Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 29, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | PERFICIENT INC | |
Trading Symbol | 0 | |
Entity Central Index Key | 1,085,869 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 36,104,020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 9,016 | $ 8,811 |
Accounts receivable, net | 116,428 | 120,612 |
Prepaid expenses | 3,456 | 3,297 |
Other current assets | 6,067 | 7,032 |
Total current assets | 134,967 | 139,752 |
Property and equipment, net | 7,781 | 7,891 |
Goodwill | 269,606 | 269,383 |
Intangible assets, net | 50,706 | 53,408 |
Other non-current assets | 3,813 | 3,930 |
Total assets | 466,873 | 474,364 |
Current liabilities: | ||
Accounts payable | 12,736 | 18,793 |
Other current liabilities | 28,997 | 37,783 |
Total current liabilities | 41,733 | 56,576 |
Long-term debt | 56,000 | 56,000 |
Other non-current liabilities | 13,507 | 12,978 |
Total liabilities | 111,240 | 125,554 |
Stockholders' equity: | ||
Common stock (par value $.001 per share; 50,000,000 shares authorized and 45,457,477 shares issued and 34,605,750 shares outstanding as of March 31, 2016; 45,124,948 shares issued and 34,394,412 shares outstanding as of December 31, 2015) | 45 | 45 |
Additional paid-in capital | 368,362 | 364,786 |
Accumulated other comprehensive loss | (1,683) | (1,875) |
Treasury stock, at cost (10,851,727 shares as of March 31, 2016; 10,730,536 shares as of December 31, 2015) | (105,548) | (103,197) |
Retained earnings | 94,457 | 89,051 |
Total stockholders' equity | 355,633 | 348,810 |
Total liabilities and stockholders' equity | $ 466,873 | $ 474,364 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Condensed Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 45,457,477 | 45,124,948 |
Common stock, shares outstanding (in shares) | 34,605,750 | 34,394,412 |
Treasury stock, shares (in shares) | 10,851,727 | 10,730,536 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues | ||
Services | $ 109,747 | $ 98,629 |
Software and hardware | 9,476 | 8,502 |
Reimbursable expenses | 4,620 | 3,467 |
Total revenues | 123,843 | 110,598 |
Cost of revenues (exclusive of depreciation and amortization, shown separately below) | ||
Cost of services | 71,587 | 64,343 |
Software and hardware costs | 7,412 | 6,728 |
Reimbursable expenses | 4,620 | 3,467 |
Total cost of revenues | 83,619 | 74,538 |
Gross margin | 40,224 | 36,060 |
Selling, general and administrative | 26,714 | 24,043 |
Depreciation | 1,192 | 1,081 |
Amortization | 3,365 | 3,801 |
Acquisition costs | 243 | 0 |
Adjustment to fair value of contingent consideration | 238 | 85 |
Income from operations | 8,472 | 7,050 |
Net interest expense | 520 | 553 |
Net other expense | 103 | 280 |
Income before income taxes | 7,849 | 6,217 |
Provision for income taxes | 2,443 | 2,151 |
Net income | $ 5,406 | $ 4,066 |
Basic net income per share (in dollars per share) | $ 0.16 | $ 0.12 |
Diluted net income per share (in dollars per share) | $ 0.16 | $ 0.12 |
Shares used in computing basic net income per share (in shares) | 33,911 | 33,046 |
Shares used in computing diluted net income per share (in shares) | 34,842 | 34,164 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Condensed Consolidated Statements of Comprehensive Income [Abstract] | ||
Net income | $ 5,406 | $ 4,066 |
Other comprehensive income: | ||
Foreign currency translation adjustment | 192 | (171) |
Total comprehensive income | $ 5,598 | $ 3,895 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Stockholders' Equity - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury Stock [Member] | Retained Earnings (Deficit) [Member] | Total |
Balance at Dec. 31, 2015 | $ 45 | $ 364,786 | $ (1,875) | $ (103,197) | $ 89,051 | $ 348,810 |
Balance (in shares) at Dec. 31, 2015 | 34,394,000 | 34,394,412 | ||||
Proceeds from the sales of stock through the Employee Stock Purchase Plan | 53 | $ 53 | ||||
Proceeds from the sales of stock through the Employee Stock Purchase Plan, shares | 3,000 | |||||
Stock compensation related to restricted stock vesting and retirement savings plan contributions | 3,523 | 3,523 | ||||
Stock compensation related to restricted stock vesting and retirement savings plan contributions (in shares) | 330,000 | |||||
Purchases of treasury stock and buyback of shares for taxes | (2,351) | (2,351) | ||||
Purchases of treasury stock and buyback of shares for taxes (in shares) | (121,000) | |||||
Net income | 5,406 | 5,406 | ||||
Foreign currency translation adjustment | 192 | 192 | ||||
Balance at Mar. 31, 2016 | $ 45 | $ 368,362 | $ (1,683) | $ (105,548) | $ 94,457 | $ 355,633 |
Balance (in shares) at Mar. 31, 2016 | 34,606,000 | 34,605,750 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
OPERATING ACTIVITIES | ||
Net income | $ 5,406 | $ 4,066 |
Adjustments to reconcile net income to net cash used in operations: | ||
Depreciation | 1,192 | 1,081 |
Amortization | 3,365 | 3,801 |
Deferred income taxes | 651 | (450) |
Non-cash stock compensation and retirement savings plan contributions | 3,523 | 3,348 |
Tax benefit from stock option exercises and restricted stock vesting | 0 | (418) |
Adjustment to fair value of contingent consideration | 238 | 85 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | 3,727 | 19,815 |
Other assets | 1,044 | (213) |
Accounts payable | (6,057) | (11,129) |
Other liabilities | (8,653) | (11,620) |
Net cash provided by operating activities | 4,436 | 8,366 |
INVESTING ACTIVITIES | ||
Purchase of property and equipment | (1,044) | (530) |
Capitalization of internally developed software costs | (662) | (335) |
Purchase of business, net of cash acquired | (277) | (22,340) |
Net cash used in investing activities | (1,983) | (23,205) |
FINANCING ACTIVITIES | ||
Proceeds from line of credit | 59,000 | 84,000 |
Payments on line of credit | (59,000) | (70,500) |
Payment of credit facility financing fees | 0 | (193) |
Tax benefit on stock option exercises and restricted stock vesting | 0 | 418 |
Proceeds from the exercise of stock options and sales of stock through the Employee Stock Purchase Plan | 53 | 169 |
Purchases of treasury stock | 0 | (1,367) |
Remittance of taxes withheld as part of a net share settlement of restricted stock vesting | (2,351) | (2,310) |
Net cash (used in) provided by financing activities | (2,298) | 10,217 |
Effect of exchange rate on cash and cash equivalents | 50 | 40 |
Change in cash and cash equivalents | 205 | (4,582) |
Cash and cash equivalents at beginning of period | 8,811 | 10,935 |
Cash and cash equivalents at end of period | 9,016 | 6,353 |
Supplemental disclosures: | ||
Cash paid for income taxes | 593 | 514 |
Cash paid for interest | 373 | 202 |
Non-cash activity: | ||
Stock issued for purchase of businesses | 0 | 11,412 |
Estimated fair value of contingent consideration for purchase of business | $ 0 | $ 2,240 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements of Perficient, Inc. and its subsidiaries (collectively, the "Company") have been prepared in accordance with U.S. generally accepted accounting principles and are presented in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC") applicable to interim financial information. Accordingly, certain footnote disclosures have been condensed or omitted. In the opinion of management, the interim unaudited condensed consolidated financial statements reflect all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the Company's financial position, results of operations and cash flows for the periods presented. These financial statements should be read in conjunction with the Company's consolidated financial statements and notes thereto filed with the SEC in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. Operating results for the three months ended March 31, 2016 may not be indicative of the results for the full fiscal year ending December 31, 2016. Certain prior period financial statement amounts have been reclassified to conform to current period presentation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates, and such differences could be material to the financial statements. Revenue Recognition Software – Revenue Recognition, Revenue Recognition – Multiple-Element Arrangements Revenue Recognition There are no significant cancellation or termination-type provisions for the Company's software and hardware sales. Contracts for professional services provide for a general right, to the client or the Company, to cancel or terminate the contract within a given period of time (generally 10 to 30 days' notice is required). The client is responsible for any time and expenses incurred up to the date of cancellation or termination of the contract. The Company may provide multiple services under the terms of an arrangement and is required to assess whether one or more units of accounting are present. Service fees are typically accounted for as one unit of accounting, as fair value evidence for individual tasks or milestones is not available. The Company follows the guidelines discussed above in determining revenues; however, certain judgments and estimates are made and used to determine revenues recognized in any accounting period. If estimates are revised, material differences may result in the amount and timing of revenues recognized for a given period. Revenues are presented net of taxes assessed by governmental authorities. Sales taxes are generally collected and subsequently remitted on all software and hardware sales and certain services transactions as appropriate. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | 3. Stock-Based Compensation Stock-based compensation is accounted for in accordance with ASC Topic 718, Compensation – Stock Compensation Improvements to Employee Share-Based Payment Accounting Recent Accounting Pronouncements Stock Award Plans The Company's Amended and Restated Perficient, Inc. 2012 Long Term Incentive Plan (as amended, the "Incentive Plan") allows for the granting of various types of stock awards, not to exceed a total of 5.0 million shares, to eligible individuals. The Compensation Committee of the Board of Directors administers the Incentive Plan and determines the terms of all stock awards made under the Incentive Plan. Stock-based compensation cost recognized for the three months ended March 31, 2016 and 2015 was approximately $3.7 million and $3.5 million, respectively, which included $0.7 million and $0.6 million, respectively, of expense for retirement savings plan contributions. The associated current and future income tax benefits recognized wer . Restricted stock activity for the three months ended March 31, 2016 was as follows (shares in thousands): Shares Weighted-Average Grant Date Fair Value Restricted stock awards outstanding at December 31, 2015 1,370 $ 17.82 Awards granted 358 19.95 Awards vested (296 ) 17.14 Awards forfeited (38 ) 17.75 Restricted stock awards outstanding at March 31, 2016 1,394 $ 18.49 |
Net Income per Share
Net Income per Share | 3 Months Ended |
Mar. 31, 2016 | |
Net Income per Share [Abstract] | |
Net Income per Share | 4. Net Income per Share The following table presents the calculation of basic and diluted net income per share (in thousands, except per share information): Three Months Ended March 31, 2016 2015 Net income $ 5,406 $ 4,066 Basic: Weighted-average shares of common stock outstanding 33,911 33,046 Shares used in computing basic net income per share 33,911 33,046 Effect of dilutive securities: Stock options - 2 Restricted stock subject to vesting 363 504 Contingently issuable shares (1) 7 - Shares issuable for acquisition consideration (2) 561 612 Shares used in computing diluted net income per share 34,842 34,164 Basic net income per share $ 0.16 $ 0.12 Diluted net income per share $ 0.16 $ 0.12 Anti-dilutive options and restricted stock not included in the calculation of diluted net income per share 112 109 (1) For the three months ended March 31, 2016, this represents the Company's estimate of shares to be issued to Zeon Solutions Incorporated and certain related entities (collectively, "Zeon") pursuant to the Asset Purchase Agreement. (2) For the three months ended March 31, 2016, this represents the shares held in escrow pursuant to: (i) the Asset Purchase Agreement with BioPharm Systems, Inc. ("BioPharm"); (ii) the Asset Purchase Agreement with Zeon; (iii) the Stock Purchase Agreement for Market Street Solutions, Inc. ("Market Street") and (iv) the Asset Purchase Agreement with The Pup Group, Inc. ("Enlighten") as part of the consideration. For the three months ended March 31, 2015, this represents the shares held in escrow pursuant to: (i) the Agreement and Plan of Merger with ForwardThink Group Inc.; (ii) the Asset Purchase Agreement with BioPharm; (iii) the Asset Purchase Agreement with Trifecta Technologies, Inc. and Trifecta Technologies Canada, Limited; and (iv) the Asset Purchase Agreement with Zeon as part of the consideration. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies From time to time the Company is involved in legal proceedings, claims and litigation related to employee claims, contractual disputes and taxes in the ordinary course of its business. Although the Company cannot predict the outcome of such matters, currently the Company has no reason to believe the disposition of any current matter could reasonably be expected to have a material adverse impact on the Company's financial position, results of operations or the ability to carry on any of its business activities. Certain of the Company's operating leases contain predetermined fixed escalations of minimum rentals during the original lease terms. For these leases, the Company recognizes the related rental expense on a straight-line basis over the life of the lease and records the difference between the amounts charged to operations and amounts paid as accrued rent expense. The Company leases office space and certain equipment under various operating lease agreements. The Company has the option to extend the term of certain lease agreements. Future minimum commitments under these lease agreements as of March 31, 2016 were as follows (in thousands): Operating Leases 2016 remaining $ 4,739 2017 5,271 2018 3,867 2019 3,155 2020 2,762 Thereafter 2,078 Total minimum lease payments $ 21,872 Rent expense for each of the three months ended March 31, 2016 and 2015, was $1.9 million and $1.6 million, respectively. |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2016 | |
Balance Sheet Components [Abstract] | |
Balance Sheet Components | 6. Balance Sheet Components March 31, 2016 December 31, 2015 (in thousands) Accounts receivable: Accounts receivable $ 72,854 $ 84,273 Unbilled revenues 44,478 37,088 Allowance for doubtful accounts (904 ) (749 ) Total $ 116,428 $ 120,612 Property and equipment: Computer hardware (useful life of 3 years) $ 12,077 $ 11,467 Furniture and fixtures (useful life of 5 years) 3,211 2,957 Leasehold improvements (useful life of 5 years) 2,557 2,517 Software (useful life of 1 to 7 years) 8,079 7,883 Less: Accumulated depreciation (18,143 ) (16,933 ) Total $ 7,781 $ 7,891 Other current liabilities: Accrued variable compensation $ 7,826 $ 15,050 Deferred revenue 5,340 5,414 Payroll related costs 2,835 2,906 Accrued subcontractor fees 543 771 Accrued medical claims expense 1,692 1,816 Professional fees 381 726 Estimated fair value of contingent consideration liability (1) 6,142 5,904 Net working capital settlements 765 1,008 Other current liabilities 3,473 4,188 Total $ 28,997 $ 37,783 Other non-current liabilities: Deferred compensation liability $ 3,175 $ 3,376 Deferred income taxes 9,113 8,463 Other non-current liabilities 1,219 1,139 Total $ 13,507 $ 12,978 (1) R epresents the fair value estimate of additional earnings-based contingent consideration that may be realized by Zeon's, Market Street's and Enlighten's selling shareholders 12 months after the applicable acquisition. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Business Combinations | 7. Business Combinations 2015 Acquisitions Acquisition of Zeon On January 2, 2015, the Company acquired the assets of Zeon pursuant to the terms of an Asset Purchase Agreement. The acquisition of Zeon expanded the Company's expertise in the support of eCommerce and digital agency solutions. The Company's total allocable purchase price consideration was $35.0 million. The purchase price was comprised of $22.9 million in cash paid and $11.4 million in Company common stock issued at closing reduced by $1.5 million for an estimated net working capital settlement due from the seller. The purchase price was also increased by $2.2 million representing the initial fair value estimate of additional earnings-based contingent consideration, which has been realized by Zeon twelve months after the closing date of the acquisition. The Company incurred approximately $0.9 million in transaction costs, which were expensed when incurred. The Company allocated the total purchase price consideration between tangible assets, identified intangible assets, liabilities, and goodwill as follows (in millions): Acquired tangible assets $ 7.5 Acquired intangible assets 12.7 Liabilities assumed (3.6 ) Goodwill 18.4 Total purchase price $ 35.0 The amount of goodwill expected to be deductible for tax purposes is $18.5 million. The Company estimated that the intangible assets acquired have useful lives of nine months to eight years. Acquisition of Market Street On September 17, 2015, the Company acquired Market Street pursuant to the terms of a Stock Purchase Agreement. The acquisition of Market Street expanded the Company's IT consulting services specializing in the development, implementation, integration and support of big data, analytics, and financial performance management solutions. The Company has initially estimated the total allocable purchase price consideration to be $5.4 million. The purchase price was comprised of $3.0 million in cash paid (net of cash acquired) and $1.1 million in Company common stock issued at closing increased by $0.3 million for a net working capital settlement paid to the seller in February 2016. The purchase price was also increased by $1.0 million representing the initial fair value estimate of additional earnings-based contingent consideration, which may be realized by Market Street twelve months after the closing date of the acquisition. The Company incurred approximately $0.5 million in transaction costs, which were expensed when incurred. The Company has estimated the allocation of the total purchase price consideration between tangible assets, identified intangible assets, liabilities, and goodwill as follows (in millions): Acquired tangible assets $ 1.3 Acquired intangible assets 3.1 Liabilities assumed (2.9 ) Goodwill 3.9 Total purchase price $ 5.4 The goodwill is non-deductible for tax purposes. The Company estimated that the intangible assets acquired have useful lives of nine months to eight years. The amounts above represent the fair value estimates as of March 31, 2016 and are subject to subsequent adjustment as the Company obtains additional information during the measurement period and finalizes its fair value estimates. Any subsequent adjustments to these fair value estimates occurring during the measurement period will result in an adjustment to goodwill or income, as applicable. Acquisition of Enlighten On December 4, 2015, the Company acquired the assets of Enlighten pursuant to the terms of an Asset Purchase Agreement. Enlighten was a digital marketing agency specializing in the development, implementation, integration and support of digital experience solutions. The acquisition of Enlighten enhanced and expanded the Company's digital strategy, creative services and marketing expertise. The Company has initially estimated the total allocable purchase price consideration to be $17.1 million. The purchase price was comprised of $11.3 million in cash paid and $2.9 million of Company common stock issued at closing increased by $0.7 million for an estimated net working capital settlement due to the seller. The purchase price was also increased by $2.2 million representing the initial fair value estimate of additional earnings-based contingent consideration, which may be realized by Enlighten twelve months after the closing date of the acquisition. The Company incurred approximately $0.5 million in transaction costs, which were expensed when incurred. The Company has estimated the allocation of the total purchase price consideration between tangible assets, identified intangible assets, liabilities, and goodwill as follows (in millions): Acquired tangible assets $ 5.2 Acquired intangible assets 4.3 Liabilities assumed (2.5 ) Goodwill 10.1 Total purchase price $ 17.1 The amount of goodwill expected to be deductible for tax purposes is $11.1 million. The Company estimated that the intangible assets acquired have useful lives of twelve months to five years. The amounts above represent the fair value estimates as of March 31, 2016 and are subject to subsequent adjustment as the Company obtains additional information during the measurement period and finalizes its fair value estimates. Any subsequent adjustments to these fair value estimates occurring during the measurement period will result in an adjustment to goodwill or income, as applicable. The following table presents details of the intangible assets acquired during the year ended December 31, 2015 (dollars in millions): Weighted Average Useful Life Useful Life Aggregate Acquisitions Customer relationships 7 years 5 - 8 years $ 18.4 Customer backlog 10 months 9 - 12 months 1.4 Non-compete agreements 5 years 5 years 0.1 Trade name 1 year 1 year 0.2 Total acquired intangible assets $ 20.1 The results of the 2015 acquisitions' operations have been included in the Company's condensed consolidated financial statements since the respective acquisition date. Pro-forma Results of Operations The following presents the unaudited pro-forma combined results of operations of the Company with the 2015 acquisitions for the three months ended March 31, 2015, after giving effect to certain pro-forma adjustments and assuming the 2015 acquisitions were acquired as of the beginning of 2014. These unaudited pro-forma results are presented in compliance with the adoption of ASU No. 2010-29, Business Combinations , Disclosure of Supplementary Pro Forma Information for Business Combinations Three Months Ended March 31, 2015 Revenues $ 118,008 Net income $ 4,632 Basic net income per share $ 0.14 Diluted net income per share $ 0.13 Shares used in computing basic net income per share 33,132 Shares used in computing diluted net income per share 34,461 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | 8. Goodwill and Intangible Assets Intangibles – Goodwill and Other Other intangible assets include customer relationships, non-compete arrangements, trade names, customer backlog, and internally developed software, which are being amortized over the assets' estimated useful lives using the straight-line method. Estimated useful lives range from less than one year to ten years. Amortization of customer relationships, non-compete arrangements, trade names, customer backlog, and internally developed software is considered an operating expense and is included in "Amortization" in the accompanying Unaudited Condensed Consolidated Statements of Operations. The Company periodically reviews the estimated useful lives of its identifiable intangible assets, taking into consideration any events or circumstances that might result in a lack of recoverability or revised useful life. Goodwill The changes in the carrying amount of goodwill for the three months ended March 31, 2016 are as follows (in thousands): Balance at December 31, 2015 $ 269,383 Purchase accounting adjustments 195 Effect of foreign currency translation adjustments 28 Balance at March 31, 2016 $ 269,606 Intangible Assets with Definite Lives The following table presents a summary of the Company's intangible assets that are subject to amortization (in thousands): March 31, 2016 December 31, 2015 Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Customer relationships $ 68,959 $ (26,196 ) $ 42,763 $ 68,959 $ (23,397 ) $ 45,562 Non-compete agreements 959 (503 ) 456 1,235 (719 ) 516 Customer backlog 350 (183 ) 167 350 (88 ) 262 Trade name 100 (58 ) 42 100 (33 ) 67 Internally developed software 10,148 (2,870 ) 7,278 9,500 (2,499 ) 7,001 Total $ 80,516 $ (29,810 ) $ 50,706 $ 80,144 $ (26,736 ) $ 53,408 The estimated useful lives of identifiable intangible assets are as follows: Customer relationships 3 – 10 years Non-compete agreements 3 – 5 years Internally developed software 1 – 7 years Trade name 1 year Customer backlog 9 – 12 months Estimated annual amortization expense for the next five years ended December 31 is as follows (in thousands): 2016 remaining $ 9,497 2017 $ 10,320 2018 $ 9,358 2019 $ 8,439 2020 $ 5,545 Thereafter $ 7,547 |
Line of Credit
Line of Credit | 3 Months Ended |
Mar. 31, 2016 | |
Line of Credit [Abstract] | |
Line of Credit | 9. Line of Credit At March 31, 2016, the Company was in compliance with all covenants under the Credit Agreement. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | 10. Income Taxes The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Internal Revenue Service (the "IRS") has completed examinations of the Company's U.S. income tax returns or the statute of limitations has passed on returns for the years through 2010. The Company's 2011, 2012 and 2013 U.S. income tax returns are currently under examination by the IRS. The IRS has sought to disallow certain research credits on the Company's 2011 and 2012 U.S. income tax returns. The Company is actively appealing the IRS's initial findings. The Company believes the research credits taken are appropriate and intends to vigorously defend its position. The amount of adjustment, if any, and the timing of such adjustment is not reasonably estimable at this time. Under the provisions of the ASC Subtopic 740-10-25, Income Taxes - Recognition The Company's effective tax rate was 31.1% for the three months ended March 31, 2016 compared to 34.6% for the three months ended March 31, 2015. The decrease in the effective rate is primarily due to the research and development tax credit, which was not re-enacted by Congress for the three months ended March 31, 2015, but was adopted in December 2015 and therefore favorably impacted the current year quarter. The rate was also favorably impacted by the early adoption of ASU No. 2016-09 . Recent Accounting Pronouncements |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2016 | |
Financial Instruments [Abstract] | |
Financial Instruments | 11. Financial Instruments In the normal course of business, the Company uses derivative financial instruments to manage foreign currency exchange rate risk. Currency exposure is monitored and managed by the Company as part of its risk management program which seeks to reduce the potentially adverse effects that market volatility could have on operating results. The Company's derivative financial instruments consist of non-deliverable foreign currency forward contracts. Financial instruments are neither held nor issued by the Company for trading purposes. Derivatives Not Designated as Hedging Instruments Both the gain or loss on the derivatives not designated as hedging instruments and the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings. Realized gains or losses and changes in the estimated fair value of foreign currency forward contracts that have not been designated as hedges were a net loss of $0.1 million and $0.2 million during the three months ended March 31, 2016 and 2015, respectively. Gains and losses on these contracts are recorded in net other expense (income) and net interest expense in the Unaudited Condensed Consolidated Statements of Operations and are offset by losses and gains on the related hedged items. The notional amounts of the Company's derivative instruments outstanding were as follows (in thousands): March 31, 2016 December 31, 2015 Derivatives not designated as hedges Foreign exchange contracts $ 5,893 $ 3,215 Total derivatives not designated as hedges $ 5,893 $ 3,215 Fair Value of Derivative Instruments The authoritative guidance defines fair value as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The authoritative guidance also establishes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity's pricing based upon its own market assumptions. The fair value hierarchy consists of the following three levels: ● Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities. ● Level 2 – Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data. ● Level 3 – Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. The Company estimates the fair value of each foreign exchange forward contract by using the present value of expected cash flows. This considers the difference between the current market forward price and the contracted forward price for each foreign exchange contract and applies the difference in the rates to each outstanding contract. Valuations for all derivatives fall within Level 2 of the GAAP valuation hierarchy. The fair value of the Company's derivative instruments outstanding as of March 31, 2016 was immaterial. Derivatives may give rise to credit risks from the possible non-performance by counterparties. Credit risk is generally limited to the fair value of those contracts that are favorable to us. The Company has limited its credit risk by entering into derivative transactions only with highly-rated global financial institutions, limiting the amount of credit exposure with any one financial institution and conducting ongoing evaluation of the creditworthiness of the financial institutions with which the Company does business. The Company utilizes standard counterparty master agreements containing provisions for the netting of certain foreign currency transaction obligations and for the set-off of certain obligations in the event of an insolvency of one of the parties to the transaction. Within the Condensed Consolidated Balance Sheets (Unaudited), the Company records derivative assets and liabilities at net fair value. |
Recent Accounting Pronoucements
Recent Accounting Pronoucements | 3 Months Ended |
Mar. 31, 2016 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | 12. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers Principal versus Agent Considerations Identifying Performance Obligations and Licensing Simplifying the Presentation of Debt Issuance Costs Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements Customer's Accounting for Fees Paid in a Cloud Computing Arrangement Simplifying the Accounting for Measurement-Period Adjustments In February 2016, the FASB issued ASU No. 2016-02, Leases Leases, Leases In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Basis of Presentation [Abstract] | |
Reclassifications | Certain prior period financial statement amounts have been reclassified to conform to current period presentation. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates, and such differences could be material to the financial statements. |
Revenue Recognition | Revenue Recognition Software – Revenue Recognition, Revenue Recognition – Multiple-Element Arrangements Revenue Recognition There are no significant cancellation or termination-type provisions for the Company's software and hardware sales. Contracts for professional services provide for a general right, to the client or the Company, to cancel or terminate the contract within a given period of time (generally 10 to 30 days' notice is required). The client is responsible for any time and expenses incurred up to the date of cancellation or termination of the contract. The Company may provide multiple services under the terms of an arrangement and is required to assess whether one or more units of accounting are present. Service fees are typically accounted for as one unit of accounting, as fair value evidence for individual tasks or milestones is not available. The Company follows the guidelines discussed above in determining revenues; however, certain judgments and estimates are made and used to determine revenues recognized in any accounting period. If estimates are revised, material differences may result in the amount and timing of revenues recognized for a given period. Revenues are presented net of taxes assessed by governmental authorities. Sales taxes are generally collected and subsequently remitted on all software and hardware sales and certain services transactions as appropriate. |
Stock-Based Compensation (Polic
Stock-Based Compensation (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Stock-based compensation is accounted for in accordance with ASC Topic 718, Compensation – Stock Compensation Improvements to Employee Share-Based Payment Accounting Recent Accounting Pronouncements |
Commitments and Contingencies (
Commitments and Contingencies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
Legal Claims | From time to time the Company is involved in legal proceedings, claims and litigation related to employee claims, contractual disputes and taxes in the ordinary course of its business. Although the Company cannot predict the outcome of such matters, currently the Company has no reason to believe the disposition of any current matter could reasonably be expected to have a material adverse impact on the Company's financial position, results of operations or the ability to carry on any of its business activities. |
Operating Leases | Certain of the Company's operating leases contain predetermined fixed escalations of minimum rentals during the original lease terms. For these leases, the Company recognizes the related rental expense on a straight-line basis over the life of the lease and records the difference between the amounts charged to operations and amounts paid as accrued rent expense. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | Other intangible assets include customer relationships, non-compete arrangements, trade names, customer backlog, and internally developed software, which are being amortized over the assets' estimated useful lives using the straight-line method. Estimated useful lives range from less than one year to ten years. Amortization of customer relationships, non-compete arrangements, trade names, customer backlog, and internally developed software is considered an operating expense and is included in "Amortization" in the accompanying Unaudited Condensed Consolidated Statements of Operations. The Company periodically reviews the estimated useful lives of its identifiable intangible assets, taking into consideration any events or circumstances that might result in a lack of recoverability or revised useful life. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Stock-Based Compensation [Abstract] | |
Restricted Stock Activity | Restricted stock activity for the three months ended March 31, 2016 was as follows (shares in thousands): Shares Weighted-Average Grant Date Fair Value Restricted stock awards outstanding at December 31, 2015 1,370 $ 17.82 Awards granted 358 19.95 Awards vested (296 ) 17.14 Awards forfeited (38 ) 17.75 Restricted stock awards outstanding at March 31, 2016 1,394 $ 18.49 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Net Income per Share [Abstract] | |
Basic and Diluted Net Income per Share | The following table presents the calculation of basic and diluted net income per share (in thousands, except per share information): Three Months Ended March 31, 2016 2015 Net income $ 5,406 $ 4,066 Basic: Weighted-average shares of common stock outstanding 33,911 33,046 Shares used in computing basic net income per share 33,911 33,046 Effect of dilutive securities: Stock options - 2 Restricted stock subject to vesting 363 504 Contingently issuable shares (1) 7 - Shares issuable for acquisition consideration (2) 561 612 Shares used in computing diluted net income per share 34,842 34,164 Basic net income per share $ 0.16 $ 0.12 Diluted net income per share $ 0.16 $ 0.12 Anti-dilutive options and restricted stock not included in the calculation of diluted net income per share 112 109 (1) For the three months ended March 31, 2016, this represents the Company's estimate of shares to be issued to Zeon Solutions Incorporated and certain related entities (collectively, "Zeon") pursuant to the Asset Purchase Agreement. (2) For the three months ended March 31, 2016, this represents the shares held in escrow pursuant to: (i) the Asset Purchase Agreement with BioPharm Systems, Inc. ("BioPharm"); (ii) the Asset Purchase Agreement with Zeon; (iii) the Stock Purchase Agreement for Market Street Solutions, Inc. ("Market Street") and (iv) the Asset Purchase Agreement with The Pup Group, Inc. ("Enlighten") as part of the consideration. For the three months ended March 31, 2015, this represents the shares held in escrow pursuant to: (i) the Agreement and Plan of Merger with ForwardThink Group Inc.; (ii) the Asset Purchase Agreement with BioPharm; (iii) the Asset Purchase Agreement with Trifecta Technologies, Inc. and Trifecta Technologies Canada, Limited; and (iv) the Asset Purchase Agreement with Zeon as part of the consideration. |
Commitments and Contingencies27
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
Operating Lease Agreement | The Company leases office space and certain equipment under various operating lease agreements. The Company has the option to extend the term of certain lease agreements. Future minimum commitments under these lease agreements as of March 31, 2016 were as follows (in thousands): Operating Leases 2016 remaining $ 4,739 2017 5,271 2018 3,867 2019 3,155 2020 2,762 Thereafter 2,078 Total minimum lease payments $ 21,872 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Balance Sheet Components [Abstract] | |
Accounts Receivable | March 31, 2016 December 31, 2015 (in thousands) Accounts receivable: Accounts receivable $ 72,854 $ 84,273 Unbilled revenues 44,478 37,088 Allowance for doubtful accounts (904 ) (749 ) Total $ 116,428 $ 120,612 |
Property and Equipment | Property and equipment: Computer hardware (useful life of 3 years) $ 12,077 $ 11,467 Furniture and fixtures (useful life of 5 years) 3,211 2,957 Leasehold improvements (useful life of 5 years) 2,557 2,517 Software (useful life of 1 to 7 years) 8,079 7,883 Less: Accumulated depreciation (18,143 ) (16,933 ) Total $ 7,781 $ 7,891 |
Other Current Liabilities | Other current liabilities: Accrued variable compensation $ 7,826 $ 15,050 Deferred revenue 5,340 5,414 Payroll related costs 2,835 2,906 Accrued subcontractor fees 543 771 Accrued medical claims expense 1,692 1,816 Professional fees 381 726 Estimated fair value of contingent consideration liability (1) 6,142 5,904 Net working capital settlements 765 1,008 Other current liabilities 3,473 4,188 Total $ 28,997 $ 37,783 (1) R epresents the fair value estimate of additional earnings-based contingent consideration that may be realized by Zeon's, Market Street's and Enlighten's selling shareholders 12 months after the applicable acquisition. |
Other Non-Current Liabilities | Other non-current liabilities: Deferred compensation liability $ 3,175 $ 3,376 Deferred income taxes 9,113 8,463 Other non-current liabilities 1,219 1,139 Total $ 13,507 $ 12,978 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Intangible Assets Acquired | The following table presents details of the intangible assets acquired during the year ended December 31, 2015 (dollars in millions): Weighted Average Useful Life Useful Life Aggregate Acquisitions Customer relationships 7 years 5 - 8 years $ 18.4 Customer backlog 10 months 9 - 12 months 1.4 Non-compete agreements 5 years 5 years 0.1 Trade name 1 year 1 year 0.2 Total acquired intangible assets $ 20.1 |
Pro-Forma Results of Operations | These unaudited pro-forma results are presented in compliance with the adoption of ASU No. 2010-29, Business Combinations , Disclosure of Supplementary Pro Forma Information for Business Combinations Three Months Ended March 31, 2015 Revenues $ 118,008 Net income $ 4,632 Basic net income per share $ 0.14 Diluted net income per share $ 0.13 Shares used in computing basic net income per share 33,132 Shares used in computing diluted net income per share 34,461 |
Zeon [Member] | |
Business Combinations [Abstract] | |
Allocation of Total Purchase Price Consideration | The Company allocated the total purchase price consideration between tangible assets, identified intangible assets, liabilities, and goodwill as follows (in millions): Acquired tangible assets $ 7.5 Acquired intangible assets 12.7 Liabilities assumed (3.6 ) Goodwill 18.4 Total purchase price $ 35.0 |
Market Street [Member] | |
Business Combinations [Abstract] | |
Allocation of Total Purchase Price Consideration | The Company has estimated the allocation of the total purchase price consideration between tangible assets, identified intangible assets, liabilities, and goodwill as follows (in millions): Acquired tangible assets $ 1.3 Acquired intangible assets 3.1 Liabilities assumed (2.9 ) Goodwill 3.9 Total purchase price $ 5.4 |
Enlighten [Member] | |
Business Combinations [Abstract] | |
Allocation of Total Purchase Price Consideration | The Company has estimated the allocation of the total purchase price consideration between tangible assets, identified intangible assets, liabilities, and goodwill as follows (in millions): Acquired tangible assets $ 5.2 Acquired intangible assets 4.3 Liabilities assumed (2.5 ) Goodwill 10.1 Total purchase price $ 17.1 |
Goodwill and Intangible Asset30
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill | The changes in the carrying amount of goodwill for the three months ended March 31, 2016 are as follows (in thousands): Balance at December 31, 2015 $ 269,383 Purchase accounting adjustments 195 Effect of foreign currency translation adjustments 28 Balance at March 31, 2016 $ 269,606 |
Intangible Assets | The following table presents a summary of the Company's intangible assets that are subject to amortization (in thousands): March 31, 2016 December 31, 2015 Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Customer relationships $ 68,959 $ (26,196 ) $ 42,763 $ 68,959 $ (23,397 ) $ 45,562 Non-compete agreements 959 (503 ) 456 1,235 (719 ) 516 Customer backlog 350 (183 ) 167 350 (88 ) 262 Trade name 100 (58 ) 42 100 (33 ) 67 Internally developed software 10,148 (2,870 ) 7,278 9,500 (2,499 ) 7,001 Total $ 80,516 $ (29,810 ) $ 50,706 $ 80,144 $ (26,736 ) $ 53,408 |
Estimated Useful Lives of Intangible Assets | The estimated useful lives of identifiable intangible assets are as follows: Customer relationships 3 – 10 years Non-compete agreements 3 – 5 years Internally developed software 1 – 7 years Trade name 1 year Customer backlog 9 – 12 months |
Estimated Annual Amortization Expense | Estimated annual amortization expense for the next five years ended December 31 is as follows (in thousands): 2016 remaining $ 9,497 2017 $ 10,320 2018 $ 9,358 2019 $ 8,439 2020 $ 5,545 Thereafter $ 7,547 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Financial Instruments [Abstract] | |
Notional Amounts of Derivative Instruments Outstanding | The notional amounts of the Company's derivative instruments outstanding were as follows (in thousands): March 31, 2016 December 31, 2015 Derivatives not designated as hedges Foreign exchange contracts $ 5,893 $ 3,215 Total derivatives not designated as hedges $ 5,893 $ 3,215 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2016 | |
Minimum [Member] | |
Revenue Recognition [Abstract] | |
Period of cancellation notice | 10 days |
Maximum [Member] | |
Revenue Recognition [Abstract] | |
Period of cancellation notice | 30 days |
Stock-Based Compensation, Stock
Stock-Based Compensation, Stock Award Plans (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Stock-Based Compensation [Abstract] | ||
Stock-based compensation expense | $ 3.7 | $ 3.5 |
Stock-based compensation expense for retirement savings plan contributions | 0.7 | 0.6 |
Associated current and future income tax benefits recognized | 1.1 | $ 1.1 |
Total unrecognized compensation cost related to non-vested share-based awards | $ 22.4 | |
Unrecognized compensation cost, weighted-average period for recognition | 2 years | |
2012 Long Term Incentive Plan [Member] | ||
Stock-Based Compensation [Abstract] | ||
Maximum number of shares authorized under plan (in shares) | 5 |
Stock-Based Compensation, Restr
Stock-Based Compensation, Restricted Stock Activity (Details) - 2012 Long Term Incentive Plan [Member] - Restricted Stock [Member] shares in Thousands | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Shares [Roll Forward] | |
Awards outstanding at beginning of period (in shares) | shares | 1,370 |
Awards granted (in shares) | shares | 358 |
Awards vested (in shares) | shares | (296) |
Awards forfeited (in shares) | shares | (38) |
Awards outstanding at end of period (in shares) | shares | 1,394 |
Weighted-Average Grant Date Fair Value [Abstract] | |
Awards outstanding at beginning of period (in dollars per share) | $ / shares | $ 17.82 |
Awards granted (in dollars per share) | $ / shares | 19.95 |
Awards vested (in dollars per share) | $ / shares | 17.14 |
Awards forfeited (in dollars per share) | $ / shares | 17.75 |
Awards outstanding at end of period (in dollars per share) | $ / shares | $ 18.49 |
Net Income per Share (Details)
Net Income per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | |||
Net Income per Share [Abstract] | ||||
Net income | $ 5,406 | $ 4,066 | ||
Weighted-average shares of common stock outstanding (in shares) | 33,911 | 33,046 | ||
Shares used in computing basic net income per share (in shares) | 33,911 | 33,046 | ||
Stock options (in shares) | 0 | 2 | ||
Restricted stock subject to vesting (in shares) | 363 | 504 | ||
Contingently issuable shares (in shares) | 7 | [1] | 0 | |
Shares issuable for acquisition consideration (in shares) | [2] | 561 | 612 | |
Shares used in computing diluted net income per share (in shares) | 34,842 | 34,164 | ||
Basic net income per share (in dollars per share) | $ 0.16 | $ 0.12 | ||
Diluted net income per share (in dollars per share) | $ 0.16 | $ 0.12 | ||
Anti-dilutive options and restricted stock not included in the calculation of diluted net income per share (in shares) | 112 | 109 | ||
[1] | For the three months ended March 31, 2016, this represents the Company's estimate of shares to be issued to Zeon Solutions Incorporated and certain related entities (collectively, "Zeon") pursuant to the Asset Purchase Agreement. | |||
[2] | For the three months ended March 31, 2016, this represents the shares held in escrow pursuant to: (i) the Asset Purchase Agreement with BioPharm Systems, Inc. ("BioPharm"); (ii) the Asset Purchase Agreement with Zeon; (iii) the Stock Purchase Agreement for Market Street Solutions, Inc. ("Market Street") and (iv) the Asset Purchase Agreement with The Pup Group, Inc. ("Enlighten") as part of the consideration. For the three months ended March 31, 2015, this represents the shares held in escrow pursuant to: (i) the Agreement and Plan of Merger with ForwardThink Group Inc.; (ii) the Asset Purchase Agreement with BioPharm; (iii) the Asset Purchase Agreement with Trifecta Technologies, Inc. and Trifecta Technologies Canada, Limited; and (iv) the Asset Purchase Agreement with Zeon as part of the consideration. |
Commitments and Contingencies36
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Commitments and Contingencies [Abstract] | ||
2016 remaining | $ 4,739 | |
2,017 | 5,271 | |
2,018 | 3,867 | |
2,019 | 3,155 | |
2,020 | 2,762 | |
Thereafter | 2,078 | |
Total minimum lease payments | 21,872 | |
Rent expense | $ 1,900 | $ 1,600 |
Balance Sheet Components, Accou
Balance Sheet Components, Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Balance Sheet Components [Abstract] | ||
Accounts receivable | $ 72,854 | $ 84,273 |
Unbilled revenues | 44,478 | 37,088 |
Allowance for doubtful accounts | (904) | (749) |
Total | $ 116,428 | $ 120,612 |
Balance Sheet Components, Prope
Balance Sheet Components, Property and Equipment) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Property and Equipment [Abstract] | ||
Less: Accumulated depreciation | $ (18,143) | $ (16,933) |
Total | 7,781 | 7,891 |
Computer Hardware [Member] | ||
Property and Equipment [Abstract] | ||
Property and equipment | $ 12,077 | 11,467 |
Useful life | 3 years | |
Furniture And Fixtures [Member] | ||
Property and Equipment [Abstract] | ||
Property and equipment | $ 3,211 | 2,957 |
Useful life | 5 years | |
Leasehold Improvements [Member] | ||
Property and Equipment [Abstract] | ||
Property and equipment | $ 2,557 | 2,517 |
Useful life | 5 years | |
Software and Software Development Costs [Member] | ||
Property and Equipment [Abstract] | ||
Property and equipment | $ 8,079 | $ 7,883 |
Minimum [Member] | Software and Software Development Costs [Member] | ||
Property and Equipment [Abstract] | ||
Useful life | 1 year | |
Maximum [Member] | Software and Software Development Costs [Member] | ||
Property and Equipment [Abstract] | ||
Useful life | 7 years |
Balance Sheet Components, Other
Balance Sheet Components, Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | |
Balance Sheet Components [Abstract] | |||
Accrued variable compensation | $ 7,826 | $ 15,050 | |
Deferred revenues | 5,340 | 5,414 | |
Payroll related costs | 2,835 | 2,906 | |
Accrued subcontractor fees | 543 | 771 | |
Accrued medical claims expense | 1,692 | 1,816 | |
Professional Fees | 381 | 726 | |
Estimated fair value of contingent consideration liability | [1] | 6,142 | 5,904 |
Net working capital settlements | 765 | 1,008 | |
Other current liabilities | 3,473 | 4,188 | |
Total | $ 28,997 | $ 37,783 | |
[1] | Represents the fair value estimate of additional earnings-based contingent consideration that may be realized by Zeon's, Market Street's and Enlighten's selling shareholders 12 months after the applicable acquisition. |
Balance Sheet Components, Oth40
Balance Sheet Components, Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Balance Sheet Components [Abstract] | ||
Deferred compensation liability | $ 3,175 | $ 3,376 |
Deferred income taxes | 9,113 | 8,463 |
Other non-current liabilities | 1,219 | 1,139 |
Total | $ 13,507 | $ 12,978 |
Business Combinations, Zeon (De
Business Combinations, Zeon (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2015 | ||
Business Combinations [Abstract] | |||
Estimated fair value of contingent consideration liability | [1] | $ 6,142 | $ 5,904 |
Allocation of Total Purchase Price Consideration [Abstract] | |||
Goodwill | $ 269,606 | $ 269,383 | |
Zeon [Member] | |||
Business Combinations [Abstract] | |||
Date of acquisition | Jan. 2, 2015 | ||
Cash paid for acquisition | $ 22,900 | ||
Common stock issued | 11,400 | ||
Net working capital settlement | (1,500) | ||
Fair value estimate of additional earnings-based contingent consideration | 2,200 | ||
Transaction costs | $ 900 | ||
Period to realize additional earnings-based contingent consideration | 12 months | ||
Allocation of Total Purchase Price Consideration [Abstract] | |||
Acquired tangible assets | $ 7,500 | ||
Acquired intangible assets | 12,700 | ||
Liabilities assumed | (3,600) | ||
Goodwill | 18,400 | ||
Total purchase price | 35,000 | ||
Tax deductible amount of goodwill | $ 18,500 | ||
Zeon [Member] | Minimum [Member] | |||
Allocation of Total Purchase Price Consideration [Abstract] | |||
Intangible assets estimated useful life | 9 months | ||
Zeon [Member] | Maximum [Member] | |||
Allocation of Total Purchase Price Consideration [Abstract] | |||
Intangible assets estimated useful life | 8 years | ||
[1] | Represents the fair value estimate of additional earnings-based contingent consideration that may be realized by Zeon's, Market Street's and Enlighten's selling shareholders 12 months after the applicable acquisition. |
Business Combinations, Market S
Business Combinations, Market Street (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Allocation of Total Purchase Price Consideration [Abstract] | ||
Goodwill | $ 269,606 | $ 269,383 |
Market Street [Member] | ||
Business Combinations [Abstract] | ||
Date of acquisition | Sep. 17, 2015 | |
Cash paid for acquisition | $ 3,000 | |
Common stock issued | 1,100 | |
Net working capital settlement | 300 | |
Fair value estimate of additional earnings-based contingent consideration | 1,000 | |
Transaction costs | $ 500 | |
Period to realize additional earnings-based contingent consideration | 12 months | |
Allocation of Total Purchase Price Consideration [Abstract] | ||
Acquired tangible assets | $ 1,300 | |
Acquired intangible assets | 3,100 | |
Liabilities assumed | (2,900) | |
Goodwill | 3,900 | |
Total purchase price | 5,400 | |
Tax deductible amount of goodwill | $ 0 | |
Market Street [Member] | Minimum [Member] | ||
Allocation of Total Purchase Price Consideration [Abstract] | ||
Intangible assets estimated useful life | 9 months | |
Market Street [Member] | Maximum [Member] | ||
Allocation of Total Purchase Price Consideration [Abstract] | ||
Intangible assets estimated useful life | 8 years |
Business Combinations, Enlighte
Business Combinations, Enlighten (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Allocation of Total Purchase Price Consideration [Abstract] | ||
Goodwill | $ 269,606 | $ 269,383 |
Enlighten [Member] | ||
Business Combinations [Abstract] | ||
Date of acquisition | Dec. 4, 2015 | |
Cash paid for acquisition | $ 11,300 | |
Common stock issued | 2,900 | |
Net working capital settlement | 700 | |
Fair value estimate of additional earnings-based contingent consideration | 2,200 | |
Transaction costs | $ 500 | |
Period to realize additional earnings-based contingent consideration | 12 months | |
Allocation of Total Purchase Price Consideration [Abstract] | ||
Acquired tangible assets | $ 5,200 | |
Acquired intangible assets | 4,300 | |
Liabilities assumed | (2,500) | |
Goodwill | 10,100 | |
Total purchase price | 17,100 | |
Tax deductible amount of goodwill | $ 11,100 | |
Enlighten [Member] | Minimum [Member] | ||
Allocation of Total Purchase Price Consideration [Abstract] | ||
Intangible assets estimated useful life | 12 months | |
Enlighten [Member] | Maximum [Member] | ||
Allocation of Total Purchase Price Consideration [Abstract] | ||
Intangible assets estimated useful life | 5 years |
Business Combinations, Intangib
Business Combinations, Intangible Assets Acquired (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Intangible Assets Acquired [Abstract] | |
Aggregate acquisitions | $ 20.1 |
Customer Relationships [Member] | |
Intangible Assets Acquired [Abstract] | |
Weighted average useful life | 7 years |
Aggregate acquisitions | $ 18.4 |
Customer Relationships [Member] | Minimum [Member] | |
Intangible Assets Acquired [Abstract] | |
Useful life | 5 years |
Customer Relationships [Member] | Maximum [Member] | |
Intangible Assets Acquired [Abstract] | |
Useful life | 8 years |
Customer Backlog [Member] | |
Intangible Assets Acquired [Abstract] | |
Weighted average useful life | 10 months |
Aggregate acquisitions | $ 1.4 |
Customer Backlog [Member] | Minimum [Member] | |
Intangible Assets Acquired [Abstract] | |
Useful life | 9 months |
Customer Backlog [Member] | Maximum [Member] | |
Intangible Assets Acquired [Abstract] | |
Useful life | 12 months |
Non-Compete Agreements [Member] | |
Intangible Assets Acquired [Abstract] | |
Weighted average useful life | 5 years |
Useful life | 5 years |
Aggregate acquisitions | $ 0.1 |
Trade Name [Member] | |
Intangible Assets Acquired [Abstract] | |
Weighted average useful life | 1 year |
Useful life | 1 year |
Aggregate acquisitions | $ 0.2 |
Business Combinations, Pro Form
Business Combinations, Pro Forma Information (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2015USD ($)$ / sharesshares | |
Business Acquisition, Pro Forma Information [Abstract] | |
Revenues | $ | $ 118,008 |
Net income | $ | $ 4,632 |
Basic net income per share | $ / shares | $ 0.14 |
Diluted net income per share | $ / shares | $ 0.13 |
Shares used in computing basic net income per share | shares | 33,132 |
Shares used in computing diluted net income per share | shares | 34,461 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Goodwill) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Goodwill and Intangible Assets [Abstract] | |
Balance at beginning of period | $ 269,383 |
Purchase accounting adjustments | 195 |
Effect of foreign currency translation adjustments | 28 |
Balance at end of period | $ 269,606 |
Goodwill and Intangible Asset47
Goodwill and Intangible Assets, Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Intangible Assets, Net [Abstract] | ||
Gross carrying amounts | $ 80,516 | $ 80,144 |
Accumulated amortization | (29,810) | (26,736) |
Net carrying amounts | 50,706 | 53,408 |
Customer Relationships [Member] | ||
Intangible Assets, Net [Abstract] | ||
Gross carrying amounts | 68,959 | 68,959 |
Accumulated amortization | (26,196) | (23,397) |
Net carrying amounts | 42,763 | 45,562 |
Non-Compete Agreements [Member] | ||
Intangible Assets, Net [Abstract] | ||
Gross carrying amounts | 959 | 1,235 |
Accumulated amortization | (503) | (719) |
Net carrying amounts | 456 | 516 |
Customer Backlog [Member] | ||
Intangible Assets, Net [Abstract] | ||
Gross carrying amounts | 350 | 350 |
Accumulated amortization | (183) | (88) |
Net carrying amounts | 167 | 262 |
Trade Name [Member] | ||
Intangible Assets, Net [Abstract] | ||
Gross carrying amounts | 100 | 100 |
Accumulated amortization | (58) | (33) |
Net carrying amounts | 42 | 67 |
Internally Developed Software [Member] | ||
Intangible Assets, Net [Abstract] | ||
Gross carrying amounts | 10,148 | 9,500 |
Accumulated amortization | (2,870) | (2,499) |
Net carrying amounts | $ 7,278 | $ 7,001 |
Goodwill and Intangible Asset48
Goodwill and Intangible Assets, Estimated Useful Lives (Details) | 3 Months Ended |
Mar. 31, 2016 | |
Customer Relationships [Member] | Minimum [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 3 years |
Customer Relationships [Member] | Maximum [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 10 years |
Non-Compete Agreements [Member] | Minimum [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 3 years |
Non-Compete Agreements [Member] | Maximum [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 5 years |
Internally Developed Software [Member] | Minimum [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 1 year |
Internally Developed Software [Member] | Maximum [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 7 years |
Trade Name [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 1 year |
Customer Backlog [Member] | Minimum [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 9 months |
Customer Backlog [Member] | Maximum [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 12 months |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets, Estimated Amortization Expense (Details) $ in Thousands | Mar. 31, 2016USD ($) |
Estimated Amortization Expense [Abstract] | |
2016 remaining | $ 9,497 |
2,017 | 10,320 |
2,018 | 9,358 |
2,019 | 8,439 |
2,020 | 5,545 |
Thereafter | $ 7,547 |
Line of Credit (Details)
Line of Credit (Details) - Revolving Credit Facility [Member] $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($)LetterOfCredit | |
Credit Agreement [Member] | |
Line of Credit [Abstract] | |
Allowable amount of letters of credit for issuance | $ 10 |
Number of letters of credit outstanding | LetterOfCredit | 0 |
Letters of credit outstanding | $ 0 |
Maturity date | Jul. 31, 2017 |
Unused portion of line of credit | $ 69 |
Annual commitment fee percentage on unused capacity | 0.20% |
Ratio of EBITDA plus stock compensation and minus income taxes paid and capital expenditures to interest expense and scheduled payments due for borrowings | 2 |
Ratio of current maturities of long-term debt to EBITDA plus stock compensation and minus income taxes paid and capital expenditures | 2.75 |
Credit Agreement [Member] | Prime Rate [Member] | |
Line of Credit [Abstract] | |
Interest rate at end of period | 3.50% |
Credit Agreement [Member] | Prime Rate [Member] | Minimum [Member] | |
Line of Credit [Abstract] | |
Margin interest rate percentage | 2.00% |
Credit Agreement [Member] | Prime Rate [Member] | Maximum [Member] | |
Line of Credit [Abstract] | |
Margin interest rate percentage | 2.50% |
Credit Agreement [Member] | LIBOR [Member] | |
Line of Credit [Abstract] | |
Interest rate at end of period | 0.44% |
Term of variable rate | 1 month |
Credit Agreement [Member] | LIBOR [Member] | Minimum [Member] | |
Line of Credit [Abstract] | |
Margin interest rate percentage | 0.00% |
Credit Agreement [Member] | LIBOR [Member] | Maximum [Member] | |
Line of Credit [Abstract] | |
Margin interest rate percentage | 0.50% |
Second Amendment [Member] | |
Line of Credit [Abstract] | |
Maximum borrowing capacity increase | $ 35 |
Maximum borrowing capacity | 125 |
Additional commitment increase | 50 |
First Amendment [Member] | |
Line of Credit [Abstract] | |
Maximum borrowing capacity | 90 |
Additional commitment increase | $ 25 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Taxes [Abstract] | ||
Unrecognized tax benefits | $ 1.1 | |
Effective tax rate | 31.10% | 34.60% |
Net non-current deferred tax liability | $ 9.1 |
Financial Instruments, Gains (L
Financial Instruments, Gains (Losses) on Derivatives, Net (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Gains (Losses) on Derivatives, Net [Abstract] | ||
Gains (losses) on derivatives, net | $ (0.1) | $ (0.2) |
Financial Instruments, Notional
Financial Instruments, Notional Amounts (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Notional Amounts [Abstract] | ||
Notional amount | $ 5,893 | $ 3,215 |
Foreign Currency Forward [Member] | ||
Notional Amounts [Abstract] | ||
Notional amount | $ 5,893 | $ 3,215 |
Recent Accounting Pronoucemen54
Recent Accounting Pronoucements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Recent Accounting Pronouncements [Abstract] | ||
Provision for income taxes | $ 2,443 | $ 2,151 |
Effect of Early Adoption of ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting [Member] | ||
Recent Accounting Pronouncements [Abstract] | ||
Provision for income taxes | $ (300) |