medp-10q_20180630.htm

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, a 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.

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 ☒

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.

(Amounts in thousands, except share amounts)	As Of
	June 30,			December 31.
	2018			2017
ASSETS
Current assets:
Cash and cash equivalents	$	22,230		$	26,485
Restricted cash		7			7
Accounts receivable and unbilled, net (includes $2.1 million and $1.0 million with related parties at June 30, 2018 and December 31, 2017, respectively)		115,398			83,079
Prepaid expenses and other current assets		20,844			20,400
Total current assets		158,479			129,971
Property and equipment, net		52,360			48,739
Goodwill		660,981			660,981
Intangible assets, net		83,959			98,740
Deferred income taxes		5,972			6,343
Other assets		6,430			5,943
Total assets	$	968,181		$	950,717
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	16,859		$	16,674
Accrued expenses		72,925			23,673
Pre-funded study costs (includes $1.0 million with related parties at December 31, 2017)		-			57,406
Advanced billings (includes $0.6 million and $1.7 million with related parties at June 30, 2018 and December 31, 2017, respectively)		120,945			73,756
Current portion of long-term debt		16,500			16,500
Other current liabilities		5,933			4,697
Total current liabilities		233,162			192,706
Long-term debt, net, less current portion		147,021			205,111
Deemed landlord liability, less current portion		25,571			26,602
Deferred income tax liability		602			560
Deferred credit		11,061			11,468
Other long-term liabilities		10,683			10,740
Total liabilities		428,100			447,187
Commitments and contingencies (see Note 11)
Shareholders’ equity:
Preferred stock - $0.01 par-value; 5,000,000 shares authorized; no shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively		-			-
Common stock - $0.01 par-value; 250,000,000 shares authorized at June 30, 2018 and December 31, 2017, respectively; 35,545,233 and 35,466,510 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively		356			355
Treasury stock - 200,000 shares at June 30, 2018 and December 31, 2017		(6,030	)		(6,030	)
Additional paid-in capital		634,469			630,341
Accumulated deficit		(86,599	)		(120,402	)
Accumulated other comprehensive loss		(2,115	)		(734	)
Total shareholders’ equity		540,081			503,530
Total liabilities and shareholders’ equity	$	968,181		$	950,717

(Amounts in thousands, except per share amounts)	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Revenue:
Revenue, net (includes $2.6 million and $4.1 million with related parties for the three and six months ended June 30, 2018, respectively)	$	170,144		$	-		$	333,221		$	-
Service revenue, net (includes $2.9 million and $6.9 million with related parties for the three and six months ended June 30, 2017, respectively)		-			94,552			-			188,333
Reimbursed out-of-pocket revenue (includes $0.4 million and $1.1 million with related parties for the three and six months ended June 30, 2017, respectively)		-			11,664			-			24,494
Total revenue		170,144			106,216			333,221			212,827
Operating expenses:
Direct service costs, excluding depreciation and amortization		61,478			51,955			121,819			103,060
Reimbursed out-of-pocket expenses		55,198			11,664			112,111			24,494
Total direct costs		116,676			63,619			233,930			127,554
Selling, general and administrative		20,507			14,755			36,506			29,909
Depreciation		2,226			2,101			4,540			4,231
Amortization		7,390			9,462			14,781			18,910
Total operating expenses		146,799			89,937			289,757			180,604
Income from operations		23,345			16,279			43,464			32,223
Other expense, net:
Miscellaneous income (expense), net		478			(125	)		325			(497	)
Interest expense, net		(2,308	)		(1,808	)		(4,617	)		(3,602	)
Total other expense, net		(1,830	)		(1,933	)		(4,292	)		(4,099	)
Income before income taxes		21,515			14,346			39,172			28,124
Income tax provision		4,947			4,793			8,053			10,124
Net income	$	16,568		$	9,553		$	31,119		$	18,000
Net income per share attributable to common shareholders:
Basic	$	0.46		$	0.24		$	0.87		$	0.44
Diluted	$	0.45		$	0.23		$	0.85		$	0.44
Weighted average common shares outstanding:
Basic		35,519			40,183			35,503			40,425
Diluted		36,664			40,825			36,586			41,158

(Amounts in thousands)	Six Months Ended
	June 30,
	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	31,119		$	18,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		4,540			4,231
Amortization		14,781			18,910
Stock-based compensation expense		2,954			2,234
Amortization of debt issuance costs and discount		317			332
Deferred income tax benefit		(286	)		(864	)
Amortization and adjustment of deferred credit		(407	)		-
Other		743			(744	)
Changes in assets and liabilities:
Accounts receivable and unbilled, net		(20,289	)		3,405
Prepaid expenses and other current assets		(804	)		(519	)
Accounts payable		1,375			(2,855	)
Accrued expenses		14,184			(8,398	)
Pre-funded study costs		-			(3,510	)
Advanced billings		15,846			(294	)
Other assets and liabilities, net		568			(195	)
Net cash provided by operating activities		64,641			29,733
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment expenditures		(9,793	)		(6,019	)
Acquisition of intangibles		-			(515	)
Other		(178	)		29
Net cash used in investing activities		(9,971	)		(6,505	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock option exercises		1,175			955
Repurchases of common stock		-			(26,405	)
Payment of debt		(8,250	)		(6,187	)
Payments on revolving loan		(50,000	)		-
Payment of deemed landlord liability		(910	)		(813	)
Net cash used in financing activities		(57,985	)		(32,450	)
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		(940	)		1,145
DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		(4,255	)		(8,077	)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period		26,492			37,407
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	$	22,237		$	29,330

Medpace Holdings, Inc. together with its subsidiaries, (“Medpace” or the “Company”), a Delaware corporation, is a global provider of clinical research-based drug and medical device development services. The Company partners with pharmaceutical, biotechnology, and medical device companies in the development and execution of clinical trials. The Company’s drug development services focus on full service Phase I-IV clinical development services and include development plan design, coordinated central laboratory, project management, regulatory affairs, clinical monitoring, data management and analysis, pharmacovigilance new drug application submissions, and post-marketing clinical support. The Company also provides bio-analytical laboratory services, clinical human pharmacology, imaging services, and electrocardiography reading support for clinical trials.

The Company’s operations are principally based in North America, Europe, and Asia.

The interim condensed consolidated financial statements include the accounts of the Company, are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), and are unaudited. In the opinion of the Company’s management, all adjustments of a normal recurring nature necessary for a fair presentation have been reflected. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted. The preparation of the interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and outcomes could differ from management’s estimates and assumptions. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended

During the three and six months ended June 30, 2018, Cinven Capital Management (V) General Partner Limited (“Cinven”), sold a total of 6,000,000 shares of the Company’s common stock as part of two secondary offerings (the “Offerings”). The Company incurred professional fees in connection with the Offerings of approximately $0.4 million during the three and six months ended June 30, 2018. The fees are included within operating expenses in the accompanying consolidated statement of operations. As of June 30, 2018, Cinven owned 29.3% of the Company’s outstanding common stock. The Company did not sell any shares in or receive any proceeds from the Offerings.

Our significant accounting policies are detailed in Note 3 “Summary of Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended December 31, 2017. Significant changes to our accounting policies as a result of adopting Accounting Standards Codification Topic 606 (“ASC 606”) are discussed below:

We generally enter into contracts with customers to provide services ranging in duration from a few months to several years. The contract terms generally provide for payments based on a fixed-fee or unit-of-service arrangement. We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers, which we adopted on January 1, 2018. Revenue on contracts is recognized when or as we satisfy the contract performance obligations, at the amount that reflects our cumulative progress toward delivery of the performance obligation. This progress assessment is applied to the amount of consideration to which we expect to be paid for delivery of the performance obligation. Our performance obligations are generally satisfied over time and related revenue is recognized as services are provided to meet these obligations.

An arrangement is accounted for as a contract within the scope of ASC 606 when the Company and its customers approve the contract, are committed to perform their respective obligations, each party can identify its rights regarding the goods or services to be

transferred, commercial substance is present, and it is probable that the Company will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

For our services to meet this criteria, contracts generally need to be written, pending regulatory hurdles required to commence work must be cleared, the study protocol must be completed, the customer must have adequate funding or reasonable path to funding to execute the contracted portion of the study, and the study must be actively moving forward. Once these criteria have been met, it is deemed that the Company and its customers are committed to perform their respective obligations. Depending on the timing of when these criteria are met, revenue recognition may vary significantly on a period over period basis.

Accounting for contracts performed over a period of time involves the use of various assumptions to estimate total contract revenue and costs. We estimate expected costs to complete a contract and recognize contracted revenue over the life of the contract as those costs are incurred.

Cost estimates are based on a detailed project budget and are developed based on many variables, including, but not limited to, the scope of the work, the complexity of the study, the participating geographic locations and the Company’s historical experience. To assist with the estimation of costs expected at completion over the life of a project, regular contract reviews are performed in which performance to date is compared to the most current estimate to complete assumptions. The reviews include an assessment of costs incurred to date compared to expectations based on budget assumptions and other circumstances specific to the project. The total estimated costs necessary to complete is updated and any revisions to the existing cost estimate results in cumulative adjustments to the amount of revenue recognized in the period in which the revisions are identified. In the case of cost estimates related to activities legally contracted as reimbursable in nature, including but not limited to investigator fee activity, these estimates also influence our assumed contract value and assumed remaining performance obligations. Because of the uncertainties inherent in estimating the costs necessary to fulfill contractual obligations, it is possible that estimates may change in the near term, resulting in a material change in revenue reported.

Contracts generally provide for pricing modifications upon scope of work changes. We recognize revenue, at an amount to which we expect to be entitled, related to work performed in connection with scope changes when the underlying services are performed and a binding contractual commitment has been established with the customer. If our customers do not agree to contract changes upon changes in our scope of work, we could be exposed to cost overruns and reduced contract profitability. Costs are not deferred in anticipation of contracts being awarded or amendments being finalized, but are expensed as incurred.

Most contracts are terminable by the customer, either immediately or according to advance notice terms specified within the contracts. These contracts require payment of fees for services rendered through the date of termination and may require payment for subsequent services necessary to conclude the study or close out the contract. Final settlement amounts are agreed to with the customer based on remaining work to be performed. These amounts are included in revenue when we believe the amount can be estimated reliably and its realization is probable. In evaluating the probability of recognition, we consider the contractual basis for the settlement amount and the objective evidence available to support the amount.

Certain contracts contain volume rebate arrangements with our customers that provide for rebates if certain specified spending thresholds are met. These obligations are considered as a reduction in revenue when it appears probable that the arrangement thresholds will be met, which can be at contract inception.

We occasionally enter into incentive fee arrangements with customers that provide for additional compensation if certain defined contractual milestones or performance thresholds are met. These additional fees are included in the estimated transaction price when there is a basis to reasonably estimate the amount of the fee and when achievement of the incentive milestone is deemed probable. These estimates are based on anticipated performance, our best judgement at the time or ultimately, upon achievement of the threshold or milestone.

We record revenue net of any tax assessments by governmental authorities that are imposed and concurrent with specific revenue generating transactions.

Substantially all of our contracts consist of a single performance obligation, as the promise to transfer the individual services described in the contracts are not separately identifiable from other promises in the contracts, and therefore not distinct. Revenue recognition is determined by assessing the progress of performance completed or delivered to date compared to total services to be delivered under the terms of the arrangement. The measures utilized to assess progress on the satisfaction of performance are specific to the performance obligation identified in the contract.

For the majority of our contract performance obligations, we utilize the input method of cost to cost to measure progress, as the Company has determined that it is the most consistent measure of progress among contract tasks and represents the most faithful depiction of the transfer of services over the contract life. Under this method, the Company determines cost incurred to date for the services it provides compared to the total estimated costs at completion.

For certain other contractual performance obligations, the Company has determined that an output method is the best measure of progress. These relate to certain unitized contracts, and the Company recognizes revenue in the period in which the unit is delivered compared to total contracted units.

On June 30, 2018, we had approximately $1,014.2 million of performance obligations remaining to be performed for active projects.

The Company incurs costs associated with service delivery including direct labor and related employee benefits, laboratory supplies, and other expenses. These costs are recorded in Direct service costs, excluding depreciation and amortization as a component of Total direct costs in the accompanying condensed consolidated statements of operations.

In addition, the Company incurs expenses on behalf of its customers for various project expenditures including, but not limited to, investigator site payments, travel, meetings, printing, and shipping and handling fees that are reimbursed by our customers at cost. These costs are included in Reimburseable out-of-pocket expenses as a component of Total direct costs in the accompanying condensed consolidated statements of operations.

Total direct costs are expensed as incurred and are not deferred in anticipation of contracts being awarded or finalization of changes in scope.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09 ‘‘Revenue from Contracts with Customers,’’ (ASC 606) to clarify the principles of recognizing revenue and create common revenue recognition guidance between US GAAP and International Financial Reporting Standards. The new standard became effective for the Company in the first quarter 2018.

Under ASC 606, the majority of the Company’s contracts will have a single performance obligation that is satisfied over time, with revenue recognized based on overall project progress measured as of the financial statement date. This represents a change in the Company’s previous revenue accounting methodology, Accounting Standards Codification Topic 605, Revenue Recognition (“ASC 605”), as a majority of contracts were accounted for under the multiple element arrangement guidance. Under the previous revenue recognition accounting methodology, certain revenue related to reimbursable expenses was presented either as a separate line item within Reimbursable out-of-pocket revenue or net of related expenses within Service revenue, net in the condensed consolidated statements of operations. As a result of having a single performance obligation, the Company accounts for all revenue related to reimbursable expenses on a gross basis within a single revenue line item. Measurement of progress on contracts with customers will generally be based on the input measurement of cost incurred relative to the total expected costs to satisfy the performance obligation.

The Company elected to utilize the modified retrospective implementation method for its transition to ASC 606 as of January 1, 2018 (the “Implementation Date”). Under this implementation method, the Company recognized the cumulative effect of initially applying the ASC 606 revenue recognition guidance to contracts that were not completed at the Implementation Date. At the Implementation Date, the Company elected to reflect the aggregate effect of all contract modifications that occurred before January 1, 2018 in determining the satisfied and unsatisfied performance obligations and determination of the transaction price.

The cumulative effect adjustment was recorded as a reduction to the opening balance of Accumulated deficit in the condensed consolidated balance sheets in the amount of $2.7 million, with offsetting amounts of $12.9 million to Accounts receivable and unbilled, net, $(0.7) million to Deferred income taxes, $35.4 million to Accrued expenses, $(57.4) million to Pre-funded study costs and $31.5 million to Advanced billings, respectively. The amounts recorded to Accounts receivable and unbilled, net, Deferred income taxes, Accrued expenses, Pre-funded study costs, and Advanced billings reflect differences between revenue recognized and billings to customers by project as well as costs incurred but not settled as of the Implementation Date. The above disclosed cumulative effect adjustments have been revised from the amounts previously disclosed in our interim financial statements filed on Form 10-Q for the quarterly period ended March 31, 2018 to correct certain immaterial misstatements. The effects of these misstatements were immaterial to our results of operations.

In connection with the implementation of ASC 606 on the modified retrospective method, we are presenting additional information to assist with the comparability of select line items of the current and prior period year to date reporting in our condensed consolidated balance sheets and condensed consolidated statements of operations. Below we have presented the amount by which each financial statement line item is affected in the current reporting period by the application of ASC 606 as compared with the guidance that was in effect before the change (ASC 605).

	Three Months Ended June 30, 2018
	As Reported		Adjustments			As Revised under ASC 605
Revenue:
Revenue, net	$	170,144	$	(170,144	)	$	-
Service revenue, net		-		117,792			117,792
Reimbursed out-of-pocket revenue		-		19,044			19,044
Total revenue		170,144		(33,308	)		136,836
Operating expenses:
Direct service costs, excluding depreciation and amortization		61,478		-			61,478
Reimbursed out-of-pocket expenses		55,198		(36,154	)		19,044
Total direct costs		116,676		(36,154	)		80,522
Total operating expenses		146,799		(36,154	)		110,645
Income from operations		23,345		2,846			26,191
Income before income taxes		21,515		2,846			24,361
Income tax provision		4,947		653			5,600
Net income	$	16,568	$	2,193		$	18,761
Net income per share attributable to common shareholders:
Basic	$	0.46	$	0.07		$	0.53
Diluted	$	0.45	$	0.06		$	0.51
Weighted average common shares outstanding:
Basic		35,519		-			35,519
Diluted		36,664		-			36,664

	Six Months Ended June 30, 2018
	As Reported		Adjustments			As Revised under ASC 605
Revenue:
Revenue, net	$	333,221	$	(333,221	)	$	-
Service revenue, net		-		226,220			226,220
Reimbursed out-of-pocket revenue		-		34,061			34,061
Total revenue		333,221		(72,940	)		260,281
Operating expenses:
Direct service costs, excluding depreciation and amortization		121,819		-			121,819
Reimbursed out-of-pocket expenses		112,111		(78,050	)		34,061
Total direct costs		233,930		(78,050	)		155,880
Total operating expenses		289,757		(78,050	)		211,707
Income from operations		43,464		5,110			48,574
Income before income taxes		39,172		5,110			44,282
Income tax provision		8,053		1,164			9,217
Net income	$	31,119	$	3,946		$	35,065
Net income per share attributable to common shareholders:
Basic	$	0.87	$	0.11		$	0.98
Diluted	$	0.85	$	0.10		$	0.95
Weighted average common shares outstanding:
Basic		35,503		-			35,503
Diluted		36,586		-			36,586

ASSETS	As of June 30, 2018
Current assets:	As Reported			Adjustments			As Revised under ASC 605
Accounts receivable and unbilled, net		115,398			(11,252	)		104,146
Total current assets		158,479			(11,252	)		147,227
Deferred income taxes		5,972			703			6,675
Total assets	$	968,181		$	(10,549	)	$	957,632
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accrued expenses		72,925			(47,935	)		24,990
Pre-funded study costs		-			57,900			57,900
Advanced billings		120,945			(22,940	)		98,005
Other current liabilities		5,933			1,164			7,097
Total current liabilities		233,162			(11,811	)		221,351
Total liabilities		428,100			(11,811	)		416,289
Shareholders’ equity:
Accumulated deficit		(86,599	)		1,262			(85,337	)
Total shareholders’ equity		540,081			1,262			541,343
Total liabilities and shareholders’ equity	$	968,181		$	(10,549	)	$	957,632

CASH FLOWS FROM OPERATING ACTIVITIES:	Six Months Ended June 30, 2018
	As Reported			Adjustments			As Revised under ASC 605
Net income		31,119			3,946			35,065
Changes in assets and liabilities:
Accounts receivable and unbilled, net		(20,289	)		(1,623	)		(21,912	)
Accrued expenses		14,184			(12,589	)		1,595
Pre-funded study costs		-			504			504
Advanced billings		15,846			8,598			24,444
Other assets and liabilities, net		568			1,164			1,732
Net cash provided by operating activities		64,641			-			64,641

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 will be applied on a modified retrospective basis to each prior reporting period presented and is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its condensed consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU 2018-02 allows for an entity to elect to reclassify the income tax effects on items within accumulated other comprehensive income resulting from U.S. tax reform to retained earnings. The guidance may be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized and is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, including interim periods within those years. The Company is currently evaluating the effect this standard will have on its condensed consolidated financial statements.

Basic and diluted earnings or loss per share (“EPS”) are computed using the two-class method, which is an earnings allocation that determines EPS for each class of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Restricted Stock Awards (“RSAs”) are considered participating securities because they are legally issued at the date of grant and holders are entitled to receive non-forfeitable dividends during the vesting term.

The computation of diluted EPS includes additional common shares, such as unvested stock options with exercise prices less than the average market price of the Company’s common stock during the period (“in-the-money options”), which would be considered outstanding under the treasury stock method. The treasury stock method assumes that additional shares would have to be issued in cases where the exercise price of stock options is less than the value of the common stock being acquired because the cash proceeds received from the stock option holder would not be sufficient to acquire that same number of shares. The Company does not compute diluted EPS in cases where the inclusion of such additional shares would be anti-dilutive in effect.

The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2018 and 2017 (in thousands, except for earnings per share):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Weighted-average shares:
Common shares outstanding		35,519		40,183		35,503		40,425
RSAs		144		59		145		59
Total weighted-average shares		35,663		40,242		35,648		40,484
Earnings per common share—Basic
Net income	$	16,568	$	9,553	$	31,119	$	18,000
Less: Undistributed earnings allocated to RSAs		67		14		127		26
Net income available to common shareholders—Basic	$	16,501	$	9,539	$	30,992	$	17,974

Net income per common share—Basic	$	0.46	$	0.24	$	0.87	$	0.44

Basic weighted-average common shares outstanding		35,519		40,183		35,503		40,425
Effect of diluted shares		1,145		642		1,083

Class		Number of Shares Outstanding
Common Stock $0.01 par value		35,555,874 shares outstanding as of July 27, 2018

Item Number		Page
	PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2018 and 2017	4
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2018 and 2017	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28

	PART II — OTHER INFORMATION	29
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	30
EXHIBIT INDEX		31
SIGNATURES		32

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☒