0.9 | $ 0.7 |
Commitments and Contingencies - Future Minimum Rental Commitments under Non-Cancelable Leases (Details) $ in Thousands |
Mar. 31, 2018
USD ($)
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Commitments and Contingencies Disclosure [Abstract] | |
Remainder of 2018 | $ 2,007 |
2019 | 3,070 |
2020 | 3,033 |
2021 | 2,139 |
2022 | 1,710 |
Thereafter | 2,190 |
Total | $ 14,149 |
Stock-based Compensation - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 0.6 | $ 1.1 |
Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options vesting period | 4 years | |
Minimum | Restricted Stock and Performance Stock Units | 2012 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options vesting period | 1 year | |
Maximum | Restricted Stock and Performance Stock Units | 2012 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options vesting period | 4 years |
Income Taxes - Narrative (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Income Tax Disclosure [Abstract] | ||
Effective income tax rate (as a percent) | 22.80% | (12.30%) |
Earnings per Share - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2018
shares
| |
Earnings Per Share [Abstract] | |
Antidilutive securities excluded (shares) | 2,346,711 |
Earnings per Share - Reconciliation of Basic to Diluted Weighted Average Shares (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Earnings Per Share [Abstract] | ||
Weighted average shares outstanding – basic (shares) | 51,320 | 50,304 |
Dilutive effect of stock options (shares) | 2,135 | 0 |
Weighted average shares outstanding – diluted (shares) | 53,455 | 50,304 |
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