Note 2 - Acquisitions

12 Months Ended

Dec. 31, 2011

Business Combination Disclosure [Text Block]

(2)           Acquisitions

On August 3, 2010, the Company acquired all of the issued and outstanding shares of stock and stock rights of OCS, a provider of clinical, financial and operational benchmarks and analytics to home care and hospice providers.  The acquisition provides the Company with an entry in the home health and hospice markets through OCS’s customer relationships with home healthcare and hospice providers and expands the Company's service offerings across the continuum of care.  Goodwill related to the acquisition of OCS primarily relates to intangible assets that do not qualify for separate recognition including the depth and knowledge of management.  Cash consideration paid at closing was $15.3 million, net of $1.0 million cash received.  Of the purchase price, $1.6 million was deposited into an escrow for indemnification, working capital adjustments and certain other potential claims or expenses following closing, which was released in varying amounts through February 2012.  The following table summarizes the purchase allocation of fair value of the assets acquired and liabilities assumed at the acquisition date.

Amount of Identified Assets Acquired and Liabilities Assumed
(In thousands)
	Weighted-Average Life
Current Assets		$	3,615
Property and equipment			1,632
Customer relationships	10 years		2,330
Trade name	5 years		330
Non-compete Agreements	3 years		430
Goodwill			13,502
Total acquired assets			21,839
Current liabilities			6,310
Long-term liabilities			260
Total liabilities assumed			6,570
Net assets acquired		$	15,269

The identifiable intangible assets are being amortized over their estimated useful lives and have a total weighted average amortization period of 8.5 years. The excess of purchase price over the fair value of net assets acquired resulted in the Company recording $13.6 million of goodwill. The goodwill and identifiable intangible assets are non-deductible for tax purposes. No residual value was estimated for intangible assets.

The consolidated financial statements as of December 31, 2011 and 2010, and for the years then ended, include amounts acquired from, as well as the results of operations of, OCS from August 3, 2010, forward.  Results of operations for the year ended December 31, 2010, include revenue of $3.0 million and operating income of $221,000 attributable to OCS since its acquisition.  Acquisition-related costs included in selling, general and administrative expenses for the year ended December 31, 2010, approximated $312,000.  The following unaudited pro forma information for the Company has been prepared as if the acquisition of OCS had occurred on January 1, 2009.  The information is based on the historical results of the separate companies and may not necessarily be indicative of the results that could have been achieved or of results that may occur in the future.  The pro forma adjustments include the impact of depreciation and amortization of property and equipment and intangible assets acquired, interest expense on the acquisition debt and income tax benefits for tax effects of the foregoing adjustments to depreciation, amortization and interest expense.

	Year Ended December 31,
	2010		2009
	(in thousands)
Revenue	$	67,341	$	63,457
Net income	$	7,664	$	7,198
Net income per share – basic	$	1.15	$	1.08
Net income per share – diluted	$	1.14	$	1.07