27400000
187000
776000
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1377000
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2406000
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8300000
21400000
5400000
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6500000
32040067
54000
47200000
546000
1085000
5979000
2523000
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3052000
90309000
43798000
42600000
3700000
900000
500000
75000
484000
0.32
670900000
4931
1.00
331000
81995000
167859000
-37000
27677000
174926000
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303000
82010000
83073000
280320000
658000
-70000
31647000
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13161000
177437000
44805000
20527000
3127000
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396000000
53540000
31787000
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0
10000000
49634000
75000000
31748000
280813000
31748000
13485000
68542000
8171000
7517000
0
316000
743000
1397000
5801000
5968000
1818000
1275000
654000
3267000
2523000
1894000
7859000
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1171000
332000
5968000
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16445000
94809000
78364000
109765000
3276000
396000000
94970000
8694000
603000
1095000
18183000
10245000
30772000
5346000
476000
6.74
286108000
397000
18000
2581000
350000
23.36
253000
108678000
35988000
96323000
155011000
1000
53540000
52000
53591000
44436000
50000
44486000
1000
9104000
2000
9105000
11539000
66446000
11539000
77985000
66446000
4906000
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11918000
20885000
4862000
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-51000
31748000
280813000
5346000
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16381000
69230000
2205000
11062000
12877000
199728000
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4836000
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12500000
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1.3
31908000
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9911000
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327000
1015000
3115000
4599000
1926000
1467000
1981000
1110000
2917000
1330000
1881000
6302000
617000
841000
548000
1926000
3337000
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9438000
7356000
28814000
6277000
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1610000
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3744000
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16174000
8992000
34854000
17542000
5912000
5912000
23.16
376000
7.44
376000
7.44
300170000
360000
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2602000
337000
0.50
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23.13
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P13Y
P5Y
P6Y
44120000
3880000
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90529000
P13Y
P5Y
P6Y
89850000
679000
225000
1000000
3
-2358000
2581000
-2541000
8543000
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600
P1Y
49310
54241
329000
1100000
3008000
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312000
16000
3280000
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8588000
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0.29
3008000
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0
72000
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13719000
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6173000
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673000
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56000
3075000
-1110000
379000
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1372000
1006000
736000
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34917000
975000
99961000
8621000
13557000
-33000
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29259000
1401000
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756000
7265000
88075000
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15359000
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24214000
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-429000
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0
30436000
30057000
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1800000
230000
526000
13551000
965000
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0.45
0.44
5257000
-25418000
1617000
1061000
1548000
2007000
34193000
6693000
39986000
11403000
161289000
3986000
-2559000
332000
13520000
824000
1340000
547000
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3008000
3280000
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54000
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8621000
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2200000
1000000
false
Less than three months
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman">
<b>Advertising</b></p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify">The Company expenses the costs of advertising as
incurred. Advertising expense for the years ended December 31,
2017, 2016, and 2015 was approximately $1.0 million,
$1.0 million, and $1.1 million, respectively.</p>
</div>
1852000
471000
58000
1852000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt" align="justify">Changes in the allowance for doubtful accounts and
the amounts charged to bad debt expense for the years ended
December 31 were as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="68%" align="center" border="0">
<tr>
<td width="12%"></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Allowance Balance at</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 76.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Beginning of Period</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Charged to Costs and</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 35.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Expenses</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 39.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b><font style="WHITE-SPACE: nowrap">Write-offs</font></b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Allowance Balance at</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 53.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>End of Period</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2017</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">
            863</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">
        1,813</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
         (471</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">
          2,205</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2016</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">303</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">640</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(80</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">863</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2015</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">331</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">284</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(312</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">303</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
</table>
</div>
9500000
10100000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>5. BUSINESS COMBINATIONS</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b><i>Morrisey Associates, Inc.</i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">On August 8, 2016, Echo, Inc.
(“Echo”), a wholly owned subsidiary of the Company,
acquired all of the outstanding stock of Morrisey Associates, Inc.
(“MAI”), a Chicago, Illinois based company that
provides credentialing and privileging software to healthcare
organizations. The acquisition of MAI allows the Company to expand
its credentialing and privileging product offerings and solutions
to healthcare organizations. The consideration paid for MAI
consisted of approximately $48.0 million in cash, which the
Company funded with cash on hand, and was not subject to any
post-closing working capital or similar adjustment. The Company
incurred approximately $953,000 in transaction costs, all of which
were incurred during the year ended December 31, 2016. The
transaction costs were recorded in other general and administrative
expenses in the consolidated statements of income. The results of
operations for MAI have been included in the Company’s
consolidated financial statements from the date of acquisition and
are also included in the HealthStream Provider Solutions
segment.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">A summary of the purchase price is as follows (in
thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="96%" align="center" border="0">
<tr>
<td width="89%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cash paid at closing</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">44,120</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cash held in escrow</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,880</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total consideration paid</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        48,000</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The following table summarizes the fair value of
the assets acquired and liabilities assumed as of the date of
acquisition (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="98%" border="0">
<tr>
<td width="90%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Accounts receivable, net</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2,406</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Prepaid royalties and other prepaid assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">187</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Property and equipment</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">75</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred tax assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,377</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Goodwill</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">21,000</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Intangible assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">27,400</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Accounts payable and accrued liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(776)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred revenue</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(3,669)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net assets acquired</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      48,000</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The excess purchase price over the fair values of
net tangible and intangible assets was recorded as goodwill. The
fair values of tangible and identifiable intangible assets,
deferred revenue, and other liabilities assumed were based on
management’s estimates and assumptions. The goodwill balance
was primarily attributed to the assembled workforce, additional
market opportunities from offering MAI’s products, and
expected synergies from integrating MAI with other products or
other combined functional areas within the Company. During the
three months ended September 30, 2017, the Company determined
that a portion of the acquired accounts receivable required an
adjustment to net realizable value and a portion of the assumed
liabilities would not be satisfied and therefore recorded a
measurement period adjustment, which on a net basis, increased
goodwill by approximately $533,000. The measurement period
adjustment has no effect on current period or prior period
earnings. The goodwill balance, including the measurement period
adjustment, is deductible for U.S. income tax purposes. The net
tangible assets include deferred revenue, which was adjusted down
from a book value at the acquisition date of $8.3 million to
an estimated fair value of $3.7 million. The $4.6 million
write-down of deferred revenue will result in lower revenues than
would have otherwise been recognized for such services.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The following table sets forth the components of
identifiable intangible assets and their estimated useful lives as
of the acquisition date (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="81%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Fair value</b></td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Useful life</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 1pt">
<td height="8"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Customer relationships</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">21,400</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">13 years </td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Developed technology</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5,400</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5 years </td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Trade name</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">600</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6 years </td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total intangible assets subject to amortization</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">27,400</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 4pt" align="justify">The amounts of revenue and operating loss of MAI
included in the Company’s consolidated statement of income
from the date of acquisition of August 8, 2016 to the period
ending December 31, 2016 are as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 4pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="99%" border="0">
<tr>
<td width="91%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total revenues</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      2,581</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Operating loss</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(2,358)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 4pt" align="justify">The following unaudited pro forma financial
information summarizes the combined results of operations of the
Company and MAI, which was significant for purposes of the
unaudited pro forma financial information disclosure, as though the
companies were combined as of January 1, 2016 (in thousands,
except per share data):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 4pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="98%" border="0">
<tr>
<td width="77%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Year Ended</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 55.35pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>December 31,</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 19pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 19pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total revenues</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      248,942</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    236,205</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net income</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">10,958</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,610</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Basic earnings per share</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.34</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.21</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Diluted earnings per share</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.34</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.21</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 4pt" align="justify">These unaudited pro forma combined results of
operations include certain adjustments arising from the acquisition
such as adjustment for amortization of intangible assets,
depreciation of property and equipment, and fair value adjustments
of acquired deferred revenue balances. The unaudited pro forma
combined results of operations is for informational purposes only
and is not indicative of what the Company’s results of
operations would have been had the transaction occurred at the
beginning of the period presented or to project the Company’s
results of operations in any future period.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 4pt" align="justify">The unaudited pro forma financial information for
the years ended December 31, 2017 and 2016 combines the
historical results of the Company and MAI for the years ended
December 31, 2017 and 2016 and the pro forma adjustments
listed above.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 4pt">
<b><i>HealthLine Systems</i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 4pt" align="justify">On March 16, 2015, the Company acquired all of
the membership interests of HealthLine Systems, LLC
(“HLS”), a San Diego, California based company that
specializes in credentialing, privileging, call center, and quality
management solutions for the healthcare industry. The acquisition
of HLS enabled the Company to provide a comprehensive solution set
for healthcare provider credentialing, privileging, enrollment,
referral, onboarding, and analytics in support of
HealthStream’s approach to talent management for healthcare
organizations. The consideration paid for HLS consisted of
approximately $90.5 million in cash (taking into account an
estimated closing working capital adjustment and the payment of an
incremental tax indemnification claim by the Company as noted
below). The Company incurred approximately $1.3 million in
transaction costs associated with the acquisition, of which
$965,000 were incurred during the year ended December 31, 2015
and $329,000 were incurred during the year ended December 31,
2014. The transaction costs were recorded in other general and
administrative expenses in the consolidated statements of income
for such periods. The results of operations for HLS have been
included in the Company’s consolidated financial statements
from the date of acquisition, and are also included in the
HealthStream Provider Solutions segment.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 4pt" align="justify">A summary of the purchase price is as follows (in
thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 4pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="99%" border="0">
<tr>
<td width="89%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cash paid</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">89,850</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cash held in escrow</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">679</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2.5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total consideration paid</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        90,529</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 4pt" align="justify">The following table summarizes the fair value of
the assets acquired and liabilities assumed as of the date of
acquisition (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="90%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cash</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">54</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Accounts receivable, net</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,052</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Prepaid assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">546</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Property and equipment</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">200</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred tax assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,523</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Goodwill</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">43,798</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Intangible assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">47,200</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Accounts payable and accrued liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(1,085)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred revenue</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(5,979)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net assets acquired</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      90,309</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The total consideration paid does not equal the
fair value of assets acquired and liabilities assumed due to the
post measurement period adjustment discussed below. The excess of
purchase price over the fair values of net tangible and intangible
assets has been recorded as goodwill. The fair values of tangible
and identifiable intangible assets, deferred tax assets, deferred
revenue, and other liabilities are based on management’s
estimates and assumptions. Included in the assets and liabilities
assumed is an estimated indemnification asset of $300,000 and a
contingent liability of $700,000, both of which are associated with
tax liabilities. The contingent liability is measured based on
management’s estimate of a range of probable outcomes. The
goodwill balance is primarily attributed to the assembled
workforce, additional market opportunities from offering
HLS’s products, and expected synergies from integrating HLS
with other products or other combined functional areas within the
Company. During the three months ended March 31, 2016, the
Company received notice of an indemnification claim from the former
owners of HLS pursuant to the terms of the membership interest
purchase agreement. The terms of such agreement require the Company
to indemnify such owners for incremental taxes incurred as the
result of the structure of the acquisition, which had favorable tax
aspects to the Company. The Company recorded a measurement period
adjustment in relation to the claim that increased goodwill by
approximately $2.2 million during the three months ended
March 31, 2016. The additional goodwill is deductible for U.S.
income tax purposes. The goodwill balance excluding such
measurement period adjustment is also deductible for U.S. income
tax purposes. During the three months ended September 30,
2016, the Company agreed to settle this indemnification claim for
approximately $2.4 million in respect of such tax
indemnification provision in the membership interest purchase
agreement, a difference of approximately $200,000 from the
$2.2 million measurement period adjustment. The Company
surpassed the one year measurement period as of the period ended
March 31, 2016; accordingly, in accordance with requisite
accounting guidance, the $200,000 difference has been reflected as
a charge against net income for the year ended December 31,
2016. The net tangible assets include deferred revenue, which was
adjusted down from a book value at the acquisition date of
$15.0 million to an estimated fair value of $6.0 million.
The $9.0 million write-down of deferred revenue will result in
lower revenues than would have otherwise been recognized for such
services.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt" align="justify">The following table sets forth the components of
identifiable intangible assets and their estimated useful lives as
of the acquisition date (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="99%" border="0">
<tr>
<td width="80%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 41.45pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Fair value</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 40.9pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Useful life</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Customer relationships</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">42,600</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">13 years </td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Developed technology</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,700</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5 years </td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Trade names</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">900</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6 years </td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total intangible assets subject to amortization</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">47,200</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt" align="justify">The amounts of revenue and operating loss of HLS
included in the Company’s consolidated statement of income
from the date of acquisition of March 16, 2015 to the period
ending December 31, 2015 are as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="93%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total revenues</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,543</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Operating loss</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(2,541</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt" align="justify">The following unaudited pro forma financial
information summarizes the combined results of operations of the
Company and HLS, which was significant for purposes of the
unaudited pro forma financial information disclosure, as though the
companies were combined as of January 1, 2015 (in thousands,
except per share data):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="97%" border="0">
<tr>
<td width="77%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Year Ended</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 55.35pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>December 31,</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 19pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 19pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total revenues</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      227,834</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    219,108</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net income</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">4,924</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">13,551</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Basic earnings per share</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.16</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.45</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Diluted earnings per share</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.15</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.44</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt" align="justify">These unaudited pro forma combined results of
operations include certain adjustments arising from the acquisition
such as adjustment for amortization of intangible assets,
depreciation of property and equipment, fair value adjustments of
acquired deferred revenue balances, and interest expense associated
with borrowings under a revolving credit facility by the Company to
partially fund the acquisition. The unaudited pro forma combined
results of operations is for informational purposes only and is not
indicative of what the Company’s results of operations would
have been had the transaction occurred at the beginning of the
period presented or to project the Company’s results of
operations in any future period.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt" align="justify">The unaudited pro forma financial information for
the years ended December 31, 2016 and 2015 combines the
historical results of the Company and HLS for the years ended
December 31, 2016 and 2015 and the pro forma adjustments
listed above.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b><i>Other Business Combinations</i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt" align="justify">On June 30, 2016, the Company acquired all of
the stock of Performance Management Services, Inc.
(“PMSI”), a Company based in Tustin, California focused
on competency-based performance development for nurses, for
$4.0 million in cash and up to an additional $500,000 of
contingent consideration. The acquisition, including associated
transaction costs, is not considered material to the
Company’s financial statements. The Company accounted for the
acquisition as a business combination and has allocated the
purchase consideration based on management’s estimates of
fair value. The results of operations for PMSI are included in the
Company’s consolidated financial statements from the date of
acquisition and are included in the HealthStream Workforce
Solutions segment.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt" align="justify">On July 25, 2016, the Company purchased all of
the outstanding stock of Nursing Registry Consultants Corporation
(“Nurse Competency”) not previously held by the Company
for approximately $1.0 million in cash and up to an additional
$75,000 in contingent consideration. Nurse Competency provides
SaaS-based clinical assessment and testing products to the
healthcare industry. The Company previously held a 32% minority
equity interest in Nurse Competency and had accounted for such
interest as an equity method investment. The fair value of the
minority equity interest as of the July 25, 2016 acquisition
date was approximately $484,000 and was determined in accordance
with the fair value of the controlling interest acquired with
consideration given to acquisition premiums, where applicable. The
Company recorded a gain of approximately $225,000 to account for
the difference between the noted acquisition date fair value of the
minority equity interest and the carrying value as of such date.
The gain is included in other income (expense), net in the
consolidated statement of income for the year ended
December 31, 2016. The Company accounted for the acquisition
as a business combination and has allocated the purchase
consideration based on management’s estimates of fair value.
The results of operations for Nurse Competency are included in the
Company’s consolidated financial statements from the date of
acquisition and are included in the HealthStream Workforce
Solutions segment.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Concentrations of Credit Risk and Significant Customers</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The Company’s credit risks relate primarily
to cash and cash equivalents, marketable securities and accounts
receivable. The Company places its temporary excess cash
investments in high quality, <font style="WHITE-SPACE: nowrap">short-term</font> money market instruments.
At times, such investments may be in excess of the FDIC insurance
limits. Marketable securities consist primarily of investment grade
corporate debt securities and certificates of deposit.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The Company sells its products and services to
various companies in the healthcare industry that are located in
the United States. Credit evaluations of our customers’
financial condition are performed on an ongoing basis, which
generally require no collateral from customers. An allowance for
doubtful accounts is maintained for potentially uncollectible
accounts receivable. The Company did not have any single customer
representing over 10% of net revenues or accounts receivable during
2017, 2016, or 2015.</p>
</div>
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman">
<b>Principles of Consolidation</b></p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify">The consolidated financial statements include the
accounts of the Company and its <font style="white-space:nowrap">wholly-owned</font> subsidiaries. All
intercompany accounts and transactions have been eliminated in
consolidation.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Cash Equivalents</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The Company considers cash equivalents to be
unrestricted, highly liquid investments with initial maturities of
less than three months.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>15. COLLABORATIVE ARRANGEMENT</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The Company participates in a collaborative
arrangement, SimVentures<sup style="FONT-SIZE: 85%; VERTICAL-ALIGN: top">TM</sup>, with Laerdal
Medical A/S (“Laerdal Medical”), which is ending
effective March 1, 2018. The Company receives 50 percent
of the profits or losses generated from this collaborative
arrangement. The parties did not form a separate legal entity as
part of the collaborative arrangement; therefore, the Company
accounts for SimVentures as a collaborative arrangement in
accordance with applicable accounting guidance. For the year ended
December 31, 2017, the Company recorded approximately
$2.2 million of revenues and $1.2 million of expenses
related to the collaborative arrangement. For the year ended
December 31, 2016, the Company recorded approximately
$2.7 million of revenues and $1.4 million of expenses
related to the collaborative arrangement. For the year ended
December 31, 2015, the Company recorded approximately
$2.2 million of revenues and $1.8 million of expenses
related to the collaborative arrangement.</p>
</div>
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman">
<b>16. LITIGATION</b></p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify">In connection with its business, the Company is
from time to time involved in various legal actions. The litigation
process is inherently uncertain and it is possible that the
resolution of such matters might have a material adverse effect
upon the financial condition and/or results of operations of the
Company. However, in the opinion of the Company’s management,
matters currently pending or threatened against the Company are not
expected to have a material adverse effect on the financial
position or results of operations of the Company.</p>
</div>
35134000
The Company did not have any single customer representing over 10% of net revenues or accounts receivable during 2017, 2016, or 2015.
10017000
1679000
895000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Prepaid Royalties</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Prepaid royalties represents advance payments
associated with the sale of third party products, such as
courseware subscriptions. Royalties are typically paid in advance
at the commencement of the revenue cycle or periodically throughout
the revenue cycle, such as quarterly, <font style="WHITE-SPACE: nowrap">bi-annual,</font> or annual installments.
Royalty payments are amortized over the term of the underlying
contracts, which generally range from 12 to 36 months, in order to
match the direct royalty costs to the same period the subscription
revenue is recognized. Amortization of royalties is included under
the caption “cost of revenues (excluding depreciation and
amortization)” in the accompanying consolidated statements of
income.</p>
</div>
106000000
237862000
2192000
--12-31
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>13. DEBT</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">At December 31, 2017 and 2016, the Company had
no debt outstanding.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify"><u>Revolving Credit Facility</u></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The Company entered into a First Amendment to
Revolving Credit Agreement (“Revolving Credit
Facility”), amending the Revolving Credit Facility, dated as
of November 24, 2014 with SunTrust Bank
(“SunTrust”), extending the maturity date to
November 24, 2018. Under the Revolving Credit Facility, the
Company may borrow up to $50.0 million, which includes a
$5.0 million swing line <font style="WHITE-SPACE: nowrap">sub-facility</font> and a $5.0 million
letter of credit <font style="WHITE-SPACE: nowrap">sub-facility,</font> as well as an accordion
feature that allows the Company to increase the Revolving Credit
Facility by a total of up to $25.0 million, subject to
securing additional commitments from existing lenders or new
lending institutions. The obligations under the Revolving Credit
Facility are guaranteed by each of the Company’s
subsidiaries. At the Company’s election, the borrowings under
the Revolving Credit Facility bear interest at either (1) a
rate per annum equal to the highest of SunTrust’s prime rate
or 0.5% in excess of the Federal Funds Rate or 1.0% in excess of
<font style="WHITE-SPACE: nowrap">one-month</font> LIBOR (the
“Base Rate”), plus an applicable margin, or
(2) the one, two, three, or <font style="WHITE-SPACE: nowrap">six-month</font> per annum LIBOR for deposits
in the applicable currency (the “Eurocurrency Rate”),
as selected by the Company, plus an applicable margin. The
applicable margin for Eurocurrency Rate loans depends on the
Company’s funded debt leverage ratio and varies from 1.50% to
2.00%. The applicable margin for Base Rate loans depends on the
Company’s funded debt leverage ratio and varies from 0.50% to
1.50%. Commitment fees and letter of credit fees are also payable
under the Revolving Credit Facility. Principal is payable in full
at maturity on November 24, 2018, and there are no scheduled
principal payments prior to maturity. The Company is required to
pay a commitment fee ranging between 20 and 30 basis points per
annum of the average daily unused portion of the Revolving Credit
Facility, depending on the Company’s funded debt leverage
ratio.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The purpose of the Revolving Credit Facility is for
general working capital needs, permitted acquisitions (as defined
in the Loan Agreement), and for stock repurchase and/or redemption
transactions that the Company may authorize.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The Revolving Credit Facility contains certain
covenants that, among other things, restrict additional
indebtedness, liens and encumbrances, changes to the character of
the Company’s business, acquisitions, asset dispositions,
mergers and consolidations, sale or discount of receivables,
creation or acquisitions of additional subsidiaries, and other
matters customarily restricted in such agreements.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">In addition, the Revolving Credit Facility requires
the Company to meet certain financial tests, including, without
limitation:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="PAGE-BREAK-INSIDE: avoid">
<td width="4%"> </td>
<td valign="top" width="1%" align="left">•</td>
<td valign="top" width="1%"> </td>
<td valign="top" align="left">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">a funded debt leverage ratio (consolidated
debt/consolidated EBITDA) of not greater than 3.0 to 1.0; and</p>
</td>
</tr>
</table>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="PAGE-BREAK-INSIDE: avoid">
<td width="4%"> </td>
<td valign="top" width="1%" align="left">•</td>
<td valign="top" width="1%"> </td>
<td valign="top" align="left">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">an interest coverage ratio (consolidated
EBITDA/consolidated interest expense) of not less than 3.0 to
1.0.</p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt" align="justify">As of December 31, 2017, the Company was in
material compliance with all covenants. There were no balances
outstanding on the Revolving Credit Facility as of
December 31, 2017 and there were no borrowings under the
Revolving Credit Facility during the year ended December 31,
2017.</p>
</div>
909000
-2192000
-2045000
147000
6600000
26283000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>3. EARNINGS PER SHARE</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The following table sets forth the computation of
basic and diluted earnings per share for the three years ended
December 31, 2017 (in thousands, except per share
amounts):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="66%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; WIDTH: 17pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; WIDTH: 17pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; WIDTH: 17pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Numerator:</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net income</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
                10,004</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
              3,755</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
              8,621</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Denominator:</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Weighted-average shares outstanding</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">31,861</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">31,721</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">30,057</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Effect of dilutive shares</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">335</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">347</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">379</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Weighted-average diluted shares</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">32,196</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">32,068</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">30,436</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 1pt">
<td height="8"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Basic earnings per share</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.31</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.12</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.29</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Diluted earnings per share</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.31</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.12</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.28</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Potentially dilutive shares representing
approximately 58,000, 38,000, and 16,000 shares of common stock for
the years ended December 31, 2017, 2016, and 2015,
respectively, were excluded from the calculation of diluted
earnings per share because their effect would have been
anti-dilutive.</p>
</div>
P2Y6M21D
426000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>11. STOCK BASED COMPENSATION</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<u>Stock Incentive Plans</u></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The Company’s 2016 Omnibus Incentive Plan
(“2016 Plan”), 2010 Stock Incentive Plan (“2010
Plan”), and 2000 Stock Incentive Plan (“2000
Plan”; collectively, the 2016 Plan, the 2010 Plan, and the
2000 Plan, referred to as the “Plan”) authorize the
grant of options, restricted share units (“RSUs”), or
other forms of stock based compensation to employees, officers,
directors, and others, and such grants must be approved by the
Compensation Committee of the Board of Directors. Options granted
under the Plan have terms of no more than ten years, with certain
restrictions. The Plan allows the Compensation Committee of the
Board of Directors to determine the vesting period and parameters
of each grant. The vesting period of the options and RSUs granted
has historically ranged from immediate vesting to annual vesting up
to four years, generally beginning one year after the grant date.
As of December 31, 2017, approximately 1.3 million shares
of unissued common stock remained reserved for future stock
incentive grants under the 2016 Plan. The Company issues new shares
of common stock when options are exercised or when RSUs become
vested.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<u>Stock Option Activity</u></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">A summary of activity and various other information
relative to stock options for the year ended December 31, 2017
is presented in the tables below (in thousands, except exercise
price).</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2"> </td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<b>Weighted-</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2"> </td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center"><b>Common</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center"><b>Average</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<b>Aggregate</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 26pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Shares</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 54.75pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Exercise Price</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 57.75pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Intrinsic Value</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Outstanding at beginning of period</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">476</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6.74</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Granted</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Exercised</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(100)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4.13</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Expired</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Forfeited</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Outstanding at end of period</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">376</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">7.44</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">5,912</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Exercisable at end of period</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
          376</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        7.44</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        5,912</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The aggregate intrinsic value for stock options in
the table above represents the total difference between the
Company’s closing stock price on December 29, 2017 (the
last trading day of the year) of $23.16 per share and the option
exercise price, multiplied by the number of <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">in-the-money</font></font> options as of
December 31, 2017. The weighted average remaining contractual
term of options outstanding at December 31, 2017 was 0.9
years. Options exercisable at December 31, 2017 have a
weighted average remaining contractual term of 0.9 years.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Other information relative to option activity
during the three years ended December 31, 2017 is as follows
(in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="67%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 18pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 18pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 18pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total grant date fair value of stock options vested</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">232</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total intrinsic value of stock options exercised</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,973</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">820</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,662</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cash proceeds from exercise of stock options</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
                413</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
                145</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
                328</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<u>Restricted Share Unit Activity</u></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">A summary of activity relative to RSUs for the year
ended December 31, 2017 is as follows (in thousands, except
weighted average grant date fair value):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="63%"></td>
<td valign="bottom" width="6%"></td>
<td style="WIDTH: 20pt"></td>
<td></td>
<td></td>
<td style="WIDTH: 20pt"></td>
<td valign="bottom" width="6%"></td>
<td style="WIDTH: 43pt"></td>
<td></td>
<td></td>
<td style="WIDTH: 43pt"></td>
<td valign="bottom" width="6%"></td>
<td style="WIDTH: 28pt"></td>
<td></td>
<td></td>
<td style="WIDTH: 28pt"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4" align="center">
<b>Weighted-</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4" align="center">
<b>Number of</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4" align="center"><b>Average</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4" align="center">
<b>Aggregate</b></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 24.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>RSU’s</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 87.25pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Grant Date Fair Value</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 57.75pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Intrinsic Value</b></p>
</td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Outstanding at beginning of period</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">253</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">23.36</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Granted</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">111</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">23.43</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Vested</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(77)</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">24.21</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Forfeited</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(28)</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">23.39</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Outstanding at end of period</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
        259</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        23.13</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        6,002</td>
<td valign="bottom" nowrap="nowrap"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The aggregate fair value of RSUs that vested during
the year ended December 31, 2017 and 2016, as of the
respective vesting dates, was approximately $1.9 million and
$1.5 million, respectively. A portion of RSUs that vested in
2017 and 2016 were <font style="WHITE-SPACE: nowrap">net-share</font> settled such that the
Company withheld shares with value equivalent to the
employees’ minimum statutory obligation for the applicable
income and other employment taxes, and remitted the cash to the
appropriate taxing authorities. The total shares withheld for RSUs
during 2017 and 2016 were 17,122 and 15,373, respectively, and were
based on the value of the RSUs on their respective settlement dates
as determined by the Company’s closing stock price. Total
payments related to RSUs for the employees’ tax obligations
to taxing authorities were approximately $412,000 in 2017, $316,000
in 2016, and $230,000 in 2015, and are reflected as a financing
activity within the consolidated statements of cash flows. These
<font style="WHITE-SPACE: nowrap">net-share</font> settlements had
the effect of share repurchases by the Company as they reduced and
retired the number of shares that would have otherwise been issued
as a result of the vesting and did not represent an expense to the
Company.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<u>Stock Based Compensation</u></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Total stock based compensation expense, which is
recorded in our consolidated statements of income, recorded for the
years ended December 31, is as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="70%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="10" align="center"><b>Years Ended
December 31,</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 19pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 19pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 19pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cost of revenues (excluding depreciation and amortization)</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">76</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">144</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">824</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Product development</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">258</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">178</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">569</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Sales and marketing</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">240</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">239</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">547</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Other general and administrative</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,278</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,407</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,340</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total stock based compensation expense</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          1,852</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          1,968</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          3,280</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The Company amortizes the fair value of all stock
based awards, net of estimated forfeitures, on a straight-line
basis over the requisite service period, which generally is the
vesting period. As of December 31, 2017, total unrecognized
compensation expense related to <font style="WHITE-SPACE: nowrap">non-vested</font> stock options and RSUs was
approximately $3.4 million, net of estimated forfeitures, with
a weighted average expense recognition period remaining of 2.56
years. The Company realized approximately $426,000 of excess tax
benefits related to stock based awards during the year ended
December 31, 2017, which was reflected in the statement of
income as a component of the provision for income taxes.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Stock based compensation cost for RSUs is measured
based on the closing fair market value of the Company’s stock
on the date of grant. Stock based compensation cost for stock
options is estimated at the grant date based on the fair value
calculated using the <font style="WHITE-SPACE: nowrap">Black-Scholes</font> method. The Company did
not grant any stock options during 2017, 2016, or 2015.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<u>Stock Awards</u></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">During June 2015, the Company’s Chief
Executive Officer (“CEO”), Robert A. Frist, Jr.,
entered into an agreement with the Company pursuant to which he
contributed 54,241 of his personally owned shares of HealthStream,
Inc. common stock to the Company, without any consideration paid to
him. In connection with this contribution, the Company approved the
grant of 49,310 shares of HealthStream, Inc. common stock to over
600 employees who were not otherwise eligible to receive equity
awards and had at least one year of service with the Company. The
Company recognized approximately $1.5 million of stock based
compensation expense for these stock awards during the three months
ended June 30, 2015 based on the closing fair market value of
the Company’s stock on the date of the Company’s
approval of these grants. In connection with these equity awards,
effective in the second quarter of 2015, the Company withheld
shares with value equivalent to the employees’ minimum
statutory obligation for the applicable income and other employment
taxes, and remitted the cash to the appropriate taxing authorities.
The total shares withheld were 17,279, and were based on the value
of the stock awards on the date of the Company’s approval of
these grants, as determined by the Company’s closing stock
price on that date. Total payments related to the employees’
tax obligations to taxing authorities for these stock awards were
approximately $526,000, and are reflected as a financing activity
within the consolidated statements of cash flows for the year ended
December 31, 2015. These share withholdings had the effect of
share repurchases by the Company as they reduced and retired the
number of shares otherwise issuable as a result of the stock awards
and did not represent an expense to the Company.</p>
</div>
FY
2017
10-K
0.31
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman">
<b>Earnings per Share</b></p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify">Basic earnings per share is computed by dividing
the net income available to common shareholders for the period by
the weighted average number of common shares outstanding during the
period. Diluted earnings per share is computed by dividing the net
income for the period by the weighted average number of common and
common equivalent shares outstanding during the period. Common
equivalent shares are composed of incremental common shares
issuable upon the exercise of stock options and restricted share
units subject to vesting. The dilutive effect of common equivalent
shares is included in diluted earnings per share by application of
the treasury stock method. Common equivalent shares that have an
anti-dilutive effect on diluted net income per share have been
excluded from the calculation of diluted weighted average shares
outstanding for the years ended December 31, 2017, 2016, and
2015.</p>
</div>
2017-12-31
0.31
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman">
<b><font style="white-space:nowrap">Non-Marketable</font> Equity
Investments</b></p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify"><font style="white-space:nowrap">Non-marketable</font> equity investments are
accounted for using the equity method when the Company can exercise
significant influence over the investee. Investments for which the
Company is not able to exercise significant influence over the
investee are accounted for under the cost method. The proportionate
share of income or loss from equity method investments are recorded
under the caption “other income, net” in the
accompanying consolidated statements of income.</p>
</div>
HEALTHSTREAM INC
No
0001095565
No
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman">
<b>Financial Instruments</b></p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify">The Company has various financial instruments,
including cash and cash equivalents, accounts receivable, accounts
receivable-unbilled, accounts payable, accrued liabilities, and
deferred revenue. The carrying amounts of these financial
instruments approximate fair value because of the short term
maturity or short term nature of such instruments. The Company also
has marketable securities, which are recorded at approximate fair
value based on quoted market prices or alternative pricing sources
(see Note 4 – Marketable Securities).</p>
</div>
Yes
Large Accelerated Filer
<div>
<p style="margin-top:8pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman">
<b>Fair Value Measurements</b></p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify">Fair value is defined as the price that would be
received to sell an asset or paid to transfer a liability in the
principal or most advantageous market in an orderly transaction
between market participants at the measurement date. The fair value
hierarchy prioritizes the inputs to valuation techniques used in
measuring fair value. There are three levels to the fair value
hierarchy based on the reliability of inputs, as follows:</p>
<p style="margin-top:8pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify"><u>Level</u><u> 1</u> – Observable
inputs that reflect quoted prices (unadjusted) for identical assets
or liabilities in active markets.</p>
<p style="margin-top:8pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify"><u>Level</u><u> 2</u> – Inputs other
than quoted prices included in Level 1 that are observable for
the asset or liability, either directly or indirectly.</p>
<p style="margin-top:8pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify"><u>Level</u><u> 3</u> – Unobservable
inputs in which little or no market data exists, therefore
requiring the Company to develop its own assumptions.</p>
<p style="margin-top:8pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify">The Company evaluates assets and liabilities
subject to fair value measurements on a recurring basis to
determine the appropriate level at which to classify them for each
reporting period. This determination requires significant judgments
to be made by the Company. At December 31, 2017 and 2016, our
assets measured at fair value on a recurring basis consisted of
marketable securities, which are classified as available for sale
(see Note 4 – Marketable Securities). The Company did not
have any financial liabilities that were subject to fair value
measurements as of such dates.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Goodwill and Intangible Assets</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Goodwill represents the excess of purchase price in
a business combination over the fair value of the net identifiable
assets acquired. The carrying amount of our goodwill is evaluated
for impairment at least annually during the fourth quarter and
whenever events or changes in facts or circumstances indicate that
impairment may exist. In accordance with ASC 350, <i>Intangibles
– Goodwill and Other</i>, companies may opt to first assess
qualitative factors to determine whether it is more likely than not
that the fair value of a reporting unit is less than its carrying
amount. A qualitative assessment includes factors such as financial
performance, industry and market metrics, and other factors
affecting the reporting unit. If this assessment concludes that it
is more likely than not that the fair value of a reporting unit
exceeds its carrying value, then goodwill is not considered
impaired and no further impairment testing is required. Conversely,
if the qualitative assessment concludes that it is more likely than
not that the fair value of a reporting unit is less than its
carrying value, we must then compare the fair value of the
reporting unit to its carrying value. The Company determines fair
value of the reporting units using both income and market based
models. These models require the use of various assumptions
relating to cash flow projections, growth rates, discount rates and
terminal value calculations. There were no goodwill impairments
identified or recorded for the years ended December 31, 2017,
2016 or 2015.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">As of December 31, 2017, intangible assets
include customer relationships, internally-developed technology and
patents, <font style="WHITE-SPACE: nowrap">non-competition</font>
agreements, and trade names. These intangible assets are considered
to have definite useful lives and are being amortized on a straight
line basis over periods ranging between three and thirteen years.
The weighted average amortization period for definite lived
intangible assets as of December 31, 2017 was 11.1 years.
Intangible assets are reviewed for impairment whenever events or
changes in facts or circumstances indicate that the carrying amount
of the assets may not be recoverable. There were no intangible
asset impairments identified or recorded for the years ended
December 31, 2017, 2016, or 2015.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
<b>7. GOODWILL</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt" align="justify">The changes in the carrying amount of goodwill for
the years ended December 31, 2017 and 2016 are as follows (in
thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 42pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Workforce</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Patient</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 43pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Experience</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 34pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Provider</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 20.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Total</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Balance at January 1, 2017</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">16,381</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">24,154</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">69,230</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">109,765</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Acquisition of Morrisey Associates, Inc.</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">533</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">533</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Balance at December 31, 2017</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">16,381</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">24,154</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">69,763</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">110,298</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 1pt">
<td height="16"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 42pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Workforce</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Patient</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 43pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Experience</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 34pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Provider</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 20.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Total</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Balance at January 1, 2016</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">12,336</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">24,154</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">46,583</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">83,073</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Acquisition of HealthLine Systems, LLC.</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,180</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,180</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Acquisition of Morrisey Associates, Inc.</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">20,467</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">20,467</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Other business combinations</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,045</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,045</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Balance at December 31, 2016</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      16,381</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      24,154</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    69,230</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      109,765</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt" align="justify">During the three months ended September 30,
2017, the Company recorded approximately $533,000 of additional
goodwill in relation to the August 2016 acquisition of Morrisey
Associates, Inc. Such amount relates to the measurement period
adjustment previously mentioned in Note 5 under the caption
“<i>Morrisey Associates, Inc.</i>”</p>
</div>
0
-97000
0
10533000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 10pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<b>10. INCOME TAXES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 10pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" align="justify">The provision (benefit) for income taxes is
comprised of the following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="72%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="10" align="center"><b>Year Ended
December 31,</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 16pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 16pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 16pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Current federal</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,679</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(271)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">3,608</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Current state</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">895</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">877</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,098</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred federal</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,192)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,489</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">501</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred state</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">147</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">298</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(109)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Provision for income taxes</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          529</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          2,393</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          5,098</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 10pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" align="justify">A reconciliation of income taxes at the statutory
federal income tax rate to the provision for income taxes included
in the accompanying consolidated statements of income is as follows
(in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="71%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="10" align="center"><b>Year Ended
December 31,</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 16pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 16pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 16pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Federal tax provision at the statutory rate</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">3,687</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2,152</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">4,802</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
State income tax provision, net of federal benefit</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">424</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">539</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">673</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Tax credits</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(583)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(560)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(425)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Change in state valuation allowance</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">322</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">308</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(8)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Tax Act revaluation of deferred tax balances</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,685)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Other</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(636)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(46)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">56</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Provision for income taxes</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          529</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          2,393</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          5,098</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 10pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" align="justify">Management periodically assesses the realizability
of its deferred tax assets, and to the extent that a recovery is
not likely, a valuation allowance is established to reduce the
deferred tax asset to the amount estimated to be recoverable. At
December 31, 2017, a valuation allowance of $1.1 million
exists.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 10pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" align="justify">As of December 31, 2017, the Company had state
net operating loss carryforwards of $19.5 million. These loss
carryforwards will expire in years 2018 through 2027. The Company
is subject to income taxation at the federal and various state
levels. The Company is subject to U.S. federal tax examinations for
tax years 2015 through 2017. Loss carryforwards and credit
carryforwards generated or utilized in years earlier than 2015 are
also subject to examination and adjustment. The Company has
completed examinations with the Internal Revenue Service for tax
years 2013 and 2014. The Company has research and development tax
credit carryforwards of $2.3 million that expire in varying
amounts through 2037. As of December 31, 2017, the Company had
alternative minimum tax credit carryforwards of $837,000 that are
available to offset future regular tax liabilities and do not
expire.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 10pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" align="justify">On December 22, 2017, the President signed
into law the Tax Cuts and Jobs Act (the “Tax Act”),
reducing the U.S. corporate income tax rate
to 21% effective January 1, 2018. Under ASC 740, the
effects of new legislation are recognized in the period that
includes the date of enactment. The estimated impact as of
December 31, 2017 was to remeasure our deferred tax liability
by $2.7 million, which has been reflected in our
effective tax rate reconciliation. This impact is our most
reasonable estimate at this time; however, we are still analyzing
certain aspects of the Tax Act and refining our calculations, which
could potentially impact future taxable income.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" align="justify">A reconciliation of the beginning and ending
liability for gross unrecognized tax benefits at December 31,
2017 and 2016, are as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="84%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<b>December 31,</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; WIDTH: 17pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; WIDTH: 17pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Balance at beginning of year</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">397</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">658</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Additions for tax positions in the current year</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">10</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">64</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Reductions for tax positions of prior years</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(47)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(325)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Balance at end of year</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          360</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          397</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" align="justify">The Company recognized approximately $3,000 and
$18,000 for interest and penalties related to unrecognized tax
benefits within the provision for income taxes during the years
ended December 31, 2017 and 2016, respectively. Unrecognized
tax benefits included tax positions of approximately $337,000 and
$350,000 at December 31, 2017 and 2016, respectively, that if
recognized would impact the Company’s effective tax rate. The
reduction for tax positions of prior years reflected in the table
above as of December 31, 2017, relates to (a) an item
considered to be effectively settled with the IRS, and
(b) amended returns filed with the state of Wisconsin. The
Company estimates that it is reasonably possible the liability for
unrecognized tax benefits could decrease up to $23,000 within the
next 12 months.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" align="justify">Deferred federal and state income taxes reflect the
net tax effects of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. Significant
components of deferred tax assets and deferred tax liabilities are
as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="82%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<b>December 31,</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; WIDTH: 17pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; WIDTH: 17pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred tax assets:</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Allowance for doubtful accounts</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">548</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">332</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Accrued liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,981</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,275</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Tax credits</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,115</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,397</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Stock based compensation</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">841</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,171</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred revenue</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,467</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,818</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Depreciation</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">617</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,119</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Basis difference on investments</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">327</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">316</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net operating loss carryforwards</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,015</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">743</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total deferred tax assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
          9,911</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
          8,171</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Less: Valuation allowance</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(1,110</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(654</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred tax assets, net of valuation allowance</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8,801</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">7,517</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred tax liabilities:</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deductible goodwill</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,917</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,267</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Nondeductible intangible assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,330</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,523</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Prepaid assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,881</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,894</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Capitalized software development</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,599</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5,801</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total deferred tax liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">10,727</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">13,485</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 1pt">
<td height="10"></td>
<td height="10" colspan="4"></td>
<td height="10" colspan="4"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net deferred tax liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(1,926</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(5,968</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<br class="Apple-interchange-newline" /></div>
638000
3687000
-806000
-29000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b><font style="WHITE-SPACE: nowrap">Long-Lived</font>
Assets</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Long-lived assets to be held for use are reviewed
for events or changes in facts and circumstances, both internally
and externally, which may indicate that an impairment of
<font style="WHITE-SPACE: nowrap">long-lived</font> assets held for
use is present. The Company measures any impairment using
observable market values or discounted future cash flows from the
related long-lived assets. The cash flow estimates and discount
rates incorporate management’s best estimates, using
appropriate and customary assumptions and projections at the date
of evaluation. Management periodically evaluates whether the
carrying value of <font style="WHITE-SPACE: nowrap">long-lived</font> assets, including
intangible assets, property and equipment, capitalized software
development, and other assets will be recoverable. There were no
long-lived asset impairments identified or recorded for the years
ended December 31, 2017, 2016, or 2015.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Income Taxes</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Income taxes are accounted for using the asset and
liability method, whereby deferred tax assets and liabilities are
determined based on the temporary differences between the financial
statement and tax bases of assets and liabilities measured at tax
rates that will be in effect for the year in which the differences
are expected to affect taxable income. Management evaluates all
available evidence, both positive and negative, to determine
whether, based on the weight of that evidence, a valuation
allowance is needed. Future realization of the tax benefit of an
existing deductible temporary difference or carryforward ultimately
depends on the existence of sufficient taxable income of the
appropriate character within the carryback or carryforward period
available under the tax law. There are four possible sources of
taxable income that may be available under the tax law to realize a
tax benefit for deductible temporary differences and carryforwards:
1) future reversals of existing taxable temporary differences, 2)
future taxable income exclusive of reversing temporary differences
and carryforwards, 3) taxable income in prior carryback year(s) if
carryback is permitted under the tax law, and 4) <font style="WHITE-SPACE: nowrap">tax-planning</font> strategies that would, if
necessary, be implemented to realize deductible temporary
differences or carryforwards prior to their expiration. Management
reviews the realizability of its deferred tax assets each reporting
period to identify whether any significant changes in circumstances
or assumptions have occurred that could materially affect the
realizability of deferred tax assets. As of December 31, 2017,
the Company had established a valuation allowance of
$1.1 million for the portion of its net deferred tax assets
that are not more likely than not expected to be realized.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The Company accounts for income tax uncertainties
using a <font style="WHITE-SPACE: nowrap">more-likely-than-not</font> recognition
threshold based on the technical merits of the tax position taken.
Tax positions that meet the <font style="WHITE-SPACE: nowrap">more-likely-than-not</font> recognition
threshold are measured in order to determine the tax benefit to be
recognized in the financial statements. The Company expenses any
penalties or interest associated with tax obligations as general
and administrative expenses and interest expense, respectively.</p>
</div>
322000
424000
583000
0
-636000
4106000
168000
335000
-5000
529000
2284000
225000
-2008000
-1125000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>4. MARKETABLE SECURITIES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">At December 31, 2017 and 2016, the fair value
of marketable securities, which were all classified as available
for sale, included the following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="59%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="14" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; WIDTH: 68.7pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>December 31, 2017</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Adjusted Cost</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Unrealized<br />
Gains</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Unrealized<br />
Losses</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Fair Value</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Level 2:</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Corporate debt securities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">41,900</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(39)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">41,862</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Government-sponsored enterprise debt securities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,488</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(1)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,488</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        46,388</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
                  2</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
                (40)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
            46,350</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 1pt">
<td height="16"></td>
<td height="16" colspan="16"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="14" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; WIDTH: 68.7pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>December 31, 2016</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Adjusted Cost</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Unrealized<br />
Gains</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Unrealized<br />
Losses</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Fair Value</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Level 2:</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Corporate debt securities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">44,486</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(50)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">44,436</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Government-sponsored enterprise debt securities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">9,105</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">9,104</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">53,591</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(52)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">53,540</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The carrying amounts of the marketable securities
reported in the consolidated balance sheets approximate fair value
based on quoted market prices or alternative pricing sources and
models utilizing market observable inputs. As of December 31,
2017, the Company does not consider any of its marketable
securities to be other than temporarily impaired. During the years
ended December 31, 2017 and 2016, the Company did not
reclassify any items out of accumulated other comprehensive income
to net income. All investments in marketable securities are
classified as a current asset on the balance sheet because the
underlying securities mature within one year from the balance sheet
date.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>8. INTANGIBLE ASSETS</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Intangible assets other than goodwill are
considered to have finite useful lives. Customer-related
intangibles include customer relationships and are amortized over
their estimated useful lives ranging from five to thirteen years.
Other intangible assets include <font style="WHITE-SPACE: nowrap">non-competition</font> agreements, technology
and patents, and trade names and are amortized over their estimated
useful lives ranging from three to nine years. Amounts presented
below as of December 31, 2017 and December 31, 2016 are
inclusive of identifiable intangible assets recorded in relation to
our acquisitions of Morrisey Associates, Inc. and HealthLine
Systems, LLC, as well as other business combinations (see Note 5
– Business Combinations). Amortization of intangible assets
was approximately $9.5 million, $7.8 million, and
$5.6 million for the years ended December 31, 2017, 2016,
and 2015, respectively.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Identifiable intangible assets are comprised of the
following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="41%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="10" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 94.75pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>As of December 31, 2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="10" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 94.75pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>As of December 31, 2016</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 1pt">
<td height="8"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Gross Amount</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Accumulated<br />
Amortization</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Net</b></td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Gross Amount</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Accumulated<br />
Amortization</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Net</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Customer related</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">77,985</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(18,027)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">59,958</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">77,985</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(11,539)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">66,446</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Other</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">16,824</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(7,966)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8,858</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">16,824</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(4,906)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">11,918</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      94,809</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      (25,993)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      68,816</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      94,809</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      (16,445)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        78,364</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The expected future annual amortization expense for
the years ending December 31, is as follows (in
thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="90%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2018</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9,438</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2019</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8,792</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2020</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8,139</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2021</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">7,356</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2022</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6,277</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Thereafter</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,814</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        68,816</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
101000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>14. LEASES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The Company has <font style="WHITE-SPACE: nowrap">non-cancellable</font> operating leases
primarily for office space and hosting facilities. Some lease
agreements contain provisions for escalating rent payments over the
initial terms of the lease. The Company accounts for these leases
by recognizing rent expense on a <font style="WHITE-SPACE: nowrap">straight-line</font> basis and adjusting the
deferred rent expense liability for the difference between the
<font style="WHITE-SPACE: nowrap">straight-line</font> rent expense
and the amount of rent paid. The terms of the lease agreements
generally provide the Company the option to renew. Total rent
expense under all operating leases was approximately
$7.6 million, $5.6 million, and $4.3 million, for
the years ended December 31, 2017, 2016, and 2015,
respectively.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 24px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Future rental payment commitments at
December 31, 2017 under <font style="WHITE-SPACE: nowrap">non-cancelable</font> operating leases, with
initial terms of one year or more, are as follows (in
thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="90%" border="0">
<tr>
<td width="90%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2018</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">4,720</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2019</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,495</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2020</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,920</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2021</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,750</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2022</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,744</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Thereafter</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">20,361</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total minimum lease payments</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        39,990</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The Company subleases certain of its office space
included above under <font style="WHITE-SPACE: nowrap">non-cancellable</font> leases and is due to
receive future minimum rental payments of approximately $148,000
for the year ended December 31, 2018.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Marketable Securities</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Marketable securities are classified as available
for sale and are stated at fair market value, with the unrealized
gains and losses, net of tax, reported in other accumulated
comprehensive income (loss) on the accompanying consolidated
balance sheets. Realized gains and losses and declines in market
value judged to be other than temporary on investments in
marketable securities are included in interest and other income on
the accompanying consolidated statements of income. The cost of
securities sold is based on the specific identification method.
Interest and dividends on securities classified as available for
sale are included in other income (expense) on the accompanying
consolidated statements of income. Premiums and discounts are
amortized over the life of the related available for sale security
as an adjustment to the yield using the effective interest
method.</p>
</div>
-11579000
46712000
1000
10004000
3
9800000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Newly Issued Accounting Standards</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">In May 2014, the FASB issued ASU <font style="WHITE-SPACE: nowrap">2014-09,</font> Revenue from Contracts with
Customers (Topic 606), which supersedes the revenue recognition
requirements in Topic 605, Revenue Recognition, and most
industry-specific revenue recognition guidance throughout the
Industry Topics of the Accounting Standards Codification. The
updated guidance states that an entity should recognize revenue to
depict the transfer of promised goods or services to customers in
an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. The
guidance also provides for additional disclosures with respect to
revenues and cash flows arising from contracts with customers. The
standard will be effective for the first interim period within
annual reporting periods beginning after December 15, 2017,
and the Company will adopt the standard using the modified
retrospective approach effective January 1, 2018. In
preparation for adoption of the standard, the Company implemented
internal controls and key system functionality to enable the
preparation of financial information and has reached conclusions on
key accounting assessments related to the standard.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The most significant impact of the standard relates
to capitalizing costs to acquire contracts, which have historically
been expensed as incurred. As of December 31, 2017, the
Company’s sales commission plans have included multiple
payments, including initial payments in the period a customer
contract is obtained and deferred payments either 15 or 27 months
after the initial payment. Under the standard, only the initial
payment is subject to capitalization as the deferred payments
require a substantive performance condition of the employee. These
initial commission payments will be capitalized in the period a
customer contract is obtained and will be amortized consistent with
the transfer of the goods or services to the customer over the
expected period of benefit. The expected period of benefit is the
contract term, except when the commission payment is expected to
provide economic benefit to the Company for a period longer than
the contract term, such as for new customer or incremental sales
where renewals are expected and renewal commissions are not
commensurate with initial commissions. Such commissions will be
amortized over the greater of contract term or technological
obsolescence period when the underlying contracted products are
technology-based, such as for the SaaS-based platforms, or the
expected customer relationship period when the underlying
contracted products are not technology-based, such as for patient
experience survey products.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Additionally, the standard impacts several of the
Company’s revenue streams. The primary streams affected are
professional services and patient experience surveys. For
professional services, the identification of performance
obligations and the related timing of revenue recognition is
changing such that revenues will be recognized earlier, during the
period of service delivery, rather than over the related
product’s contractual term. For patient experience surveys,
revenues will correlate to survey delivery, which approximates
ratable recognition over the contractual term, rather than the
current method of spreading quarterly revenue over the five-month
life cycle of the patient experience survey cycle.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The Company will finalize its calculation of the
financial impact of the adoption of this accounting standard on its
future consolidated financial statements in the first quarter of
2018. The Company anticipates adjustments to retained earnings of
no more than $10 million and $16 million, net of related
tax effects, upon adoption for revenue recognition and sales
commissions, respectively.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">In January 2016, the FASB issued ASU <font style="WHITE-SPACE: nowrap">2016-01,</font> Financial Instruments –
Overall (Sub Topic <font style="WHITE-SPACE: nowrap">825-10),</font> which addresses certain
aspects of the recognition, measurement, presentation, and
disclosure of financial instruments. The guidance will, among other
things, require equity investments (except those accounted for
under the equity method of accounting or those that result in
consolidation of the investee) to be measured at fair value with
changes in fair value recognized in net income. The standard will
be effective for the first interim period within annual reporting
periods beginning after December 15, 2017, and early adoption
is permitted for only limited aspects of such guidance. The Company
plans to adopt this ASU on January 1, 2018, and is currently
reviewing this standard to assess the impact on its future
consolidated financial statements.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">In February 2016, the FASB issued ASU <font style="WHITE-SPACE: nowrap">2016-02,</font> Leases <i>(Topic 842),</i>
which requires lessees to recognize assets and liabilities for most
leases. The recognition, measurement and presentation of expenses
and cash flows arising from a lease by a lessee is not expected to
significantly change under such guidance; however, the Company is
currently reviewing this standard to assess the impact on its
future consolidated financial statements. The standard will be
effective for the first interim period within annual reporting
periods beginning after December 15, 2018, and early adoption
is permitted. The Company expects to adopt this ASU on
January 1, 2019, and is currently evaluating the impact that
adoption of this ASU will have on its consolidated financial
position and results of operations.</p>
</div>
13000
13000
7600000
34765000
408000
733000
412000
11856000
6017000
83279000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>12. EMPLOYEE BENEFIT PLAN</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>401(k) Plan</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The Company has a defined-contribution employee
benefit plan (“401(k) Plan”) incorporating provisions
of Section 401(k) of the Internal Revenue Code. Employees must
have attained the age of 21 and have completed thirty days of
service to be eligible to participate in the 401(k) Plan. Under the
provisions of the 401(k) Plan, a plan member may make
contributions, on a <font style="WHITE-SPACE: nowrap">tax-deferred</font> basis, subject to IRS
limitations. The Company elected to provide eligible employees with
matching contributions totaling approximately $909,000, $391,000,
and $645,000 for the years ended December 31, 2017, 2016, and
2015, respectively.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt" align="justify">Property and equipment consist of the
following:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="99%" border="0">
<tr>
<td width="81%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<b>December 31,</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 18pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 18pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Equipment</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">25,396</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">20,885</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Leasehold improvements</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5,291</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5,025</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Furniture and fixtures</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,167</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,862</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Gross property and equipment</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">34,854</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">30,772</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Accumulated depreciation and amortization</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(25,862)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(20,527)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Property and equipment, net</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        8,992</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        10,245</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
90073000
413000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt">
<b>Property and Equipment</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Property and equipment are stated on the basis of
cost. Depreciation and amortization are provided on the
<font style="WHITE-SPACE: nowrap">straight-line</font> method over
the following estimated useful lives, except for assets under
capital leases and leasehold improvements, which are amortized over
the shorter of the estimated useful life or their respective lease
term.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="96%" border="0">
<tr>
<td width="95%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 7.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Years</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Furniture and fixtures</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Equipment</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
</table>
</div>
18033000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
<b>6. PROPERTY AND EQUIPMENT</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt" align="justify">Property and equipment consist of the
following:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="99%" border="0">
<tr>
<td width="81%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<b>December 31,</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 18pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 18pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Equipment</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">25,396</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">20,885</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Leasehold improvements</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5,291</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5,025</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Furniture and fixtures</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,167</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,862</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Gross property and equipment</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">34,854</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">30,772</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Accumulated depreciation and amortization</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(25,862)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(20,527)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Property and equipment, net</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        8,992</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        10,245</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt" align="justify">Depreciation of property and equipment totaled
approximately $6.6 million, $6.8 million, and
$5.3 million for the years ended December 31, 2017, 2016,
and 2015, respectively.</p>
</div>
1813000
<div>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="bottom">Operating income:</td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; WIDTH: 18pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; WIDTH: 18pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; WIDTH: 18pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2.5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Workforce Solutions</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">33,579</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">37,329</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">39,986</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2.5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Patient Experience Solutions</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,491</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(522)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,548</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2.5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Provider Solutions</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">879</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,443)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,559)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2.5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Unallocated</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(26,149)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(28,797)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(25,418)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total operating income</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    9,800</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    5,567</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    13,557</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal">
 </p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The following is the Company’s business
segment information as of and for the years ended December 31,
2017, 2016 and 2015 (in thousands).</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="67%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom">Revenues, net:</td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 18pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 18pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 18pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2.5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Workforce Solutions</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">178,061</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">168,040</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">161,289</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2.5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Patient Experience Solutions</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">32,763</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">33,850</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">34,193</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2.5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Provider Solutions</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">36,838</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">24,084</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">13,520</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total revenues, net</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    247,662</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    225,974</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    209,002</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt">
<b>Capitalized Software Development</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Capitalized software development is stated on the
basis of cost and is presented net of accumulated amortization. The
Company capitalizes costs incurred during the software development
phase for projects when such costs are material. These assets are
generally amortized using the straight-line method over three
years. The Company capitalized approximately $12.5 million and
$10.0 million during 2017 and 2016, respectively. Amortization
of capitalized software development was approximately
$10.1 million, $7.7 million, and $6.2 million during
2017, 2016, and 2015, respectively. Maintenance and operating costs
are expensed as incurred. As of December 31, 2017 and 2016,
there were no capitalized software development costs for external
computer software developed for resale.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt">
<b>Allowance for Doubtful Accounts</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The Company estimates its allowance for doubtful
accounts using a specific identification method in which management
considers the facts and circumstances surrounding each potentially
uncollectible receivable. An allowance is also maintained for
accounts that are not specifically identified that may become
uncollectible in the future. Uncollectible receivables are
<font style="WHITE-SPACE: nowrap">written-off</font> in the period
management believes it has exhausted every opportunity to collect
payment from the customer. Bad debt expense is recorded when events
or circumstances indicate an additional allowance is required based
on the Company’s specific identification approach.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt" align="justify">Changes in the allowance for doubtful accounts and
the amounts charged to bad debt expense for the years ended
December 31 were as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="68%" align="center" border="0">
<tr>
<td width="12%"></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Allowance Balance at</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 76.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Beginning of Period</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Charged to Costs and</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 35.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Expenses</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 39.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b><font style="WHITE-SPACE: nowrap">Write-offs</font></b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Allowance Balance at</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 53.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>End of Period</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2017</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">
            863</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">
        1,813</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
         (471</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">
          2,205</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2016</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">303</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">640</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(80</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">863</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2015</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">331</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">284</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(312</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">303</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
</table>
</div>
<div>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman">
<b>17. RELATED PARTY TRANSACTIONS</b></p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify">During the three months ended June 30, 2015,
the Company’s CEO, Robert A. Frist, Jr., entered into an
agreement with the Company pursuant to which he contributed 54,241
of his personally owned shares of HealthStream, Inc. common stock
to the Company, without any consideration paid to him. In
connection with this contribution, the Company approved the grant
of 49,310 shares of common stock to over 600 employees, with a fair
market value of approximately $1.5 million. Mr. Frist
contributed 4,931 of the contributed shares noted above to take
into account the estimated Company costs, such as administrative
expenses and employer payroll taxes associated with the grants (See
Note 11).</p>
</div>
27899000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Deferred Revenue</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Deferred revenue represents amounts that have been
billed or collected in advance of revenue recognition. The Company
typically invoices customers in quarterly, <font style="WHITE-SPACE: nowrap">bi-annual,</font> or annual installments.
Deferred revenue is reduced as services are provided and the
revenue recognition criteria are met.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 10pt" align="justify">The provision (benefit) for income taxes is
comprised of the following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="72%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="10" align="center"><b>Year Ended
December 31,</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 16pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 16pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 16pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Current federal</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,679</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(271)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">3,608</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Current state</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">895</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">877</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,098</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred federal</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,192)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,489</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">501</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred state</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">147</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">298</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(109)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Provision for income taxes</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          529</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          2,393</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          5,098</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Recognition of Revenue</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Revenues are derived from providing services
through our SaaS-based workforce development platform products,
courseware subscriptions, provision of survey and research
services, sales of software licensing arrangements, software
maintenance and support, professional services, custom courseware
development, and other education and training services.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The Company recognizes revenue when it is realized
or realizable and earned. The Company considers revenue realized or
realizable and earned when persuasive evidence of an arrangement
exists, prices are fixed or determinable, services and products are
provided to the customer and collectability is probable or
reasonably assured.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Revenue recognized from software and other
arrangements is allocated to each element of the arrangement based
on the relative fair values of the elements. While elements include
software products and post contract customer support, the fair
value of each element is based on vendor specific objective
evidence (“VSOE”). For installed software products, if
fair value cannot be determined for each undelivered element of the
arrangement, all revenue from the arrangement is deferred until
fair value can be determined or until all elements of the
arrangement are delivered and customer acceptance has occurred.
Sales of the Company’s SaaS-based workforce development
platform products include customer support, implementation
services, and training; therefore all revenues are deferred until
the SaaS-based product is implemented, at which time revenues are
recognized ratably over the subscription service period. In the
event that circumstances occur which give rise to uncertainty
regarding the collectibility of contracted amounts, revenue
recognition is suspended until such uncertainty is resolved. Fees
for these services are billed on either a monthly, quarterly, or
annual basis.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Revenues derived from the delivery of services
through the Company’s SaaS-based workforce development
platform products and courseware subscriptions are recognized
ratably over the term of the subscription service agreement or over
the historical usage period, if usage typically differs from the
subscription period. Training revenues are generally recognized
upon the completion of training.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Revenues derived from the license of installed
software products are recognized using the residual method upon
delivery of the software, when VSOE of fair value for the
undelivered elements within the contract can be established. If the
Company cannot objectively determine the fair value of each
undelivered element based on the VSOE of fair value, the Company
defers revenue recognition until all elements are delivered, all
services have been performed, or until fair value can be
objectively determined. Software support and maintenance revenues
are recognized ratably over the term of the related agreement.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Revenues recognized from the Company’s survey
and research services are determined using both the proportional
performance method and the completed contract method. Revenues are
generally earned over the estimated survey cycle, which typically
ranges from less than one month to up to five months. The survey
cycle is generally initiated based on the receipt of the first
survey response and runs through provision of related survey
reports to the customer. If survey results are not available to the
customer during the survey fielding cycle, revenues are recognized
at time of report delivery. Revenues for coaching and consulting
engagements are recognized using the proportional performance
method over the term of the underlying contract. Fees for survey
services are billed upon initiation of the survey cycle, with
progress billings made throughout the survey cycle. Fees for
coaching and consulting engagements are billed upon initiation of
the engagement with progress billings throughout the term of the
contract.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Revenues from professional services and courseware
development services are recognized upon the completion of
performance milestones and deliverables using the proportional
performance method. All other revenues are recognized as the
related services are performed or products are delivered. Fees for
these services are generally billed at project initiation and upon
completion of various milestones.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-TOP: 12pt" align="justify">Significant components of deferred tax assets and
deferred tax liabilities are as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<br class="Apple-interchange-newline" />
<table style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="82%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<b>December 31,</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; WIDTH: 17pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; WIDTH: 17pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred tax assets:</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Allowance for doubtful accounts</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">548</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">332</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Accrued liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,981</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,275</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Tax credits</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,115</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,397</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Stock based compensation</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">841</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,171</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred revenue</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,467</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,818</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Depreciation</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">617</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,119</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Basis difference on investments</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">327</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">316</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net operating loss carryforwards</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,015</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">743</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total deferred tax assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
          9,911</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
          8,171</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Less: Valuation allowance</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(1,110</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(654</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred tax assets, net of valuation allowance</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8,801</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">7,517</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred tax liabilities:</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deductible goodwill</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,917</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,267</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Nondeductible intangible assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,330</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,523</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Prepaid assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,881</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,894</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Capitalized software development</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,599</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5,801</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total deferred tax liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">10,727</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">13,485</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 1pt">
<td height="10"></td>
<td height="10" colspan="4"></td>
<td height="10" colspan="4"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net deferred tax liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(1,926</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(5,968</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td style="FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; BACKGROUND-COLOR: rgb(255,255,255); TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" valign="bottom"></td>
<td style="FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; BACKGROUND-COLOR: rgb(255,255,255); TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" valign="bottom">  </td>
<td style="FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; BACKGROUND-COLOR: rgb(255,255,255); TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td style="FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; BACKGROUND-COLOR: rgb(255,255,255); TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td style="FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; BACKGROUND-COLOR: rgb(255,255,255); TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </td>
<td style="FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; BACKGROUND-COLOR: rgb(255,255,255); TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" valign="bottom"> </td>
<td style="FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; BACKGROUND-COLOR: rgb(255,255,255); TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td style="FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; BACKGROUND-COLOR: rgb(255,255,255); TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The following table sets forth the computation of
basic and diluted earnings per share for the three years ended
December 31, 2017 (in thousands, except per share
amounts):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="66%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; WIDTH: 17pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; WIDTH: 17pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; WIDTH: 17pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Numerator:</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net income</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
                10,004</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
              3,755</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
              8,621</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Denominator:</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Weighted-average shares outstanding</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">31,861</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">31,721</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">30,057</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Effect of dilutive shares</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">335</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">347</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">379</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Weighted-average diluted shares</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">32,196</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">32,068</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">30,436</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 1pt">
<td height="8"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Basic earnings per share</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.31</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.12</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.29</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Diluted earnings per share</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.31</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.12</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.28</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Total stock based compensation expense, which is
recorded in our consolidated statements of income, recorded for the
years ended December 31, is as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="70%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="10" align="center"><b>Years Ended
December 31,</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 19pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 19pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 19pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cost of revenues (excluding depreciation and amortization)</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">76</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">144</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">824</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Product development</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">258</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">178</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">569</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Sales and marketing</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">240</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">239</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">547</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Other general and administrative</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,278</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,407</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,340</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total stock based compensation expense</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          1,852</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          1,968</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          3,280</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The expected future annual amortization expense for
the years ending December 31, is as follows (in
thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="90%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2018</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9,438</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2019</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8,792</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2020</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8,139</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2021</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">7,356</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2022</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6,277</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Thereafter</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,814</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        68,816</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt" align="justify">The changes in the carrying amount of goodwill for
the years ended December 31, 2017 and 2016 are as follows (in
thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 42pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Workforce</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Patient</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 43pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Experience</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 34pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Provider</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 20.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Total</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Balance at January 1, 2017</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">16,381</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">24,154</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">69,230</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">109,765</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Acquisition of Morrisey Associates, Inc.</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">533</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">533</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Balance at December 31, 2017</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">16,381</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">24,154</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">69,763</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">110,298</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 1pt">
<td height="16"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 42pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Workforce</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Patient</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 43pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Experience</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 34pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Provider</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 20.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Total</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Balance at January 1, 2016</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">12,336</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">24,154</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">46,583</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">83,073</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Acquisition of HealthLine Systems, LLC.</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,180</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,180</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Acquisition of Morrisey Associates, Inc.</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">20,467</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">20,467</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Other business combinations</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,045</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,045</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Balance at December 31, 2016</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      16,381</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      24,154</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    69,230</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      109,765</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">A summary of activity relative to RSUs for the year
ended December 31, 2017 is as follows (in thousands, except
weighted average grant date fair value):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="63%"></td>
<td valign="bottom" width="6%"></td>
<td style="WIDTH: 20pt"></td>
<td></td>
<td></td>
<td style="WIDTH: 20pt"></td>
<td valign="bottom" width="6%"></td>
<td style="WIDTH: 43pt"></td>
<td></td>
<td></td>
<td style="WIDTH: 43pt"></td>
<td valign="bottom" width="6%"></td>
<td style="WIDTH: 28pt"></td>
<td></td>
<td></td>
<td style="WIDTH: 28pt"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4" align="center">
<b>Weighted-</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4" align="center">
<b>Number of</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4" align="center"><b>Average</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4" align="center">
<b>Aggregate</b></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 24.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>RSU’s</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 87.25pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Grant Date Fair Value</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="4" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 57.75pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Intrinsic Value</b></p>
</td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Outstanding at beginning of period</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">253</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">23.36</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Granted</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">111</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">23.43</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Vested</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(77)</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">24.21</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Forfeited</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(28)</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">23.39</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Outstanding at end of period</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
        259</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        23.13</td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        6,002</td>
<td valign="bottom" nowrap="nowrap"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
247662000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Identifiable intangible assets are comprised of the
following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="41%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="10" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 94.75pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>As of December 31, 2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="10" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 94.75pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>As of December 31, 2016</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 1pt">
<td height="8"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Gross Amount</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Accumulated<br />
Amortization</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Net</b></td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Gross Amount</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Accumulated<br />
Amortization</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Net</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Customer related</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">77,985</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(18,027)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">59,958</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">77,985</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(11,539)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">66,446</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Other</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">16,824</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(7,966)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8,858</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">16,824</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(4,906)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">11,918</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      94,809</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      (25,993)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      68,816</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      94,809</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      (16,445)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        78,364</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">At December 31, 2017 and 2016, the fair value
of marketable securities, which were all classified as available
for sale, included the following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="59%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="14" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; WIDTH: 68.7pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>December 31, 2017</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Adjusted Cost</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Unrealized<br />
Gains</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Unrealized<br />
Losses</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Fair Value</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Level 2:</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Corporate debt securities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">41,900</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(39)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">41,862</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Government-sponsored enterprise debt securities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,488</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(1)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,488</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        46,388</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
                  2</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
                (40)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
            46,350</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 1pt">
<td height="16"></td>
<td height="16" colspan="16"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="14" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; WIDTH: 68.7pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>December 31, 2016</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Adjusted Cost</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Unrealized<br />
Gains</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Unrealized<br />
Losses</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Fair Value</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Level 2:</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Corporate debt securities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">44,486</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(50)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">44,436</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Government-sponsored enterprise debt securities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">9,105</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">9,104</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">53,591</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(52)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">53,540</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 10pt" align="justify">A reconciliation of income taxes at the statutory
federal income tax rate to the provision for income taxes included
in the accompanying consolidated statements of income is as follows
(in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="71%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="10" align="center"><b>Year Ended
December 31,</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 16pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 16pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 16pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Federal tax provision at the statutory rate</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">3,687</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2,152</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">4,802</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
State income tax provision, net of federal benefit</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">424</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">539</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">673</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Tax credits</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(583)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(560)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(425)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Change in state valuation allowance</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">322</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">308</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(8)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Tax Act revaluation of deferred tax balances</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,685)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Other</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(636)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(46)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">56</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Provision for income taxes</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          529</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          2,393</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          5,098</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="44%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 27.3pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Assets *</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="10" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 100.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Purchases of long-lived assets</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="10" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 104.75pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Depreciation and amortization</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 16pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 16pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 16pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 16pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 16pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 16pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 16pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 16pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Workforce Solutions</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">90,055</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">96,323</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9,888</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9,266</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">11,403</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9,982</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,243</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,693</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Patient Experience Solutions</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">34,198</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">35,988</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,764</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,123</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,007</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,510</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,144</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,061</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Provider Solutions</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">150,797</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">155,011</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,619</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,026</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">332</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8,147</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6,061</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,986</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Unallocated</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">136,024</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">108,678</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,762</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,135</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,617</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6,644</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6,759</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5,257</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">411,074</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">396,000</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">  18,033</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">  14,550</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">  15,359</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">  26,283</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">  22,207</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">  16,997</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 10pt" align="justify">* Segment assets include accounts and unbilled
receivables, prepaid royalties, prepaid and other current assets,
other assets, capitalized software development, certain property
and equipment, and intangible assets. Cash and cash equivalents and
marketable securities are not allocated to individual segments, and
are included within Unallocated. A significant portion of property
and equipment assets are included within Unallocated.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">A summary of activity and various other information
relative to stock options for the year ended December 31, 2017
is presented in the tables below (in thousands, except exercise
price).</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2"> </td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<b>Weighted-</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2"> </td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center"><b>Common</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center"><b>Average</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<b>Aggregate</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 26pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Shares</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 54.75pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Exercise Price</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 57.75pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Intrinsic Value</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Outstanding at beginning of period</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">476</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6.74</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Granted</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Exercised</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(100)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4.13</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Expired</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Forfeited</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Outstanding at end of period</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">376</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">7.44</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">5,912</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Exercisable at end of period</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
          376</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        7.44</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        5,912</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Reporting Entity and Segments</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">HealthStream, Inc. (the “Company”) was
incorporated in 1990 as a Tennessee corporation and is
headquartered in Nashville, Tennessee. As of December 31,
2017, the Company operated in three segments: HealthStream
Workforce Solutions, HealthStream Patient Experience Solutions, and
HealthStream Provider Solutions. Workforce Solutions products
consist of <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">software-as-a-service</font></font></font>
(“SaaS”) based services and subscription-based
solutions to meet the ongoing training, certification, assessment,
and development needs of the healthcare community. These solutions
provide, deliver, and track online education for our customers in
the United States through our SaaS model. Patient Experience
products offer healthcare organizations a wide range of quality and
satisfaction surveys, consulting services, analyses of survey
results, and other research-based services. Provider Solutions
products offer healthcare organizations software applications for
administering and tracking provider credentialing, privileging,
call center, and enrollment activities.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Future rental payment commitments at
December 31, 2017 under <font style="WHITE-SPACE: nowrap">non-cancelable</font> operating leases, with
initial terms of one year or more, are as follows (in
thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="90%" border="0">
<tr>
<td width="90%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2018</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">4,720</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2019</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,495</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2020</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,920</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2021</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,750</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2022</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,744</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Thereafter</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">20,361</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total minimum lease payments</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        39,990</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
1852000
0
P0Y10M25D
4.13
0
42915000
P0Y10M25D
0
0
0
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Stock Based Compensation</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">As of December 31, 2017, the Company maintains
three stock based compensation plans under which awards are
outstanding, as described in Note 11. The Company accounts for
stock based compensation using the fair-value based method for
costs related to share-based payments, including stock options and
restricted share units. The Company uses the Black Scholes option
pricing model for calculating the fair value of option awards
issued under its stock based compensation plan. The Company
measures compensation cost of restricted share units based on the
closing fair market value of the Company’s stock on the date
of grant. Stock based compensation cost is measured at the grant
date, based on the fair value of the award that is ultimately
expected to vest, and is recognized as an expense over the
requisite service period. The Company recognizes tax benefits from
stock based compensation if an excess tax benefit is realized.
Excess tax benefits are reflected in the statement of income as a
component of the provision for income taxes when realized.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal">
<b>9. BUSINESS SEGMENTS</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 10pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal" align="justify">The Company provides services to healthcare
organizations and other members within the healthcare industry. The
Company’s services are focused on the delivery of workforce
development products and services (“HealthStream Workforce
Solutions”), survey and research services
(“HealthStream Patient Experience Solutions”), and
provider credentialing, privileging, call center, and enrollment
products and services (“HealthStream Provider
Solutions”).</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal" align="justify">The Company measures segment performance based on
operating income before income taxes and prior to the allocation of
certain corporate overhead expenses, interest income, interest
expense, gains and losses from equity investments, and
depreciation. The Unallocated component below includes corporate
functions, such as accounting, human resources, legal, investor
relations, administrative and executive personnel, depreciation, a
portion of amortization, and certain other expenses, which are not
currently allocated in measuring segment performance. The following
is the Company’s business segment information as of and for
the years ended December 31, 2017, 2016 and 2015 (in
thousands).</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="67%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="bottom">Revenues, net:</td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; WIDTH: 18pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; WIDTH: 18pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; WIDTH: 18pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2.5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Workforce Solutions</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">178,061</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">168,040</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">161,289</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2.5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Patient Experience Solutions</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">32,763</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">33,850</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">34,193</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2.5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Provider Solutions</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">36,838</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">24,084</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">13,520</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total revenues, net</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    247,662</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    225,974</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    209,002</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 1pt">
<td height="16"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="bottom">Operating income:</td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; WIDTH: 18pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; WIDTH: 18pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; WIDTH: 18pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2.5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Workforce Solutions</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">33,579</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">37,329</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">39,986</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2.5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Patient Experience Solutions</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,491</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(522)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,548</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2.5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Provider Solutions</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">879</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,443)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,559)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 2.5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Unallocated</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(26,149)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(28,797)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(25,418)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total operating income</p>
</td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    9,800</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    5,567</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    13,557</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="44%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 27.3pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Assets *</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="10" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 100.5pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Purchases of long-lived assets</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="10" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 104.75pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Depreciation and amortization</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 16pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 16pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 16pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 16pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 16pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 16pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 16pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: "Times New Roman"; WIDTH: 16pt; BORDER-BOTTOM: rgb(0,0,0) 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Workforce Solutions</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">90,055</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">96,323</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9,888</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9,266</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">11,403</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9,982</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,243</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,693</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Patient Experience Solutions</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">34,198</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">35,988</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,764</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,123</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,007</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,510</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,144</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,061</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Provider Solutions</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">150,797</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">155,011</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,619</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,026</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">332</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8,147</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6,061</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,986</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Unallocated</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">136,024</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">108,678</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,762</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,135</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,617</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6,644</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6,759</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5,257</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: "Times New Roman"; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">411,074</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">396,000</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">  18,033</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">  14,550</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">  15,359</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">  26,283</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">  22,207</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">  16,997</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: rgb(0,0,0) 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 7pt; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 10pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal" align="justify">* Segment assets include accounts and unbilled
receivables, prepaid royalties, prepaid and other current assets,
other assets, capitalized software development, certain property
and equipment, and intangible assets. Cash and cash equivalents and
marketable securities are not allocated to individual segments, and
are included within Unallocated. A significant portion of property
and equipment assets are included within Unallocated.</p>
</div>
0
1973000
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman">
<b>Shipping and Handling Costs</b></p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify">Shipping and handling costs that are associated
with our products and services are included in cost of
revenues.</p>
</div>
<div>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman">
<b>2. SHAREHOLDERS’ EQUITY</b></p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman">
<b>Common Stock</b></p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify">The Company is authorized to issue up to
75 million shares of common stock. The number of common shares
issued and outstanding as of December 31, 2017 and 2016 was
approximately 31.9 million and 31.7 million,
respectively.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman">
<b>Preferred Stock</b></p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify">The Company is authorized to issue up to
10 million shares of preferred stock in one or more series,
having the relative voting powers, designations, preferences,
rights and qualifications, limitations or restrictions, and other
terms as the Board of Directors may fix in providing for the
issuance of such series, without any vote or action of the
shareholders.</p>
</div>
100000
1000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Reporting Entity and Segments</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">HealthStream, Inc. (the “Company”) was
incorporated in 1990 as a Tennessee corporation and is
headquartered in Nashville, Tennessee. As of December 31,
2017, the Company operated in three segments: HealthStream
Workforce Solutions, HealthStream Patient Experience Solutions, and
HealthStream Provider Solutions. Workforce Solutions products
consist of <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">software-as-a-service</font></font></font>
(“SaaS”) based services and subscription-based
solutions to meet the ongoing training, certification, assessment,
and development needs of the healthcare community. These solutions
provide, deliver, and track online education for our customers in
the United States through our SaaS model. Patient Experience
products offer healthcare organizations a wide range of quality and
satisfaction surveys, consulting services, analyses of survey
results, and other research-based services. Provider Solutions
products offer healthcare organizations software applications for
administering and tracking provider credentialing, privileging,
call center, and enrollment activities.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Recently Adopted Accounting Standards</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The Company adopted the Financial Accounting
Standards Board (“FASB”) Accounting Standards Update
(“ASU”) <font style="WHITE-SPACE: nowrap">2016-09,</font> Improvements to Employee
Share-Based Payment Accounting, effective January 1, 2017. As
a result of the adoption, the Company recorded an adjustment to
retained earnings of approximately $2.2 million to recognize
deferred tax assets associated with previous excess tax benefits on
stock based compensation that had not been previously recognized
because the related tax deduction had not reduced income taxes
payable. The Company elected to continue to estimate expected
forfeitures rather than account for them as they occur and to
prospectively reflect the presentation of excess tax benefits on
the statement of cash flows as an operating activity. In addition,
effective January 1, 2017, excess tax benefits or deficiencies
from equity based awards is reflected in the statement of income as
a component of the provision for income taxes.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">In January 2017, the FASB issued ASU <font style="WHITE-SPACE: nowrap">2017-04,</font> Simplifying the Test for
Goodwill Impairment, which simplifies the measurement of goodwill
by eliminating Step 2 from the goodwill impairment test. With the
elimination of Step 2, entities will measure goodwill for
impairment by comparing the fair value of the reporting unit with
its carrying amount. An impairment charge should be recognized for
the amount by which the carrying amount exceeds the reporting
unit’s fair value, only to the extent of the carrying value
of goodwill allocated to that reporting unit. The Company elected
to early adopt ASU <font style="WHITE-SPACE: nowrap">2017-04</font>
effective January 1, 2017 and is required to apply the new
guidance on a prospective basis. The adoption is not expected to
have a material effect on the Company’s consolidated
financial statements. The Company anticipates the new guidance will
make the goodwill impairment evaluation process more efficient and
cost effective.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Recognition of Revenue</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Revenues are derived from providing services
through our SaaS-based workforce development platform products,
courseware subscriptions, provision of survey and research
services, sales of software licensing arrangements, software
maintenance and support, professional services, custom courseware
development, and other education and training services.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The Company recognizes revenue when it is realized
or realizable and earned. The Company considers revenue realized or
realizable and earned when persuasive evidence of an arrangement
exists, prices are fixed or determinable, services and products are
provided to the customer and collectability is probable or
reasonably assured.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Revenue recognized from software and other
arrangements is allocated to each element of the arrangement based
on the relative fair values of the elements. While elements include
software products and post contract customer support, the fair
value of each element is based on vendor specific objective
evidence (“VSOE”). For installed software products, if
fair value cannot be determined for each undelivered element of the
arrangement, all revenue from the arrangement is deferred until
fair value can be determined or until all elements of the
arrangement are delivered and customer acceptance has occurred.
Sales of the Company’s SaaS-based workforce development
platform products include customer support, implementation
services, and training; therefore all revenues are deferred until
the SaaS-based product is implemented, at which time revenues are
recognized ratably over the subscription service period. In the
event that circumstances occur which give rise to uncertainty
regarding the collectibility of contracted amounts, revenue
recognition is suspended until such uncertainty is resolved. Fees
for these services are billed on either a monthly, quarterly, or
annual basis.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Revenues derived from the delivery of services
through the Company’s SaaS-based workforce development
platform products and courseware subscriptions are recognized
ratably over the term of the subscription service agreement or over
the historical usage period, if usage typically differs from the
subscription period. Training revenues are generally recognized
upon the completion of training.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Revenues derived from the license of installed
software products are recognized using the residual method upon
delivery of the software, when VSOE of fair value for the
undelivered elements within the contract can be established. If the
Company cannot objectively determine the fair value of each
undelivered element based on the VSOE of fair value, the Company
defers revenue recognition until all elements are delivered, all
services have been performed, or until fair value can be
objectively determined. Software support and maintenance revenues
are recognized ratably over the term of the related agreement.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Revenues recognized from the Company’s survey
and research services are determined using both the proportional
performance method and the completed contract method. Revenues are
generally earned over the estimated survey cycle, which typically
ranges from less than one month to up to five months. The survey
cycle is generally initiated based on the receipt of the first
survey response and runs through provision of related survey
reports to the customer. If survey results are not available to the
customer during the survey fielding cycle, revenues are recognized
at time of report delivery. Revenues for coaching and consulting
engagements are recognized using the proportional performance
method over the term of the underlying contract. Fees for survey
services are billed upon initiation of the survey cycle, with
progress billings made throughout the survey cycle. Fees for
coaching and consulting engagements are billed upon initiation of
the engagement with progress billings throughout the term of the
contract.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Revenues from professional services and courseware
development services are recognized upon the completion of
performance milestones and deliverables using the proportional
performance method. All other revenues are recognized as the
related services are performed or products are delivered. Fees for
these services are generally billed at project initiation and upon
completion of various milestones.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Principles of Consolidation</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The consolidated financial statements include the
accounts of the Company and its <font style="WHITE-SPACE: nowrap">wholly-owned</font> subsidiaries. All
intercompany accounts and transactions have been eliminated in
consolidation.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Use of Estimates</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The consolidated financial statements are prepared
in accordance with U.S. generally accepted accounting principles.
These accounting principles require management to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from
those estimates and such differences could be material to the
consolidated financial statements.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Cash Equivalents</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The Company considers cash equivalents to be
unrestricted, highly liquid investments with initial maturities of
less than three months.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Marketable Securities</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Marketable securities are classified as available
for sale and are stated at fair market value, with the unrealized
gains and losses, net of tax, reported in other accumulated
comprehensive income (loss) on the accompanying consolidated
balance sheets. Realized gains and losses and declines in market
value judged to be other than temporary on investments in
marketable securities are included in interest and other income on
the accompanying consolidated statements of income. The cost of
securities sold is based on the specific identification method.
Interest and dividends on securities classified as available for
sale are included in other income (expense) on the accompanying
consolidated statements of income. Premiums and discounts are
amortized over the life of the related available for sale security
as an adjustment to the yield using the effective interest
method.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Accounts <font style="WHITE-SPACE: nowrap">Receivable-Unbilled</font></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Accounts <font style="WHITE-SPACE: nowrap">receivable-unbilled</font> represents the
following: 1) revenue earned and recognized on contracts accounted
for using the proportional performance method for which invoices
have not been generated or contractual billing dates have not been
reached; and 2) the difference between billings for contracts
containing escalated pricing over the term of the agreement and the
recognition of revenue ratably over the subscription period.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Deferred Revenue</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Deferred revenue represents amounts that have been
billed or collected in advance of revenue recognition. The Company
typically invoices customers in quarterly, <font style="WHITE-SPACE: nowrap">bi-annual,</font> or annual installments.
Deferred revenue is reduced as services are provided and the
revenue recognition criteria are met.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Prepaid Royalties</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Prepaid royalties represents advance payments
associated with the sale of third party products, such as
courseware subscriptions. Royalties are typically paid in advance
at the commencement of the revenue cycle or periodically throughout
the revenue cycle, such as quarterly, <font style="WHITE-SPACE: nowrap">bi-annual,</font> or annual installments.
Royalty payments are amortized over the term of the underlying
contracts, which generally range from 12 to 36 months, in order to
match the direct royalty costs to the same period the subscription
revenue is recognized. Amortization of royalties is included under
the caption “cost of revenues (excluding depreciation and
amortization)” in the accompanying consolidated statements of
income.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt">
<b>Allowance for Doubtful Accounts</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The Company estimates its allowance for doubtful
accounts using a specific identification method in which management
considers the facts and circumstances surrounding each potentially
uncollectible receivable. An allowance is also maintained for
accounts that are not specifically identified that may become
uncollectible in the future. Uncollectible receivables are
<font style="WHITE-SPACE: nowrap">written-off</font> in the period
management believes it has exhausted every opportunity to collect
payment from the customer. Bad debt expense is recorded when events
or circumstances indicate an additional allowance is required based
on the Company’s specific identification approach.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt" align="justify">Changes in the allowance for doubtful accounts and
the amounts charged to bad debt expense for the years ended
December 31 were as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="68%" align="center" border="0">
<tr>
<td width="12%"></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Allowance Balance at</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 76.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Beginning of Period</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Charged to Costs and</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 35.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Expenses</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 39.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b><font style="WHITE-SPACE: nowrap">Write-offs</font></b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Allowance Balance at</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 53.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>End of Period</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2017</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">
            863</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">
        1,813</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
         (471</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">
          2,205</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2016</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">303</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">640</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(80</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">863</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2015</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">331</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">284</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(312</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom">    $</td>
<td valign="bottom" align="right">303</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt">
<b>Capitalized Software Development</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Capitalized software development is stated on the
basis of cost and is presented net of accumulated amortization. The
Company capitalizes costs incurred during the software development
phase for projects when such costs are material. These assets are
generally amortized using the straight-line method over three
years. The Company capitalized approximately $12.5 million and
$10.0 million during 2017 and 2016, respectively. Amortization
of capitalized software development was approximately
$10.1 million, $7.7 million, and $6.2 million during
2017, 2016, and 2015, respectively. Maintenance and operating costs
are expensed as incurred. As of December 31, 2017 and 2016,
there were no capitalized software development costs for external
computer software developed for resale.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt">
<b>Fair Value Measurements</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Fair value is defined as the price that would be
received to sell an asset or paid to transfer a liability in the
principal or most advantageous market in an orderly transaction
between market participants at the measurement date. The fair value
hierarchy prioritizes the inputs to valuation techniques used in
measuring fair value. There are three levels to the fair value
hierarchy based on the reliability of inputs, as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt" align="justify"><u>Level</u><u> 1</u> – Observable
inputs that reflect quoted prices (unadjusted) for identical assets
or liabilities in active markets.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt" align="justify"><u>Level</u><u> 2</u> – Inputs other
than quoted prices included in Level 1 that are observable for
the asset or liability, either directly or indirectly.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt" align="justify"><u>Level</u><u> 3</u> – Unobservable
inputs in which little or no market data exists, therefore
requiring the Company to develop its own assumptions.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt" align="justify">The Company evaluates assets and liabilities
subject to fair value measurements on a recurring basis to
determine the appropriate level at which to classify them for each
reporting period. This determination requires significant judgments
to be made by the Company. At December 31, 2017 and 2016, our
assets measured at fair value on a recurring basis consisted of
marketable securities, which are classified as available for sale
(see Note 4 – Marketable Securities). The Company did not
have any financial liabilities that were subject to fair value
measurements as of such dates.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt">
<b>Property and Equipment</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Property and equipment are stated on the basis of
cost. Depreciation and amortization are provided on the
<font style="WHITE-SPACE: nowrap">straight-line</font> method over
the following estimated useful lives, except for assets under
capital leases and leasehold improvements, which are amortized over
the shorter of the estimated useful life or their respective lease
term.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="96%" border="0">
<tr>
<td width="95%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 7.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Years</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Furniture and fixtures</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Equipment</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Goodwill and Intangible Assets</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Goodwill represents the excess of purchase price in
a business combination over the fair value of the net identifiable
assets acquired. The carrying amount of our goodwill is evaluated
for impairment at least annually during the fourth quarter and
whenever events or changes in facts or circumstances indicate that
impairment may exist. In accordance with ASC 350, <i>Intangibles
– Goodwill and Other</i>, companies may opt to first assess
qualitative factors to determine whether it is more likely than not
that the fair value of a reporting unit is less than its carrying
amount. A qualitative assessment includes factors such as financial
performance, industry and market metrics, and other factors
affecting the reporting unit. If this assessment concludes that it
is more likely than not that the fair value of a reporting unit
exceeds its carrying value, then goodwill is not considered
impaired and no further impairment testing is required. Conversely,
if the qualitative assessment concludes that it is more likely than
not that the fair value of a reporting unit is less than its
carrying value, we must then compare the fair value of the
reporting unit to its carrying value. The Company determines fair
value of the reporting units using both income and market based
models. These models require the use of various assumptions
relating to cash flow projections, growth rates, discount rates and
terminal value calculations. There were no goodwill impairments
identified or recorded for the years ended December 31, 2017,
2016 or 2015.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">As of December 31, 2017, intangible assets
include customer relationships, internally-developed technology and
patents, <font style="WHITE-SPACE: nowrap">non-competition</font>
agreements, and trade names. These intangible assets are considered
to have definite useful lives and are being amortized on a straight
line basis over periods ranging between three and thirteen years.
The weighted average amortization period for definite lived
intangible assets as of December 31, 2017 was 11.1 years.
Intangible assets are reviewed for impairment whenever events or
changes in facts or circumstances indicate that the carrying amount
of the assets may not be recoverable. There were no intangible
asset impairments identified or recorded for the years ended
December 31, 2017, 2016, or 2015.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b><font style="WHITE-SPACE: nowrap">Long-Lived</font>
Assets</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Long-lived assets to be held for use are reviewed
for events or changes in facts and circumstances, both internally
and externally, which may indicate that an impairment of
<font style="WHITE-SPACE: nowrap">long-lived</font> assets held for
use is present. The Company measures any impairment using
observable market values or discounted future cash flows from the
related long-lived assets. The cash flow estimates and discount
rates incorporate management’s best estimates, using
appropriate and customary assumptions and projections at the date
of evaluation. Management periodically evaluates whether the
carrying value of <font style="WHITE-SPACE: nowrap">long-lived</font> assets, including
intangible assets, property and equipment, capitalized software
development, and other assets will be recoverable. There were no
long-lived asset impairments identified or recorded for the years
ended December 31, 2017, 2016, or 2015.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b><font style="WHITE-SPACE: nowrap">Non-Marketable</font> Equity
Investments</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify"><font style="WHITE-SPACE: nowrap">Non-marketable</font> equity investments are
accounted for using the equity method when the Company can exercise
significant influence over the investee. Investments for which the
Company is not able to exercise significant influence over the
investee are accounted for under the cost method. The proportionate
share of income or loss from equity method investments are recorded
under the caption “other income, net” in the
accompanying consolidated statements of income.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Financial Instruments</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The Company has various financial instruments,
including cash and cash equivalents, accounts receivable, accounts
receivable-unbilled, accounts payable, accrued liabilities, and
deferred revenue. The carrying amounts of these financial
instruments approximate fair value because of the short term
maturity or short term nature of such instruments. The Company also
has marketable securities, which are recorded at approximate fair
value based on quoted market prices or alternative pricing sources
(see Note 4 – Marketable Securities).</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Advertising</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The Company expenses the costs of advertising as
incurred. Advertising expense for the years ended December 31,
2017, 2016, and 2015 was approximately $1.0 million,
$1.0 million, and $1.1 million, respectively.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Shipping and Handling Costs</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Shipping and handling costs that are associated
with our products and services are included in cost of
revenues.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Income Taxes</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Income taxes are accounted for using the asset and
liability method, whereby deferred tax assets and liabilities are
determined based on the temporary differences between the financial
statement and tax bases of assets and liabilities measured at tax
rates that will be in effect for the year in which the differences
are expected to affect taxable income. Management evaluates all
available evidence, both positive and negative, to determine
whether, based on the weight of that evidence, a valuation
allowance is needed. Future realization of the tax benefit of an
existing deductible temporary difference or carryforward ultimately
depends on the existence of sufficient taxable income of the
appropriate character within the carryback or carryforward period
available under the tax law. There are four possible sources of
taxable income that may be available under the tax law to realize a
tax benefit for deductible temporary differences and carryforwards:
1) future reversals of existing taxable temporary differences, 2)
future taxable income exclusive of reversing temporary differences
and carryforwards, 3) taxable income in prior carryback year(s) if
carryback is permitted under the tax law, and 4) <font style="WHITE-SPACE: nowrap">tax-planning</font> strategies that would, if
necessary, be implemented to realize deductible temporary
differences or carryforwards prior to their expiration. Management
reviews the realizability of its deferred tax assets each reporting
period to identify whether any significant changes in circumstances
or assumptions have occurred that could materially affect the
realizability of deferred tax assets. As of December 31, 2017,
the Company had established a valuation allowance of
$1.1 million for the portion of its net deferred tax assets
that are not more likely than not expected to be realized.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The Company accounts for income tax uncertainties
using a <font style="WHITE-SPACE: nowrap">more-likely-than-not</font> recognition
threshold based on the technical merits of the tax position taken.
Tax positions that meet the <font style="WHITE-SPACE: nowrap">more-likely-than-not</font> recognition
threshold are measured in order to determine the tax benefit to be
recognized in the financial statements. The Company expenses any
penalties or interest associated with tax obligations as general
and administrative expenses and interest expense, respectively.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Earnings per Share</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">Basic earnings per share is computed by dividing
the net income available to common shareholders for the period by
the weighted average number of common shares outstanding during the
period. Diluted earnings per share is computed by dividing the net
income for the period by the weighted average number of common and
common equivalent shares outstanding during the period. Common
equivalent shares are composed of incremental common shares
issuable upon the exercise of stock options and restricted share
units subject to vesting. The dilutive effect of common equivalent
shares is included in diluted earnings per share by application of
the treasury stock method. Common equivalent shares that have an
anti-dilutive effect on diluted net income per share have been
excluded from the calculation of diluted weighted average shares
outstanding for the years ended December 31, 2017, 2016, and
2015.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Concentrations of Credit Risk and Significant Customers</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The Company’s credit risks relate primarily
to cash and cash equivalents, marketable securities and accounts
receivable. The Company places its temporary excess cash
investments in high quality, <font style="WHITE-SPACE: nowrap">short-term</font> money market instruments.
At times, such investments may be in excess of the FDIC insurance
limits. Marketable securities consist primarily of investment grade
corporate debt securities and certificates of deposit.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The Company sells its products and services to
various companies in the healthcare industry that are located in
the United States. Credit evaluations of our customers’
financial condition are performed on an ongoing basis, which
generally require no collateral from customers. An allowance for
doubtful accounts is maintained for potentially uncollectible
accounts receivable. The Company did not have any single customer
representing over 10% of net revenues or accounts receivable during
2017, 2016, or 2015.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Stock Based Compensation</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">As of December 31, 2017, the Company maintains
three stock based compensation plans under which awards are
outstanding, as described in Note 11. The Company accounts for
stock based compensation using the fair-value based method for
costs related to share-based payments, including stock options and
restricted share units. The Company uses the Black Scholes option
pricing model for calculating the fair value of option awards
issued under its stock based compensation plan. The Company
measures compensation cost of restricted share units based on the
closing fair market value of the Company’s stock on the date
of grant. Stock based compensation cost is measured at the grant
date, based on the fair value of the award that is ultimately
expected to vest, and is recognized as an expense over the
requisite service period. The Company recognizes tax benefits from
stock based compensation if an excess tax benefit is realized.
Excess tax benefits are reflected in the statement of income as a
component of the provision for income taxes when realized.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Newly Issued Accounting Standards</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">In May 2014, the FASB issued ASU <font style="WHITE-SPACE: nowrap">2014-09,</font> Revenue from Contracts with
Customers (Topic 606), which supersedes the revenue recognition
requirements in Topic 605, Revenue Recognition, and most
industry-specific revenue recognition guidance throughout the
Industry Topics of the Accounting Standards Codification. The
updated guidance states that an entity should recognize revenue to
depict the transfer of promised goods or services to customers in
an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. The
guidance also provides for additional disclosures with respect to
revenues and cash flows arising from contracts with customers. The
standard will be effective for the first interim period within
annual reporting periods beginning after December 15, 2017,
and the Company will adopt the standard using the modified
retrospective approach effective January 1, 2018. In
preparation for adoption of the standard, the Company implemented
internal controls and key system functionality to enable the
preparation of financial information and has reached conclusions on
key accounting assessments related to the standard.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The most significant impact of the standard relates
to capitalizing costs to acquire contracts, which have historically
been expensed as incurred. As of December 31, 2017, the
Company’s sales commission plans have included multiple
payments, including initial payments in the period a customer
contract is obtained and deferred payments either 15 or 27 months
after the initial payment. Under the standard, only the initial
payment is subject to capitalization as the deferred payments
require a substantive performance condition of the employee. These
initial commission payments will be capitalized in the period a
customer contract is obtained and will be amortized consistent with
the transfer of the goods or services to the customer over the
expected period of benefit. The expected period of benefit is the
contract term, except when the commission payment is expected to
provide economic benefit to the Company for a period longer than
the contract term, such as for new customer or incremental sales
where renewals are expected and renewal commissions are not
commensurate with initial commissions. Such commissions will be
amortized over the greater of contract term or technological
obsolescence period when the underlying contracted products are
technology-based, such as for the SaaS-based platforms, or the
expected customer relationship period when the underlying
contracted products are not technology-based, such as for patient
experience survey products.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Additionally, the standard impacts several of the
Company’s revenue streams. The primary streams affected are
professional services and patient experience surveys. For
professional services, the identification of performance
obligations and the related timing of revenue recognition is
changing such that revenues will be recognized earlier, during the
period of service delivery, rather than over the related
product’s contractual term. For patient experience surveys,
revenues will correlate to survey delivery, which approximates
ratable recognition over the contractual term, rather than the
current method of spreading quarterly revenue over the five-month
life cycle of the patient experience survey cycle.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The Company will finalize its calculation of the
financial impact of the adoption of this accounting standard on its
future consolidated financial statements in the first quarter of
2018. The Company anticipates adjustments to retained earnings of
no more than $10 million and $16 million, net of related
tax effects, upon adoption for revenue recognition and sales
commissions, respectively.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">In January 2016, the FASB issued ASU <font style="WHITE-SPACE: nowrap">2016-01,</font> Financial Instruments –
Overall (Sub Topic <font style="WHITE-SPACE: nowrap">825-10),</font> which addresses certain
aspects of the recognition, measurement, presentation, and
disclosure of financial instruments. The guidance will, among other
things, require equity investments (except those accounted for
under the equity method of accounting or those that result in
consolidation of the investee) to be measured at fair value with
changes in fair value recognized in net income. The standard will
be effective for the first interim period within annual reporting
periods beginning after December 15, 2017, and early adoption
is permitted for only limited aspects of such guidance. The Company
plans to adopt this ASU on January 1, 2018, and is currently
reviewing this standard to assess the impact on its future
consolidated financial statements.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">In February 2016, the FASB issued ASU <font style="WHITE-SPACE: nowrap">2016-02,</font> Leases <i>(Topic 842),</i>
which requires lessees to recognize assets and liabilities for most
leases. The recognition, measurement and presentation of expenses
and cash flows arising from a lease by a lessee is not expected to
significantly change under such guidance; however, the Company is
currently reviewing this standard to assess the impact on its
future consolidated financial statements. The standard will be
effective for the first interim period within annual reporting
periods beginning after December 15, 2018, and early adoption
is permitted. The Company expects to adopt this ASU on
January 1, 2019, and is currently evaluating the impact that
adoption of this ASU will have on its consolidated financial
position and results of operations.</p>
</div>
10000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>18. SUBSEQUENT EVENTS</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">On February 12, 2018, the Company divested its
Patient Experience (“PX”) business to Press Ganey
Associates (“Press Ganey”) for $65.5 million in
cash (subject to adjustment based on the working capital of the PX
business at closing), of which $6.5 million will be held in
escrow for a period of time following the sale as a source of
recovery for indemnification claims by Press Ganey. The sale of the
PX business was effected by (i) the contribution by the
Company of specified assets and certain liabilities used in the PX
business to a newly-formed wholly-owned subsidiary of the Company,
and (ii) immediately thereafter, the sale by the Company to
Press Ganey of all of the outstanding equity interests such
wholly-owned subsidiary. In connection with such contribution, the
Company retained certain liabilities related to the PX
business.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">HealthStream anticipates recording a <font style="WHITE-SPACE: nowrap">pre-tax</font> book gain in the first quarter
of 2018 on the sale of its PX business between $34.0 million
to $38.0 million. This sale of the PX business resulted in the
Company’s complete divestiture of the Company’s patient
experience solutions business segment. With the proceeds from this
transaction, the Board of Directors declared a $1.00 per common
share special cash dividend payable on April 3, 2018 to
shareholders of record on March 6, 2018.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">A reconciliation of the beginning and ending
liability for gross unrecognized tax benefits at December 31,
2017 and 2016, are as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="84%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<b>December 31,</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; WIDTH: 17pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; WIDTH: 17pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Balance at beginning of year</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">397</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">658</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Additions for tax positions in the current year</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">10</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">64</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Reductions for tax positions of prior years</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(47)</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(325)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Balance at end of year</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          360</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
          397</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
2037-12-31
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman">
<b>Accounts <font style="white-space:nowrap">Receivable-Unbilled</font></b></p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify">Accounts <font style="white-space:nowrap">receivable-unbilled</font> represents the
following: 1) revenue earned and recognized on contracts accounted
for using the proportional performance method for which invoices
have not been generated or contractual billing dates have not been
reached; and 2) the difference between billings for contracts
containing escalated pricing over the term of the agreement and the
recognition of revenue ratably over the subscription period.</p>
</div>
47000
HSTM
32196000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Use of Estimates</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="justify">The consolidated financial statements are prepared
in accordance with U.S. generally accepted accounting principles.
These accounting principles require management to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from
those estimates and such differences could be material to the
consolidated financial statements.</p>
</div>
31861000
500000
1200000
4
P30D
P3Y
P21Y
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">Other information relative to option activity
during the three years ended December 31, 2017 is as follows
(in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="67%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 18pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 18pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman; WIDTH: 18pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total grant date fair value of stock options vested</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">-</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">232</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total intrinsic value of stock options exercised</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,973</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">820</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,662</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cash proceeds from exercise of stock options</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
                413</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
                145</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
                328</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman">
<b>Recently Adopted Accounting Standards</b></p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify">The Company adopted the Financial Accounting
Standards Board (“FASB”) Accounting Standards Update
(“ASU”) <font style="white-space:nowrap">2016-09,</font> Improvements to Employee
Share-Based Payment Accounting, effective January 1, 2017. As
a result of the adoption, the Company recorded an adjustment to
retained earnings of approximately $2.2 million to recognize
deferred tax assets associated with previous excess tax benefits on
stock based compensation that had not been previously recognized
because the related tax deduction had not reduced income taxes
payable. The Company elected to continue to estimate expected
forfeitures rather than account for them as they occur and to
prospectively reflect the presentation of excess tax benefits on
the statement of cash flows as an operating activity. In addition,
effective January 1, 2017, excess tax benefits or deficiencies
from equity based awards is reflected in the statement of income as
a component of the provision for income taxes.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:9.5pt; font-family:Times New Roman" align="justify">In January 2017, the FASB issued ASU <font style="white-space:nowrap">2017-04,</font> Simplifying the Test for
Goodwill Impairment, which simplifies the measurement of goodwill
by eliminating Step 2 from the goodwill impairment test. With the
elimination of Step 2, entities will measure goodwill for
impairment by comparing the fair value of the reporting unit with
its carrying amount. An impairment charge should be recognized for
the amount by which the carrying amount exceeds the reporting
unit’s fair value, only to the extent of the carrying value
of goodwill allocated to that reporting unit. The Company elected
to early adopt ASU <font style="white-space:nowrap">2017-04</font>
effective January 1, 2017 and is required to apply the new
guidance on a prospective basis. The adoption is not expected to
have a material effect on the Company’s consolidated
financial statements. The Company anticipates the new guidance will
make the goodwill impairment evaluation process more efficient and
cost effective.</p>
</div>
<div>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="96%" border="0">
<tr>
<td width="95%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 7.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Years</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Furniture and fixtures</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Equipment</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
</table>
</div>
2685000
2200000
P10Y
412000
17122
28000
111000
77000
1900000
24.21
23.39
23.43
P4Y
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt" align="justify">The amounts of revenue and operating loss of HLS
included in the Company’s consolidated statement of income
from the date of acquisition of March 16, 2015 to the period
ending December 31, 2015 are as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="93%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total revenues</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,543</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Operating loss</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(2,541</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt" align="justify">The following unaudited pro forma financial
information summarizes the combined results of operations of the
Company and HLS, which was significant for purposes of the
unaudited pro forma financial information disclosure, as though the
companies were combined as of January 1, 2015 (in thousands,
except per share data):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="97%" border="0">
<tr>
<td width="77%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Year Ended</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 55.35pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>December 31,</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 19pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 19pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2015</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total revenues</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      227,834</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    219,108</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net income</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">4,924</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">13,551</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Basic earnings per share</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.16</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.45</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Diluted earnings per share</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.15</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.44</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
2015-03-16
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 4pt" align="justify">A summary of the purchase price is as follows (in
thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 4pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="99%" border="0">
<tr>
<td width="89%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cash paid</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">89,850</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cash held in escrow</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">679</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2.5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total consideration paid</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        90,529</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 4pt" align="justify">The following table summarizes the fair value of
the assets acquired and liabilities assumed as of the date of
acquisition (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="90%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cash</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">54</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Accounts receivable, net</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,052</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Prepaid assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">546</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Property and equipment</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">200</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred tax assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,523</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Goodwill</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">43,798</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Intangible assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">47,200</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Accounts payable and accrued liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(1,085)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred revenue</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(5,979)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net assets acquired</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      90,309</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt" align="justify">The following table sets forth the components of
identifiable intangible assets and their estimated useful lives as
of the acquisition date (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="99%" border="0">
<tr>
<td width="80%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 41.45pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Fair value</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 40.9pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>Useful life</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Customer relationships</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">42,600</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">13 years </td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Developed technology</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,700</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5 years </td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Trade names</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">900</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6 years </td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total intangible assets subject to amortization</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">47,200</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
</table>
</div>
9000000
P1Y
10958000
248942000
0.34
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 4pt" align="justify">The amounts of revenue and operating loss of MAI
included in the Company’s consolidated statement of income
from the date of acquisition of August 8, 2016 to the period
ending December 31, 2016 are as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 4pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="99%" border="0">
<tr>
<td width="91%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total revenues</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      2,581</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Operating loss</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(2,358)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 4pt" align="justify">The following unaudited pro forma financial
information summarizes the combined results of operations of the
Company and MAI, which was significant for purposes of the
unaudited pro forma financial information disclosure, as though the
companies were combined as of January 1, 2016 (in thousands,
except per share data):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 4pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="98%" border="0">
<tr>
<td width="77%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Year Ended</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 55.35pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>December 31,</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 19pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2017</b></p>
</td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; WIDTH: 19pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline" align="center"><b>2016</b></p>
</td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total revenues</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      248,942</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    236,205</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net income</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">10,958</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,610</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Basic earnings per share</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.34</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.21</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Diluted earnings per share</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.34</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.21</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
2016-08-08
0.34
533000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">A summary of the purchase price is as follows (in
thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="96%" align="center" border="0">
<tr>
<td width="89%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cash paid at closing</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">44,120</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cash held in escrow</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,880</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total consideration paid</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
        48,000</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The following table summarizes the fair value of
the assets acquired and liabilities assumed as of the date of
acquisition (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="98%" border="0">
<tr>
<td width="90%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Accounts receivable, net</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2,406</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Prepaid royalties and other prepaid assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">187</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Property and equipment</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">75</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred tax assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,377</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Goodwill</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">21,000</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Intangible assets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">27,400</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Accounts payable and accrued liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(776)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Deferred revenue</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(3,669)</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net assets acquired</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
      48,000</td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="justify">The following table sets forth the components of
identifiable intangible assets and their estimated useful lives as
of the acquisition date (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="81%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Fair value</b></td>
<td valign="bottom"> </td>
<td valign="bottom">    </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Useful life</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 1pt">
<td height="8"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Customer relationships</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">21,400</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">13 years </td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Developed technology</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5,400</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5 years </td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Trade name</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">600</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6 years </td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total intangible assets subject to amortization</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">27,400</td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">    </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">    </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
</table>
</div>
533000
6644000
-26149000
1762000
1510000
1491000
2764000
32763000
9982000
33579000
9888000
178061000
8147000
879000
3619000
36838000
0
2018-11-24
The borrowings under the Revolving Credit Facility bear interest at either (1) a rate per annum equal to the highest of SunTrust’s prime rate or 0.5% in excess of the Federal Funds Rate or 1.0% in excess of one-month LIBOR (the “Base Rate”), plus an applicable margin, or (2) the one, two, three, or six-month per annum LIBOR for deposits in the applicable currency (the “Eurocurrency Rate”), as selected by the Company, plus an applicable margin. The applicable margin for Eurocurrency Rate loans depends on the Company’s funded debt leverage ratio and varies from 1.50% to 2.00%. The applicable margin for Base Rate loans depends on the Company’s funded debt leverage ratio and varies from 0.50% to 1.50%.
0.0150
0.0200
0.0050
0.0150
0.010
0.005
P13Y
P5Y
P9Y
P3Y
76000
1278000
240000
258000
2015
2017
A funded debt leverage ratio (consolidated debt/consolidated EBITDA) of not greater than 3.0 to 1.0 and an interest coverage ratio (consolidated EBITDA/consolidated interest expense) of not less than 3.0 to 1.0.
0.003
0.002
P3Y
P5Y
P5M
P27M
P15M
P13Y
P36M
P5M
P3Y
P12M
P1M
P11Y0M4D
13000
1852000
160000
1000
2192000
10004000
2018-12-31
2027-12-31
2200000
0.21
1000000
217000
1968000
80000
38000
1968000
7800000
7700000
-32376000
3774000
-271000
877000
96634000
220407000
391000
1489000
1786000
298000
6800000
22207000
0.12
0.12
217000
217000
0
0
6148000
2496000
2152000
2946000
3691000
308000
539000
560000
0
-46000
-884000
-305000
347000
121000
2393000
-1319000
1462000
4008000
6079000
76000
-56656000
24234000
46000
3755000
5567000
19000
19000
5600000
33665000
1026000
581000
316000
9721000
55255000
5085000
106965000
119395000
975000
145000
14550000
640000
28897000
225974000
1968000
39004000
820000
-171000
0
64000
325000
32068000
31721000
1400000
316000
15373
1500000
4924000
227834000
0.16
0.15
2180000
200000
2180000
6610000
953000
236205000
0.21
0.21
20467000
20467000
4045000
4045000
6759000
-28797000
2135000
1144000
-522000
1123000
33850000
8243000
37329000
9266000
168040000
6061000
-2443000
2026000
24084000
144000
1407000
239000
178000
19000
0
217000
1968000
101000
-171000
0
3755000
0
2700000
1300000
10000000
16000000
38000000
34000000
2018-04-03
2018-03-06
1500000
17279
1500000
49310
54241
600
2200000
200000
2400000
533000
0001095565
hstm:MorriseyAssociatesIncMember
2017-07-01
2017-09-30
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