Contingent Consideration

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Contingent Consideration

Contingent Consideration

In connection with certain of the Company’s acquisitions, contingent consideration is payable in cash or common stock of the Company upon the achievement of certain performance measures over future periods. The Company recorded the acquisition date fair value of the contingent consideration liability as additional purchase price. As discussed in Note 11, the process for determining the fair value of the contingent consideration liability consists of reviewing financial forecasts and assessing the likelihood of reaching the required performance measures based on factors specific to each acquisition as well as the Company’s historical experience with similar arrangements. Subsequent to the acquisition date, the Company estimates the fair value of the contingent consideration liability each reporting period and any adjustments made to the fair value are recorded in the Company’s results of operations. If an acquisition reaches the required performance measures within the reporting period, the fair value of the contingent consideration liability is increased to 100%, the maximum potential payment, and reclassified to due to seller.

There were no contingent consideration obligations outstanding as of December 31, 2017 or September 30, 2018. During the three months ended September 30, 2017, the Company recorded (income) expense of $(0.2) million. During the nine months ended September 30, 2017, the Company recorded expense of $0.7 million. For the nine months ended September 30, 2017, $4.4 million of contingent consideration payments were reclassified from financing activities to operating activities in accordance with ASU 2016-15 (See Note 1) as they were not made soon after the acquisition date and deemed to be excess cash payments.