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Liquidity Liquidity
12 Months Ended
Dec. 31, 2012
Liquidity [Abstract]  
Liquidity
Liquidity

For the two years ended December 31, 2012 and 2011, the Company incurred losses from continuing operations of $17.7 million, and $3.6 million, respectively, which include losses from operations. The Company reported income from continuing operations of $1.4 million for the year ended December 31, 2010. Restructuring charges are included in results for each of the three years ended December 31, 2012.  The Company has managed its liquidity through a series of cost reduction and accounts receivable collection initiatives.

At December 31, 2012, the Company had $8.3 million in cash and cash equivalents and no outstanding debt.  The Company's net cash (used in) provided by operating activities of continuing operations for the three years ended December 31, 2012, 2011 and 2010 was $(4.2) million, $0.8 million and $9.4 million, respectively. For the three years ended December 31, 2012, the Company's capital expenditures totaled $4.1 million, $4.8 million and $4.3 million.

On February 28, 2013, the Company entered into a three year Loan and Security Agreement (the “2013 Loan and Security Agreement”) with Keltic Financial Partners II, LP (“Keltic Financial”), the proceeds of which are to be used for working capital purposes and capital expenditures. The 2013 Loan and Security Agreement provides a revolving credit facility to the Company in an aggregate principal amount at any one time outstanding which does not exceed 85% of “Eligible Receivables” (as defined in the 2013 Loan and Security Agreement), provided that in no event can the aggregate amount of the revolving credit loans at any time exceed $10 million. The Company may also request a revolving credit increase amount, not to exceed $5 million, subject to certain terms and conditions and at the sole discretion of Keltic Financial.

The 2013 Loan and Security Agreement contains covenants, including financial covenants which require the Company to achieve a minimum EBITDA amount (earnings before interest expense, taxes, depreciation and amortization) with the six months ending June 30, 2013 as the first measurement date. In addition, the Company has limitations on the maximum amount of unfunded capital expenditures for each fiscal year, beginning with the year ending December 31, 2013. On March 28, 2013, the Company entered into the First Amendment to the 2013 Loan and Security Agreement, whereby the first measurement date for minimum EBITDA was changed to the twelve months ending June 30, 2014.

The failure of the Company or any subsidiary guarantor to comply with any of the covenants may limit or eliminate the Company's borrowing capability under the terms of the 2013 Loan and Security Agreement.

In June 2012, the Company restructured its Portamedic service line, which included the deployment of a new model for delivering paramedical exam services. The restructure resulted in, among other things, the closure of branch offices, headcount reductions, the elimination of both fixed and variable costs and the consolidation of certain services into centralized customer service centers. For the year ended December 31, 2012, the Company's consolidated revenues totaled $146.3 million, representing a decline of 7.1% from the prior year period which was primarily attributable to the Portamedic service line.  The Company is monitoring the impact of the new Portamedic delivery model and will continue to modify and expand the model, with management's longer-term expectation of a favorable impact on future Portamedic revenues. Nonetheless, in response to the declining revenues in the fourth quarter of 2012, the Company implemented additional actions to reduce our costs and cash outflows, including headcount reductions and a reduction in capital expenditures and operating expenses.  The actions taken are expected to reduce or delay expenses and uses of cash during 2013 and thereafter. In the fourth quarter of 2012 and continuing in 2013, Portamedic revenue declines continued at higher rates compared to pre-June 2012 revenue declines, thus triggering the Company to perform an impairment evaluation of the long-lived assets associated with the Portamedic new model for delivering paramedical exam services. The evaluation resulted in an impairment charge associated with these long-lived assets totaling $4.9 million, which is included in the accompanying consolidated statement of operations for the year ended December 31, 2012.

    
If the new Portamedic delivery model, and the Company's other services, are not successful and revenues continue to decline, operating losses will continue, assets may become further impaired and the Company will be required to take additional actions to further reduce or delay expenses and uses of cash. This would also reduce the Company's cash reserves and would require it to borrow under its new 2013 credit facility. Reductions or restrictions of Eligible Receivables could affect the Company's borrowing capacity. There is no guarantee that the Portamedic delivery model will reverse the decline in revenues or that the Company's cost reduction actions will generate the savings necessary to offset revenue declines, operating losses and uses of cash.

In addition, if the Company is unsuccessful in reversing past revenue declines and cost reduction initiatives cannot be implemented to offset revenue declines, the Company may fail to satisfy the financial covenants maintained in the 2013 Loan and Security Agreement, as discussed in Note 9. These and other factors would adversely affect the Company's liquidity and its ability to generate profits in the future.

Based on the Company's anticipated level of future revenues, the cost reduction initiatives implemented to date, along with the Company's existing cash, cash equivalents and borrowing capacity, the Company believes it has sufficient funds to meet its cash needs through at least December 31, 2013.