RESTRUCTURING AND OTHER EXPENSES

9 Months Ended

Sep. 30, 2015

Restructuring and Related Activities [Abstract]

Restructuring and Other Expenses

RESTRUCTURING AND OTHER EXPENSES

Restructuring and other expenses include expenses resulting from the execution of our strategic assessment and related restructuring plans, consisting primarily of employee severance and other benefit-related costs, third-party consulting costs, facility-related costs and certain other costs. It also includes other transitional costs such as training, redundant salaries, retention bonuses for certain critical personnel, certain excess facility costs for locations not yet abandoned and professional fees and other costs related to contract terminations and closed branches which are not classified as restructuring. The restructuring costs are included in restructuring and other expenses in the Unaudited Consolidated Statements of Operations.

Restructuring

On August 10, 2015, the Company announced a plan to implement a new operations financial improvement plan (the “Financial Improvement Plan”) as part of an initiative to accelerate long-term growth, reduce costs and increase operating efficiencies. In connection with the Financial Improvement Plan, the Company intends to consolidate corporate functions in the Company’s Eden Prairie, Minnesota facility and transition the Elmsford, New York office to non-executive functions by December 31, 2015. The Company estimates that the Financial Improvement Plan will be substantially completed by the end of the fourth quarter of 2015 and expects it will reduce its workforce by approximately 12% .  These targeted reductions are not expected to impact the Company’s ability to provide quality care and service to patients.

Since inception, the Company has incurred approximately $3.2 million in total expenses for the Financial Improvement Plan, consisting of $0.7 million of employee severance and other benefit-related costs related to workforce reductions, $1.2 million in training and transition costs and $1.3 million of other costs in the three months and nine months ended September 30, 2015. Past restructuring plans have led to the Company incurring approximately $0.8 million and $1.8 million in the three months ended September 30, 2015 and 2014, respectively, and $9.1 million and $10.3 million in the nine months ended September 30, 2015 and 2014, respectively.

As of September 30, 2015, there are restructuring accruals of approximately $1.9 million related to the Company’s Financial Improvement Plan and prior restructuring plans included in accrued expenses and other current liabilities and other non-current liabilities on the Consolidated Balance Sheets.

The Company anticipates that additional restructuring will occur and thus significant additional charges such as the write down of certain long-lived assets, employee severance, other restructuring type charges, temporary redundant expenses, potential cash bonus payments and potential accelerated payments or termination costs for certain of its contractual obligations, could impact the Company’s future consolidated financial statements.