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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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13-4066229
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.0001 per share
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The NASDAQ Stock Market
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Page
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Exhibits, Financial Statement Schedules
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Item 1.
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Business.
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Item 1A.
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Risk Factors.
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•
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Potential loss of key employees or clients of acquired companies;
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•
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Difficulties integrating acquired personnel and distinct cultures into our business;
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•
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Difficulties integrating acquired companies into our operating, financial planning and financial reporting systems;
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•
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Diversion of management attention from existing operations; and
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•
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Assumptions of liabilities and exposure to unforeseen liabilities of acquired companies, including liabilities for their failure to comply with healthcare and tax regulations.
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Item 1B.
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Unresolved Staff Comments.
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Item 2.
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Properties.
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Location
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Function
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Square
Feet
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Lease Expiration
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Boca Raton, Florida
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Headquarters and nurse and allied staffing administration
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70,406
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May 1, 2018
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Berkeley Lake, Georgia
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Temporary physician staffing and allied
staffing offices
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41,607
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October 7, 2024
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Newtown Square, Pennsylvania
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Nurse and allied staffing administration and general office use
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16,304
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December 31, 2018
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Creve Coeur, Missouri
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Retained search headquarters
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27,051
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June 14, 2017
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Malden, Massachusetts
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Nurse and allied staffing administration and general office use
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22,767
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June 30, 2017
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Pune, India
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In-house information systems and
development support
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20,700
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November 30, 2015
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Brentwood, Tennessee
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Education training headquarters
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16,884
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August 31, 2017
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Tampa, Florida
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Nurse and allied staffing administration and general office use
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15,698
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February 15, 2015
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Item 3.
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Legal Proceedings.
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Item 4.
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Mine Safety Disclosures.
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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Sale Prices
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||||||
Calendar Period
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High
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Low
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2013
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Quarter Ended March 31, 2013
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$
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6.23
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$
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4.86
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Quarter Ended June 30, 2013
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$
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5.60
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$
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4.59
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Quarter Ended September 30, 2013
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$
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6.19
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$
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5.14
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Quarter Ended December 31, 2013
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$
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10.53
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$
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5.55
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2012
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Quarter Ended March 31, 2012
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$
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6.73
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$
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4.40
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Quarter Ended June 30, 2012
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$
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5.64
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$
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3.87
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Quarter Ended September 30, 2012
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$
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5.12
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$
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3.90
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Quarter Ended December 31, 2012
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$
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4.98
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$
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3.80
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Item 6.
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Selected Financial Data.
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Year Ended December 31,
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2013 (a)
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2012
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2011
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2010
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2009
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(Dollars in thousands, except share and per share data)
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Consolidated Statements of Operations Data
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Revenue from services
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$
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438,311
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$
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442,635
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$
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439,377
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$
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406,604
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$
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506,559
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Operating expenses:
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Direct operating expenses
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324,851
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331,050
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319,989
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292,333
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374,043
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Selling, general and administrative
expenses
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106,117
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109,417
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104,544
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97,379
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106,875
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Bad debt expense
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1,078
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786
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574
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248
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107
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Depreciation
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3,886
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4,905
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5,965
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7,122
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7,713
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Amortization
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2,294
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2,263
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2,394
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2,568
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2,701
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Acquisition costs (a)
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473
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—
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—
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—
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—
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Restructuring costs (b)
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484
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—
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—
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—
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—
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Impairment charges (c)
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6,400
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18,732
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—
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10,764
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—
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Legal settlement charge (d)
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750
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—
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—
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—
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345
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Total operating expenses
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446,333
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467,153
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433,466
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410,414
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491,784
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(Loss) income from operations
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(8,022
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)
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(24,518
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)
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5,911
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(3,810
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)
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14,775
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Other (income) expenses:
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Foreign exchange (gain) loss
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(132
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)
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(62
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(264
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)
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68
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61
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Interest expense
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849
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2,341
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2,856
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4,244
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6,243
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Loss on early extinguishment and modification of debt
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1,419
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82
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—
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—
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—
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Other (income) expense, net
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(119
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16
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(298
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)
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(172
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(69
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(Loss) income from continuing operations
before income taxes
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(10,039
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)
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(26,895
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)
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3,617
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(7,950
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)
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8,540
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Income tax expense (benefit)
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44,211
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(6,150
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)
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2,069
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(2,693
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)
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3,598
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(Loss) income from continuing operations
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(54,250
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)
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(20,745
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)
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1,548
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(5,257
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)
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4,942
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Income (loss) from discontinued operations, net of tax
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2,281
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(21,476
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)
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2,550
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2,482
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1,752
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Net (loss) income
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$
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(51,969
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)
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$
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(42,221
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)
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$
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4,098
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$
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(2,775
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)
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$
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6,694
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Net (loss) income per common share –
basic:
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Continuing operations
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$
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(1.75
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)
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$
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(0.67
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)
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$
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0.05
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$
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(0.17
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)
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$
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0.16
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Discontinued operations
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0.07
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(0.70
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)
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0.08
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0.08
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0.06
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Net (loss) income
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$
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(1.68
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)
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$
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(1.37
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)
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$
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0.13
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$
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(0.09
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)
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$
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0.22
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Net (loss) income per common share –
diluted (e):
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Continuing operations
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$
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(1.75
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)
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$
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(0.67
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)
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$
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0.05
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$
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(0.17
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)
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$
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0.16
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Discontinued operations
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0.07
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(0.70
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)
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0.08
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0.08
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0.06
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Net (loss) income
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$
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(1.68
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)
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$
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(1.37
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)
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$
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0.13
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$
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(0.09
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)
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$
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0.22
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Weighted average common shares
outstanding:
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Basic
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31,009,218
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30,842,723
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31,146,165
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31,060,426
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30,824,660
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Diluted (e)
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31,009,218
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30,842,723
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31,192,016
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31,060,426
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30,999,446
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Year Ended December 31,
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2013
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2012
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2011
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2010
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2009
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Other Operating Data
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Nurse and allied staffing statistical data:
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FTEs (f)
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2,420
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2,446
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2,472
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2,185
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2,735
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Days worked (g)
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883,300
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895,236
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902,280
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797,525
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998,275
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Average revenue per FTE per day (h)
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$
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316
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$
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310
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$
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309
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|
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$
|
304
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$
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314
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Physician staffing statistical data (i):
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Days filled (j)
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80,294
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85,001
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85,416
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89,421
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95,253
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Revenue per day filled (k)
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$
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1,512
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$
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1,453
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$
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1,391
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|
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$
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1,360
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|
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$
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1,594
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Cash flow data ($000):
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Net cash provided by operating activities
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$
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8,659
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$
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10,146
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$
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18,296
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|
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$
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31,522
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|
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$
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72,400
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Net cash provided by (used in) investing activities
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$
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15,205
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$
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175
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$
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(4,196
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)
|
|
$
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(16,199
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)
|
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$
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(11,713
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)
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Net cash used in financing activities
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$
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(26,061
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)
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$
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(10,583
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)
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$
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(14,236
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)
|
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$
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(11,191
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)
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$
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(64,217
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)
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||||||||||
Consolidated Balance Sheet Data ($000)
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Working capital (l)
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$
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39,030
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$
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66,205
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$
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50,348
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|
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$
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59,145
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|
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$
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64,505
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Cash and cash equivalents
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$
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8,055
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$
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10,463
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$
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10,648
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$
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10,957
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$
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6,861
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Total assets (l)
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$
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248,245
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$
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305,924
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$
|
347,884
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|
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$
|
358,359
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|
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$
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365,726
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Total debt
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$
|
8,576
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|
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$
|
33,859
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|
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$
|
42,046
|
|
|
$
|
53,513
|
|
|
$
|
62,514
|
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Stockholders’ equity
|
$
|
160,667
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|
|
$
|
209,123
|
|
|
$
|
249,300
|
|
|
$
|
246,009
|
|
|
$
|
246,071
|
|
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(a)
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On December 2, 2013, the Company acquired the operating assets of On Assignment, Inc.’s Allied Healthcare Staffing division. The acquisition has been accounted for in accordance with FASB ASC Topic 805-
Business Combinations
, using the purchase method of accounting. The results of On Assignment's operations have been included in the Company's consolidated statements of operations since December 2, 2013, the date of the acquisition. For further information about this acquisition, refer to the notes to the consolidated financial statements (Note 5 - Acquisitions).
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(b)
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Restructuring costs primarily related to senior management employee severance pay.
|
(c)
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Impairment charges include goodwill and other intangible asset impairment charges pursuant to the
Intangibles-Goodwill and Other
Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) and the
Impairment or Disposal of Long-Lived Assets
subsection of the
Property, Plant and Equipment
Topic of the FASB ASC. In the fourth quarter of 2013, in conjunction with the annual testing of indefinite-lived intangible assets not subject to amortization, the Company recorded a pre-tax non-cash impairment charge of approximately
$6.4
million of which
$6.2
million related to the physician staffing segment and
$0.2
million related to the nurse and allied staffing segment. In the year ended December 2012, the Company recorded noncash impairment charges of $18.7 million related to the impairment of goodwill in the Company's nurse and allied staffing reporting unit. In the fourth quarter of 2010, the Company recorded noncash pretax impairment charges of $10.8 million, related to the impairment of specific trade names in its physician and nurse and allied staffing business segments related to its acquisition of MDA. Refer to further discussion of some of these impairment charges in our notes to the consolidated financial statements (Note 4 – Goodwill, Trade Names and Other Identifiable Intangible Assets).
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(d)
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During the year ended December 31, 2013, the Company agreed to settle a wage and hour class action lawsuit in California for $0.75 million, subject to a final binding agreement and approval by the court. The courts granted preliminary approval of the settlement on January 17, 2014, subject to the inclusion of language requiring a five-day cure period for deficient requests for exclusion from class members. On February 6, 2014, the parties amended the settlement agreement to include such language. A hearing for final approval of the settlement
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(e)
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For purposes of calculating diluted earnings per common share in 2013, 2012 and 2010 the Company excluded potentially dilutive shares from the calculation as their effect would have been anti-dilutive, due to the Company’s net loss from continuing operations in those years.
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(f)
|
FTEs represent the average number of nurse and allied contract staffing personnel on a full-time equivalent basis.
|
(g)
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Days worked is calculated by multiplying the FTEs by the number of days during the respective period.
|
(h)
|
Average nurse and allied staffing revenue per FTE per day is calculated by dividing the nurse and allied staffing revenue by the number of days worked in the respective periods. Nurse and allied staffing revenue includes revenue from permanent placement of nurses.
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(i)
|
Beginning in the first quarter of 2011, the Company refined its statistical methodology related to its physician staffing days filled metrics. Accordingly, historical 2010 data for these metrics has been revised to conform to the 2011 presentation. Historical data for 2009 has not been reclassified due to excessive cost of applying the methodology, which, the Company believes outweighs the benefit of the additional information.
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(j)
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Days filled is calculated by dividing the total hours filled during the period by 8 hours.
|
(k)
|
Revenue per day filled is calculated by dividing the applicable revenue generated by the Company’s physician staffing segment by days filled for the period presented.
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(l)
|
Working capital and total assets as of December 31, 2012 includes the net assets held for sale related to our discontinued clinical trial services staffing business. See Note 3 – Assets Held for Sale and Discontinued Operations. Total assets presented include estimated insurance recoveries for all periods presented. See Note 7 – Accrued Compensation and Benefits. Working capital and total asset balance information has been reclassified to conform to the 2013 presentation of deferred taxes. See Note 12 - Income Taxes.
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Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
We have also entered into certain contracts with acute care facilities to provide comprehensive managed service programs (MSP) solutions. Under these contract arrangements, we use our nurses primarily, along with those of third party subcontractors, to fulfill customer orders. If a subcontractor is used, we invoice our customer for these services, but revenue is recorded at the time of billing, net of any related subcontractor liability. The resulting net revenue represents the administrative fee charged by us for our MSP services.
|
•
|
Revenue from our physician staffing and education and training businesses is recognized on a gross basis as we believe we are the principal in the arrangements.
|
|
Year Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Revenue from services
|
100.0
|
%
|
|
100.0%
|
|
|
100.0%
|
|
Direct operating expenses
|
74.1
|
|
|
74.8
|
|
|
72.8
|
|
Selling, general and administrative expenses
|
24.2
|
|
|
24.7
|
|
|
23.8
|
|
Bad debt expense
|
0.2
|
|
|
0.2
|
|
|
0.1
|
|
Depreciation and amortization
|
1.4
|
|
|
1.6
|
|
|
1.9
|
|
Acquisition costs
|
0.1
|
|
|
—
|
|
|
—
|
|
Restructuring costs
|
0.1
|
|
|
—
|
|
|
—
|
|
Legal settlement charge
|
0.2
|
|
|
—
|
|
|
—
|
|
Impairment charges
|
1.5
|
|
|
4.2
|
|
|
—
|
|
(Loss) income from operations
|
(1.8
|
)
|
|
(5.5
|
)
|
|
1.4
|
|
Foreign exchange (gain) loss
|
—
|
|
|
—
|
|
|
—
|
|
Interest expense
|
0.2
|
|
|
0.6
|
|
|
0.7
|
|
Loss on modification of debt
|
0.3
|
|
|
—
|
|
|
—
|
|
Other income, net
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
(Loss) income from continuing operations before income
taxes
|
(2.3
|
)
|
|
(6.1
|
)
|
|
0.8
|
|
Income (benefit) tax expense
|
10.1
|
|
|
(1.4
|
)
|
|
0.5
|
|
(Loss) income from continuing operations
|
(12.4
|
)
|
|
(4.7
|
)
|
|
0.3
|
|
Income (Loss) from discontinued operations, net of tax
|
0.5
|
|
|
(4.8
|
)
|
|
0.6
|
|
Net (loss) income
|
(11.9)%
|
|
|
(9.5
|
)%
|
|
0.9%
|
|
|
Year ended December 31,
|
||||||||||
|
2013
|
|
2012 (c)
|
|
2011 (c)
|
||||||
|
(Amounts in thousands)
|
||||||||||
Revenue from services:
|
|
|
|
|
|
||||||
Nurse and allied staffing
|
$
|
278,973
|
|
|
$
|
277,754
|
|
|
$
|
278,793
|
|
Physician staffing
|
121,371
|
|
|
123,545
|
|
|
118,781
|
|
|||
Other human capital management services
|
37,967
|
|
|
41,336
|
|
|
41,803
|
|
|||
|
$
|
438,311
|
|
|
$
|
442,635
|
|
|
$
|
439,377
|
|
|
|
|
|
|
|
||||||
Contribution income (a):
|
|
|
|
|
|
|
|
|
|||
Nurse and allied staffing
|
$
|
19,188
|
|
|
$
|
11,360
|
|
|
$
|
20,078
|
|
Physician staffing
|
8,617
|
|
|
10,652
|
|
|
11,320
|
|
|||
Other human capital management services
|
746
|
|
|
1,944
|
|
|
3,172
|
|
|||
|
28,551
|
|
|
23,956
|
|
|
34,570
|
|
|||
|
|
|
|
|
|
||||||
Unallocated corporate overhead
|
22,286
|
|
|
22,574
|
|
|
20,300
|
|
|||
Depreciation
|
3,886
|
|
|
4,905
|
|
|
5,965
|
|
|||
Amortization
|
2,294
|
|
|
2,263
|
|
|
2,394
|
|
|||
Acquisition costs
|
473
|
|
|
—
|
|
|
—
|
|
|||
Restructuring costs
|
484
|
|
|
—
|
|
|
—
|
|
|||
Legal settlement charge
|
750
|
|
|
—
|
|
|
—
|
|
|||
Impairment charges (b)
|
6,400
|
|
|
18,732
|
|
|
—
|
|
|||
(Loss) income from operations
|
$
|
(8,022
|
)
|
|
$
|
(24,518
|
)
|
|
$
|
5,911
|
|
(a)
|
We define contribution income as (loss) income from operations before depreciation, amortization, acquisition costs, restructuring costs, legal settlement charges, impairment charges, and other corporate expenses not specifically identified to a reporting segment. Contribution income is a measure used by management to assess operations and is provided in accordance with the
Segment Reporting
Topic of the FASB ASC.
|
(b)
|
In 2013, we refined our methodology for allocating certain corporate overhead expenses to its nurse and allied staffing segment expenses to more accurately reflect this segment’s profitability. Prior year information has been reclassified to conform to current year presentation.
|
(c)
|
During the year ended December 31, 2012, we recognized pretax impairment charges in our continuing operations of
$18.7
million. Refer to discussion in Note 4-Goodwill, Trade Names and Other Identifiable Intangible Assets.
|
Commitments
|
Total
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
||||||||||||||
|
(Unaudited, amounts in thousands)
|
||||||||||||||||||||||||||
Asset-based revolving credit facility (a)
|
$
|
8,400
|
|
|
$
|
8,400
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Capital lease obligations
|
176
|
|
|
83
|
|
|
65
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Operating leases obligations (b)
|
19,065
|
|
|
4,267
|
|
|
3,915
|
|
|
3,958
|
|
|
3,017
|
|
|
1,305
|
|
|
2,603
|
|
|||||||
|
$
|
27,641
|
|
|
$
|
12,750
|
|
|
$
|
3,980
|
|
|
$
|
3,986
|
|
|
$
|
3,017
|
|
|
$
|
1,305
|
|
|
$
|
2,603
|
|
(a)
|
Under our credit facility, we are required to comply with certain financial covenants. Our inability to comply with the required covenants or other provisions could result in default under our credit facility. In the event of any such default and our inability to obtain a waiver of the default, all amounts outstanding under the credit facility could be declared immediately due and payable.
|
(b)
|
Represents future minimum lease payments associated with operating lease agreements with original terms of more than one year.
|
1)
|
Our business acquisitions typically result in the recording of goodwill and other intangible assets, and the recorded values of those assets may become impaired in the future. The determination of the value of such intangible assets requires management to make estimates and assumptions that affect our consolidated financial statements. For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish their recorded values. In accordance with the
Intangibles – Goodwill and Other
Topic of the FASB ASC and the
Property, Plant and Equipment/Impairment of Disposal of Long-Lived Assets
Topic of the FASB ASC, we perform annual impairment analysis to assess the recoverability of the goodwill and indefinite-lived intangible assets.
|
2)
|
We maintain accruals for our health, workers’ compensation and professional liability claims that are partially self-insured and are classified as accrued compensation and benefits on our consolidated balance sheets. We determine the adequacy of these accruals by periodically evaluating our historical experience and trends related to health, workers’ compensation and professional liability claims and payments, based on actuarial models, as well as industry experience and trends. If such models indicate that our accruals are overstated or understated, we will reduce or provide for additional accruals as appropriate. Healthcare insurance accruals have fluctuated with increases or decreases in the average number of temporary healthcare professionals on assignment as well as actual company experience and increases in national healthcare costs. As of December 31, 2013 and 2012, we had
$1.4 million
and $2.0 million accrued, respectively, for incurred but not reported health insurance claims. Corporate and field employees are covered through a partially self-insured health plan. Workers’ compensation insurance accruals can fluctuate over time due to the number of employees and inflation, as well as additional exposures arising from the current policy year. As of December 31, 2013, we had $2.8 million accrued for case reserves and for incurred but not reported workers’ compensation claims, net of insurance receivables, a decrease of $0.6 million over the amount accrued at December 31, 2012. The accrual for workers’ compensation is based on an actuarial model which is prepared or reviewed by an independent actuary. As of December 31, 2013, and 2012, we had $7.9 million and $8.9 million accrued, respectively, for case reserves and for incurred but not reported professional liability claims, net of insurance receivables. The accrual for professional liability is based on an actuarial models which are prepared or reviewed by an independent actuary annually.
|
3)
|
We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments, which results in a provision for bad debt expense. We determine the adequacy of this allowance by continually evaluating individual customer receivables, considering the customer’s financial condition, credit history and current economic conditions. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. We write off specific accounts based on an ongoing review of collectability as well as our past experience with the customer. Historically, losses on uncollectible accounts have not exceeded our allowances. As of December 31, 2013, our allowance for doubtful accounts was $1.7 million.
|
4)
|
We are subject to various claims and legal actions in the ordinary course of our business. Some of these matters include professional liability and employee-related matters. Our healthcare facility clients may also become subject to claims, governmental inquiries and investigations and legal actions to which we may become a party relating to services provided by our professionals. From time to time, and depending upon the particular facts and circumstances, we may be subject to indemnification obligations under our contracts with our healthcare facility clients relating to these matters. Material pending legal proceedings brought against us, if any, other than ordinary routine litigation incidental to the business are described in Legal Proceedings.
|
5)
|
We account for income taxes in accordance with the
Income Taxes
Topic of the FASB ASC. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and other loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled
.
As of December 31, 2013, we have deferred tax assets related to certain federal, state and foreign net operating loss carryforwards of $32.3 million. The state carryforwards will expire between 2013 and 2032. The federal carryforwards expire between 2030 and 2032. The majority of the foreign carryforwards are in a jurisdiction with no expiration.
|
6)
|
Our sales and other non-income tax filings are subject to routine audits by authorities in the jurisdictions where we conduct business, which may result in assessments of additional taxes. As a result of a state administrative ruling, we determined that additional sales and non-income taxes were probable of being assessed for certain states. The total amount accrued is based on our best estimate of our probable liability and is based on current available information and interpretation of relevant tax regulations.
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
Item 8.
|
Financial Statements and Supplementary Data.
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
•
|
Increasing its reliance on third party experts for the review of non-routine accounting transactions.
|
•
|
Expanding the Company’s complement of qualified accounting staff and implementing process improvements that permit more effective and efficient management of the accounting and financial reporting processes, including those related to non-routine transactions.
|
|
/s/ Ernst & Young LLP
|
|
Certified Public Accountants
|
Boca Raton, Florida
|
|
March 17, 2014
|
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters.
|
Plan Category
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights (a)
|
|
Weighted-average
exercise price of
outstanding options,
warrants and
rights (b)
|
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a)) (c)
|
||||
Equity compensation plans approved by
security holders
|
1,546,299
|
|
|
$
|
8.93
|
|
|
789,052
|
|
Equity compensation plans not approved by
security holders
|
None
|
|
|
N/A
|
|
|
N/A
|
|
|
Total
|
1,546,299
|
|
|
$
|
8.93
|
|
|
789,052
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accountant Fees and Services.
|
Item 15.
|
Exhibits, Financial Statement Schedules.
|
|
CROSS COUNTRY HEALTHCARE, INC.
|
|
|
|
|
|
By:
|
/s/ William J. Grubbs
|
|
|
Name: William J. Grubbs
|
|
|
Title: Chief Executive Officer and President
|
|
|
Date: March 17, 2014
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ William J. Grubbs
|
|
President, Chief Executive Officer,
|
|
March 17, 2014
|
William J. Grubbs
|
|
Director (Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Emil Hensel
|
|
Chief Financial Officer
|
|
March 17, 2014
|
Emil Hensel
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Nicholas Buscemi III
|
|
Chief Accounting Officer and Corporate Controller
|
|
March 17, 2014
|
Nicholas Buscemi III
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Thomas C. Dircks
|
|
Director
|
|
March 17, 2014
|
Thomas C. Dircks
|
|
|
|
|
|
|
|
|
|
/s/ W. Larry Cash
|
|
Director
|
|
March 17, 2014
|
W. Larry Cash
|
|
|
|
|
|
|
|
|
|
/s/ Richard M. Mastaler
|
|
Director
|
|
March 17, 2014
|
Richard M. Mastaler
|
|
|
|
|
|
|
|
|
|
/s/ Gale Fitzgerald
|
|
Director
|
|
March 17, 2014
|
Gale Fitzgerald
|
|
|
|
|
|
|
|
|
|
/s/ Joseph A. Trunfio
|
|
Director
|
|
March 17, 2014
|
Joseph A. Trunfio
|
|
|
|
|
No.
|
|
Description
|
3.1
|
|
Amended and Restated Certificate of Incorporation of the Registrant (1)
|
3.2
|
|
Amended and Restated By-laws of the Registrant
|
4.1
|
|
Form of specimen common stock certificate (1)
|
4.2
|
|
Amended and Restated Stockholders Agreement, dated August 23, 2001, among the Registrant, a Delaware corporation, the CEP Investors and the Investors (1)
|
4.3
|
|
Registration Rights Agreement, dated as of October 29, 1999, among the Registrant, a Delaware corporation, and the CEP Investors and the MSDWCP Investors (1)
|
4.4
|
|
Amendment to the Registration Rights Agreement, dated as of August 23, 2001, among the Registrant, a Delaware corporation, and the CEP Investors and the MSDWCP Investors (1)
|
4.5
|
|
Shareholders Agreement, dated as of August 23, 2001, among the Registrant, Joseph Boshart and Emil Hensel and the Financial Investors (1)
|
10.1
|
|
Employment Agreement, dated as of June 24, 1999, between Joseph Boshart and the Registrant (1)(6)
|
10.2
|
|
Employment Agreement, dated as of June 24, 1999, between Emil Hensel and the Registrant (1)(6)
|
10.3
|
|
Employment Agreement, dated as of March 20, 2013, between William J. Grubbs and the Registrant (6)(19)
|
10.4
|
|
222 Building Standard Office Lease between Clayton Investors Associates, LLC and Cejka & Company (1)
|
10.5
|
|
Cross Country Healthcare, Inc. 2007 Stock Incentive Plan adopted April 5, 2007 (2)(8)
|
10.6
|
|
Cross Country, Inc. Deferred Compensation Plan (2)(6)
|
10.7
|
|
Restricted Stock Agreement between Company and Joseph A. Boshart (2)(6)
|
10.8
|
|
Restricted Stock Agreement between Company and Emil Hensel (2)(6)
|
10.9
|
|
Restricted Stock Agreement between Company and Vickie Anenberg (2)(6)
|
10.10
|
|
Restricted Stock Agreement between Company and Jonathan Ward (2)(6)
|
10.11
|
|
Form of Incentive Stock Option Agreement (3)(6)
|
10.12
|
|
First Amendment to Lease Agreement, dated February 24, 2005, between Blevens Family Storage, L.P., and Cross Country Seminars, Inc. (4)
|
10.13
|
|
Lease Agreement, dated February 15, 2006, between MedStaff, Inc. and Campus Investors D Building, L.P. (5)
|
10.14
|
|
Lease Guaranty Agreement by and between Cross Country Healthcare, Inc. and Campus Investors D Building, L.P. dated February 17, 2006. (5)
|
10.15
|
|
Lease Agreement between Cornerstone Opportunity Ventures, LLC and Cejka Search, Inc., dated February 2, 2007 (7)
|
10.16
|
|
Lease Agreement between Self Service Mini Storage, L.P. and Cross Country Education, LLC, dated February 2, 2007 (7)
|
10.17
|
|
Second Amendment to Lease Agreement by and between Meridian Commercial Properties Limited Partnership and Cross Country Healthcare, Inc., dated February 17, 2007 (7)
|
10.18
|
|
Lease Agreement dated as of September 21, 2004, by and between TGS American Realty Limited Partnership and Medical Doctor Associates, Inc. (10)
|
10.19
|
|
First Amendment to Lease Agreement dated as of September 1, 2007, by and between Cornerstone Opportunity Ventures, LLC and Cejka Search, Inc. (10)
|
10.20
|
|
Employment Agreement, dated as of September 9, 2008, by and between Jim Ginter and StoneCo H, Inc. (6)(12)
|
10.21
|
|
Employment Agreement, dated as of September 9, 2008, by and between Mike Pretiger and StoneCo H, Inc. (6)(12)
|
10.22
|
|
Employment Agreement, dated as of September 9, 2008, by and between Anne Anderson and StoneCo H, Inc. (6)(12)
|
No.
|
|
Description
|
10.23
|
|
Form of Restricted Stock Agreement under Cross Country Healthcare, Inc. 2007 Stock Incentive Plan (6)(11)(12)
|
10.24
|
|
Form of Stock Appreciation Rights Agreement under Cross Country Healthcare, Inc. 2007 Stock Incentive Plan (6)(9)(12)
|
10.25
|
|
Amended and Restated Executive Severance Policy of Cross Country Healthcare, Inc. dated as of January 1, 2008 (6)(12)
|
10.26
|
|
Lease Agreement, dated July 1, 2010, between Goldberg Brothers Real Estate LLC and MCVT, Inc. (13)
|
10.27
|
|
Leave and License Agreement dated October 15, 2010 between Cross Country InfoTech, Ltd. And ShriSubhashDattatrayaAngal (14)
|
10.28
|
|
Lease Agreement, dated July 18, 2013, between Peachtree II and III, LLC and MDA Holdings, Inc. (21)
|
10.29
|
|
Amended and Restated Executive Severance Plan of Cross Country Healthcare, Inc. (15)
|
10.30
|
|
First Amendment to Lease Agreement, dated April 22, 2011, between Self Service Mini Storage, L.P. and Cross Country Education, LLC, dated February 2, 2007 (16)
|
10.31
|
|
Loan and Security Agreement, dated January 9, 2013, by and among Cross Country Healthcare, Inc. and certain of its subsidiaries, as Borrowers, the Lenders referenced therein, and Bank of America, N.A., as Agent (17)
|
10.32
|
|
Stock Purchase Agreement, dated February 2, 2013, by and among ICON Clinical Research, Inc. and ICON Clinical Research UK Limited, as Buyers, and Cross Country Healthcare, Inc., Local Staff, LLC and Cross Country Healthcare UK Holdco Ltd., as Sellers (18)
|
10.33
|
|
Lease Agreement, dated March 1, 1999 by and between Medical Doctor Associates, Inc. and ADKS Realty Corporation (10)
|
10.34
|
|
Asset Purchase Agreement, dated December 2, 2013, between Local Staff, LLC, as Buyer, Cross Country Healthcare, Inc., as Parent and On Assignment Staffing Services, Inc., Assignment Ready, Inc., and On Assignment, Inc., collectively as Seller. (20)
|
10.35
|
|
Amended and restated Stock Incentive Plan of Cross Country Healthcare, Inc. (6)(22)
|
10.36
|
|
Registration Statement for registration of additional common stock of Cross Country Healthcare, Inc., dated May 10, 2013 (23)
|
10.37
|
|
Employment Agreement, dated March 3, 2014, between William Burns and Cross Country Healthcare (6)*
|
10.38
|
|
Transition Agreement, dated March 3, 2014, between Emil Hensel and Cross Country Healthcare (6)*
|
14.1
|
|
Code of Ethics (3)
|
*21.1
|
|
List of subsidiaries of the Registrant
|
*23.1
|
|
Consent of Independent Registered Public Accounting Firm
|
*31.1
|
|
Certification Pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by William J. Grubbs, President and Chief Executive Officer
|
*31.2
|
|
Certification Pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Emil Hensel, Chief Financial Officer
|
*32.1
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by William J. Grubbs, Chief Executive Officer
|
*32.2
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Emil Hensel, Chief Financial Officer
|
**101.INS
|
|
XBRL Instance Document
|
**101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
**101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
**101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
**101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
**101.PRE
|
|
PRE XBRL Taxonomy Extension Presentation Linkbase Document
|
(1)
|
Previously filed as an exhibit to the Company’s Registration Statement on Form S-1/A, Commission File No. 333-83450, and incorporated by reference herein.
|
(2)
|
Previously filed as exhibits in the Company’s Form 10-K for the year ended December 31, 2002 and incorporated by reference herein.
|
(3)
|
Previously filed as exhibits in the Company’s Form 10-K for the year ended December 31, 2004 and incorporated by reference herein.
|
(4)
|
Previously filed as an exhibit in the Company’s Form 10-Q for the quarter ended June 30, 2005 and incorporated by reference herein.
|
(5)
|
Previously filed as exhibits in the Company’s Form 10-K for the year ended December 31, 2005 and incorporated by reference herein.
|
(6)
|
Management contract or compensatory plan or arrangement.
|
(7)
|
Previously filed as exhibits in the Company’s Form 10-K for the year ended December 31, 2006 and incorporated by reference herein.
|
(8)
|
Previously filed as exhibit in the Company’s Form 8-K dated May 15, 2007 and incorporated by reference herein.
|
(9)
|
Previously filed as exhibit in the Company’s Form 8-K dated October 15, 2007 and incorporated by reference herein.
|
(10)
|
Previously filed as an exhibit in the Company’s Form 10-Q for the quarter ended September 30, 2008 and incorporated by reference herein.
|
(11)
|
Previously filed as an exhibit in the Company’s S-8 dated August 15, 2007 and incorporated by reference herein.
|
(12)
|
Previously filed as exhibits in the Company’s Form 10-K for the year ended December 31, 2008 and incorporated by reference herein.
|
(13)
|
Previously filed as an exhibit in the Company’s Form 10-Q for the quarter ended June 30, 2010 and incorporated by reference herein.
|
(14)
|
Previously filed as an exhibit in the Company’s Form 10-Q for the quarter ended September 30, 2010 and incorporated by reference herein.
|
(15)
|
Previously filed as an exhibit in the Company’s Form 8-K dated May 28, 2010 and incorporated by reference herein.
|
(16)
|
Previously filed as an exhibit in the Company’s Form 10-Q for the quarter ended June 30, 2011 and incorporated by reference herein.
|
(17)
|
Previously filed as an exhibit in the Company’s Form 8-K dated January 11, 2013 and incorporated herein by reference.
|
(18)
|
Previously filed as an exhibit in the Company’s Form 8-K dated February 5 and incorporated herein by reference.
|
(19)
|
Previously filed as an exhibit in the Company’s Form 8-K dated March 22, 2013 and incorporated herein by reference.
|
(20)
|
Previously filed as an exhibit in the Company’s Form 8-K dated December 3, 2013 and incorporated herein by reference.
|
(21)
|
Previously filed as an exhibit in the Company’s Form 10-Q for the quarter ended June 30, 2013 and incorporated herein by reference.
|
(22)
|
Previously filed in the Company’s Form DEF14A on March 22, 2013 and incorporated herein by reference.
|
(23)
|
Previously filed in the Company’s Form S-8 on May 10, 2013 and incorporated herein by reference.
|
|
Page
|
Cross Country Healthcare, Inc.
|
|
Financial Statement Schedule
|
|
|
/s/ Ernst & Young LLP
|
|
Certified Public Accountants
|
Boca Raton, Florida
|
|
March 17, 2014
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
8,054,613
|
|
|
$
|
10,462,692
|
|
Accounts receivable, less allowance for doubtful accounts
of $1,650,973 in 2013 and $1,841,136 in 2012
|
60,750,181
|
|
|
62,674,176
|
|
||
Deferred tax assets
|
—
|
|
|
5,983,483
|
|
||
Income taxes receivable
|
537,912
|
|
|
585,709
|
|
||
Prepaid expenses
|
6,162,730
|
|
|
5,580,473
|
|
||
Insurance recovery receivable
|
3,886,285
|
|
|
5,483,889
|
|
||
Indemnity escrow receivable
|
3,750,000
|
|
|
—
|
|
||
Assets held for sale
|
—
|
|
|
46,970,964
|
|
||
Other current assets
|
793,197
|
|
|
1,049,275
|
|
||
Total current assets
|
83,934,918
|
|
|
138,790,661
|
|
||
Property and equipment, net of accumulated depreciation of
$44,778,602 in 2013 and $41,917,771 in 2012
|
6,170,499
|
|
|
8,234,812
|
|
||
Trade Names, net
|
42,301,331
|
|
|
48,701,331
|
|
||
Goodwill
|
77,265,907
|
|
|
62,712,109
|
|
||
Other identifiable intangible assets, net
|
26,197,905
|
|
|
14,491,982
|
|
||
Debt issuance costs, net of accumulated amortization of $221,588 in 2013 and $3,594,511 in 2012
|
463,594
|
|
|
1,609,954
|
|
||
Non-current deferred tax assets
|
—
|
|
|
22,760,052
|
|
||
Non-current insurance recovery receivable
|
10,913,527
|
|
|
8,210,139
|
|
||
Non-current security deposits
|
996,885
|
|
|
412,515
|
|
||
Total assets
|
$
|
248,244,566
|
|
|
$
|
305,923,555
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and accrued expenses
|
$
|
10,272,039
|
|
|
$
|
10,129,605
|
|
Accrued compensation and benefits
|
19,148,312
|
|
|
21,650,233
|
|
||
Current portion of long-term debt and capital lease obligations
|
8,483,088
|
|
|
33,682,348
|
|
||
Sales tax payable
|
2,403,994
|
|
|
1,545,062
|
|
||
Liabilities related to assets held for sale
|
—
|
|
|
2,834,516
|
|
||
Deferred tax liabilities
|
534,827
|
|
|
—
|
|
||
Other current liabilities
|
4,062,875
|
|
|
2,744,341
|
|
||
Total current liabilities
|
44,905,135
|
|
|
72,586,105
|
|
||
Long-term debt and capital lease obligations
|
93,231
|
|
|
176,309
|
|
||
Non-current deferred tax liabilities
|
16,849,051
|
|
|
—
|
|
||
Long-term accrued claims
|
18,303,096
|
|
|
16,347,342
|
|
||
Long-term unrecognized tax benefits
|
4,012,524
|
|
|
4,655,720
|
|
||
Other long-term liabilities
|
3,414,949
|
|
|
3,035,290
|
|
||
Total liabilities
|
87,577,986
|
|
|
96,800,766
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
|
|
||
Common stock—$0.0001 par value; 100,000,000 shares authorized; 31,085,289 and 30,902,314 shares issued and outstanding at December 31, 2013 and 2012, respectively
|
3,109
|
|
|
3,090
|
|
||
Additional paid-in capital
|
246,324,580
|
|
|
244,924,076
|
|
||
Accumulated other comprehensive loss
|
(970,113
|
)
|
|
(3,082,704
|
)
|
||
Accumulated deficit
|
(84,690,996
|
)
|
|
(32,721,673
|
)
|
||
Total stockholders' equity
|
160,666,580
|
|
|
209,122,789
|
|
||
Total liabilities and stockholders' equity
|
$
|
248,244,566
|
|
|
$
|
305,923,555
|
|
|
Year ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Revenue from services
|
$
|
438,310,716
|
|
|
$
|
442,635,146
|
|
|
$
|
439,377,460
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|||
Direct operating expenses
|
324,850,878
|
|
|
331,050,041
|
|
|
319,988,729
|
|
|||
Selling, general and administrative expenses
|
106,116,849
|
|
|
109,416,687
|
|
|
104,544,116
|
|
|||
Bad debt expense
|
1,078,195
|
|
|
786,107
|
|
|
574,457
|
|
|||
Depreciation
|
3,885,688
|
|
|
4,904,845
|
|
|
5,965,002
|
|
|||
Amortization
|
2,294,077
|
|
|
2,263,556
|
|
|
2,393,722
|
|
|||
Acquisition costs
|
473,488
|
|
|
—
|
|
|
—
|
|
|||
Restructuring costs
|
483,578
|
|
|
—
|
|
|
—
|
|
|||
Legal settlement charge
|
750,000
|
|
|
—
|
|
|
—
|
|
|||
Impairment charges
|
6,400,000
|
|
|
18,732,407
|
|
|
—
|
|
|||
Total operating expenses
|
446,332,753
|
|
|
467,153,643
|
|
|
433,466,026
|
|
|||
|
|
|
|
|
|
||||||
(Loss) income from continuing operations
|
(8,022,037
|
)
|
|
(24,518,497
|
)
|
|
5,911,434
|
|
|||
|
|
|
|
|
|
||||||
Other expenses (income):
|
|
|
|
|
|
|
|
|
|||
Foreign exchange gain
|
(132,058
|
)
|
|
(62,231
|
)
|
|
(263,967
|
)
|
|||
Interest expense
|
849,149
|
|
|
2,341,299
|
|
|
2,856,043
|
|
|||
Loss on early extinguishment and modification of debt
|
1,419,010
|
|
|
81,503
|
|
|
—
|
|
|||
Other (income) expense, net
|
(118,675
|
)
|
|
15,790
|
|
|
(297,728
|
)
|
|||
(Loss) income from continuing operations before income taxes
|
(10,039,463
|
)
|
|
(26,894,858
|
)
|
|
3,617,086
|
|
|||
Income tax expense (benefit)
|
44,210,548
|
|
|
(6,149,889
|
)
|
|
2,069,447
|
|
|||
(Loss) income from continuing operations
|
(54,250,011
|
)
|
|
(20,744,969
|
)
|
|
1,547,639
|
|
|||
Income (loss) from discontinued operations, net of income taxes
|
2,280,688
|
|
|
(21,476,528
|
)
|
|
2,550,210
|
|
|||
Net (loss) income
|
$
|
(51,969,323
|
)
|
|
$
|
(42,221,497
|
)
|
|
$
|
4,097,849
|
|
|
|
|
|
|
|
||||||
Basic (loss) income per common share from:
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
$
|
(1.75
|
)
|
|
$
|
(0.67
|
)
|
|
$
|
0.05
|
|
Discontinued operations
|
0.07
|
|
|
(0.70
|
)
|
|
0.08
|
|
|||
Net (loss) income
|
$
|
(1.68
|
)
|
|
$
|
(1.37
|
)
|
|
$
|
0.13
|
|
|
|
|
|
|
|
||||||
Diluted (loss) income per common share from:
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
$
|
(1.75
|
)
|
|
$
|
(0.67
|
)
|
|
$
|
0.05
|
|
Discontinued operations
|
0.07
|
|
|
(0.70
|
)
|
|
0.08
|
|
|||
Net (loss) income
|
$
|
(1.68
|
)
|
|
$
|
(1.37
|
)
|
|
$
|
0.13
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding—basic
|
31,009,218
|
|
|
30,842,723
|
|
|
31,146,165
|
|
|||
|
|
|
|
|
|
||||||
Weighted average common shares outstanding—diluted
|
31,009,218
|
|
|
30,842,723
|
|
|
31,192,016
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net (loss) income
|
$
|
(51,969,323
|
)
|
|
$
|
(42,221,497
|
)
|
|
$
|
4,097,849
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
(386,094
|
)
|
|
267,809
|
|
|
(939,000
|
)
|
|||
Reclassification of currency translation adjustments
related to sale of clinical trial services business (see Note 2 - Summary of Significant Accounting Policies)
|
2,336,201
|
|
|
—
|
|
|
—
|
|
|||
Write-down of marketable securities
|
—
|
|
|
38,515
|
|
|
—
|
|
|||
Net change in fair value of marketable securities
|
—
|
|
|
(915
|
)
|
|
(55,815
|
)
|
|||
Other comprehensive income (loss), before tax
|
1,950,107
|
|
|
305,409
|
|
|
(994,815
|
)
|
|||
|
|
|
|
|
|
||||||
Income tax (benefit) expense related to
items of other comprehensive (loss) income
|
(162,484
|
)
|
|
14,951
|
|
|
(22,384
|
)
|
|||
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax
|
2,112,591
|
|
|
290,458
|
|
|
(972,431
|
)
|
|||
Comprehensive (loss) income
|
$
|
(49,856,732
|
)
|
|
$
|
(41,931,039
|
)
|
|
$
|
3,125,418
|
|
|
Common Stock
|
|
Additional
Paid-In Capital
|
|
Accumulated Other Total
Comprehensive Income (Loss)
|
|
(Accumulated Deficit) Retained Earnings
|
|
Stockholders’ Equity
|
|||||||||||||
|
Shares
|
|
Dollars
|
|||||||||||||||||||
Balance at December 31, 2010
|
31,102,682
|
|
|
$
|
3,110
|
|
|
$
|
243,004,522
|
|
|
$
|
(2,400,731
|
)
|
|
$
|
5,401,975
|
|
|
$
|
246,008,876
|
|
Repurchase of stock for tax withholdings
|
(31,263
|
)
|
|
(3
|
)
|
|
(221,593
|
)
|
|
—
|
|
|
—
|
|
|
(221,596
|
)
|
|||||
Vesting of restricted stock
|
167,647
|
|
|
17
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Tax deficit of share-based compensation
|
—
|
|
|
—
|
|
|
(272,828
|
)
|
|
—
|
|
|
—
|
|
|
(272,828
|
)
|
|||||
Equity compensation
|
—
|
|
|
—
|
|
|
2,895,012
|
|
|
—
|
|
|
—
|
|
|
2,895,012
|
|
|||||
Stock repurchase and retirement
|
(427,043
|
)
|
|
(43
|
)
|
|
(2,234,542
|
)
|
|
—
|
|
|
—
|
|
|
(2,234,585
|
)
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(939,000
|
)
|
|
—
|
|
|
(939,000
|
)
|
|||||
Net change in fair value of marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
(33,431
|
)
|
|
—
|
|
|
(33,431
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,097,849
|
|
|
4,097,849
|
|
|||||
Balance at December 31, 2011
|
30,812,023
|
|
|
3,081
|
|
|
243,170,554
|
|
|
(3,373,162
|
)
|
|
9,499,824
|
|
|
249,300,297
|
|
|||||
Vesting of restricted stock
|
161,944
|
|
|
16
|
|
|
(152,446
|
)
|
|
—
|
|
|
—
|
|
|
(152,430
|
)
|
|||||
Tax deficit of share-based compensation
|
—
|
|
|
—
|
|
|
(314,314
|
)
|
|
—
|
|
|
—
|
|
|
(314,314
|
)
|
|||||
Equity compensation
|
—
|
|
|
—
|
|
|
2,594,523
|
|
|
—
|
|
|
—
|
|
|
2,594,523
|
|
|||||
Stock repurchase and retirement
|
(71,653
|
)
|
|
(7
|
)
|
|
(374,241
|
)
|
|
—
|
|
|
—
|
|
|
(374,248
|
)
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
267,809
|
|
|
—
|
|
|
267,809
|
|
|||||
Net change in fair value of marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
22,649
|
|
|
—
|
|
|
22,649
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,221,497
|
)
|
|
(42,221,497
|
)
|
|||||
Balance at December 31, 2012
|
30,902,314
|
|
|
3,090
|
|
|
244,924,076
|
|
|
(3,082,704
|
)
|
|
(32,721,673
|
)
|
|
209,122,789
|
|
|||||
Exercise of stock options
|
2,362
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Vesting of restricted stock
|
180,613
|
|
|
19
|
|
|
(300,551
|
)
|
|
—
|
|
|
—
|
|
|
(300,532
|
)
|
|||||
Tax deficit of share-based compensation
|
—
|
|
|
—
|
|
|
(398,886
|
)
|
|
—
|
|
|
—
|
|
|
(398,886
|
)
|
|||||
Equity compensation
|
—
|
|
|
—
|
|
|
2,099,941
|
|
|
—
|
|
|
—
|
|
|
2,099,941
|
|
|||||
Foreign currency translation adjustment, net of deferred taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(223,610
|
)
|
|
—
|
|
|
(223,610
|
)
|
|||||
Reclassification of currency translation adjustments related to sale of clinical trial services business
|
—
|
|
|
—
|
|
|
—
|
|
|
2,336,201
|
|
|
—
|
|
|
2,336,201
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51,969,323
|
)
|
|
(51,969,323
|
)
|
|||||
Balance at December 31, 2013
|
31,085,289
|
|
|
$
|
3,109
|
|
|
$
|
246,324,580
|
|
|
$
|
(970,113
|
)
|
|
$
|
(84,690,996
|
)
|
|
$
|
160,666,580
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(51,969,323
|
)
|
|
$
|
(42,221,497
|
)
|
|
$
|
4,097,849
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Bad debt expense
|
1,082,920
|
|
|
870,715
|
|
|
578,805
|
|
|||
Depreciation
|
3,885,688
|
|
|
5,566,184
|
|
|
6,790,677
|
|
|||
Amortization
|
2,294,077
|
|
|
3,381,743
|
|
|
3,493,408
|
|
|||
Impairment charges
|
6,400,000
|
|
|
54,132,407
|
|
|
—
|
|
|||
Loss on early extinguishment and modification of debt
|
1,419,010
|
|
|
81,503
|
|
|
—
|
|
|||
Deferred income tax expense (benefit)
|
45,900,296
|
|
|
(18,520,360
|
)
|
|
3,052,909
|
|
|||
Amortization of debt issuance costs
|
233,256
|
|
|
605,558
|
|
|
913,509
|
|
|||
Equity compensation
|
2,099,941
|
|
|
2,594,523
|
|
|
2,895,012
|
|
|||
Gain on sale of clinical trial services business
|
(3,968,714
|
)
|
|
—
|
|
|
—
|
|
|||
Debt financing costs
|
—
|
|
|
279,005
|
|
|
—
|
|
|||
Other noncash costs
|
11,890
|
|
|
543,296
|
|
|
22,832
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
2,036,387
|
|
|
(4,255,411
|
)
|
|
(7,973,162
|
)
|
|||
Prepaid expenses and other assets
|
(1,847,999
|
)
|
|
(444,351
|
)
|
|
1,878,943
|
|
|||
Income taxes
|
(138,401
|
)
|
|
1,748,750
|
|
|
4,310,626
|
|
|||
Accounts payable and accrued expenses
|
(319,856
|
)
|
|
4,128,000
|
|
|
(1,327,040
|
)
|
|||
Other liabilities
|
1,539,840
|
|
|
1,656,065
|
|
|
(438,168
|
)
|
|||
Net cash provided by operating activities
|
8,659,012
|
|
|
10,146,130
|
|
|
18,296,200
|
|
|||
|
|
|
|
|
|
||||||
Investing activities
|
|
|
|
|
|
|
|
|
|||
Proceeds from sale of business segment, net of cash sold and transaction costs
|
45,655,319
|
|
|
—
|
|
|
—
|
|
|||
Acquisition of assets of On Assignment, Inc.
|
(28,700,000
|
)
|
|
—
|
|
|
—
|
|
|||
Purchases of property and equipment
|
(1,750,663
|
)
|
|
(2,218,877
|
)
|
|
(3,998,129
|
)
|
|||
Liquidation of foreign cash investments
|
—
|
|
|
2,652,335
|
|
|
—
|
|
|||
Other investing activities
|
—
|
|
|
(258,832
|
)
|
|
(197,907
|
)
|
|||
Net cash provided by (used in) investing activities
|
15,204,656
|
|
|
174,626
|
|
|
(4,196,036
|
)
|
|||
|
|
|
|
|
|
||||||
Financing activities
|
|
|
|
|
|
|
|
|
|||
Debt issuance costs
|
(505,905
|
)
|
|
(1,377,410
|
)
|
|
—
|
|
|||
Repurchase of stock for tax withholdings
|
(300,531
|
)
|
|
(152,430
|
)
|
|
(221,596
|
)
|
|||
Stock repurchase and retirement
|
—
|
|
|
(374,248
|
)
|
|
(2,234,585
|
)
|
|||
Proceeds from borrowing on term loan
|
—
|
|
|
25,000,000
|
|
|
—
|
|
|||
Principal payments on term loan
|
(23,125,000
|
)
|
|
(43,326,056
|
)
|
|
(14,088,284
|
)
|
|||
Borrowings under revolving credit facility
|
—
|
|
|
26,900,000
|
|
|
2,500,000
|
|
|||
Repayments on revolving credit facility
|
(10,000,000
|
)
|
|
(16,900,000
|
)
|
|
—
|
|
|||
Borrowings under asset-based revolving credit facility
|
63,444,175
|
|
|
—
|
|
|
—
|
|
|||
Repayments on asset-based revolving credit facility
|
(55,044,175
|
)
|
|
—
|
|
|
—
|
|
|||
Repayments of capital lease obligations and note payable
|
(529,884
|
)
|
|
(352,776
|
)
|
|
(191,755
|
)
|
|||
Net cash used in financing activities
|
(26,061,320
|
)
|
|
(10,582,920
|
)
|
|
(14,236,220
|
)
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash
|
(210,427
|
)
|
|
76,821
|
|
|
(172,573
|
)
|
|||
Change in cash and cash equivalents
|
(2,408,079
|
)
|
|
(185,343
|
)
|
|
(308,629
|
)
|
|||
Cash and cash equivalents at beginning of year
|
10,462,692
|
|
|
10,648,035
|
|
|
10,956,664
|
|
|||
Cash and cash equivalents at end of year
|
$
|
8,054,613
|
|
|
$
|
10,462,692
|
|
|
$
|
10,648,035
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of noncash investing and financing activities:
|
|
|
|
|
|
|
|
|
|||
Equipment purchased through capital lease obligations
|
$
|
—
|
|
|
$
|
302,316
|
|
|
$
|
312,562
|
|
Insurance premium financing
|
$
|
—
|
|
|
$
|
189,654
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|||
Interest paid
|
$
|
621,969
|
|
|
$
|
1,467,233
|
|
|
$
|
2,134,575
|
|
Income taxes paid
|
$
|
1,164,472
|
|
|
$
|
1,681,992
|
|
|
$
|
1,559,424
|
|
Income tax refunds
|
$
|
(322,512
|
)
|
|
$
|
(564,430
|
)
|
|
$
|
(4,792,495
|
)
|
•
|
The subcontractor is the primary obligor in the arrangement and is responsible for fulfillment.
|
•
|
The amount the Company earns is fixed, typically a stated percentage of the amount billed to the customer.
|
•
|
The subcontractor bears the credit risk, not the Company.
|
•
|
The Company maintains the direct contractual relationship with the customer.
|
•
|
The Company performs part of the service by credentialing all of the providers and providing them with professional liability insurance.
|
•
|
The Company establishes the price for its services.
|
•
|
The Company bears the risk and rewards of the transaction including credit risk if the customer fails to pay for services performed.
|
•
|
The Company bears the risk and rewards of the transaction including credit risk if the customer fails to pay for services performed.
|
•
|
The Company performs part of the service by being involved with the program development and handling accreditation of the courses.
|
•
|
The Company establishes the price for its service.
|
|
Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Revenue
|
$
|
7,939,150
|
|
|
$
|
67,626,715
|
|
|
$
|
64,608,763
|
|
|
|
|
|
|
|
||||||
Income (loss) from discontinued operations before gain on sale and income taxes
|
433,915
|
|
|
(30,973,520
|
)
|
|
4,613,260
|
|
|||
Gain on sale of discontinued operations
|
3,968,714
|
|
|
—
|
|
|
—
|
|
|||
Income tax (expense) benefit
|
(2,121,941
|
)
|
|
9,496,992
|
|
|
(2,063,050
|
)
|
|||
Income (loss) from discontinued operations, net of income taxes
|
$
|
2,280,688
|
|
|
$
|
(21,476,528
|
)
|
|
$
|
2,550,210
|
|
|
December 31,
2012
|
||
Assets:
|
|
||
Accounts receivable, net
|
$
|
12,553,056
|
|
Other prepaid expenses
|
485,840
|
|
|
Other current assets
|
13,771
|
|
|
Property and Equipment, net
|
364,972
|
|
|
Goodwill
|
28,175,772
|
|
|
Other intangible assets, net
|
5,335,816
|
|
|
Other long-term assets
|
41,737
|
|
|
Total assets held for sale
|
$
|
46,970,964
|
|
Liabilities:
|
|
|
|
Accounts payable and accrued expenses
|
$
|
354,453
|
|
Accrued employee compensation and benefits
|
1,478,638
|
|
|
Other current liabilities
|
984,978
|
|
|
Other non-current liabilities
|
16,447
|
|
|
Total liabilities related to assets held for sale
|
$
|
2,834,516
|
|
|
December 31, 2013
|
|
December 31, 2012
|
||||||||||||||||||||
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
||||||||||||
Intangible assets subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Databases
|
$
|
15,925,000
|
|
|
$
|
12,102,685
|
|
|
$
|
3,822,315
|
|
|
$
|
12,525,000
|
|
|
$
|
11,954,630
|
|
|
$
|
570,370
|
|
Customer relationships
|
37,304,000
|
|
|
15,125,076
|
|
|
22,178,924
|
|
|
26,904,000
|
|
|
13,089,055
|
|
|
13,814,945
|
|
||||||
Non-compete agreements
|
3,603,000
|
|
|
3,406,334
|
|
|
196,666
|
|
|
3,403,000
|
|
|
3,296,333
|
|
|
106,667
|
|
||||||
|
$
|
56,832,000
|
|
|
$
|
30,634,095
|
|
|
$
|
26,197,905
|
|
|
$
|
42,832,000
|
|
|
$
|
28,340,018
|
|
|
$
|
14,491,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Goodwill
|
|
|
|
|
|
|
$
|
77,265,907
|
|
|
|
|
|
|
|
$
|
62,712,109
|
|
|||||
Trade Names
|
|
|
|
|
|
|
42,301,331
|
|
|
|
|
|
|
|
|
48,701,331
|
|
||||||
|
|
|
|
|
|
|
$
|
119,567,238
|
|
|
|
|
|
|
|
|
$
|
111,413,440
|
|
Year Ending December 31:
|
|
||
2014
|
$
|
3,063,146
|
|
2015
|
2,906,222
|
|
|
2016
|
2,906,222
|
|
|
2017
|
2,861,481
|
|
|
2018
|
2,776,667
|
|
|
Thereafter
|
11,684,167
|
|
|
|
$
|
26,197,905
|
|
|
Nurse and
Allied Staffing
Segment
|
|
Physician
Staffing
Segment
|
|
Other Human
Capital
Management
Services
Segment
|
|
Total
|
||||||||
Balances as of December 31, 2012
|
|
|
|
|
|
|
|
||||||||
Aggregate goodwill acquired
|
$
|
259,732,408
|
|
|
$
|
43,405,047
|
|
|
$
|
19,307,062
|
|
|
$
|
322,444,517
|
|
Accumulated impairment loss (a)
|
(259,732,408
|
)
|
|
—
|
|
|
—
|
|
|
(259,732,408
|
)
|
||||
Goodwill, net of impairment loss
|
—
|
|
|
43,405,047
|
|
|
19,307,062
|
|
|
62,712,109
|
|
||||
Changes to aggregate goodwill in 2013
|
|
|
|
|
|
|
|
||||||||
Goodwill acquired (b)
|
14,553,798
|
|
|
—
|
|
|
—
|
|
|
14,553,798
|
|
||||
Balances as of December 31, 2013
|
|
|
|
|
|
|
|
||||||||
Aggregate goodwill acquired
|
274,286,206
|
|
|
43,405,047
|
|
|
19,307,062
|
|
|
336,998,315
|
|
||||
Accumulated impairment loss
|
(259,732,408
|
)
|
|
—
|
|
|
—
|
|
|
(259,732,408
|
)
|
||||
Goodwill, net of impairment loss
|
$
|
14,553,798
|
|
|
$
|
43,405,047
|
|
|
$
|
19,307,062
|
|
|
$
|
77,265,907
|
|
(a)
|
A non-cash pretax impairment charge of approximately
$241,000,000
was recorded to reduce the carrying value of goodwill to its estimated fair value in the fourth quarter of 2008 for its nurse and allied staffing business segment. The majority of the goodwill impairment was attributable to the Company’s initial capitalization in 1999, which was accounted for as an asset purchase (see Note 1 – Organization and Basis of Presentation), and subsequent nurse staffing acquisitions made through 2003. In addition, in the second quarter of 2012, a non-cash pretax impairment charge of approximately
$18,732,000
was recorded for the Company’s nurse and allied staffing reporting unit. See impairment review disclosures that follow.
|
(b)
|
Goodwill acquired from the acquisition of On Assignment's allied health business. See Note 5 - Acquisitions.
|
Other current assets
|
$
|
61,837
|
|
Property and equipment
|
160,921
|
|
|
Goodwill
|
14,553,798
|
|
|
Other intangible assets
|
14,000,000
|
|
|
Other assets
|
52,444
|
|
|
Total assets acquired
|
28,829,000
|
|
|
|
|
||
Accrued employee compensation and benefits
|
111,789
|
|
|
Total liabilities assumed
|
111,789
|
|
|
|
|
||
Net assets acquired
|
$
|
28,717,211
|
|
|
Year Ended December 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(unaudited, amounts in thousands)
|
||||||
|
|
|
|
||||
Revenue from services
|
$
|
476,456
|
|
|
$
|
482,142
|
|
|
|
|
|
||||
Net income (loss)
|
$
|
(50,336
|
)
|
|
$
|
(40,543
|
)
|
|
|
|
|
||||
Net income (loss) per common share - basic
|
$
|
(1.62
|
)
|
|
$
|
(1.31
|
)
|
|
|
|
|
||||
Net income (loss) per common share - diluted
|
$
|
(1.62
|
)
|
|
$
|
(1.31
|
)
|
|
|
|
December 31,
|
||||||
|
Useful Lives
|
|
2013
|
|
2012
|
||||
Computer equipment
|
3-5 years
|
|
$
|
12,115,305
|
|
|
$
|
12,373,042
|
|
Computer software
|
3-5 years
|
|
30,059,145
|
|
|
29,929,913
|
|
||
Office equipment
|
5-7 years
|
|
3,306,824
|
|
|
3,307,815
|
|
||
Furniture and fixtures
|
5-7 years
|
|
1,751,669
|
|
|
1,704,073
|
|
||
Leasehold improvements
|
(a)
|
|
3,716,158
|
|
|
2,837,740
|
|
||
|
|
|
50,949,101
|
|
|
50,152,583
|
|
||
Less accumulated depreciation and amortization
|
|
|
(44,778,602
|
)
|
|
(41,917,771
|
)
|
||
|
|
|
$
|
6,170,499
|
|
|
$
|
8,234,812
|
|
(a)
|
See Note 2 – Summary of Significant Accounting Policies.
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Insurance recovery receivable:
|
|
|
|
||||
Insurance recovery for workers’ compensation
|
$
|
2,093,000
|
|
|
$
|
2,427,994
|
|
Insurance recovery for professional liability
|
1,793,285
|
|
|
3,055,895
|
|
||
|
$
|
3,886,285
|
|
|
$
|
5,483,889
|
|
|
|
|
|
||||
Non-current insurance recovery receivable:
|
|
|
|
||||
Insurance recovery for workers’ compensation – long term
|
$
|
3,336,000
|
|
|
$
|
3,694,006
|
|
Insurance recovery for professional liability – long term
|
7,577,527
|
|
|
4,516,133
|
|
||
|
$
|
10,913,527
|
|
|
$
|
8,210,139
|
|
|
|
|
|
||||
Accrued compensation and benefits:
|
|
|
|
||||
Salaries and payroll taxes
|
$
|
6,874,644
|
|
|
$
|
6,931,650
|
|
Bonuses
|
2,199,559
|
|
|
1,648,979
|
|
||
Accrual for workers’ compensation claims
|
3,236,428
|
|
|
3,800,526
|
|
||
Accrual for health care benefits
|
1,385,115
|
|
|
2,005,486
|
|
||
Accrual for professional liability insurance
|
4,091,405
|
|
|
5,847,638
|
|
||
Accrual for vacation
|
1,361,161
|
|
|
1,415,954
|
|
||
|
$
|
19,148,312
|
|
|
$
|
21,650,233
|
|
|
|
|
|
||||
Long-term accrued claims:
|
|
|
|
||||
Accrual for workers’ compensation claims
|
$
|
5,076,000
|
|
|
$
|
5,748,506
|
|
Accrual for professional liability insurance
|
13,227,096
|
|
|
10,598,836
|
|
||
|
$
|
18,303,096
|
|
|
$
|
16,347,342
|
|
|
|
|
|
||||
Other long-term liabilities:
|
|
|
|
||||
Deferred compensation
|
$
|
1,638,334
|
|
|
$
|
1,471,091
|
|
Deferred rent
|
1,776,615
|
|
|
1,564,199
|
|
||
|
$
|
3,414,949
|
|
|
$
|
3,035,290
|
|
|
|
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Term loan, interest 2.72% at December 31, 2012
|
$
|
—
|
|
|
$
|
23,125,000
|
|
Revolving credit facility, interest 3.27% and 2.72% at December 31, 2013 and 2012, respectively
|
8,400,000
|
|
|
10,000,000
|
|
||
Capital lease obligations and note payable
|
176,319
|
|
|
733,657
|
|
||
Total debt
|
8,576,319
|
|
|
33,858,657
|
|
||
Less current portion
|
(8,483,088
|
)
|
|
(33,682,348
|
)
|
||
Long-term debt
|
$
|
93,231
|
|
|
$
|
176,309
|
|
Through Year Ending December 31:
|
Revolver
|
|
Capital Leases and
Note Payable |
||||
2014
|
$
|
8,400,000
|
|
|
$
|
83,088
|
|
2015
|
—
|
|
|
65,409
|
|
||
2016
|
—
|
|
|
27,822
|
|
||
2017
|
—
|
|
|
—
|
|
||
2018
|
—
|
|
|
—
|
|
||
Total
|
$
|
8,400,000
|
|
|
$
|
176,319
|
|
|
December 31, 2013
|
|
December 31, 2012
|
||||||||||||
|
Total
|
|
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
|
Total
|
|
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deferred compensation
|
$
|
1,638,334
|
|
|
$
|
1,638,334
|
|
|
$
|
1,471,091
|
|
|
$
|
1,471,091
|
|
|
December 31, 2013
|
|
December 31, 2012
|
||||
(Level 3)
|
|
|
|
||||
MDA trade names
|
$
|
28,836,000
|
|
|
n/a
|
||
Clinical trial services segment goodwill
|
n/a
|
|
$
|
28,175,722
|
|
|
December 31, 2013
|
|
December 31, 2012
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
(Level 2)
|
|
|
|
|
|
|
|
||||||||
Financial Assets:
|
|
|
|
|
|
|
|
||||||||
Escrow Receivable
|
$
|
3,750,000
|
|
|
$
|
3,700,373
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Term loan and revolver credit facility
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,125,000
|
|
|
$
|
32,654,213
|
|
Asset-based revolving credit facility (a)
|
$
|
8,400,000
|
|
|
$
|
8,400,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
Carrying value of the asset-based revolving credit facility approximates estimated fair value based on the short-term nature and the pricing at varying interest rates.
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
United States
|
$
|
(11,216,037
|
)
|
|
$
|
(28,599,481
|
)
|
|
$
|
1,384,963
|
|
Foreign
|
1,176,574
|
|
|
1,704,623
|
|
|
2,232,123
|
|
|||
|
$
|
(10,039,463
|
)
|
|
$
|
(26,894,858
|
)
|
|
$
|
3,617,086
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Continuing operations:
|
|
|
|
|
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
411,767
|
|
|
$
|
(29,716
|
)
|
State
|
540,266
|
|
|
811,760
|
|
|
355,142
|
|
|||
Foreign
|
415,806
|
|
|
1,561,492
|
|
|
632,415
|
|
|||
|
956,072
|
|
|
2,785,019
|
|
|
957,841
|
|
|||
Deferred
|
|
|
|
|
|
|
|
|
|||
Federal
|
37,821,541
|
|
|
(4,048,064
|
)
|
|
444,193
|
|
|||
State
|
5,133,844
|
|
|
(5,251,385
|
)
|
|
681,076
|
|
|||
Foreign
|
299,091
|
|
|
364,541
|
|
|
(13,663
|
)
|
|||
Total
|
43,254,476
|
|
|
(8,934,908
|
)
|
|
1,111,606
|
|
|||
|
$
|
44,210,548
|
|
|
$
|
(6,149,889
|
)
|
|
$
|
2,069,447
|
|
The total income tax provision is summarized as follows:
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
$
|
44,210,548
|
|
|
$
|
(6,149,889
|
)
|
|
$
|
2,069,447
|
|
Discontinued operations
|
2,121,941
|
|
|
(9,496,992
|
)
|
|
2,063,050
|
|
|||
|
$
|
46,332,489
|
|
|
$
|
(15,646,881
|
)
|
|
$
|
4,132,497
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Current deferred tax assets (liabilities):
|
|
|
|
||||
Accrued other and prepaid expenses
|
$
|
2,591,944
|
|
|
$
|
2,302,277
|
|
Accrued settlement charge
|
283,534
|
|
|
—
|
|
||
Allowance for doubtful accounts
|
649,790
|
|
|
808,466
|
|
||
Assets held for sale
|
—
|
|
|
2,826,663
|
|
||
Other
|
468,082
|
|
|
597,237
|
|
||
Gross deferred tax assets
|
3,993,350
|
|
|
6,534,643
|
|
||
Valuation allowance
|
(4,528,177
|
)
|
|
(551,160
|
)
|
||
Deferred tax assets (liabilities)
|
(534,827
|
)
|
|
5,983,483
|
|
||
Non-current deferred tax (liabilities) and assets:
|
|
|
|
|
|
||
Amortization
|
(1,313,863
|
)
|
|
4,377,573
|
|
||
Depreciation
|
(383,895
|
)
|
|
(1,631,495
|
)
|
||
Identifiable intangibles
|
(2,237,409
|
)
|
|
(2,409,238
|
)
|
||
Net operating loss carryforwards
|
32,531,221
|
|
|
23,616,558
|
|
||
Accrued professional liability
|
(117,842
|
)
|
|
293,815
|
|
||
Accrued workers’ compensation
|
675,201
|
|
|
768,617
|
|
||
Tax on unrepatriated earnings
|
(453,298
|
)
|
|
(1,860,656
|
)
|
||
Share-based compensation
|
1,610,346
|
|
|
2,120,269
|
|
||
Other
|
313,898
|
|
|
966,361
|
|
||
Gross deferred tax assets
|
30,624,359
|
|
|
26,241,804
|
|
||
Valuation allowance
|
(47,473,410
|
)
|
|
(3,481,752
|
)
|
||
Deferred tax (liabilities) assets
|
(16,849,051
|
)
|
|
22,760,052
|
|
||
Net deferred taxes
|
$
|
(17,383,878
|
)
|
|
$
|
28,743,535
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Tax at U.S. statutory rate
|
$
|
(3,513,812
|
)
|
|
$
|
(9,413,200
|
)
|
|
$
|
1,266,166
|
|
State taxes, net of federal benefit
|
(190,656
|
)
|
|
(1,226,475
|
)
|
|
(64,608
|
)
|
|||
Non-deductible meals and entertainment
|
449,780
|
|
|
961,933
|
|
|
290,280
|
|
|||
Foreign tax expense
|
554,314
|
|
|
(221,897
|
)
|
|
(162,448
|
)
|
|||
Valuation allowances
|
48,556,357
|
|
|
(43,657
|
)
|
|
367,068
|
|
|||
Uncertain tax positions
|
(257,488
|
)
|
|
647,720
|
|
|
174,045
|
|
|||
Deferred tax rate differential
|
312
|
|
|
150,583
|
|
|
(107,057
|
)
|
|||
Deferred tax write-offs (a)
|
221,028
|
|
|
—
|
|
|
301,765
|
|
|||
Audit settlements
|
160,026
|
|
|
—
|
|
|
(391,822
|
)
|
|||
Tax on unrepatriated earnings
|
(1,464,728
|
)
|
|
2,004,596
|
|
|
—
|
|
|||
Tax on repatriated earnings
|
—
|
|
|
519,072
|
|
|
—
|
|
|||
Tax true ups and other
|
(304,585
|
)
|
|
471,436
|
|
|
396,058
|
|
|||
Total income tax expense (benefit)
|
$
|
44,210,548
|
|
|
$
|
(6,149,889
|
)
|
|
$
|
2,069,447
|
|
(a)
|
During 2013 and 2011, the Company recorded deferred tax expense related to an overstatement of deferred tax assets for share-based payments related to prior periods of approximately
$221,000
and
$302,000
, respectively.
|
|
2013
|
|
2012
|
||||
Balance at January 1
|
$
|
5,204,000
|
|
|
$
|
4,500,000
|
|
Additions based on tax positions related to the current year
|
496,000
|
|
|
852,000
|
|
||
Additions based on tax positions related to prior years
|
681,000
|
|
|
152,000
|
|
||
Reductions based on settlements of tax positions related to the prior year
|
(292,000
|
)
|
|
(30,000
|
)
|
||
Reductions for tax positions as a result of a lapse of the applicable statute of limitations
|
(1,076,000
|
)
|
|
(263,000
|
)
|
||
Other
|
(27,000
|
)
|
|
(7,000
|
)
|
||
Balance at December 31
|
$
|
4,986,000
|
|
|
$
|
5,204,000
|
|
|
Year Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Stock appreciation rights
|
324,000
|
|
|
344,500
|
|
|
261,500
|
|
Restricted stock
|
340,509
|
|
|
337,220
|
|
|
216,538
|
|
|
Shares
|
|
Option Price
|
|
Weighted
Average Exercise Price |
|
Weighted-
Average Remaining Contractual Life (in years) |
|
Aggregate
Intrinsic Value |
|||
Share options outstanding at beginning of year
|
1,922,756
|
|
|
$4.16-$22.50
|
|
$9.67
|
|
|
|
|
||
Granted
|
324,000
|
|
|
$4.92-$5.61
|
|
$5.25
|
|
|
|
|
||
Exercised
|
(14,000
|
)
|
|
$4.35
|
|
$4.35
|
|
|
|
|
||
Forfeited/expired
|
(686,457
|
)
|
|
$4.35-$22.50
|
|
$9.36
|
|
|
|
|
||
Share options outstanding at end of year
|
1,546,299
|
|
|
$4.16-$22.50
|
|
$8.93
|
|
3.28
|
|
$
|
3,770,958
|
|
Share options exercisable at end of year
|
1,006,674
|
|
|
$4.16-$22.50
|
|
$10.79
|
|
1.99
|
|
$
|
1,329,153
|
|
Share options unvested at end of year
|
539,625
|
|
|
$4.16-$8.09
|
|
$5.46
|
|
5.69
|
|
$
|
2,441,805
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Share option grants
|
324,000
|
|
|
344,500
|
|
|
261,500
|
|
|||
Weighted average grant date fair value of options granted during the period
|
$
|
1.77
|
|
|
$
|
1.65
|
|
|
$
|
2.63
|
|
Total intrinsic value of options exercised
|
$
|
12,465
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Expected volatility
|
48.00
|
%
|
|
47.00
|
%
|
|
42.00
|
%
|
Risk-free interest rate
|
0.79
|
%
|
|
0.58
|
%
|
|
1.33
|
%
|
Expected life
|
4.2 years
|
|
|
4.3 years
|
|
|
4.3 years
|
|
|
Number of
Shares |
|
Weighted
Average Grant Date Fair Value |
|||
Unvested restricted stock awards, January 1, 2013
|
661,648
|
|
|
$
|
6.08
|
|
Granted
|
340,509
|
|
|
$
|
4.64
|
|
Vested
|
(238,296
|
)
|
|
$
|
6.86
|
|
Forfeited
|
(211,630
|
)
|
|
$
|
4.73
|
|
Unvested restricted stock awards, December 31, 2013
|
552,231
|
|
|
$
|
5.37
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
(Loss) income from continuing operations
|
$
|
(54,250,011
|
)
|
|
$
|
(20,744,969
|
)
|
|
$
|
1,547,639
|
|
Income (loss) from discontinued operations, net of income taxes
|
2,280,688
|
|
|
(21,476,528
|
)
|
|
2,550,210
|
|
|||
Net (loss) income
|
$
|
(51,969,323
|
)
|
|
$
|
(42,221,497
|
)
|
|
$
|
4,097,849
|
|
|
|
|
|
|
|
||||||
Basic (loss) income per common share from:
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
$
|
(1.75
|
)
|
|
$
|
(0.67
|
)
|
|
$
|
0.05
|
|
Discontinued operations
|
0.07
|
|
|
(0.70
|
)
|
|
0.08
|
|
|||
Net (loss) income
|
$
|
(1.68
|
)
|
|
$
|
(1.37
|
)
|
|
$
|
0.13
|
|
|
|
|
|
|
|
||||||
Diluted (loss) income per common share from:
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
$
|
(1.75
|
)
|
|
$
|
(0.67
|
)
|
|
$
|
0.05
|
|
Discontinued operations
|
0.07
|
|
|
(0.70
|
)
|
|
0.08
|
|
|||
Net (loss) income
|
$
|
(1.68
|
)
|
|
$
|
(1.37
|
)
|
|
$
|
0.13
|
|
|
|
|
|
|
|
||||||
Weighted-average number of shares outstanding-basic
|
31,009,218
|
|
|
30,842,723
|
|
|
31,146,165
|
|
|||
Plus dilutive equity awards
|
—
|
|
|
—
|
|
|
45,851
|
|
|||
Weighted-average number of shares outstanding-diluted
|
31,009,218
|
|
|
30,842,723
|
|
|
31,192,016
|
|
|
Year ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Revenue from unaffiliated customers:
|
|
|
|
|
|
||||||
Nurse and allied staffing
|
$
|
278,972,901
|
|
|
$
|
277,753,525
|
|
|
$
|
278,793,599
|
|
Physician staffing
|
121,371,017
|
|
|
123,545,045
|
|
|
118,780,800
|
|
|||
Other human capital management services
|
37,966,798
|
|
|
41,336,576
|
|
|
41,803,061
|
|
|||
|
$
|
438,310,716
|
|
|
$
|
442,635,146
|
|
|
$
|
439,377,460
|
|
Contribution income (a):
|
|
|
|
|
|
|
|
|
|||
Nurse and allied staffing (b)
|
$
|
19,188,403
|
|
|
$
|
11,360,870
|
|
|
$
|
20,077,583
|
|
Physician staffing
|
8,616,916
|
|
|
10,651,879
|
|
|
11,320,076
|
|
|||
Other human capital management services
|
745,506
|
|
|
1,943,628
|
|
|
3,172,282
|
|
|||
|
28,550,825
|
|
|
23,956,377
|
|
|
34,569,941
|
|
|||
|
|
|
|
|
|
||||||
Unallocated corporate overhead (b)
|
22,286,031
|
|
|
22,574,066
|
|
|
20,299,783
|
|
|||
Depreciation
|
3,885,688
|
|
|
4,904,845
|
|
|
5,965,002
|
|
|||
Amortization
|
2,294,077
|
|
|
2,263,556
|
|
|
2,393,722
|
|
|||
Acquisition costs
|
473,488
|
|
|
—
|
|
|
—
|
|
|||
Restructuring costs
|
483,578
|
|
|
—
|
|
|
—
|
|
|||
Legal settlement charge
|
750,000
|
|
|
—
|
|
|
—
|
|
|||
Impairment charges (c)
|
6,400,000
|
|
|
18,732,407
|
|
|
—
|
|
|||
(Loss) income from continuing operations
|
$
|
(8,022,037
|
)
|
|
$
|
(24,518,497
|
)
|
|
$
|
5,911,434
|
|
(a)
|
The Company defines contribution income as income from operations before depreciation, amortization, acquisition costs, restructuring costs, legal settlement charges, impairment charges and corporate expenses not specifically identified
|
(b)
|
In 2013, the Company refined its methodology for allocating certain corporate overhead expenses to its nurse and allied staffing segment expenses to more accurately reflect this segment’s profitability. Prior year information has been reclassified to conform to current year presentation.
|
(c)
|
During the fourth quarter of 2013, the Company recorded a trade names impairment charge of
$6,400,000
.
During the year ended December 31, 2012, the Company recorded pretax impairment charges in its continuing operations of
$18,732,407
. Refer to discussion in Note 4-Goodwill, Trade Names and Other Identifiable Intangible Assets.
|
|
First
Quarter (a) |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter (b) |
||||||||
2013
|
|
|
|
|
|
|
|
||||||||
Revenue from services
|
$
|
110,315,840
|
|
|
$
|
110,768,343
|
|
|
$
|
108,047,986
|
|
|
$
|
109,178,547
|
|
Gross profit
|
$
|
28,875,395
|
|
|
$
|
27,838,891
|
|
|
$
|
28,184,087
|
|
|
$
|
28,561,465
|
|
|
|
|
|
|
|
|
|
||||||||
(Loss) income from continuing operations, net of tax
|
$
|
(1,345,729
|
)
|
|
$
|
(1,435,829
|
)
|
|
$
|
1,453,590
|
|
|
$
|
(52,922,043
|
)
|
Income (loss) from discontinued operations, net of tax
|
$
|
2,503,763
|
|
|
$
|
(21,393
|
)
|
|
$
|
(538,916
|
)
|
|
$
|
337,234
|
|
Net income (loss)
|
$
|
1,158,034
|
|
|
$
|
(1,457,222
|
)
|
|
$
|
914,674
|
|
|
$
|
(52,584,809
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic income (loss) per common share from:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Continuing operations
|
$
|
(0.04
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
0.05
|
|
|
$
|
(1.70
|
)
|
Discontinuing operations
|
0.08
|
|
|
—
|
|
|
(0.02
|
)
|
|
0.01
|
|
||||
Net income (loss)
|
$
|
0.04
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.03
|
|
|
$
|
(1.69
|
)
|
|
|
|
|
|
|
|
|
||||||||
Diluted income (loss) per common share from:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Continuing operations
|
$
|
(0.04
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
0.05
|
|
|
$
|
(1.70
|
)
|
Discontinuing operations
|
0.08
|
|
|
—
|
|
|
(0.02
|
)
|
|
0.01
|
|
||||
Net income (loss)
|
$
|
0.04
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.03
|
|
|
$
|
(1.69
|
)
|
|
First
Quarter |
|
Second
Quarter (c) |
|
Third
Quarter (c) |
|
Fourth
Quarter (c) |
||||||||
2012
|
|
|
|
|
|
|
|
||||||||
Revenue from services
|
$
|
109,799,496
|
|
|
$
|
108,847,135
|
|
|
$
|
112,257,707
|
|
|
$
|
111,730,808
|
|
Gross profit
|
$
|
29,049,682
|
|
|
$
|
27,136,129
|
|
|
$
|
27,455,827
|
|
|
$
|
27,943,467
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations, net of tax
|
$
|
361,955
|
|
|
$
|
(18,841,283
|
)
|
|
$
|
719,539
|
|
|
$
|
(2,985,180
|
)
|
(Loss) income from discontinued operations, net of tax
|
$
|
(946,322
|
)
|
|
$
|
4,337,450
|
|
|
$
|
(18,319,626
|
)
|
|
$
|
(6,548,030
|
)
|
Net loss
|
$
|
(584,367
|
)
|
|
$
|
(14,503,833
|
)
|
|
$
|
(17,600,087
|
)
|
|
$
|
(9,533,210
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic (loss) income per common share from:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Continuing operations
|
$
|
0.01
|
|
|
$
|
(0.61
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.10
|
)
|
Discontinuing operations
|
(0.03
|
)
|
|
0.14
|
|
|
(0.59
|
)
|
|
(0.21
|
)
|
||||
Net loss
|
$
|
(0.02
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
(0.57
|
)
|
|
$
|
(0.31
|
)
|
|
|
|
|
|
|
|
|
||||||||
Diluted (loss) income per common share from:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Continuing operations
|
$
|
0.01
|
|
|
$
|
(0.61
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.10
|
)
|
Discontinuing operations
|
(0.03
|
)
|
|
0.14
|
|
|
(0.59
|
)
|
|
(0.21
|
)
|
||||
Net loss
|
$
|
(0.02
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
(0.57
|
)
|
|
$
|
(0.31
|
)
|
(a)
|
The Company sold its clinical trial services business on February 15, 2013. The clinical trial services business has been classified as discontinued operations. The transaction resulted in a gain on sale of
$3,968,714
pretax, or
$2,055,907
after tax. See Note 3 – Assets Held for Sale and Discontinued Operations.
|
(b)
|
On December 2, 2013, the Company acquired the operating assets of On Assignment, Inc.’s Allied Healthcare Staffing division. The acquisition has been accounted for in accordance with FASB ASC Topic 805-
Business Combinations
, using the purchase method. The results of On Assignment's operations have been included in the Company's consolidated statements of operations since December 2, 2013, the date of the acquisition. See Note 5 - Acquisitions. During the fourth quarter of 2013, the Company recorded a deferred tax assets valuation allowance of approximately
$48,406,398
and a trade names impairment charge of
$6,400,000
. See Note 12 - Income Taxes and Note 4 - Goodwill, Trade Names and Other Identifiable Intangible Assets.
|
(c)
|
During the second, third and fourth quarters of 2012, the Company recorded impairment charges of approximately
$18,732,000
,
$23,500,000
and
$11,900,000
, respectively. See Note 4 – Goodwill, Trade Names and Other Identifiable Intangible Assets and Note 3 – Assets Held for Sale and Discontinued Operations.
|
Allowance for Doubtful Accounts
|
Balance at
Beginning of Period |
|
Charged to
Costs and Expenses |
|
Write-offs
|
|
Recoveries
|
|
Other
Changes |
|
Balance at
End of Period |
||||||||||||
Year ended December 31, 2013
|
$
|
1,841,136
|
|
|
$
|
1,078,195
|
|
|
$
|
(1,324,027
|
)
|
|
$
|
55,669
|
|
|
$
|
—
|
|
|
$
|
1,650,973
|
|
Year ended December 31, 2012
|
$
|
2,180,125
|
|
|
$
|
786,107
|
|
|
$
|
(912,797
|
)
|
|
$
|
16,076
|
|
|
$
|
(228,375
|
)
|
(a)
|
$
|
1,841,136
|
|
Year ended December 31, 2011
|
$
|
3,500,968
|
|
|
$
|
578,805
|
|
|
$
|
(1,903,539
|
)
|
|
$
|
3,891
|
|
|
$
|
—
|
|
|
$
|
2,180,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Valuation Allowance for Deferred Tax Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Year ended December 31, 2013
|
$
|
4,032,912
|
|
|
$
|
48,406,398
|
|
(b)
|
$
|
(437,723
|
)
|
(b)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
52,001,587
|
|
Year ended December 31, 2012
|
$
|
3,678,183
|
|
|
$
|
354,729
|
|
(c)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,032,912
|
|
Year ended December 31, 2011
|
$
|
3,311,831
|
|
|
$
|
366,352
|
|
(c)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,678,183
|
|
(a)
|
Represents the reclassification of the allowance for doubtful accounts related to Assets Held for Sale. See Note 3 – Assets Held for Sale and Discontinued Operations.
|
(b)
|
Related to deferred tax assets, Cyprus NOL's, and reversal of deferred tax assets related to the clinical trial services business.
|
(c)
|
Related to deferred tax assets on state net operating losses and a particular subsidiary’s state portion of its deferred tax asset that arose from goodwill impairment.
|
▪
|
Two house hunting trips
|
▪
|
Closing costs of sale of current home
|
▪
|
Closing costs of new home purchase
|
▪
|
Household moving expenses
|
1.
|
|
RESIGNATION:
|
2.
|
|
BENEFITS DUE TO RESIGNATION AND RETIREMENT:
|
3.
|
|
RELEASE
.
|
5.
|
|
GENERAL PROVISIONS
|
•
|
Title VII of the Civil Rights Act of 1964, as amended;
|
•
|
The Civil Rights Act of 1991;
|
•
|
Sections 1981 through 1988 of Title 42 of the United States Code, as amended;
|
•
|
The Employee Retirement Income Security Act of 1974 (“ERISA”), as amended (except for any vested benefits under any tax qualified benefit plan);
|
•
|
The Immigration Reform and Control Act, as amended;
|
•
|
The Americans with Disabilities Act of 1990 (the “ADEA”), as amended;
|
•
|
The Age Discrimination in Employment Act of 1967, as amended;
|
•
|
The Family and Medical Leave Act of 1993, as amended;
|
•
|
The Fair Labor Standards Act of 1938, as amended;
|
•
|
The Worker Adjustment and Retraining Notification Act, as amended;
|
•
|
The Occupational Safety and Health Act, as amended;
|
•
|
The Sarbanes-Oxley Act of 2002;
|
•
|
The Florida Civil Rights Act – Fla. Stat. § 760.01, et seq.;
|
•
|
Florida’s Private-Sector Whistle-blower’s Act – Fla. Stat. § 448.101, et seq.;
|
•
|
Florida’s Public-Sector Whistle-blower’s Act – Fla. Stat. § 112.3187, et seq.;
|
•
|
Florida’s Statutory Provision Regarding Retaliation/Discrimination for Filing a Workers Compensation Claim – Fla. Stat. § 440.205;
|
•
|
Florida’s Statutory Provision Regarding Wage Rate Discrimination Based on Sex – Fla. Stat. § 448.07;
|
•
|
The Florida Equal Pay Act – Fla. Stat. § 725.07;
|
•
|
The Florida Omnibus AIDS Act – Fla. Stat. § 760.50;
|
•
|
Florida’s Statutory Provisions Regarding Employment Discrimination on the Basis of and Mandatory Screening or Testing for Sickle-Cell Trait – Fla. Stat. §§ 448.075, 448.076;
|
•
|
Florida’s Wage Payment Laws, Fla. Stat. §§ 448.01, 448.08;
|
•
|
Florida’s Domestic Violence Leave Act – Fla. Stat. §741.313;
|
•
|
Florida’s Preservation & Protection of Right to Keep & Bear Arms in Motor Vehicles Act – Fla. Stat. §790.251;
|
•
|
Florida’s Statutory Provision Regarding Termination of Employees who Testify in Judicial Proceedings – Fla. Stat. § 92.57;
|
•
|
Florida’s General Labor Regulations, Fla. Stat. ch. 448;
|
•
|
Any other federal, state or local civil or human rights law or any other local, state or federal law, regulation or ordinance;
|
•
|
Any public policy, contract, tort, or common law; or
|
•
|
Any claim for costs, fees, or other expenses including attorneys’ fees incurred in these matters.
|
Subsidiary
|
|
Place of Incorporation
|
Assignment America, LLC
|
|
Delaware
|
Cejka Search, Inc.
|
|
Delaware
|
Credent Verification and Licensing Services, LLC
|
|
Delaware
|
Cross Country Healthcare UK Holdco Limited *
|
|
United Kingdom
|
Cross Country Holdco (Cyprus) Limited
|
|
Cyprus
|
Cross Country Infotech, Pvt. Ltd.
|
|
India
|
Cross Country Education, Inc. *
|
|
Canada
|
Cross Country Education, LLC
|
|
Delaware
|
Cross Country Publishing, LLC
|
|
Delaware
|
Cross Country Staffing, Inc.
|
|
Delaware
|
Jamestown Indemnity, Ltd.
|
|
Cayman Islands
|
Local Staff, LLC
|
|
Delaware
|
MDA Holdings, Inc.
|
|
Delaware
|
Medical Doctor Associates, LLC
|
|
Delaware
|
Travel Staff, LLC
|
|
Delaware
|
(a)
|
On February 15, 2013, the Company, together with Local Staff, LLC and Cross Country Healthcare UK HoldCo Ltd. sold the issued and outstanding membership interests of ClinForce, LLC and the issued and outstanding shares of capital stock of Akos Limited. Both Metropolitan Research Associates, Inc. and Assent Consulting were wholly owned by ClinForce, LLC.
|
(b)
|
On December 31, 2013, CC Local, Inc. was dissolved under the laws of the State of Delaware.
|
(c)
|
On December 31, 2013, MRA Search, Inc. was merged with and into Cross Country Staffing, Inc. with Cross Country Staffing, Inc. as the surviving company.
|
(d)
|
On December 31, 2013, MCVT, Inc. was merged with and into Cross Country Staffing, Inc. with Cross Country Staffing, Inc. as the surviving company.
|
(e)
|
On December 31, 2013Allied Health Group, LLC was merged with and into Medical Doctor Associates, LLC, with Medical Doctor Associates, LLC as the surviving company.
|
(1)
|
Registration Statement (Form S-8 No. 333-74862) pertaining to Cross Country Healthcare, Inc. Amended and Restated 1999 Stock Option Plan and Cross Country Healthcare, Inc. Amended and Restated Equity Participation Plan; and
|
(2)
|
Registration Statement (Form S-8 No. 333-145484) pertaining to Cross Country Healthcare, Inc. 2007 Stock Incentive Plan;
|
/s/ ERNST & YOUNG LLP
|
Certified Public Accountants
|
1.
|
I have reviewed this annual report on Form 10-K of Cross Country Healthcare, Inc.;
|
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 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.
|
Date:
|
March 17, 2014
|
/s/ William J. Grubbs
|
|
|
William J. Grubbs
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Cross Country Healthcare, Inc.;
|
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;
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4.
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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:
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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5.
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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 registrant’s board of directors (or persons performing the equivalent functions):
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a.
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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
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b.
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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.
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Date:
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March 17, 2014
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/s/ Emil Hensel
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Emil Hensel
Chief Financial Officer
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Date:
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March 17, 2014
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/s/ William J. Grubbs
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William J. Grubbs
Chief Executive Officer
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Date:
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March 17, 2014
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/s/ Emil Hensel
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|
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Emil Hensel
Chief Financial Officer
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