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Liquidity
3 Months Ended
Mar. 31, 2013
Liquidity [Abstract]  
Liquidity
Liquidity

For the three month periods ended March 31, 2013 and 2012, the Company incurred net losses of $2.6 million and $3.1 million, respectively, which include losses from operations. Restructuring charges are included in results for each of the three month periods ended March 31, 2013 and 2012.  The Company has managed its liquidity through a series of cost reduction and accounts receivable collection initiatives, and by obtaining a new credit facility.

At March 31, 2013, the Company had $3.8 million in cash and cash equivalents and no outstanding debt.  The Company's net cash used in operating activities for the three month periods ended March 31, 2013 and 2012 was $3.2 million and $2.4 million, respectively. For the three month periods ended March 31, 2013 and 2012, the Company's capital expenditures totaled $0.3 million and $1.0 million, respectively.

As of February 28, 2013, the Company entered into a three year Loan and Security Agreement, amended as of March 28, 2013 by the First Amendment (collectively, 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 twelve months ending June 30, 2014 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.

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.

During 2012, the Company continued to restructure its Portamedic service line, which restructuring included the deployment of a new model for delivering paramedical exam services. The restructure has 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 three month period ended March 31, 2013, the Company's consolidated revenues totaled $34.8 million, representing a decline of 10.3% 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 its costs and cash outflows, including headcount reductions and a reduction in capital expenditures and operating expenses.  These and other actions taken during 2012 have contributed to the 15.0% reduction in first quarter 2013 selling, general and administrative expenses, as compared to the first quarter of 2012, and are expected to reduce or delay expenses and uses of cash during the remainder of 2013 and thereafter.
    
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 (see note 4) and the Company will be required to take additional actions to further reduce or delay expenses and uses of cash. 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 in the 2013 Loan and Security Agreement, as discussed in Note 8. The Company's failure to comply with these financial covenants may limit or eliminate its borrowing capacity under the terms of the 2013 Loan and Security Agreement. 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 March 31, 2014.