8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 1, 2015

CIVITAS SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-36623	65-1309110
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

313 Congress Street, 6^th Floor

Boston, Massachusetts 02210

(Address of Principal executive offices, including Zip Code)

(617) 790-4800

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01. Completion or Acquisition or Disposition of Assets

On December 1, 2015, National Mentor Healthcare, LLC (“NMH”), a wholly-owned indirect subsidiary of Civitas Solutions, Inc. (the “Company”), completed the sale of its at-risk youth business in North Carolina (the “NC ARY Business”) to Pinnacle Family Services, LLC (“Pinnacle”). Pursuant to the Asset Purchase Agreement, Pinnacle assumed certain liabilities of the NC ARY Business and NMH agreed to pay $1,250,000 to Pinnacle in respect of working capital needs.

The closure of the NC ARY Business was part of the previously announced closure of at-risk youth programs provided by the Company in Florida, Louisiana, Indiana, North Carolina and Texas.

Because the sale meets at least one of the significance tests specified in Item 2.01 of Form 8-K, the Company is including unaudited pro forma condensed consolidated statements of operations for the Company for the nine months ended June 30, 2015 and for the fiscal year ended September 30, 2014 that give effect to the sale.

The transition of services to other service providers in the states of Florida, Indiana, Louisiana and Texas (the “Remaining States”) is ongoing. The Company expects that the closure of all at-risk youth service programs in the Remaining States will be substantially completed by December 31, 2015.

Item 9.01. Financial Statements and Exhibits

(b) Pro Forma Financial Information

Unaudited Pro Forma Condensed Consolidated Statement of Operations for the nine months ended June 30, 2015 and the Unaudited Pro Forma Condensed Consolidated Statement of Operations for the fiscal year ended September 30, 2014.

(d) Exhibits

Exhibit No.	Description
99.1	Unaudited Pro Forma Condensed Consolidated Financial Information.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CIVITAS SOLUTIONS, INC.
	/s/ Denis M. Holler
Date: December 7, 2015	Name:	Denis M. Holler
	Title:	Chief Financial Officer

EX-99.1

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

On June 24, 2015, Civitas Solutions, Inc. (the “Company”) announced its decision to discontinue ARY services in the states of Florida, Indiana, Louisiana, North Carolina and Texas. On November 2, 2015, we entered into an asset purchase agreement to sell our ARY operations in the state of North Carolina. As consideration the buyer will assume the Company’s lease obligations and service delivery obligations in exchange for the assets of the business, excluding working capital items, and the Company will make a cash payment of $1.25 million to the buyer. This transaction was completed on December 1, 2015. In connection with the sale, the Company will record a loss of $1.25 million in the first quarter of fiscal 2016. In the other four states, the Company is working with its public partners to transition each child or adolescent into other provider programs by the end of the first quarter of fiscal 2016. The pro forma effect of the divestiture of the ARY operations in the five states is reflected in the Unaudited Pro Forma Condensed Consolidated Financial Information. The Company assessed the disposal group under the guidance of ASU 2014-08, “Discontinued Operations and Disclosures of Disposals of Components of an Entity” and concluded that the planned divestiture does not represent a “strategic shift,” and therefore will not be classified as discontinued operations.

The following Unaudited Pro Forma Condensed Consolidated Financial Information was prepared in accordance with GAAP and pursuant to U.S. Securities and Exchange Commission Regulation S-X Article 11, and present the pro forma results of operations of the Company, based upon the historical information, after giving effect to the divestiture of ARY operations in the five states and related adjustments described in the Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information. The Unaudited Pro Forma Condensed Consolidated Statements of Operations for the nine months ended June 30, 2015 and the fiscal year ended September 30, 2014 are presented as if the divestiture had occurred on October 1, 2013. The pro forma effect of the divestiture on the Condensed Consolidated Balance Sheet as of June 30, 2015 is immaterial; therefore, it has not been included in the following Unaudited Pro Forma Condensed Consolidated Financial Information.

The following Unaudited Pro Forma Condensed Consolidated Financial Information is presented for illustrative and informational purposes only and is not intended to represent or be indicative of the results of operations that would actually have been recorded if the divestiture of the ARY operations in Florida, Indiana, Louisiana, North Carolina and Texas had occurred during the periods presented. In addition, the Unaudited Pro Forma Condensed Consolidated Financial Information is not intended to represent the Company’s results of operations for any future date or period.

The unaudited pro forma financial information includes the adjustments deemed appropriate by the Company’s management for the fair presentation of the divestiture. An explanation of the adjustments is set forth under the Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.

The unaudited pro forma financial information should be read in conjunction with the Company’s historical audited Consolidated Financial Statements for the years ended September 30, 2014, 2013 and 2012 included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2014 and the unaudited Condensed Consolidated Financial Statements for the nine months ended June 30, 2015 and 2014 included in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015.

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Civitas Solutions, Inc

Unaudited Pro Forma Condensed Consolidated Statement of Operations

Nine Months Ended June 30, 2015

($ in thousands except share and per share amounts)

	Reported Nine Months Ended June 30, 2015			(a) Pro Forma Adjustments			Pro Forma Nine Months Ended June 30, 2015
Net revenue	$	1,015,764		$	37,672		$	978,092
Cost of revenue (exclusive of depreciation and amortization expense shown below)		786,024			30,095			755,929
Operating expenses:
General and administrative		119,452			4,920			114,532
Depreciation and amortization		64,278			9,311	(b)		54,967
Total operating expenses		183,730			14,231			169,499
Income (loss) from operations		46,010			(6,654	)		52,664
Other income (expense):
Management fee of related party		(162	)		—			(162	)
Other expense, net		(333	)		—			(333	)
Extinguishment of debt		(17,058	)		—			(17,058	)
Interest expense		(28,868	)		—			(28,868	)
(Loss) income from continuing operations before income taxes		(411	)		(6,654	)		6,243
(Benefit) provision for income taxes		(185	)		(2,995	)(d)		2,810
(Loss) income from continuing operations	$	(226	)	$	(3,659	)	$	3,433
(Loss) income per common share, basic and diluted:
(Loss) income from continuing operations, basic and diluted	$	(0.01	)				$	0.09
Weighted average number of common shares outstanding, basic		36,950,000						36,950,000
Weighted average number of common shares outstanding, diluted		36,950,000						37,046,897

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Civitas Solutions, Inc

Unaudited Pro Forma Condensed Consolidated Statement of Operations

Fiscal Year Ended September 30, 2014

($ in thousands except share and per share amounts)

	Reported Fiscal Year Ended September 30, 2014			(c) Pro Forma Adjustments			Pro Forma Fiscal Year Ended September 30, 2014
Net revenue	$	1,255,838		$	56,894		$	1,198,944
Cost of revenue (exclusive of depreciation and amortization expense shown below)		983,043			46,902			936,141
Operating expenses:
General and administrative		145,041			7,931			137,110
Depreciation and amortization		67,488			1,915			65,573
Total operating expenses		212,529			9,846			202,683
Income from operations		60,266			146			60,120
Other income (expense):
Management fee of related party		(9,488	)		—			(9,488	)
Other expense, net		374			—			374
Extinguishment of debt		(14,699	)		—			(14,699	)
Interest expense		(69,349	)		—			(69,349	)
(Loss) income from continuing operations before income taxes		(32,896	)		146			(33,042	)
(Benefit) provision for income taxes		(11,463	)		51	(d)		(11,514	)
(Loss) income from continuing operations	$	(21,433	)	$	95		$	(21,528	)
Loss per common share, basic and diluted:
Loss income from continuing operations, basic and diluted	$	(0.84	)				$	(0.84	)
Weighted average number of common shares outstanding, basic and diluted		25,538,493						25,538,493

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Note to Unaudited Pro Forma Condensed Consolidated Financial Information

Pro Forma Adjustments

The following is a summary of the pro forma adjustments reflected in the Unaudited Pro Forma Condensed Consolidated Financial Information based on preliminary estimates, which may change as additional information is obtained:

a) Represents the elimination of the historical financial results of ARY operations in Florida, Indiana, Louisiana, North Carolina and Texas for the nine months ended June 30, 2015.

b) Pro forma adjustment includes the intangible asset impairment charge of $8.2 million related to the ARY operations in Florida, Indiana, Louisiana, North Carolina and Texas that was recorded in the nine months ended June 30, 2015.

c) Represents the elimination of the historical financial results of ARY operations in Florida, Indiana, Louisiana, North Carolina and Texas for the fiscal year ended September 30, 2014.

d) The tax effect of the pro forma adjustments was determined based on the Company’s effective tax rate for each respective period presented.

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