What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-04-27 compared with 2020-10-27 · 80 added, 135 removed, 296 unchanged (42% of the section changed)

4 unchanged sentences

(Amounts in thousands, except share amounts)

September 30,

Current assets:

Cash and cash equivalents

Accounts receivable and unbilled, net (includes $ 2.9 million and $ 1.9 million with related parties at September 30, 2020 and December 31, 2019, respectively)

Accounts receivable and unbilled, net (includes $ 2.2 million and $ 2.6 million with related parties at March 31, 2021 and December 31, 2020, respectively)

Prepaid expenses and other current assets

6 unchanged sentences

Current liabilities:

Accounts payable (includes $ 0.2 million and $ 0.2 million with related parties at September 30, 2020 and December 31, 2019, respectively)

Accounts payable (includes $ 0.1 million and $ 0.2 million with related parties at March 31, 2021 and December 31, 2020, respectively)

Accrued expenses

Advanced billings (includes $ 4.6 million and $ 3.0 million with related parties at September 30, 2020 and December 31, 2019, respectively)

Advanced billings (includes $ 6.1 million and $ 6.5 million with related parties at March 31, 2021 and December 31, 2020, respectively)

Other current liabilities

8 unchanged sentences

5,000,000 shares authorized;

no shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

no shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

Common stock - $ 0.01 par-value;

250,000,000 shares authorized at September 30, 2020 and December 31, 2019, respectively;

35,757,453 and 36,065,278 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

Treasury stock - 200,000 shares at September 30, 2020 and December 31, 2019, respectively

250,000,000 shares authorized at March 31, 2021 and December 31, 2020, respectively;

35,926,158 and 35,519,989 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

Treasury stock - 185,000 shares at March 31, 2021 and December 31, 2020, respectively

Additional paid-in capital

9 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Revenue, net (includes $ 3.4 million and $ 4.6 million with related parties for the three months ended September 30, 2020 and 2019, respectively, and $ 11.6 million and $ 13.7 million with related parties for the nine months ended September 30, 2020 and 2019, respectively)

Revenue, net (includes $ 5.3 million and $ 5.5 million with related parties for the three months ended March 31, 2021 and 2020, respectively)

Operating expenses:

5 unchanged sentences

Income from operations

Other income (expense), net:

Miscellaneous income (expense), net

Other income, net:

Miscellaneous income, net

Interest (expense) income, net

Total other income (expense), net

Total other income, net

Income before income taxes

8 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Other comprehensive income

8 unchanged sentences

BALANCE — December 31, 2019

Impact to Retained Earnings from adoption of ASU 2016-02

BALANCE — January 1, 2019

Foreign currency translation

1 unchanged sentence

Stock options exercised

Repurchases of common stock

BALANCE — March 31, 2020

Foreign currency translation

Stock-based compensation expense

Stock options exercised

BALANCE — June 30, 2019

Foreign currency translation

Stock-based compensation expense

Stock options exercised

BALANCE — September 30, 2019

Comprehensive

3 unchanged sentences

Stock options exercised

Repurchases of common stock

BALANCE — March 31, 2021

Foreign currency translation

Stock-based compensation expense

Stock options exercised

Repurchases of common stock

BALANCE — June 30, 2020

Foreign currency translation

Stock-based compensation expense

Stock options exercised

BALANCE — September 30, 2020

See notes to condensed consolidated financial statements.

3 unchanged sentences

(Amounts in thousands)

Nine Months Ended

September 30,

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

1 unchanged sentence

Stock-based compensation expense

Amortization of debt issuance costs and discount

Noncash lease expense

16 unchanged sentences

Repurchases of common stock

Payment of debt

Net cash used in financing activities

Net cash provided by (used in) financing activities

EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS, AND

3 unchanged sentences

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION—

Acquisition of property and equipment—non-cash

See notes to condensed consolidated financial statements.

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2020

March 31, 2021

(1) Basis of Presentation

15 unchanged sentences

In the first quarter of 2018, the Board of Directors approved a share repurchase program authorizing up to $ 50.0 million in share repurchases.

In the first quarter of 2020, the Board of Directors approved an additional $ 50.0 million in share repurchases, bringing the total to $ 100.0 million authorized under the share repurchase program.

There were no share repurchases during the three months ended September 30, 2020.

During the nine months ended September 30, 2020, the Company repurchased 772,125 shares for $ 50.8 million.

As of September 30, 2020, $ 49.2 million remained available under the repurchase program authorization.

In the first quarter of 2020, the Board of Directors approved an increase in the stock repurchase authorization by $ 50.0 million.

In the fourth quarter of 2020, the Board approved the stock repurchase authorization up to $ 150.0 million.

During the quarter ended March 31, 2020, the Company repurchased 661,637 shares for $ 43.2 million.

As of March 31, 2021, we have remaining authorization of $ 102.6 million remaining under the repurchase program.

Repurchases under the share repurchase program are executed in the open market or negotiated transactions under trading plans put in place pursuant to Rule 10b5-1.

The Company constructively retires all repurchased shares with all amounts paid in excess of par value reflected within Retained earnings in the Company’s condensed consolidated balance sheets.

The Company constructively retired the repurchased shares associated with these approved share repurchases, with all amounts paid in excess of par value reflected within Retained earnings in the Company’s condensed consolidated balance sheets.

The repurchase program may be suspended or discontinued at any time without notice.

Supplemental Cash Flow Disclosure

During the three months ended March 31, 2020, the company engaged in a non-cash financing activity of $ 1.4 million related to share repurchases executed, but not yet paid as of March 31, 2020.

Recently Adopted Accounting Standards

3 unchanged sentences

The guidance is effective for fiscal years beginning after December 15, 2019 with early adoption permitted.

The Company adopted this standard in the first quarter of 2020 and it had no impact to the condensed consolidated financial statements.

The Company adopted this standard in the first quarter of 2020 and it had no material impact to the condensed consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes.” The new guidance includes several provisions to reduce the complexity of accounting for income taxes for financial reporting purposes and increasing consistency and clarity for financial statement readers.

The new guidance is effective for public entities for fiscal years, and the related interim periods, beginning after December 15, 2020.

The Company adopted this standard in the first quarter of 2021 and it has no material impact on the condensed consolidated financial statements.

(2) Net Income Per Share

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’s Restricted Stock Awards (“RSA”) 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 Restricted Stock Units (“RSU”) and 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.

This 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 nine months ended September 30, 2020 and 2019 (in thousands, except for earnings per share):

The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2021 and 2020 (in thousands, except for earnings per share):

Three Months Ended

Nine Months Ended

September 30,

Weighted-average shares:

9 unchanged sentences

Net income per common share—Diluted

During the three and nine months ended September 30, 2020, the Company had 4,800 and 204,205 stock options, respectively, that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period.

During the three and nine months ended September 30, 2019, the Company had 245,000 stock options, respectively, that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period.

During the three months ended March 31, 2021 and 2020, the Company had 0 and 439,405 stock options, respectively, that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period.

(3) Fair Value Measurements

6 unchanged sentences

The fair value of financial instruments such as cash and cash equivalents, accounts receivable and unbilled, net, accounts payable, accrued expenses and advanced billings approximate their carrying amounts due to their short term maturities.

The Company does not have any recurring fair value measurements as of September 30, 2020.

There were no transfers between Level 1, Level 2 or Level 3 during the three and nine months ended September 30, 2020 or 2019.

The Company does not have any recurring fair value measurements as of March 31, 2021.

There were no transfers between Level 1, Level 2 or Level 3 during the three months ended March 31, 2021 or 2020.

(4) Contract Assets and Contract Liabilities

6 unchanged sentences

Accounts receivable and unbilled, net consisted of the following (in thousands):

September 30,

Accounts receivable

3 unchanged sentences

Contract Liabilities

Advanced billings represents cash received from customers, or billed amounts per an agreed upon payment schedule, in advance of services being performed or revenue being recognized.

Advanced billings represent cash received from customers, or billed amounts per an agreed upon payment schedule, in advance of services being performed or revenue being recognized.

Advanced billings consisted of the following (in thousands):

September 30,

Advanced billings

As of September 30, 2020, we had approximately $ 1.5 billion of performance obligations remaining to be performed for active projects.

As of March 31, 2021, we had approximately $ 1.8 billion of performance obligations remaining to be performed for active projects.

(5) Intangible Assets, Net

Intangible assets, net consisted of the following (in thousands):

September 30,

Intangible assets:

2 unchanged sentences

Customer relationships

Total finite-lived intangible assets

Accumulated amortization:

Customer relationships

Total accumulated amortization

Total finite-lived intangible assets, net

1 unchanged sentence

Total intangible assets, net

As of September 30, 2020, estimated amortization expense of the Company’s intangible assets for each of the next five years and thereafter is as follows (in thousands):

As of March 31, 2021, estimated amortization expense of the Company’s intangible assets for each of the next five years and thereafter is as follows (in thousands):

Remainder of 2021

1 unchanged sentence

Accrued expenses consisted of the following (in thousands):

September 30,

Employee compensation and benefits

4 unchanged sentences

On March 30, 2020, the Company amended the credit facility to extend its expiration date to March 31, 2021 and add provisions for alternative interest rates when certain interbank market offered rates are not available.

As of September 30, 2020, there were no outstanding borrowings under the Credit Facility and $ 0.2 million in letters of credit outstanding related to certain operating lease obligations, which are secured by the Credit Facility.

( 8 ) Leas es

On March 29, 2021, the Company amended the credit facility expiration date to March 31, 2022.

As of March 31, 2021, there were no outstanding borrowings under the Credit Facility and $ 0.2 million in letters of credit outstanding related to certain operating lease obligations, which are secured by the Credit Facility.

The Company enters into leases for real estate and equipment.

4 unchanged sentences

The components of lease expense were as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Operating lease cost

1 unchanged sentence

Supplemental cash flow information related to the leases was as follows (in thousands):

Nine Months Ended September 30,

Three Months Ended March 31,

Cash paid for amounts included in the measurement of lease liabilities:

3 unchanged sentences

Supplemental balance sheet information related to the leases was as follows (in thousands):

September 30,

Operating lease right-of-use assets

6 unchanged sentences

Operating leases

Lease payments due related to lease liabilities as of September 30, 2020 were as follows (in thousands):

Lease payments due related to lease liabilities as of March 31, 2021 were as follows (in thousands):

Related Party

6 unchanged sentences

imputed interest

The Company began to occupy an additional leased corporate headquarters building in the second quarter of fiscal year 2020.

See Note 12 for details of this related party lease.

As of September 30, 2020, we have several additional leases with contractual obligations, which have not yet commenced, with future payments of $ 1.5 million through 2025.

(9) Shareholder’s Equity and Stock-Based Compensation

The Company granted 347,197 awards to employees under the 2016 Incentive Award Plan during the nine months ended September 30, 2020, consisting of 20,724 restricted stock awards (“RSA”) and 119,768 restricted stock units (“RSU”) vesting after four years , 4,800 stock option awards and 2,500 RSU vesting after three years , and 199,405 fully-vested stock option awards.

The Company granted an additional 23,148 stock option awards, vesting after one year , to non-employee directors under the 2016 Incentive Award Plan, during the nine months ended September 30, 2020.

The Company granted 778,986 awards to employees under the 2016 Incentive Award Plan during the nine months ended September 30, 2019, consisting of 10,000 stock option awards and 190,310 RSU vesting after four years , 5,000 stock option awards vesting after one year , 551,676 fully-vested stock option awards and 22,000 stock option awards with vesting in twelve equal monthly installments beginning on March 31, 2019.

The Company granted an additional 38,832 stock option awards, vesting after one year , to non-employee directors under the 2016 Incentive Award Plan, during the nine months ended September 30, 2019.

The Company granted no awards to employees under the 2016 Incentive Award Plan during the three months ended March 31, 2021.

The Company granted 312,897 awards to employees under the 2016 Incentive Award Plan during the three months ended March 31, 2020, consisting of 20,724 RSA and 92,768 restricted stock units RSU vesting after four years , and 199,405 fully-vested stock option awards.

Award Activity

The following table sets forth the Company’s stock option activity:

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

Weighted Average

6 unchanged sentences

The following table sets forth the Company’s RSA/RSU activity:

Nine Months Ended

September 30, 2020

Three Months Ended

March 31, 2021

Outstanding and unvested - beginning of period

2 unchanged sentences

Stock-based compensation expense recognized in the condensed consolidated statements of operations related to all outstanding stock based compensation awards is summarized below (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Total direct costs

2 unchanged sentences

(10) Income Taxes

The Company’s effective income tax rate was 11.8 % and 18.6 % for the three months ended September 30, 2020 and 2019, respectively.

The Company’s effective income tax rate was 17.0 % and 20.3 % for the nine months ended September 30, 2020 and 2019, respectively.

The Company’s effective income tax rate for the three and nine months ended September 30, 2020 varied from the U.S.

statutory rate of 21 % primarily due to the impact of state taxes, which was favorably offset by previously acquired tax attributes, tax benefits related to Foreign Derived Intangible Income (FDII) and excess tax benefits recognized from share-based compensation.

The Company’s effective income tax rate was 10.7 % and 20.6 % for the three months ended March 31, 2021 and 2020, respectively.

The Company’s effective income tax rate for the three months ended March 31, 2021 varied from the U.S.

statutory rate of 21 % primarily due to the impact of state taxes, which was favorably offset by tax benefits related to Foreign Derived Intangible Income (FDII) and excess tax benefits recognized from share-based compensation.

(11) Commitments and Contingencies

1 unchanged sentence

The Company is involved in legal proceedings from time to time in the ordinary course of its business, including employment claims and claims related to other business transactions.

The Company cannot predict with certainty the outcome of such proceedings, but it believes that adequate reserves have been recorded and losses already recognized with respect to such proceedings, which were immaterial as of September 30, 2020 and December 31, 2019.

There is a reasonable possibility that a loss exceeding amounts already recognized may be incurred related to these actions;

however, the Company believes that such potential losses were immaterial as of September 30, 2020.

however, the Company believes that such potential losses were immaterial as of March 31, 2021.

Purchase Commitments

The Company has several minimum purchase commitments for project related supplies totaling $ 10.2 million.

The Company has several minimum purchase commitments for project related supplies totaling $ 12.6 million as of March 31, 2021.

In return for the commitment, Medpace receives preferential pricing.

3 unchanged sentences

The Company periodically extends short term loans or advances to employees, typically upon commencement of employment.

Total receivables as a result of these employee advances of $ 0.2 million existed at September 30, 2020 and December 31, 2019, respectively, and are included in the Prepaid expenses and other current assets and Other assets line items of the condensed consolidated balance sheets, respectively, depending on the contractual repayment date.

Total receivables as a result of these employee advances of $ 0.2 million existed at March 31, 2021 and December 31, 2020, respectively, and are included in the Prepaid expenses and other current assets and Other assets line items of the condensed consolidated balance sheets, respectively, depending on the contractual repayment date.

Service Agreements

Cymabay Therapeutics, Inc.

Cymabay is a clinical-stage biopharmaceutical company developing therapies to treat metabolic diseases with high unmet medical need, including serious rare and orphan disorders.

A Medpace employee was a member Cymabay’s board of directors from the first quarter of 2016 until his resignation in the first quarter of 2020.

The Company and Cymabay entered into a MSA dated October 21, 2016.

Subsequently, the Company and Cymabay have entered into several task orders for the Company to perform clinical trial related services.

The Company recognized total revenue from Cymabay of $ 3.5 million and $ 9.4 million during the three and nine months ended September 30, 2019 , respectively, in the Company’s condensed consolidated statements of operations.

As of December 31, 2019, the Company had Advanced billings from Cymabay of $ 1.6 million in the condensed consolidated balance sheets.

As of December 31, 2019, the Company had Accounts receivable and unbilled, net from Cymabay of $ 1.4 million recorded in the condensed consolidated balance sheets.

As of the first quarter of 2020, Cymabay is no longer considered a related party.

LIB Therapeutics LLC and subsidiaries (“LIB”)

2 unchanged sentences

Subsequently, the Company and LIB have entered into several task orders for the Company to perform clinical trial related services.

The Company recognized total revenue from LIB of $ 0.6 million and $ 0.5 million during the three months ended September 30, 2020 and 2019, respectively, and $ 2.0 million and $ 1.5 million during the nine months ended September 30, 2020 and 2019, respectively, in the Company’s condensed consolidated statements of operations.

As of September 30, 2020 and December 31, 2019, respectively, the Company had Advanced billings from LIB of $ 0.7 million and $ 0.5 million recorded in the condensed consolidated balance sheets.

In addition, as of September 30, 2020 and December 31, 2019, respectively, the Company had Accounts receivable and unbilled, net from LIB of $ 0.3 million and $ 0.3 million recorded in the condensed consolidated balance sheets.

During the three months ended March 31, 2021 and 2020, the Company recognized total revenue from LIB of $ 0.5 million and $ 1.0 million, respectively, in the Company’s condensed consolidated statements of operations.

As of March 31, 2021 and December 31, 2020, respectively, the Company had Advanced billings from LIB of $ 0.6 million and $ 0.7 million recorded in the condensed consolidated balance sheets.

In addition, as of March 31, 2021 and December 31, 2020, respectively, the Company had Accounts receivable and unbilled, net from LIB of $ 0.1 million and $ 0.3 million recorded in the condensed consolidated balance sheets.

CinRX Pharma and subsidiaries (“CinRx”)

1 unchanged sentence

The Company and CinRx have entered into several task orders for the Company to perform clinical trial related services.

The Company recognized total revenue from CinRx of $ 2.7 million and $ 0.5 million during the three months ended September 30, 2020 and 2019, respectively, and $ 9.5 million and $ 2.8 million during the nine months ended September 30, 2020 and 2019, respectively, in the Company’s condensed consolidated statements of operations.

As of September 30, 2020 and December 31, 2019, respectively, the Company had Advanced billings from CinRx of $ 3.9 million and $ 0.9 million recorded in the condensed consolidated balance sheets.

As of September 30, 2020 and December 31, 2019 the Company had Accounts receivable and unbilled, net from CinRx of $ 2.6 million and $ 0.2 million, respectively, in the condensed consolidated balance sheets.

During the three months ended March 31, 2021 and 2020, the Company recognized total revenue from CinRx of $ 4.8 million and $ 4.4 million, respectively, in the Company’s condensed consolidated statements of operations.

As of March 31, 2021 and December 31, 2020, respectively, the Company had Advanced billings from CinRx of $ 5.5 million and $ 5.8 million recorded in the condensed consolidated balance sheets.

As of March 31, 2021 and December 31, 2020 the Company had Accounts receivable and unbilled, net from CinRx of $ 2.0 million and $ 2.2 million, respectively, in the condensed consolidated balance sheets.

The Summit Hotel (“The Summit”)

1 unchanged sentence

Medpace incurs travel lodging and meeting expenses at The Summit.

Medpace incurred expenses of less than $ 0.1 million and $ 0.2 million during the three months ended September 30, 2020 and 2019, respectively, and $ 0.2 million and $ 0.5 million during the nine months ended September 30, 2020 and 2019, respectively, at The Summit.

During the three months ended March 31, 2021 and 2020, Medpace incurred expenses of $ 0.1 million and $ 0.2 million at The Summit, respectively.

Leased Real Estate

5 unchanged sentences

Annual base rent for its corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index.

Operating lease cost recognized for the three months ended September 30, 2020 and 2019 was $ 0.5 million, respectively, and $ 1.5 million, for the nine months ended September 30, 2020 and 2019, respectively.

Operating lease cost recognized for the three months ended March 31, 2021 and 2020 was $ 0.5 million, respectively.

The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations.

The Operating lease right-of-use assets at September 30, 2020 and December 31, 2019 were $ 3.9 million and $ 5.3 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at September 30, 2020 were $ 1.8 million and $ 2.1 million, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The Operating lease right-of-use assets at March 31, 2021 and December 31, 2020 were $ 3.0 million and $ 3.5 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at March 31, 2021 were $ 1.9 million and $ 1.1 million, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at December 31, 2020 were $ 1.9 million and $ 1.6 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

2 unchanged sentences

The Company began to occupy the premises in the second quarter of fiscal year 2020.

The lease expires in 2040 and the Company has two 10 -year options to extend the term of the lease.

The lease expires in 2040 and the Company has two

10 -year options to extend the term of the lease.

The Company pays rent, taxes, insurance, and maintenance expenses that arise from the use of the property.

Annual base rent for the corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index.

Annual base rent for the corporate headquarters allows for adjustments to the rental rate annually for increases in consumer price index.

The Company has determined that the lease is an operating lease.

Operating lease cost recognized for the three and nine months ended September 30, 2020 was $ 1.3 million and $ 2.2 million, respectively.

Operating lease cost recognized for the three months ended March 31, 2021 was $ 1.4 million.

The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations.

The Operating lease right-of-use assets at September 30, 2020 were $ 52.1 million in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at September 30, 2020 were $ 1.0 million and $ 61.5 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The Operating lease right-of-use assets at March 31, 2021 and December 31, 2020 were $ 56.2 million and $ 56.6 million in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at March 31, 2021 were $ 0.8 million and $ 66.6 million, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at December 31, 2020 were $ 0.7 million and $ 66.8 million, respectively and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The Company entered into two multi-year lease agreements governing the occupancy of space of two buildings in Cincinnati, Ohio with an entity that is wholly owned by the Company’s chief executive officer and certain members of his immediate family.

3 unchanged sentences

The Company has determined that the leases are operating leases.

Operating lease cost recognized for the three months ended September 30, 2020 and 2019 was $ 0.9 million, respectively, and $ 2.7 million for the nine months ended September 30, 2020 and 2019, respectively.

Operating lease cost recognized for the three months ended March 31, 2021 and 2020 was $ 0.9 million, respectively.

The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations.

The Operating lease right-of-use assets at September 30, 2020 and December 31, 2019 were $ 20.2 million and $ 21.9 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at September 30, 2020 were $ 2.4 million and $ 17.8 million, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The Operating lease right-of-use assets at March 31, 2021 and December 31, 2020 were $ 19.1 million and $ 19.7 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at March 31, 2021 were $ 2.5 million and $ 16.6 million, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at December 31, 2020 were $ 2.4 million and $ 17.2 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

Travel Services

The Company incurs expenses for travel services for company executives provided by a private aviation charter company that is owned by the chief executive officer and the executive vice president of operations of the Company (“private aviation charter”).

The Company incurs expenses for travel services for company executives provided by private aviation charter companies which in 2020 was a company owned by the chief executive officer and the executive vice president of operations of the Company and commencing in 2021 is a company controlled by the chief executive officer of the Company (each a “private aviation charter”).

The Company may contract directly with the private aviation charter for the use of its aircraft or indirectly through a third party aircraft management and jet charter company (the “Aircraft Management Company”).

1 unchanged sentence

The Aircraft Management Company also makes the private aviation charter aircraft available to third parties.

The Company incurred travel expenses of $ 0.2 million and $ 0.3 million during the three months ended September 30, 2020 and 2019, respectively, and $ 0.6 million and $ 0.9 million during the nine months ended September 30, 2020 and 2019, respectively, related to these travel services.

The Company incurred travel expenses of $ 0.1 million and $ 0.2 million during the three months ended March 31, 2021 and 2020, respectively, related to these travel services.

These travel expenses are recorded in Selling, general and administrative in the Company’s condensed consolidated statements of operations.

As of September 30, 2020 and December 31, 2019, the Company had Accounts payable to the Aircraft Management Company of $ 0.2 million, respectively, and less than $ 0.1 million in the condensed consolidated balance sheets.

(13) Entity Wide Disclosures

2 unchanged sentences

Three Months Ended

Nine months Ended

September 30,

March 31, 2021

Three Months Ended

March 31, 2020

Therapeutic Area

1 unchanged sentence

Total revenue

In the current quarter and for all periods presented, the revenue associated with medical device projects, previously a separate therapeutic area, has been included in the respective therapeutic area that best aligns with the therapeutic focus of the medical device project and represents how management evaluates disaggregated revenue in its internal reporting.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements