DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document and Entity Information Abstract | ||
Entity Registrant Name | StarTek, Inc. | |
Entity Central Index Key | 1,031,029 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 16,216,297 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | $ 69,114 | $ 77,652 |
Warrant contra revenue | (2,500) | 0 |
Net revenue | 66,614 | 77,652 |
Cost of services | 61,156 | 67,638 |
Gross profit | 5,458 | 10,014 |
Selling, general and administrative expenses | 8,558 | 7,882 |
Merger related fees | 1,887 | 0 |
Impairment losses and restructuring charges, net | 4,453 | 0 |
Operating income (loss) | (9,440) | 2,132 |
Interest and other expense, net | (438) | (367) |
Income (loss) before income taxes | (9,878) | 1,765 |
Income tax expense (benefit) | 148 | (28) |
Net income (loss) | (10,026) | 1,793 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 137 | (14) |
Change in fair value of derivative instruments | (900) | 446 |
Comprehensive income (loss) | $ (10,789) | $ 2,225 |
Net income (loss) per common share - basic | $ (0.62) | $ 0.11 |
Weighted average common shares outstanding - basic | 16,195 | 15,815 |
Net income (loss) per common share - diluted | $ (0.62) | $ 0.11 |
Weighted average common shares outstanding - diluted | 16,195 | 16,995 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,196 | $ 1,456 |
Trade accounts receivable, net | 54,087 | 53,052 |
Prepaid expenses | 2,166 | 2,351 |
Other current assets | 591 | 1,290 |
Total current assets | 58,040 | 58,149 |
Property, plant and equipment, net | 17,508 | 19,943 |
Intangible assets, net | 2,993 | 5,557 |
Goodwill | 9,077 | 9,077 |
Other long-term assets | 3,533 | 3,272 |
Total assets | 91,151 | 95,998 |
Current liabilities: | ||
Accounts payable | 6,589 | 7,019 |
Accrued liabilities: | ||
Accrued employee compensation and benefits | 10,217 | 12,850 |
Other accrued liabilities | 3,157 | 2,105 |
Other current debt | 2,556 | 2,725 |
Other current liabilities | 1,553 | 1,249 |
Total current liabilities | 24,072 | 25,948 |
Line of credit | 24,720 | 19,078 |
Other debt | 2,482 | 3,128 |
Other liabilities | 775 | 905 |
Total liabilities | 52,049 | 49,059 |
Commitments and contingencies | 0 | 0 |
Stockholders’ equity: | ||
Common stock, 32,000,000 non-convertible shares, $0.01 par value, authorized; 16,207,297 and 16,175,351 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 162 | 162 |
Additional paid-in capital | 85,547 | 82,594 |
Accumulated other comprehensive income | 621 | 1,384 |
Accumulated deficit | (47,228) | (37,201) |
Total stockholders’ equity | 39,102 | 46,939 |
Total liabilities and stockholders’ equity | $ 91,151 | $ 95,998 |
CONSOLIDATED BALANCE SHEETS _Pa
CONSOLIDATED BALANCE SHEETS [Parenthetical] (Unaudited) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, non-convertible shares authorized | 32,000,000 | 32,000,000 |
Common stock, shares issued | 16,207,297 | 16,175,351 |
Common stock, shares outstanding | 16,207,297 | 16,175,351 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Activities | ||
Net income (loss) | $ (10,026) | $ 1,793 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 2,643 | 2,962 |
Impairment losses | 3,386 | 0 |
Share-based compensation expense | 262 | 229 |
Warrant contra revenue | 2,500 | 0 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | (1,001) | 5,545 |
Prepaid expenses and other assets | 88 | (214) |
Accounts payable | 326 | 18 |
Accrued and other liabilities | (1,796) | (3,150) |
Net cash (used in) provided by operating activities | (3,618) | 7,183 |
Investing Activities | ||
Proceeds from sale of assets | 0 | 342 |
Purchases of property, plant and equipment | (1,944) | (1,113) |
Net cash used in investing activities | (1,944) | (771) |
Financing Activities | ||
Proceeds from the issuance of common stock | 190 | 98 |
Proceeds from line of credit | 83,532 | 79,675 |
Principal payments on line of credit | (77,890) | (84,980) |
Principal payments on other debt | (733) | (868) |
Net cash provided by (used in) financing activities | 5,099 | (6,075) |
Effect of exchange rate changes on cash | 203 | (12) |
Net (decrease) increase in cash and cash equivalents | (260) | 325 |
Cash and cash equivalents at beginning of period | 1,456 | 1,039 |
Cash and cash equivalents at end of period | $ 1,196 | $ 1,364 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. These financial statements reflect all adjustments (consisting only of normal recurring entries, except as noted) which, in the opinion of management, are necessary for fair presentation. Operating results for the three months ended March 31, 2018 are not necessarily indicative of operating results that may be expected during any other interim period of 2018 or the year ending December 31, 2018 . The consolidated balance sheet as of December 31, 2017 , included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 . Unless otherwise noted in this report, any description of "us," "we," or "our," refers to StarTek, Inc. and its subsidiaries. Financial information in this report is presented in U.S. dollars. Use of Estimates The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts included in the financial statements and accompanying notes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period they are determined to be necessary. Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification 606, Revenue from Contracts with Customers, (Topic 606) . Topic 606 replaces numerous industry specific requirements and converges the accounting guidance on revenue recognition with International Financial Reporting Standards 15 (IFRS 15). Topic 606 utilizes a five-step process, for revenue recognition that focuses on transfer of control, rather than transfer of risks and rewards. It also provided additional guidance on accounting for contract acquisition and fulfillment costs. For more information, refer to Note 12, "Revenue Recognition." Common Stock Warrant Accounting We account for common stock warrants as equity instruments, based on the specific terms of our warrant agreement. For more information, refer to Note 13, "Warrants." Recent Accounting Pronouncements In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) (“ASU 2018-02”) , Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows for stranded tax effects in accumulated other comprehensive income resulting from the U.S. Tax Cuts and Jobs Act to be reclassified to retained earnings. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impact of adopting the new standard. In August 2017, FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815) ("ASU 2017-12"), Targeted Improvements to Accounting for Hedging Activities. The amendments in this ASU better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The guidance is effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within those annual reporting periods. We do not expect the adoption of ASU 2017-12 will have a material impact on our consolidated financial statements. In July 2017, FASB issued a two-part ASU, No. 2017-11, I. Accounting for Certain Financial Instruments with Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception ("ASU 2017-11"). Part I of this ASU addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this ASU addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification ®. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other organizations, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. In conjunction with the Amazon transaction agreement, we adopted this ASU for the first quarter of 2018. Adoption resulted in treatment of the warrants as equity in our consolidated financial statements. In May 2017, FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718) ("ASU 2017-09"), Scope of Modification Accounting. The amendments in this ASU provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should account for the effects of a modification unless all the following are met: 1. The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification; 2. The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and 3. The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. We adopted this ASU for the first quarter of 2018. A modification to the share-based payment award plan also occurred during the first quarter of 2018; modification accounting was not required because the the modification to the plan did not result in a material impact to our consolidated financial statements. In January 2017, FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) ("ASU 2017-04"), Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, the amendments eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a 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; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The guidance is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not expect the adoption of ASU 2017-04 will have a material impact on our consolidated financial statements. In October 2016, FASB issued ASU 2016-16, Income Taxes (Topic 740) ("ASU 2016-16"), Intra-Entity Transfers of Assets Other Than Inventory . The purpose of ASU 2016-16 is to simplify the income tax accounting of an intra-entity transfer of an asset other than inventory and to record its effect when the transfer occurs. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods and early adoption is permitted. We adopted this ASU for the first quarter of 2018; since there have been no intra-entity transfers of assets, there has been no impact on our consolidated financial statements. In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) ("ASU 2016-13") , Measurement of Credit Losses on Financial Instruments. The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren't measured at fair value through net income. The standard will replace today's "incurred loss" approach with an "expected loss" model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This ASU is effective for annual periods beginning after December 15, 2019, and interim periods therein. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. We do not expect the adoption of ASU 2016-13 will have a material impact on our consolidated financial statements. In February 2016, FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). These amendments require the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases currently classified as operating leases under ASC 840 “Leases”. These amendments also require qualitative disclosures along with specific quantitative disclosures. These amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. Entities are required to apply the amendments at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements, and we anticipate that adoption of ASU 2016-02 will have an impact to the financial statement presentation of right of use asset, lease liability, amortization expense, and lease expense. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments in this ASU are effective for reporting periods beginning after December 15, 2017. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We have completed our assessment of the impact of Topic 606 and have concluded that our historical revenue recognition practices are in compliance with the new standard. However, we have included additional qualitative and quantitative disclosures about our revenues as is required by Topic 606. We will utilize the Modified Retrospective transition method. Please refer to Note 12 "Revenue Recognition" for additional information. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill Total goodwill of $ 9,077 is assigned to our Domestic segment. We perform a goodwill impairment analysis at least annually (in the fourth quarter of each year) unless indicators of impairment exist in interim periods. We performed a quantitative assessment to determine whether it was more likely than not that the fair value of the Domestic reporting unit exceeded its carrying value. In making this assessment, we evaluated overall business and economic conditions as well as expectations of projected revenues and cash flows, assumptions impacting the weighted average cost of capital and overall global industry and market conditions. In 2017, we concluded that goodwill was not impaired. No indicators of impairment exist as of March 31, 2018 . Intangible Assets In February, we notified our RN's on Call clients that we would no longer be providing service after March. As a result, we fully impaired the remaining customer relationship asset of $181 . In March, Sprint indicated their intent to wind down their business with us by June 2018. Accordingly, we recorded an impairment charge of $2,098 related to the customer relationship asset. The following table presents our intangible assets as of March 31, 2018 . Gross Intangibles Accumulated Amortization Impairment Net Intangibles Weighted Average Amortization Period (years) Developed technology $ 390 $ 244 $ — $ 146 2.25 Customer relationships 7,550 2,949 2,279 2,322 3.11 Trade names 1,050 525 — 525 2.34 $ 8,990 $ 3,718 $ 2,279 $ 2,993 2.93 Expected future amortization of intangible assets as of March 31, 2018 is as follows: Year Ending December 31, Amount Remainder of 2018 $ 524 2019 691 2020 688 2021 564 2022 422 Thereafter 104 |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NET INCOME (LOSS) PER SHARE Basic net income (loss) per common share is computed based on our weighted average number of common shares outstanding. Diluted earnings per share is computed based on our weighted average number of common shares outstanding plus the effect of dilutive stock options, non-vested restricted stock, and deferred stock units, using the treasury stock method. When a net loss is reported, potentially issuable common shares are excluded from the computation of diluted earnings per share as their effect would be anti-dilutive. The following table sets forth the computation of basic and diluted shares for the periods indicated (in thousands): Three Months Ended March 31, 2018 2017 Shares used in basic earnings per share calculation: 16,195 15,815 Effect of dilutive securities: Stock options — 1,085 Restricted stock/Deferred stock units — 95 Total effects of dilutive securities — 1,180 Shares used in dilutive earnings per share calculation: 16,195 16,995 The following shares were not included in the computation of diluted earnings per share because the exercise price exceeded the value of the shares, or we reported a net loss, and the effect would have been anti-dilutive (in thousands): Three Months Ended March 31, 2018 2017 Anti-dilutive securities: Stock options 2,311 10 Restricted stock/Deferred stock units 55 — Total anti-dilutive securities 2,366 10 |
IMPAIRMENT LOSSES AND RESTRUCTU
IMPAIRMENT LOSSES AND RESTRUCTURING CHARGES | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
IMPAIRMENT LOSSES AND RESTRUCTURING CHARGES | 4. IMPAIRMENT LOSSES AND RESTRUCTURING CHARGES Impairment Losses During the first quarter of 2018, we closed our facility in Colorado Springs, Colorado. The closure resulted in an impairment loss of $1.1 million related to the disposal of certain assets, primarily leasehold improvements. In February, we notified our RN's on Call clients that we would no longer be providing service after March. As a result, we fully impaired the remaining customer relationship asset of $181 . In March, Sprint indicated their intent to wind down their business with us by June 2018. Accordingly, we recorded an impairment charge of $2,098 related to the customer relationship asset. Restructuring Charges The table below summarizes the balance of accrued restructuring costs, which is included in other accrued liabilities in our consolidated balance sheets, and the changes during the three months ended March 31, 2018: Facility-Related and Employee-Related Costs Domestic Nearshore Offshore Total Balance as of January 1, 2018 $ 9 $ — $ — $ 9 Expense (Reversal) $ 859 $ 31 $ 177 $ 1,067 Payments $ (151 ) $ (31 ) $ (11 ) $ (193 ) Balance as of March 31, 2018 $ 717 $ — $ 166 $ 883 Domestic Segment In conjunction with the Colorado Springs closure, we established restructuring reserves for employee related costs of $43 when employees were notified and facility related costs of $346 at the time the facilities were vacated. We expect to pay these expenses over the remainder of the lease term, through third quarter 2019. In the first quarter 2018. we eliminated a number of positions under a company-wide restructuring plan. We established reserves for employee related costs of $320 for our Domestic segment. We recognized employee related expense as incurred of $149 for our Domestic segment in March 2018, and we expect to pay the remaining costs by the end of second quarter 2018. Nearshore Segment In the first quarter 2018, we eliminated a number of positions under a company-wide restructuring plan. We recognized employee related expense as incurred of $31 for our Nearshore segment in March 2018. All payments were complete by end of the first quarter 2018. Offshore Segment In the first quarter 2018. we eliminated a number of positions under a company-wide restructuring plan. We recognized employee related expense as incurred of $29 for our Offshore segment in March 2018. All payments were complete by end of the first quarter 2018. In February 2018, we vacated a portion of the space under lease at our Angeles location in the Philippines, and established reserves for facilities related costs of $166 , offset by a reduction in facilities expense of ($18) upon reconciliation of the outstanding long and short term liabilities related to the lease. We expect to pay these costs by the end of third quarter 2018. |
PRINCIPAL CLIENTS
PRINCIPAL CLIENTS | 3 Months Ended |
Mar. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
PRINCIPAL CLIENTS | PRINCIPAL CLIENTS The following table represents revenue concentration of our principal clients: Three Months Ended March 31, 2018 2017 Revenue Percentage Revenue Percentage T-Mobile $ 18,188 27.3 % $ 22,054 28.4 % Comcast $ 8,629 13.0 % $ 3,802 4.9 % AT&T $ 5,070 7.6 % $ 8,647 11.1 % Sprint $ 2,808 4.2 % $ 10,256 13.2 % We enter into master service agreements (MSAs) that cover all of our work for each client. These MSAs are typically multi-year contracts that include auto-renewal provisions. They typically do not include contractual minimum volumes and are generally terminable by the customer or us with prior written notice. To limit credit risk, management performs periodic credit analyses and maintains allowances for uncollectible accounts as deemed necessary. Under certain circumstances, management may require clients to pre-pay for services. As of March 31, 2018 , management believes reserves are appropriate and does not believe that any significant credit risk exists. We have entered into factoring agreements with financial institutions to sell certain of our accounts receivable under non-recourse agreements. These transactions are accounted for as a reduction in accounts receivable because the agreements transfer effective control over and risk related to the receivables to the buyers. We do not service any factored accounts after the factoring has occurred. We utilize factoring arrangements as part of our financing for working capital. The aggregate gross amount factored under these agreements was $8,749 and $28,742 for the three months ended March 31, 2018 , and March 31, 2017 , respectively. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS We use derivatives to partially offset our business exposure to foreign currency exchange risk. We enter into foreign currency forward and option contracts to hedge our anticipated operating commitments that are denominated in foreign currencies, including forward contracts and range forward contracts (a transaction where both a call option is purchased and a put option is sold). The contracts cover periods commensurate with expected exposure, generally three to twelve months. The market risk exposure is essentially limited to risk related to currency rate movements. We operate in Canada, Jamaica, and the Philippines, where the functional currencies are the Canadian dollar, the Jamaican dollar, and the Philippine peso, respectively, which are used to pay labor and other operating costs in those countries. We provide funds for these operating costs as our client contracts generate revenues, which are paid in U.S. dollars. In Honduras, our functional currency is the U.S. dollar and the majority of our costs are denominated in U.S. dollars. We have elected to designate our derivatives as cash flow hedges in order to associate the results of the hedges with forecasted expenses. Unrealized gains and losses are recorded in accumulated other comprehensive income (“AOCI”) and will be re-classified to operations as the forecasted expenses are incurred, typically within one year. During the three months ended March 31, 2018 and 2017 , our cash flow hedges were highly effective and hedge ineffectiveness was not material. The following table shows the notional amount of our foreign exchange cash flow hedging instruments as of March 31, 2018 : Local Currency Notional Amount U.S. Dollar Notional Amount Canadian Dollar 11,400 $ 8,875 Philippine Peso 1,424,000 27,066 $ 35,941 Derivative assets and liabilities associated with our hedging activities are measured at gross fair value as described in Note 7, "Fair Value Measurements," and are included in the Other current assets and Other current liabilities in our consolidated balance sheets, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy requires that the Company maximize the use of observable inputs and minimize the use of unobservable inputs. The levels of the fair value hierarchy are described below: Level 1 - Quoted prices for identical instruments traded in active markets. Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 3 - Unobservable inputs that cannot be supported by market activity and that are significant to the fair value of the asset, liability, or equity such as the use of certain pricing models, discounted cash flow models and similar techniques that use significant assumptions. These unobservable inputs reflect our own estimates of assumptions that market participants would use in pricing the asset or liability. Derivative Instruments The values of our derivative instruments are derived from pricing models using inputs based upon market information, including contractual terms, market prices and yield curves. The inputs to the valuation pricing models are observable in the market, and as such the derivatives are classified as Level 2 in the fair value hierarchy. The following tables set forth our assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy. These balances are included in Other current assets and Other current liabilities, respectively, on our balance sheet. As of March 31, 2018 Level 1 Level 2 Level 3 Total Assets: Foreign exchange contracts $ — $ 157 $ — $ 157 Total fair value of assets measured on a recurring basis $ — $ 157 $ — $ 157 Liabilities: Foreign exchange contracts $ — $ 604 $ — $ 604 Total fair value of liabilities measured on a recurring basis $ — $ 604 $ — $ 604 As of December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Foreign exchange contracts $ — $ 566 $ — $ 566 Total fair value of assets measured on a recurring basis $ — $ 566 $ — $ 566 Liabilities: Foreign exchange contracts $ — $ 175 $ — $ 175 Total fair value of liabilities measured on a recurring basis $ — $ 175 $ — $ 175 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Secured Revolving Credit Facility On April 29, 2015, we entered into a secured revolving credit facility with BMO Harris Bank N.A. ("Administrative Agent" or "Lender"); subsequently we entered into amendments one through four (collectively, the "Credit Agreement"). The Credit Agreement is effective through March 2022 and we may borrow the lesser of the borrowing base calculation and $50,000 . As long as no default has occurred and with the Administrative Agent’s consent, we may increase the maximum availability to $70,000 in $5,000 increments. We may request letters of credit under the Credit Agreement in an aggregate amount equal to the lesser of the borrowing base calculation (minus outstanding advances) and $5,000 . The borrowing base is generally defined as 85% of our eligible accounts receivable less certain reserves as defined in the Credit Agreement. Our borrowings bear interest at one-month LIBOR plus 1.50% to 1.75% , depending on current availability. We will pay letter of credit fees equal to the applicable margin times the daily maximum amount available to be drawn under all letters of credit outstanding and a monthly unused fee at a rate per annum of 0.25% on the aggregate unused commitment. As of March 31, 2018 , outstanding letters of credit totaled $893 . The Credit Agreement contains standard affirmative and negative covenants that may limit or restrict our ability to sell assets, incur additional indebtedness and engage in mergers and acquisitions. We are required to maintain a minimum consolidated fixed charge coverage ratio of 1.00 :1.00, if a reporting trigger period commences. We were in compliance with applicable covenants as of March 31, 2018 . As of March 31, 2018 , we had $24,720 of outstanding borrowings and our remaining borrowing capacity was $18,618 . Other Debt From time to time and when management believes it to be advantageous, we may enter into other arrangements to finance the purchase or construction of capital assets. These obligations are included on our consolidated balance sheets in other current debt and other debt, as applicable. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Our share-based compensation arrangements include grants of stock options, restricted stock units and deferred stock units under the StarTek, Inc. 2008 Equity Incentive Plan and our Employee Stock Purchase Plan. The compensation expense that has been charged against income for such awards for the three months ended March 31, 2018 was $262 , and for the three months ended March 31, 2017 was $229 , and is included in selling, general and administrative expenses. As of March 31, 2018 , there was $697 of total unrecognized compensation expense related to nonvested awards, which is expected to be recognized over a weighted-average period of 1.78 years. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (AOCI) Accumulated other comprehensive income consisted of the following items: Foreign Currency Translation Adjustment Derivatives Accounted for as Cash Flow Hedges Defined Benefit Plan Total Balance at December 31, 2017 $ 1,971 $ (1,441 ) $ 854 $ 1,384 Foreign currency translation 137 — — 137 Reclassification to operations — (88 ) — (88 ) Unrealized gains (812 ) — (812 ) Balance at March 31, 2018 $ 2,108 $ (2,341 ) $ 854 $ 621 Reclassifications out of accumulated other comprehensive income for the three months ended March 31, 2018 and 2017 were as follows: Details about AOCI components Amount reclassified from AOCI Affected line item in the Consolidated Statements of Comprehensive Income Three Months Ended March 31, 2018 2017 Losses on cash flow hedges Foreign exchange contracts $ (24 ) $ 134 Cost of services Foreign exchange contracts (64 ) 10 Selling, general and administrative expenses Total reclassifications for the period $ (88 ) $ 144 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We operate our business within three reportable segments based on the geographic regions in which our services are rendered. As of March 31, 2018 , our Domestic segment included the operations of twelve facilities in the U.S. and one facility in Canada. Our Offshore segment included the operations of four facilities in the Philippines and our Nearshore segment included two facilities in Honduras and one facility in Jamaica. We primarily evaluate segment operating performance in each reporting segment based on revenue and gross profit. Certain operating expenses are not allocated to each reporting segment; therefore, we do not present income statement information by reporting segment below the gross profit level. Information about our reportable segments for the three months ended March 31, 2018 and 2017 is as follows: For the Three Months Ended March 31, 2018 2017 Revenue: Domestic $ 41,587 $ 44,363 Offshore 18,166 21,123 Nearshore 9,361 12,166 Total $ 69,114 $ 77,652 Gross profit: Domestic $ 2,527 $ 1,509 Offshore 5,296 6,175 Nearshore 135 2,330 Total $ 7,958 $ 10,014 Warrant Contra Revenue* (2,500 ) — Total $ 5,458 $ 10,014 * We did not allocate warrant contra revenue related to the Amazon agreement to the reportable segments. Allocation to reportable segments would have resulted in distortion of the gross margins of the segments. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 12. REVENUE RECOGNITION On January 1, 2018, the Company adopted Accounting Standards Codification 606, Revenue from Contracts with Customers, (Topic 606) . Topic 606 replaces numerous industry specific requirements and converges the accounting guidance on revenue recognition with International Financial Reporting Standards 15 (IFRS 15). Topic 606 utilizes a five-step process, for revenue recognition that focuses on transfer of control, rather than transfer of risks and rewards. It also provided additional guidance on accounting for contract acquisition and fulfillment costs. We have completed our assessment of the impact of Topic 606 and have concluded that our historical revenue recognition, contract acquisition cost, and fulfillment cost practices are in compliance with the new standard. However, we have included additional qualitative and quantitative disclosures about our revenues as is required by Topic 606. Contracts with Customers All of the Company's revenues are derived from written contracts with our customers. Generally speaking, our contracts document our customers' intent to utilize our services and the relevant terms and conditions under which our services will be provided. Our contracts do not contain minimum purchase requirements nor do they include termination penalties. Our customers may generally cancel our contract, without cause, upon written notice (generally ninety days). While our contracts do have stated terms, because of the facts stated above, they are accounted for on a month-to-month basis. Our contracts give us the right to bill for services rendered during the period, which for the majority of our customers is a calendar month, with a few customers specifying a fiscal month. Performance Obligations We have identified one main performance obligation for which we invoice our customers, which is to stand ready to provide care services for our customers’ clients. A stand-ready obligation is a promise that a customer will have access to services as and when the customer decides to use them. Ours is considered a stand-ready obligations because the delivery of the underlying service (that is, receiving customer contact and performing the associated care services) is outside of our control or the control of our customer. Our stand-ready obligation involves outsourcing of the entire customer care life cycle, including: • The identification, operation, management and maintenance of facilities, IT equipment, and IT and telecommunications infrastructure • Management of the entire human resources function, including recruiting, hiring, training, supervising, evaluating, coaching, retaining, compensating, providing employee benefits programs, and disciplinary activities These activities are all considered an integral part of the production activities required in the service of standing ready to accept calls as they are directed to us by our clients. Revenue Recognition Methods Because our customers receive and consume the benefit of our services as they are performed and we have the contractual right to invoice for services performed to date, we have concluded that our performance obligation is satisfied over time. Accordingly, we recognize revenue for our services in the month they are performed. This is consistent with our prior revenue recognition model. According to our contracts, we are entitled to invoice for our services on a monthly basis. We invoice according to the hourly and/or per transaction rates stated in the contract for the various activities we perform. Some contracts include opportunities to earn bonuses or include parameters under which we will incur penalties related to performance in any given month. Bonus or penalty amounts are based on the current month’s performance. Formulas are included in the contracts for calculation of any bonus or penalty. There is no other performance in future periods that will impact the bonus or penalty calculation in the current period. We estimate the amount of the bonus or penalty using the “most likely amount” method and we apply this method consistently. The bonus or penalty calculated is generally approved by the client prior to billing (and revenue being recognized). Disaggregated Revenue In the following table, revenue is disaggregated by primary geographical market, vertical, and timing of revenue recognition. Reportable Segments March 31, 2018 Reportable Segments March 31, 2017 Domestic Offshore Nearshore Total Domestic Offshore Nearshore Total Major Service Lines: Communications 24,848 14,613 5,391 44,852 31,362 18,896 9,049 59,307 Retail 5,982 2,655 2,122 10,759 7,233 1,738 1,055 10,026 Healthcare 5,377 456 48 5,881 2,914 225 162 3,301 Gov't Services 3,286 — — 3,286 — — — — Technology 252 272 1,269 1,793 614 — 1,569 2,183 Financial 1,563 — — 1,563 1,361 — — 1,361 Other 279 170 531 980 880 264 330 1,474 Total 41,587 18,166 9,361 69,114 44,364 21,123 12,165 77,652 |
WARRANTS
WARRANTS | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Amazon Transaction Agreement | 13. AMAZON TRANSACTION AGREEMENT On January 23, 2018, we entered into a Transaction Agreement (the “Amazon Transaction Agreement”) with Amazon.com, Inc. (“Amazon”), pursuant to which we agreed to issue to Amazon.com NV Investment Holdings LLC, a wholly owned subsidiary of Amazon (“NV Investment”), a warrant (the “Warrant”) to acquire up to 4,000,000 shares (the “Warrant Shares”) of our common stock, par value $0.01 per share (“Common Stock”), subject to certain vesting events. We entered into the Amazon Transaction Agreement in connection with existing commercial arrangements between us and Amazon pursuant to which we provide and will continue to provide commercial services to Amazon. The vesting of the Warrant shares, described below, is linked to payments made by Amazon or its affiliates (directly or indirectly through third parties) pursuant to the existing commercial arrangements. The first tranche of 425,532 Warrant Shares vested upon the execution of the Amazon Transaction Agreement. The remainder of the Warrant Shares will vest based on Amazon’s payment of up to $600 million to us in connection with Amazon’s receipt of commercial services from us. The exercise price for all Warrant Shares will be $9.96 per share. The Warrant Shares are exercisable through January 23, 2026. The Warrant provides for net share settlement that, if elected by the holders, will reduce the number of shares issued upon exercise to reflect net settlement of the exercise price. The Warrant provides for certain adjustments that may be made to the exercise price and the number of shares of common stock issuable upon exercise due to customary anti-dilution provisions based on future events. Vested Warrant Shares are classified as equity instruments. Because the Warrant contains performance criteria (i.e. aggregate purchase levels) which Amazon must achieve for the Warrant Shares to vest, as detailed above, the final measurement date for each tranche of the Warrant Shares is the date on which performance is completed. Prior to the final measurement date, when achievement of the performance criteria has been deemed probable, a reduction in revenue equal to the percentage of completion to date will be recognized. The fair value of the Warrant Shares will be adjusted at each reporting period until they are earned. At March 31, 2018, the initial tranche of 425,532 Warrant Shares has vested. The amount of contra revenue attributed to these Warrant Shares is $2.5 million . |
AEGIS TRANSACTION AGREEMENT
AEGIS TRANSACTION AGREEMENT | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
AEGIS TRANSACTION AGREEMENT | 14. AEGIS TRANSACTION AGREEMENT On March 14, 2018 we entered into a Transaction Agreement (the “Aegis Transaction Agreement”) with CSP Alpha Midco Pte Ltd, a Singapore private limited company (“Aegis”), and CSP Alpha Holdings Parent Pte Ltd, a Singapore private limited company (the “Aegis Stockholder”) pursuant to which we, Aegis and the Aegis Stockholder agreed to, among other things: (1) the sale of all of the issued and outstanding shares of the common stock of Aegis by the Aegis Stockholder to us; (2) the issuance of 20,600,000 shares, as may be adjusted for stock splits, consolidation and other similar corporate events, of our common stock in consideration of such sale; (3) the amendment of our Restated Certificate of Incorporation, as amended from time to time, in order to effect such issuance; and (4) in addition to the transactions set forth above, the purchase at the closing of 833,333 additional shares of our common stock by the Aegis Stockholder, for $10 million at a price of $12 per share, subject to adjustment as set forth in the Aegis Transaction Agreement. Immediately following the consummation of the transactions contemplated by the Aegis Transaction Agreement, Aegis will become a wholly-owned subsidiary of us and the Aegis Stockholder will hold approximately 55% of our outstanding common stock. We, Aegis and the Aegis Stockholder have each agreed to customary representations, warranties and covenants in the Aegis Transaction Agreement and the transactions contemplated by the Aegis Transaction Agreement are subject to approval by our stockholders as well as other specified closing conditions. We expect this transaction to close during the third quarter of 2018. |
BASIS OF PRESENTATION AND SUM20
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts included in the financial statements and accompanying notes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period they are determined to be necessary. |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification 606, Revenue from Contracts with Customers, (Topic 606) . Topic 606 replaces numerous industry specific requirements and converges the accounting guidance on revenue recognition with International Financial Reporting Standards 15 (IFRS 15). Topic 606 utilizes a five-step process, for revenue recognition that focuses on transfer of control, rather than transfer of risks and rewards. It also provided additional guidance on accounting for contract acquisition and fulfillment costs. |
Business Combinations | Common Stock Warrant Accounting We account for common stock warrants as equity instruments, based on the specific terms of our warrant agreement. For more information, refer to Note 13, "Warrants." |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) (“ASU 2018-02”) , Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows for stranded tax effects in accumulated other comprehensive income resulting from the U.S. Tax Cuts and Jobs Act to be reclassified to retained earnings. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impact of adopting the new standard. In August 2017, FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815) ("ASU 2017-12"), Targeted Improvements to Accounting for Hedging Activities. The amendments in this ASU better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The guidance is effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within those annual reporting periods. We do not expect the adoption of ASU 2017-12 will have a material impact on our consolidated financial statements. In July 2017, FASB issued a two-part ASU, No. 2017-11, I. Accounting for Certain Financial Instruments with Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception ("ASU 2017-11"). Part I of this ASU addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this ASU addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification ®. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other organizations, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. In conjunction with the Amazon transaction agreement, we adopted this ASU for the first quarter of 2018. Adoption resulted in treatment of the warrants as equity in our consolidated financial statements. In May 2017, FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718) ("ASU 2017-09"), Scope of Modification Accounting. The amendments in this ASU provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should account for the effects of a modification unless all the following are met: 1. The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification; 2. The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and 3. The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. We adopted this ASU for the first quarter of 2018. A modification to the share-based payment award plan also occurred during the first quarter of 2018; modification accounting was not required because the the modification to the plan did not result in a material impact to our consolidated financial statements. In January 2017, FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) ("ASU 2017-04"), Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, the amendments eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a 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; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The guidance is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not expect the adoption of ASU 2017-04 will have a material impact on our consolidated financial statements. In October 2016, FASB issued ASU 2016-16, Income Taxes (Topic 740) ("ASU 2016-16"), Intra-Entity Transfers of Assets Other Than Inventory . The purpose of ASU 2016-16 is to simplify the income tax accounting of an intra-entity transfer of an asset other than inventory and to record its effect when the transfer occurs. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods and early adoption is permitted. We adopted this ASU for the first quarter of 2018; since there have been no intra-entity transfers of assets, there has been no impact on our consolidated financial statements. In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) ("ASU 2016-13") , Measurement of Credit Losses on Financial Instruments. The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren't measured at fair value through net income. The standard will replace today's "incurred loss" approach with an "expected loss" model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This ASU is effective for annual periods beginning after December 15, 2019, and interim periods therein. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. We do not expect the adoption of ASU 2016-13 will have a material impact on our consolidated financial statements. In February 2016, FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). These amendments require the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases currently classified as operating leases under ASC 840 “Leases”. These amendments also require qualitative disclosures along with specific quantitative disclosures. These amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. Entities are required to apply the amendments at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements, and we anticipate that adoption of ASU 2016-02 will have an impact to the financial statement presentation of right of use asset, lease liability, amortization expense, and lease expense. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments in this ASU are effective for reporting periods beginning after December 15, 2017. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We have completed our assessment of the impact of Topic 606 and have concluded that our historical revenue recognition practices are in compliance with the new standard. However, we have included additional qualitative and quantitative disclosures about our revenues as is required by Topic 606. We will utilize the Modified Retrospective transition method. Please refer to Note 12 "Revenue Recognition" for additional information. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The following table presents our intangible assets as of March 31, 2018 . Gross Intangibles Accumulated Amortization Impairment Net Intangibles Weighted Average Amortization Period (years) Developed technology $ 390 $ 244 $ — $ 146 2.25 Customer relationships 7,550 2,949 2,279 2,322 3.11 Trade names 1,050 525 — 525 2.34 $ 8,990 $ 3,718 $ 2,279 $ 2,993 2.93 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Expected future amortization of intangible assets as of March 31, 2018 is as follows: Year Ending December 31, Amount Remainder of 2018 $ 524 2019 691 2020 688 2021 564 2022 422 Thereafter 104 |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted shares for the periods indicated (in thousands): Three Months Ended March 31, 2018 2017 Shares used in basic earnings per share calculation: 16,195 15,815 Effect of dilutive securities: Stock options — 1,085 Restricted stock/Deferred stock units — 95 Total effects of dilutive securities — 1,180 Shares used in dilutive earnings per share calculation: 16,195 16,995 |
Antidilutive Securities Excluded from Computation of Earnings Per Share | The following shares were not included in the computation of diluted earnings per share because the exercise price exceeded the value of the shares, or we reported a net loss, and the effect would have been anti-dilutive (in thousands): Three Months Ended March 31, 2018 2017 Anti-dilutive securities: Stock options 2,311 10 Restricted stock/Deferred stock units 55 — Total anti-dilutive securities 2,366 10 |
IMPAIRMENT LOSSES AND RESTRUC23
IMPAIRMENT LOSSES AND RESTRUCTURING CHARGES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The table below summarizes the balance of accrued restructuring costs, which is included in other accrued liabilities in our consolidated balance sheets, and the changes during the three months ended March 31, 2018: Facility-Related and Employee-Related Costs Domestic Nearshore Offshore Total Balance as of January 1, 2018 $ 9 $ — $ — $ 9 Expense (Reversal) $ 859 $ 31 $ 177 $ 1,067 Payments $ (151 ) $ (31 ) $ (11 ) $ (193 ) Balance as of March 31, 2018 $ 717 $ — $ 166 $ 883 |
PRINCIPAL CLIENTS (Tables)
PRINCIPAL CLIENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Schedule of Revenue by Major Customers | The following table represents revenue concentration of our principal clients: Three Months Ended March 31, 2018 2017 Revenue Percentage Revenue Percentage T-Mobile $ 18,188 27.3 % $ 22,054 28.4 % Comcast $ 8,629 13.0 % $ 3,802 4.9 % AT&T $ 5,070 7.6 % $ 8,647 11.1 % Sprint $ 2,808 4.2 % $ 10,256 13.2 % |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | The following table shows the notional amount of our foreign exchange cash flow hedging instruments as of March 31, 2018 : Local Currency Notional Amount U.S. Dollar Notional Amount Canadian Dollar 11,400 $ 8,875 Philippine Peso 1,424,000 27,066 $ 35,941 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring | The inputs to the valuation pricing models are observable in the market, and as such the derivatives are classified as Level 2 in the fair value hierarchy. The following tables set forth our assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy. These balances are included in Other current assets and Other current liabilities, respectively, on our balance sheet. As of March 31, 2018 Level 1 Level 2 Level 3 Total Assets: Foreign exchange contracts $ — $ 157 $ — $ 157 Total fair value of assets measured on a recurring basis $ — $ 157 $ — $ 157 Liabilities: Foreign exchange contracts $ — $ 604 $ — $ 604 Total fair value of liabilities measured on a recurring basis $ — $ 604 $ — $ 604 As of December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Foreign exchange contracts $ — $ 566 $ — $ 566 Total fair value of assets measured on a recurring basis $ — $ 566 $ — $ 566 Liabilities: Foreign exchange contracts $ — $ 175 $ — $ 175 Total fair value of liabilities measured on a recurring basis $ — $ 175 $ — $ 175 |
ACCUMULATED OTHER COMPREHENSI27
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Comprehensive Income | Accumulated other comprehensive income consisted of the following items: Foreign Currency Translation Adjustment Derivatives Accounted for as Cash Flow Hedges Defined Benefit Plan Total Balance at December 31, 2017 $ 1,971 $ (1,441 ) $ 854 $ 1,384 Foreign currency translation 137 — — 137 Reclassification to operations — (88 ) — (88 ) Unrealized gains (812 ) — (812 ) Balance at March 31, 2018 $ 2,108 $ (2,341 ) $ 854 $ 621 |
Reclassification out of Accumulated Other Comprehensive Income | Reclassifications out of accumulated other comprehensive income for the three months ended March 31, 2018 and 2017 were as follows: Details about AOCI components Amount reclassified from AOCI Affected line item in the Consolidated Statements of Comprehensive Income Three Months Ended March 31, 2018 2017 Losses on cash flow hedges Foreign exchange contracts $ (24 ) $ 134 Cost of services Foreign exchange contracts (64 ) 10 Selling, general and administrative expenses Total reclassifications for the period $ (88 ) $ 144 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Information about our reportable segments for the three months ended March 31, 2018 and 2017 is as follows: For the Three Months Ended March 31, 2018 2017 Revenue: Domestic $ 41,587 $ 44,363 Offshore 18,166 21,123 Nearshore 9,361 12,166 Total $ 69,114 $ 77,652 Gross profit: Domestic $ 2,527 $ 1,509 Offshore 5,296 6,175 Nearshore 135 2,330 Total $ 7,958 $ 10,014 Warrant Contra Revenue* (2,500 ) — Total $ 5,458 $ 10,014 * We did not allocate warrant contra revenue related to the Amazon agreement to the reportable segments. Allocation to reportable segments would have resulted in distortion of the gross margins of the segments. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition [Abstract] | |
Revenue Recognition - Disaggregated Revenue | In the following table, revenue is disaggregated by primary geographical market, vertical, and timing of revenue recognition. Reportable Segments March 31, 2018 Reportable Segments March 31, 2017 Domestic Offshore Nearshore Total Domestic Offshore Nearshore Total Major Service Lines: Communications 24,848 14,613 5,391 44,852 31,362 18,896 9,049 59,307 Retail 5,982 2,655 2,122 10,759 7,233 1,738 1,055 10,026 Healthcare 5,377 456 48 5,881 2,914 225 162 3,301 Gov't Services 3,286 — — 3,286 — — — — Technology 252 272 1,269 1,793 614 — 1,569 2,183 Financial 1,563 — — 1,563 1,361 — — 1,361 Other 279 170 531 980 880 264 330 1,474 Total 41,587 18,166 9,361 69,114 44,364 21,123 12,165 77,652 |
GOODWILL AND INTANGIBLE ASSET30
GOODWILL AND INTANGIBLE ASSETS Goodwill (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 9,077 | $ 9,077 |
GOODWILL AND INTANGIBLE ASSET31
GOODWILL AND INTANGIBLE ASSETS Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Intangibles | $ 8,990 | |
Accumulated Amortization | 3,718 | |
Impairment | 2,279 | |
Net Intangibles | $ 2,993 | $ 5,557 |
Weighted Average Amortization Period (years) | 2 years 11 months 5 days | |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Intangibles | $ 390 | |
Accumulated Amortization | 244 | |
Impairment | 0 | |
Net Intangibles | $ 146 | |
Weighted Average Amortization Period (years) | 2 years 3 months | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Intangibles | $ 7,550 | |
Accumulated Amortization | 2,949 | |
Impairment | 2,279 | |
Net Intangibles | $ 2,322 | |
Weighted Average Amortization Period (years) | 3 years 1 month 10 days | |
Customer relationships | RN's on Call - RNOC | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment | $ 181 | |
Customer relationships | Sprint | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment | 2,098 | |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Intangibles | 1,050 | |
Accumulated Amortization | 525 | |
Impairment | 0 | |
Net Intangibles | $ 525 | |
Weighted Average Amortization Period (years) | 2 years 4 months 4 days |
GOODWILL AND INTANGIBLE ASSET32
GOODWILL AND INTANGIBLE ASSETS Future Amortization Expense (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2018 | $ 524 |
2,019 | 691 |
2,020 | 688 |
2,021 | 564 |
2,022 | 422 |
Thereafter | $ 104 |
NET INCOME (LOSS) PER SHARE Dil
NET INCOME (LOSS) PER SHARE Dilutive (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share, Diluted | ||
Weighted average common shares outstanding - basic | 16,195 | 15,815 |
Dilutive securities (in shares) | 0 | 1,180 |
Weighted average common shares outstanding - diluted | 16,195 | 16,995 |
Stock Options | ||
Earnings Per Share, Diluted | ||
Dilutive securities (in shares) | 0 | 1,085 |
Restricted Stock/Deferred Stock Units | ||
Earnings Per Share, Diluted | ||
Dilutive securities (in shares) | 0 | 95 |
NET INCOME (LOSS) PER SHARE Ant
NET INCOME (LOSS) PER SHARE Anti-dilutive shares (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 2,366 | 10 |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 2,311 | 10 |
Restricted Stock/Deferred Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 55 | 0 |
IMPAIRMENT LOSSES AND RESTRUC35
IMPAIRMENT LOSSES AND RESTRUCTURING CHARGES Table (Details) - Facility Closing $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Balance as of January 1, 2018 | $ 9 |
Expense (Reversal) | 1,067 |
Payments | (193) |
Balance as of March 31, 2018 | 883 |
Domestic | |
Restructuring Cost and Reserve [Line Items] | |
Balance as of January 1, 2018 | 9 |
Expense (Reversal) | 859 |
Payments | (151) |
Balance as of March 31, 2018 | 717 |
Nearshore | |
Restructuring Cost and Reserve [Line Items] | |
Balance as of January 1, 2018 | 0 |
Expense (Reversal) | 31 |
Payments | (31) |
Balance as of March 31, 2018 | 0 |
Offshore | |
Restructuring Cost and Reserve [Line Items] | |
Balance as of January 1, 2018 | 0 |
Expense (Reversal) | 177 |
Payments | (11) |
Balance as of March 31, 2018 | $ 166 |
IMPAIRMENT LOSSES AND RESTRUC36
IMPAIRMENT LOSSES AND RESTRUCTURING CHARGES Textual (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Impairment losses | $ 3,386 | $ 0 | ||
Facility Closing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | 883 | $ 9 | ||
Expense (Reversal) | 1,067 | |||
Domestic | Facility Closing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | 717 | 9 | ||
Expense (Reversal) | 859 | |||
Domestic | Facility Closing | RN's on Call - RNOC | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment losses | 181 | |||
Domestic | Facility Closing | Sprint | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment losses | 2,098 | |||
Domestic | Colorado Springs, CO | Employee Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | 43 | |||
Domestic | Colorado Springs, CO | Facility Closing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment losses | 1,100 | |||
Expense (Reversal) | 346 | |||
Domestic | Tell City, IN | Employee Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | $ 262 | |||
Domestic | Tell City, IN | Facility Closing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment losses | 53 | |||
Expense (Reversal) | 52 | $ 97 | ||
Domestic | Corporate | Employee Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | 320 | |||
Domestic | Corporate | Facility Closing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expense (Reversal) | 149 | |||
Nearshore | Facility Closing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | 0 | 0 | ||
Expense (Reversal) | 31 | |||
Nearshore | Corporate | Employee Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expense (Reversal) | 31 | |||
Offshore | Facility Closing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | 166 | $ 0 | ||
Expense (Reversal) | 177 | |||
Offshore | Corporate | Employee Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expense (Reversal) | 29 | |||
Offshore | Angeles, PH | Facility Closing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | 166 | |||
Expense (Reversal) | $ (18) |
PRINCIPAL CLIENTS (Details)
PRINCIPAL CLIENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue, Major Customers [Line Items] | ||
Receivables Sold Under Factoring Agreements | $ 8,749 | $ 28,742 |
T-Mobile | ||
Revenue, Major Customers [Line Items] | ||
Revenue | $ 18,188 | $ 22,054 |
Revenue concentration, percentage | 27.30% | 28.40% |
Comcast | ||
Revenue, Major Customers [Line Items] | ||
Revenue | $ 8,629 | $ 3,802 |
Revenue concentration, percentage | 13.00% | 4.90% |
AT&T | ||
Revenue, Major Customers [Line Items] | ||
Revenue | $ 5,070 | $ 8,647 |
Revenue concentration, percentage | 7.60% | 11.10% |
Sprint | ||
Revenue, Major Customers [Line Items] | ||
Revenue | $ 2,808 | $ 10,256 |
Revenue concentration, percentage | 4.20% | 13.20% |
DERIVATIVE INSTRUMENTS Textual
DERIVATIVE INSTRUMENTS Textual (Details) - Foreign Exchange Contract | 3 Months Ended |
Mar. 31, 2018 | |
Minimum | |
Derivative [Line Items] | |
Foreign Currency Derivatives, Contract Period | 3 months |
Maximum | |
Derivative [Line Items] | |
Foreign Currency Derivatives, Contract Period | 12 months |
DERIVATIVE INSTRUMENTS Notional
DERIVATIVE INSTRUMENTS Notional (Details) - Mar. 31, 2018 - Designated as Hedging Instrument - Cash Flow Hedging - Forward Contracts ₱ in Thousands, $ in Thousands, $ in Thousands | USD ($) | PHP (₱) | CAD ($) |
CAN | |||
Derivative [Line Items] | |||
Derivative, Notional Amount | $ 8,875 | $ 11,400 | |
PHP | |||
Derivative [Line Items] | |||
Derivative, Notional Amount | 27,066 | ₱ 1,424,000 | |
USD | |||
Derivative [Line Items] | |||
Derivative, Notional Amount | $ 35,941 |
FAIR VALUE MEASUREMENTS (Recurr
FAIR VALUE MEASUREMENTS (Recurring and Nonrecurring) (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets and Liabilities at Fair Value Measured on Recurring Basis | ||
Assets, Fair Value Disclosure | $ 157 | $ 566 |
Liabilities, Fair Value Disclosure | 604 | 175 |
Level 2 | ||
Assets and Liabilities at Fair Value Measured on Recurring Basis | ||
Assets, Fair Value Disclosure | 157 | 566 |
Liabilities, Fair Value Disclosure | 604 | 175 |
Foreign exchange contracts | ||
Assets and Liabilities at Fair Value Measured on Recurring Basis | ||
Assets, Fair Value Disclosure | 157 | 566 |
Liabilities, Fair Value Disclosure | 604 | 175 |
Foreign exchange contracts | Level 2 | ||
Assets and Liabilities at Fair Value Measured on Recurring Basis | ||
Assets, Fair Value Disclosure | 157 | 566 |
Liabilities, Fair Value Disclosure | $ 604 | $ 175 |
DEBT (Details)
DEBT (Details) $ in Thousands | Mar. 28, 2017 | Apr. 30, 2015 | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Apr. 29, 2015USD ($) |
Line of Credit Facility [Line Items] | |||||
Line of credit | $ 24,720 | $ 19,078 | |||
BMO Harris Bank [Member] | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility, current borrowing capacity | $ 50,000 | ||||
Line of credit facility, maximum borrowing capacity | 70,000 | ||||
Increments for additional borrowing | 5,000 | ||||
Letters of credit, maximum allowed | $ 5,000 | ||||
Borrowing base, as percentage of eligible accounts receivables less reserves | 85.00% | ||||
Letters of Credit Outstanding, Amount | 893 | ||||
Fixed charge coverage ratio | 1 | ||||
Line of credit | 24,720 | ||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 18,618 | ||||
BMO Harris Bank [Member] | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Description of variable rate basis | one-month LIBOR | ||||
Monthly unused fee, rate per annum | 0.25% | ||||
BMO Harris Bank [Member] | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) [Member] | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 1.50% | ||||
BMO Harris Bank [Member] | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) [Member] | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 1.75% |
SHARE-BASED COMPENSATION (Textu
SHARE-BASED COMPENSATION (Textuals) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock Awards Activity [Line Items] | ||
Total compensation cost | $ 262 | $ 229 |
Stock Options | ||
Stock Awards Activity [Line Items] | ||
Total unrecognized compensation cost | $ 697 | |
Weighted-average period that cost is expected to be recognized | 1 year 9 months 11 days |
ACCUMULATED OTHER COMPREHENSI43
ACCUMULATED OTHER COMPREHENSIVE INCOME AOCI (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Accumulated Other Comprehensive Income [Roll Forward] | |
Total - Beginning balance | $ 1,384 |
Foreign currency translation | 137 |
Reclassification to operations | (88) |
Unrealized gains | (812) |
Total - Ending balance | 621 |
Foreign Currency Translation Adjustment | |
Accumulated Other Comprehensive Income [Roll Forward] | |
Total - Beginning balance | 1,971 |
Foreign currency translation | 137 |
Reclassification to operations | 0 |
Total - Ending balance | 2,108 |
Derivatives Accounted for as Cash Flow Hedges | |
Accumulated Other Comprehensive Income [Roll Forward] | |
Total - Beginning balance | (1,441) |
Reclassification to operations | (88) |
Unrealized gains | (812) |
Total - Ending balance | (2,341) |
Defined Benefit Plan | |
Accumulated Other Comprehensive Income [Roll Forward] | |
Total - Beginning balance | 854 |
Total - Ending balance | $ 854 |
ACCUMULATED OTHER COMPREHENSI44
ACCUMULATED OTHER COMPREHENSIVE INCOME Reclassification (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Cost of services | $ 61,156 | $ 67,638 |
Selling, general and administrative expenses | 8,558 | 7,882 |
Foreign exchange contracts | Amount Reclassified from Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Reclassification to operations | (88) | 144 |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges | Foreign exchange contracts | Amount Reclassified from Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Cost of services | (24) | 134 |
Selling, general and administrative expenses | $ (64) | $ 10 |
SEGMENT INFORMATION (Textual) (
SEGMENT INFORMATION (Textual) (Details) | 3 Months Ended |
Mar. 31, 2018facilitysegment | |
Segment Reporting Information [Line Items] | |
Number of Operating Segments | segment | 3 |
U.S. | |
Segment Reporting Information [Line Items] | |
Number of Operating Facilities | 12 |
Canada | |
Segment Reporting Information [Line Items] | |
Number of Operating Facilities | 1 |
Philippines | |
Segment Reporting Information [Line Items] | |
Number of Operating Facilities | 4 |
Honduras | |
Segment Reporting Information [Line Items] | |
Number of Operating Facilities | 2 |
Jamaica | |
Segment Reporting Information [Line Items] | |
Number of Operating Facilities | 1 |
SEGMENT INFORMATION (Segment Re
SEGMENT INFORMATION (Segment Reporting) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 69,114 | $ 77,652 |
Gross profit | 5,458 | 10,014 |
Warrant contra revenue | (2,500) | 0 |
Domestic | ||
Segment Reporting Information [Line Items] | ||
Revenue | 41,587 | 44,363 |
Gross profit | 2,527 | 1,509 |
Offshore | ||
Segment Reporting Information [Line Items] | ||
Revenue | 18,166 | 21,123 |
Gross profit | 5,296 | 6,175 |
Nearshore | ||
Segment Reporting Information [Line Items] | ||
Revenue | 9,361 | 12,166 |
Gross profit | 135 | 2,330 |
Combined Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 69,114 | 77,652 |
Gross profit | $ 7,958 | $ 10,014 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregated Revenue [Line Items] | ||
Revenue | $ 69,114 | $ 77,652 |
Domestic | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 41,587 | 44,364 |
Offshore | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 18,166 | 21,123 |
Nearshore | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 9,361 | 12,165 |
Communications Sector [Member] | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 44,852 | 59,307 |
Communications Sector [Member] | Domestic | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 24,848 | 31,362 |
Communications Sector [Member] | Offshore | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 14,613 | 18,896 |
Communications Sector [Member] | Nearshore | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 5,391 | 9,049 |
Retail | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 10,759 | 10,026 |
Retail | Domestic | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 5,982 | 7,233 |
Retail | Offshore | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 2,655 | 1,738 |
Retail | Nearshore | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 2,122 | 1,055 |
Healthcare | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 5,881 | 3,301 |
Healthcare | Domestic | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 5,377 | 2,914 |
Healthcare | Offshore | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 456 | 225 |
Healthcare | Nearshore | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 48 | 162 |
Gov't Services | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 3,286 | 0 |
Gov't Services | Domestic | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 3,286 | 0 |
Gov't Services | Offshore | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 0 | 0 |
Gov't Services | Nearshore | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 0 | 0 |
Technology | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 1,793 | 2,183 |
Technology | Domestic | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 252 | 614 |
Technology | Offshore | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 272 | 0 |
Technology | Nearshore | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 1,269 | 1,569 |
Financial | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 1,563 | 1,361 |
Financial | Domestic | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 1,563 | 1,361 |
Financial | Offshore | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 0 | 0 |
Financial | Nearshore | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 0 | 0 |
Other | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 980 | 1,474 |
Other | Domestic | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 279 | 880 |
Other | Offshore | ||
Disaggregated Revenue [Line Items] | ||
Revenue | 170 | 264 |
Other | Nearshore | ||
Disaggregated Revenue [Line Items] | ||
Revenue | $ 531 | $ 330 |
WARRANTS (Details)
WARRANTS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 23, 2018 | Dec. 31, 2017 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Warrant contra revenue | $ (2,500) | $ 0 | ||
Amazon Transaction Agreement | Warrant | ||||
Common stock, par value (in dollars per share) | $ 0.01 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 9.96 | |||
Warrant contra revenue | $ 2,500 | |||
Amazon Transaction Agreement | Warrant | Maximum | ||||
Class of Warrant or Right, Outstanding | 4,000,000 | |||
Warrants and Rights Outstanding | $ 600,000 | |||
Amazon Transaction Agreement | Warrant | Tranche 1 [Member] | ||||
Class of Warrant or Right, Outstanding | 425,532 | |||
Amazon Transaction Agreement | Warrant | Initial Tranche [Member] | ||||
Class of Warrant or Right, Outstanding | 425,532 |
AEGIS TRANSACTION AGREEMENT (De
AEGIS TRANSACTION AGREEMENT (Details) - Aegis [Member] - Common Stock [Member] $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Business Acquisition [Line Items] | |
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 20,600,000 |
Business Acquisition Equity Interests Issued Or Issuable Number Of Additional Shares Issued | 833,333 |
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ | $ 10 |
Business Acquisition, Share Price | $ / shares | $ 12 |
Sale of Stock, Percentage of Ownership after Transaction | 55.00% |