Form 10-Q - Quarterly report [Sections 13 or 15(d)]
01 November 2024 - 10:00PM
Edgar (US Regulatory)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File Number: 001-12111
Pediatrix Medical Group, Inc.
(Exact name of registrant as specified in its charter)
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Florida |
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26-3667538 |
(State or other jurisdiction of Incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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1301 Concord Terrace Sunrise, Florida |
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33323 |
(Address of principal executive offices) |
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(Zip Code) |
(954) 384-0175
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol |
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Name of each exchange on which registered |
Common Stock, par value $.01 per share |
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MD |
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New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
☑ |
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Accelerated filer |
☐ |
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Non-accelerated filer |
☐ |
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Smaller reporting company |
☐ |
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Emerging growth company |
☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
On October 25, 2024, the registrant had outstanding 85,880,487 shares of Common Stock, par value $.01 per share.
Pediatrix Medical Group, Inc.
INDEX
Pediatrix Medical Group, Inc.
Consolidated Balance Sheets
(in thousands, except share data)
(Unaudited)
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September 30, 2024 |
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December 31, 2023 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
103,831 |
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$ |
73,258 |
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Short-term investments |
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116,621 |
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104,485 |
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Accounts receivable, net |
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286,897 |
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272,313 |
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Prepaid expenses |
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10,188 |
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|
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13,525 |
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Income taxes receivable |
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1,198 |
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|
|
7,565 |
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Other current assets |
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9,480 |
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|
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12,308 |
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Total current assets |
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528,215 |
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483,454 |
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Property and equipment, net |
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41,922 |
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75,639 |
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Goodwill |
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1,239,007 |
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1,384,166 |
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Intangible assets, net |
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13,183 |
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|
|
21,240 |
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Operating and finance lease right-of-use assets |
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56,566 |
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|
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70,294 |
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Deferred income tax assets |
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119,386 |
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102,852 |
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Other assets |
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78,594 |
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82,165 |
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Total assets |
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$ |
2,076,873 |
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$ |
2,219,810 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable and accrued expenses |
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$ |
333,493 |
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$ |
350,798 |
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Current portion of debt and finance lease liabilities, net |
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19,276 |
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14,913 |
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Current portion of operating lease liabilities |
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16,992 |
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21,076 |
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Income taxes payable |
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3,319 |
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2,159 |
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Total current liabilities |
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373,080 |
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388,946 |
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Long-term debt and finance lease liabilities, net |
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607,445 |
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618,421 |
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Long-term operating lease liabilities |
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39,940 |
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47,238 |
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Long-term professional liabilities |
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255,263 |
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|
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251,284 |
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Deferred income tax liabilities |
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35,618 |
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|
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34,308 |
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Other liabilities |
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33,035 |
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30,552 |
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Total liabilities |
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1,344,381 |
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1,370,749 |
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Commitments and contingencies |
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Shareholders’ equity: |
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Preferred stock; $.01 par value; 1,000,000 shares authorized; none issued |
|
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— |
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— |
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Common stock; $.01 par value; 200,000,000 shares authorized; 85,865,841 and 84,018,023 shares
issued and outstanding, respectively |
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859 |
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840 |
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Additional paid-in capital |
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1,010,862 |
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|
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999,906 |
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Accumulated other comprehensive loss |
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(209 |
) |
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(2,214 |
) |
Retained deficit |
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(279,020 |
) |
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(149,471 |
) |
Total shareholders’ equity |
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732,492 |
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849,061 |
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Total liabilities and shareholders' equity |
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$ |
2,076,873 |
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$ |
2,219,810 |
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The accompanying notes are an integral part of these Consolidated Financial Statements.
Pediatrix Medical Group, Inc.
Consolidated Statements of Income and Comprehensive Income
(in thousands, except per share data)
(Unaudited)
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Net revenue |
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$ |
511,158 |
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$ |
506,612 |
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$ |
1,510,555 |
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$ |
1,498,197 |
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Operating expenses: |
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Practice salaries and benefits |
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364,888 |
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368,404 |
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1,091,834 |
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1,084,671 |
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Practice supplies and other operating expenses |
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29,449 |
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31,319 |
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92,903 |
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93,128 |
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General and administrative expenses |
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58,121 |
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57,406 |
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174,884 |
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174,478 |
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Depreciation and amortization |
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6,254 |
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9,211 |
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25,353 |
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27,109 |
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Transformational and restructuring related expenses |
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18,560 |
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— |
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40,619 |
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— |
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Goodwill impairment |
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— |
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— |
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154,243 |
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— |
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Fixed assets impairments |
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— |
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— |
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20,112 |
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— |
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Intangible assets impairments |
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— |
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— |
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7,679 |
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— |
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Loss on disposal of businesses |
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59 |
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— |
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10,932 |
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— |
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Total operating expenses |
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477,331 |
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466,340 |
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|
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1,618,559 |
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1,379,386 |
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Income (loss) from operations |
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33,827 |
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40,272 |
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|
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(108,004 |
) |
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118,811 |
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Investment and other income |
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1,089 |
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|
|
273 |
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|
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2,941 |
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|
|
2,096 |
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Interest expense |
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(10,126 |
) |
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(10,374 |
) |
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(31,033 |
) |
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(31,994 |
) |
Equity in earnings of unconsolidated affiliate |
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445 |
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661 |
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1,427 |
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1,578 |
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Total non-operating expenses |
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(8,592 |
) |
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(9,440 |
) |
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(26,665 |
) |
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(28,320 |
) |
Income (loss) before income taxes |
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25,235 |
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|
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30,832 |
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(134,669 |
) |
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90,491 |
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Income tax (provision) benefit |
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(5,794 |
) |
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(9,441 |
) |
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5,120 |
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(26,612 |
) |
Net income (loss) |
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$ |
19,441 |
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$ |
21,391 |
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$ |
(129,549 |
) |
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$ |
63,879 |
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Other comprehensive income (loss), net of tax |
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Unrealized holding gain on investments, net of tax of $571, $-, $657 and $100 |
|
|
1,745 |
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1 |
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2,005 |
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|
|
218 |
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Total comprehensive income (loss) |
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$ |
21,186 |
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$ |
21,392 |
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$ |
(127,544 |
) |
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$ |
64,097 |
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Per common and common equivalent share data: |
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Net income (loss): |
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Basic |
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$ |
0.23 |
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$ |
0.26 |
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$ |
(1.56 |
) |
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$ |
0.78 |
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Diluted |
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$ |
0.23 |
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$ |
0.26 |
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$ |
(1.56 |
) |
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$ |
0.77 |
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Weighted average common shares: |
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Basic |
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83,891 |
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82,543 |
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|
83,223 |
|
|
|
82,127 |
|
Diluted |
|
|
84,523 |
|
|
|
82,950 |
|
|
|
83,223 |
|
|
|
82,492 |
|
The accompanying notes are an integral part of these Consolidated Financial Statements.
Pediatrix Medical Group, Inc.
Consolidated Statements of Shareholders' Equity
(in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
|
Additional
Paid-in |
|
|
Accumulated
Other
Comprehensive |
|
|
Retained |
|
|
Total
Shareholders' |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Loss |
|
|
Deficit |
|
|
Equity |
|
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2024 |
|
|
84,018 |
|
|
$ |
840 |
|
|
$ |
999,906 |
|
|
$ |
(2,214 |
) |
|
$ |
(149,471 |
) |
|
$ |
849,061 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,035 |
|
|
|
4,035 |
|
Unrealized holding gain on investments, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
60 |
|
|
|
— |
|
|
|
60 |
|
Common stock issued under employee stock purchase plan |
|
|
108 |
|
|
|
1 |
|
|
|
859 |
|
|
|
— |
|
|
|
— |
|
|
|
860 |
|
Forfeitures of restricted stock |
|
|
(21 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
3,067 |
|
|
|
— |
|
|
|
— |
|
|
|
3,067 |
|
Repurchased common stock |
|
|
(97 |
) |
|
|
(1 |
) |
|
|
(886 |
) |
|
|
— |
|
|
|
— |
|
|
|
(887 |
) |
Balance at March 31, 2024 |
|
|
84,008 |
|
|
$ |
840 |
|
|
$ |
1,002,946 |
|
|
$ |
(2,154 |
) |
|
$ |
(145,436 |
) |
|
$ |
856,196 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(153,025 |
) |
|
|
(153,025 |
) |
Unrealized holding gain on investments, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
200 |
|
|
|
— |
|
|
|
200 |
|
Common stock issued under employee stock purchase plan |
|
|
139 |
|
|
|
2 |
|
|
|
1,147 |
|
|
|
— |
|
|
|
— |
|
|
|
1,149 |
|
Issuance of restricted stock |
|
|
1,630 |
|
|
|
16 |
|
|
|
(16 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Forfeitures of restricted stock |
|
|
(22 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
1,952 |
|
|
|
— |
|
|
|
— |
|
|
|
1,952 |
|
Repurchased common stock |
|
|
(2 |
) |
|
|
— |
|
|
|
(11 |
) |
|
|
— |
|
|
|
— |
|
|
|
(11 |
) |
Balance at June 30, 2024 |
|
|
85,753 |
|
|
$ |
858 |
|
|
$ |
1,006,018 |
|
|
$ |
(1,954 |
) |
|
$ |
(298,461 |
) |
|
$ |
706,461 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
19,441 |
|
|
|
19,441 |
|
Unrealized holding gain on investments, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,745 |
|
|
|
— |
|
|
|
1,745 |
|
Common stock issued under employee stock purchase plan |
|
|
149 |
|
|
|
1 |
|
|
|
896 |
|
|
|
— |
|
|
|
— |
|
|
|
897 |
|
Forfeitures of restricted stock |
|
|
(13 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
4,110 |
|
|
|
— |
|
|
|
— |
|
|
|
4,110 |
|
Repurchased common stock |
|
|
(23 |
) |
|
|
— |
|
|
|
(162 |
) |
|
|
— |
|
|
|
— |
|
|
|
(162 |
) |
Balance at September 30, 2024 |
|
|
85,866 |
|
|
$ |
859 |
|
|
$ |
1,010,862 |
|
|
$ |
(209 |
) |
|
$ |
(279,020 |
) |
|
$ |
732,492 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2023 |
|
|
82,947 |
|
|
$ |
829 |
|
|
$ |
983,601 |
|
|
$ |
(3,735 |
) |
|
$ |
(89,063 |
) |
|
$ |
891,632 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
14,206 |
|
|
|
14,206 |
|
Unrealized holding gain on investments, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
604 |
|
|
|
— |
|
|
|
604 |
|
Common stock issued under employee stock option,
employee stock purchase plan and stock purchase plan |
|
|
86 |
|
|
|
— |
|
|
|
1,095 |
|
|
|
— |
|
|
|
— |
|
|
|
1,095 |
|
Issuance of restricted stock |
|
|
871 |
|
|
|
9 |
|
|
|
(9 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Forfeitures of restricted stock |
|
|
(221 |
) |
|
|
(2 |
) |
|
|
2 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
3,009 |
|
|
|
— |
|
|
|
— |
|
|
|
3,009 |
|
Repurchased common stock |
|
|
(49 |
) |
|
|
— |
|
|
|
(775 |
) |
|
|
— |
|
|
|
— |
|
|
|
(775 |
) |
Balance at March 31, 2023 |
|
|
83,634 |
|
|
$ |
836 |
|
|
$ |
986,923 |
|
|
$ |
(3,131 |
) |
|
$ |
(74,857 |
) |
|
$ |
909,771 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
28,282 |
|
|
|
28,282 |
|
Unrealized holding loss on investments, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(387 |
) |
|
|
— |
|
|
|
(387 |
) |
Common stock issued under employee stock option,
employee stock purchase plan and stock purchase plan |
|
|
126 |
|
|
|
1 |
|
|
|
1,593 |
|
|
|
— |
|
|
|
— |
|
|
|
1,594 |
|
Issuance of restricted stock |
|
|
93 |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Forfeitures of restricted stock |
|
|
(11 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
3,126 |
|
|
|
— |
|
|
|
— |
|
|
|
3,126 |
|
Repurchased common stock |
|
|
(1 |
) |
|
|
— |
|
|
|
(11 |
) |
|
|
— |
|
|
|
— |
|
|
|
(11 |
) |
Balance at June 30, 2023 |
|
|
83,841 |
|
|
$ |
838 |
|
|
$ |
991,630 |
|
|
$ |
(3,518 |
) |
|
$ |
(46,575 |
) |
|
$ |
942,375 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
21,391 |
|
|
|
21,391 |
|
Unrealized holding gain on investments, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
Common stock issued under employee stock option,
employee stock purchase plan and stock purchase plan |
|
|
100 |
|
|
|
1 |
|
|
|
1,186 |
|
|
|
— |
|
|
|
— |
|
|
|
1,187 |
|
Forfeitures of restricted stock |
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
3,164 |
|
|
|
— |
|
|
|
— |
|
|
|
3,164 |
|
Repurchased common stock |
|
|
(11 |
) |
|
|
— |
|
|
|
(133 |
) |
|
|
— |
|
|
|
— |
|
|
|
(133 |
) |
Balance at September 30, 2023 |
|
|
83,929 |
|
|
$ |
839 |
|
|
$ |
995,847 |
|
|
$ |
(3,517 |
) |
|
$ |
(25,184 |
) |
|
$ |
967,985 |
|
The accompanying notes are an integral part of these Consolidated Financial Statements.
Pediatrix Medical Group, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
2024 |
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net (loss) income |
|
$ |
(129,549 |
) |
|
$ |
63,879 |
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
25,353 |
|
|
|
27,109 |
|
Amortization of premiums, discounts and issuance costs |
|
|
703 |
|
|
|
1,015 |
|
Goodwill impairment |
|
|
154,243 |
|
|
|
— |
|
Fixed assets impairments |
|
|
20,112 |
|
|
|
— |
|
Intangible assets impairments |
|
|
7,679 |
|
|
|
— |
|
Loss on disposal of businesses |
|
|
10,932 |
|
|
|
— |
|
Stock-based compensation expense |
|
|
9,129 |
|
|
|
9,299 |
|
Deferred income taxes |
|
|
(15,880 |
) |
|
|
10,589 |
|
Other |
|
|
(2,006 |
) |
|
|
(1,607 |
) |
Changes in assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
|
635 |
|
|
|
22,095 |
|
Prepaid expenses and other current assets |
|
|
5,945 |
|
|
|
4,290 |
|
Other long-term assets |
|
|
30,569 |
|
|
|
13,343 |
|
Accounts payable and accrued expenses |
|
|
(34,154 |
) |
|
|
(56,118 |
) |
Income taxes payable |
|
|
7,527 |
|
|
|
(5,154 |
) |
Long-term professional liabilities |
|
|
13,239 |
|
|
|
838 |
|
Other liabilities |
|
|
(22,032 |
) |
|
|
(16,500 |
) |
Net cash provided by operating activities – continuing operations |
|
|
82,445 |
|
|
|
73,078 |
|
Net cash used in operating activities - discontinued operations |
|
|
(8,882 |
) |
|
|
(5,003 |
) |
Net cash provided by operating activities |
|
|
73,563 |
|
|
|
68,075 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
Acquisition payments, net of cash acquired |
|
|
(8,167 |
) |
|
|
(1,667 |
) |
Purchases of investments |
|
|
(54,402 |
) |
|
|
(26,477 |
) |
Proceeds from maturities or sales of investments |
|
|
45,324 |
|
|
|
16,560 |
|
Purchases of property and equipment |
|
|
(18,582 |
) |
|
|
(24,284 |
) |
Other |
|
|
2,359 |
|
|
|
116 |
|
Net cash used in investing activities |
|
|
(33,468 |
) |
|
|
(35,752 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
Borrowings on line of credit |
|
|
235,500 |
|
|
|
470,000 |
|
Payments on line of credit |
|
|
(235,500 |
) |
|
|
(474,000 |
) |
Payments on term loan |
|
|
(9,375 |
) |
|
|
(9,375 |
) |
Payments on finance lease obligations |
|
|
(2,045 |
) |
|
|
(2,105 |
) |
Proceeds from issuance of common stock |
|
|
2,906 |
|
|
|
3,876 |
|
Repurchases of common stock |
|
|
(1,060 |
) |
|
|
(919 |
) |
Other |
|
|
52 |
|
|
|
(8,445 |
) |
Net cash used in financing activities |
|
|
(9,522 |
) |
|
|
(20,968 |
) |
Net increase in cash and cash equivalents |
|
|
30,573 |
|
|
|
11,355 |
|
Cash and cash equivalents at beginning of period |
|
|
73,258 |
|
|
|
9,824 |
|
Cash and cash equivalents at end of period |
|
$ |
103,831 |
|
|
$ |
21,179 |
|
The accompanying notes are an integral part of these Consolidated Financial Statements.
Pediatrix Medical Group, Inc.
Notes to Consolidated Financial Statements
September 30, 2024
(Unaudited)
1. Basis of Presentation:
The accompanying unaudited Consolidated Financial Statements of the Company and the notes thereto presented in this Form 10-Q have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to interim financial statements, and do not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results of interim periods. The financial statements include all the accounts of Pediatrix Medical Group, Inc. and its consolidated subsidiaries (collectively, “PMG”) together with the accounts of PMG’s affiliated business corporations or professional associations, professional corporations, limited liability companies and partnerships (the “affiliated professional contractors”). Certain subsidiaries of PMG have contractual management arrangements with its affiliated professional contractors, which are separate legal entities that provide physician services in certain states. The terms “Pediatrix” and the “Company” refer collectively to Pediatrix Medical Group Inc., its subsidiaries and the affiliated professional contractors.
The Company is a party to a joint venture in which it owns a 37.5% economic interest. The Company accounts for this joint venture under the equity method of accounting because the Company exercises significant influence over, but does not control, this entity.
The consolidated results of operations for the interim periods presented are not necessarily indicative of the results to be experienced for the entire fiscal year. In addition, the accompanying unaudited Consolidated Financial Statements and the notes thereto should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in the Company’s most recent Annual Report on Form 10-K (the “Form 10-K”).
2. Cash Equivalents and Investments:
As of September 30, 2024 and December 31, 2023, the Company's cash equivalents consisted entirely of money market funds totaling $0.7 million and $2.8 million, respectively.
Investments held are all classified as current and at September 30, 2024 and December 31, 2023 are summarized as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
Corporate securities |
|
$ |
50,602 |
|
|
$ |
57,878 |
|
U.S. Treasury securities |
|
|
35,105 |
|
|
|
22,674 |
|
Municipal debt securities |
|
|
21,508 |
|
|
|
14,649 |
|
Federal home loan securities |
|
|
6,673 |
|
|
|
5,670 |
|
Certificates of deposit |
|
|
2,733 |
|
|
|
3,614 |
|
|
|
$ |
116,621 |
|
|
$ |
104,485 |
|
3. Fair Value Measurements:
The accounting guidance establishes a fair value hierarchy that prioritizes valuation inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of three levels:
Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.
Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.
The following table presents information about the Company’s financial instruments that are accounted for at fair value on a recurring basis at September 30, 2024 and December 31, 2023 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value |
|
|
|
Fair Value
Category |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
Assets: |
|
|
|
|
|
|
|
|
Money market funds |
|
Level 1 |
|
$ |
711 |
|
|
$ |
2,814 |
|
Short-term investments |
|
Level 2 |
|
|
116,621 |
|
|
|
104,485 |
|
Mutual Funds |
|
Level 1 |
|
|
18,708 |
|
|
|
17,687 |
|
The following table presents information about the Company’s financial instruments that are not carried at fair value at September 30, 2024 and December 31, 2023 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
|
|
Carrying
Amount |
|
|
Fair
Value |
|
|
Carrying
Amount |
|
|
Fair
Value |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
2030 Notes |
|
$ |
400,000 |
|
|
$ |
388,240 |
|
|
$ |
400,000 |
|
|
$ |
357,000 |
|
The carrying amounts of cash equivalents, accounts receivable and accounts payable and accrued expenses approximate fair value due to the short maturities of the respective instruments.
4. Accounts Receivable and Net Revenue:
Accounts receivable, net consists of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
|