Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 25, 2013 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Information Services Group Inc. | ' |
Entity Central Index Key | '0001371489 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 37,088,639 |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $23,577 | $23,499 |
Accounts receivable, net of allowance of $304 and $395, respectively | 46,846 | 40,920 |
Deferred tax asset | 378 | 1,213 |
Prepaid expense and other current assets | 2,454 | 1,783 |
Total current assets | 73,255 | 67,415 |
Restricted cash | 53 | 52 |
Furniture, fixtures and equipment, net | 3,376 | 3,074 |
Goodwill | 34,691 | 34,691 |
Intangible assets, net | 23,530 | 27,920 |
Other assets | 3,190 | 2,833 |
Total assets | 138,095 | 135,985 |
Current liabilities | ' | ' |
Accounts payable | 7,278 | 6,072 |
Current maturities of long-term debt | 3,375 | 10,000 |
Deferred revenue | 3,184 | 3,652 |
Accrued expenses | 16,876 | 13,209 |
Total current liabilities | 30,713 | 32,933 |
Long-term debt, net of current maturities | 55,887 | 53,063 |
Deferred tax liability | 3,018 | 5,732 |
Other liabilities | 5,813 | 5,948 |
Total liabilities | 95,431 | 97,676 |
Commitments and contingencies (Note 6) | ' | ' |
Stockholders' equity | ' | ' |
Preferred stock, $.001 par value; 10,000 shares authorized; none issued | ' | ' |
Common stock, $.001 par value, 100,000 shares authorized; 37,943 shares issued and 37,060 shares outstanding at September 30, 2013 and 36,675 shares issued and 36,399 outstanding at December 31, 2012 | 38 | 37 |
Additional paid-in-capital | 208,517 | 205,568 |
Treasury stock (883 and 276 common shares, respectively, at cost) | -2,357 | -324 |
Accumulated other comprehensive loss | -2,424 | -2,043 |
Accumulated deficit | -161,110 | -164,929 |
Total stockholders' equity | 42,664 | 38,309 |
Total liabilities and stockholders' equity | $138,095 | $135,985 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Per Share data, unless otherwise specified | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ' | ' |
Accounts receivable, allowances (in dollars) | $304 | $395 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 37,943 | 36,675 |
Common stock, shares outstanding | 37,060 | 36,399 |
Treasury stock, shares | 883 | 276 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ' | ' | ' | ' |
Revenues | $51,371 | $46,469 | $157,542 | $143,225 |
Operating expenses | ' | ' | ' | ' |
Direct costs and expenses for advisors | 30,733 | 27,876 | 92,467 | 84,672 |
Selling, general and administrative | 16,987 | 13,957 | 50,761 | 47,052 |
Depreciation and amortization | 1,854 | 2,224 | 5,600 | 6,637 |
Operating income | 1,797 | 2,412 | 8,714 | 4,864 |
Interest income | 3 | 11 | 15 | 37 |
Interest expense | -660 | -790 | -2,108 | -2,501 |
Gain on extinguishment of debt | ' | ' | 79 | ' |
Foreign currency transaction | -29 | -76 | -18 | -69 |
Income before taxes | 1,111 | 1,557 | 6,682 | 2,331 |
Income tax provision | 700 | 1,347 | 2,863 | 1,877 |
Net income | 411 | 210 | 3,819 | 454 |
Weighted average shares outstanding: | ' | ' | ' | ' |
Basic (in shares) | 36,781 | 36,159 | 36,723 | 36,210 |
Diluted (in shares) | 38,830 | 38,082 | 38,712 | 37,464 |
Earnings per share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.01 | $0.01 | $0.10 | $0.01 |
Diluted (in dollars per share) | $0.01 | $0.01 | $0.10 | $0.01 |
Comprehensive income: | ' | ' | ' | ' |
Net income | 411 | 210 | 3,819 | 454 |
Foreign currency translation, net of tax of $(360), $(236), $219 and $(79), respectively | 564 | 349 | -381 | -19 |
Comprehensive income | $975 | $559 | $3,438 | $435 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ' | ' | ' | ' |
Foreign currency translation, tax | ($360) | ($236) | $219 | ($79) |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows from operating activities | ' | ' |
Net income | $3,819,000 | $454,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation expense | 1,211,000 | 1,275,000 |
Amortization of intangibles | 4,389,000 | 5,363,000 |
Amortization of deferred financing costs | 176,000 | 399,000 |
Gain on extinguishment of debt | -79,000 | ' |
Tax benefit from stock issuances | -575,000 | ' |
Compensation costs related to stock-based awards | 3,018,000 | 2,191,000 |
Change in fair value of contingent consideration | 564,000 | -1,918,000 |
Change in allowance for bad debts | -46,000 | 383,000 |
Deferred tax benefit | -1,085,000 | -2,023,000 |
Loss on disposal of furniture, fixtures and equipment | 25,000 | 21,000 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ' | ' |
Accounts receivable | -6,813,000 | -2,544,000 |
Prepaid expense and other current assets | -875,000 | -1,644,000 |
Accounts payable | 1,205,000 | 1,229,000 |
Deferred revenue | -468,000 | -1,796,000 |
Accrued liabilities | 3,553,000 | -1,279,000 |
Net cash provided by operating activities | 8,019,000 | 111,000 |
Cash flows from investing activities | ' | ' |
Acquisitions, net of cash acquired | ' | -24,000 |
Restricted cash | -1,000 | 1,000 |
Purchase of furniture, fixtures and equipment | -1,580,000 | -1,496,000 |
Net cash used in investing activities | -1,581,000 | -1,519,000 |
Cash flows from financing activities | ' | ' |
Proceeds from debt | 55,000,000 | ' |
Principal payments on borrowings | -58,306,000 | -5,250,000 |
Payment of contingent consideration | ' | -2,000,000 |
Treasury shares repurchased | -2,954,000 | -1,216,000 |
Debt issuance costs | -754,000 | ' |
Tax benefit from stock issuances | 575,000 | ' |
Proceeds from issuance of ESPP shares | 279,000 | 248,000 |
Net cash used in financing activities | -6,160,000 | -8,218,000 |
Effect of exchange rate changes on cash | -200,000 | 144,000 |
Net increase (decrease) in cash and cash equivalents | 78,000 | -9,482,000 |
Cash and cash equivalents, beginning of period | 23,499,000 | 24,469,000 |
Cash and cash equivalents, end of period | 23,577,000 | 14,987,000 |
Noncash financing activities: | ' | ' |
Issuance of treasury stock for vested restricted stock awards and stock appreciation rights (SARs) | $646,000 | $657,000 |
DESCRIPTION_OF_ORGANIZATION_AN
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 9 Months Ended |
Sep. 30, 2013 | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ' |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ' |
NOTE 1—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |
Information Services Group, Inc. (the “Company”) was founded in 2006 with the strategic vision to become a high-growth, leading provider of information-based advisory services. In 2007, we consummated our initial public offering and completed the acquisition of TPI Advisory Services Americas, Inc. (“TPI”). | |
On January 4, 2011, the Company completed the acquisition of Compass. Compass is a premier independent global provider of business and information technology benchmarking, performance improvement, data and analytics services. It was founded in 1980 and headquartered in the United Kingdom and has 180 employees in 16 countries serving nearly 250 clients worldwide. Compass uses benchmarking to support fact-based decision making, analysis to optimize cost reduction, and tools and techniques to manage business performance. For accounting purposes, the acquisition of Compass has been treated as a business combination. | |
On February 10, 2011 the Company completed the acquisition of STA Consulting (Salvaggio, Teal & Associates) a premier independent information technology advisor serving the public sector. STA Consulting advises clients on information technology strategic planning and the acquisition and implementation of new Enterprise Resource Planning (ERP) and other enterprise administration and management systems. STA Consulting was founded in 1997 and is based in Austin, Texas with approximately 40 professionals experienced in information systems consulting in public sector areas such as government operations, IT and project management, contract negotiations, financial management, procurement, human resources and payroll. STA Consulting works with such states as Alaska, Kansas, Kentucky, Louisiana, Mississippi and West Virginia. For accounting purposes, the acquisition of STA Consulting has been treated as a business combination. | |
During the fourth quarter of 2011, we merged our individual corporate brands into one globally integrated business under the ISG brand. |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2013 | |
BASIS OF PRESENTATION | ' |
BASIS OF PRESENTATION | ' |
NOTE 2—BASIS OF PRESENTATION | |
The accompanying unaudited condensed consolidated financial statements as of September 30, 2013 and for the three and nine months ended September 30, 2013 and 2012, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and pursuant to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) have been made that are considered necessary for a fair presentation of the financial position of the Company as of September 30, 2013, the results of operations for the three and nine months ended September 30, 2013 and 2012 and the cash flows for the nine months ended September 30, 2013 and 2012. The condensed consolidated balance sheet as of December 31, 2012 has been derived from the Company’s audited consolidated financial statements. Operating results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. | |
Certain reclassifications have been made to prior years to conform to current period financial statement presentation with no effect on our previously reported consolidated financial position, results of operations, or cash flows. | |
Certain information and disclosures normally included in the notes to annual financial statements prepared in accordance with GAAP have been omitted from these interim financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the financial statements for the fiscal year ended December 31, 2012, which are included in the Company’s 2012 Form 10-K filed with the SEC. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2013 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results may differ from those estimates. The complexity of the estimation process and issues related to the assumptions, risks and uncertainties inherent in the application of the proportional performance method of accounting affect the amounts of revenues, expenses, unbilled receivables and deferred revenue. Numerous internal and external factors can affect estimates. Estimates are also used for but not limited to: allowance for doubtful accounts, useful lives of furniture, fixtures and equipment, depreciation expense, contingent consideration, fair value assumptions in analyzing goodwill and intangible asset impairments, income taxes and deferred tax asset valuation, and the valuation of stock based compensation. | |
Fair Value | |
The carrying value of the Company’s cash and cash equivalents, receivables, accounts payable, debt, other current liabilities, and accrued interest approximate fair value. | |
Fair value is the price that would be received upon a sale of an asset or paid upon a transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). Market participants can use market data or assumptions in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable. The use of unobservable inputs is intended to allow for fair value determinations in situations where there is little, if any, market activity for the asset or liability at the measurement date. Under the fair-value hierarchy: | |
· Level 1 measurements include unadjusted quoted market prices for identical assets or liabilities in an active market; | |
· Level 2 measurements include quoted market prices for identical assets or liabilities in an active market that have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets; and | |
· Level 3 measurements include those that are unobservable and of a highly subjective measure. | |
The Company held investments in cash equivalent money market funds of $20,000 at September 30, 2013 and December 31, 2012. The Company considers the fair value of cash equivalent money market funds to be classified within Level 1 of the fair value hierarchy. | |
The Company’s financial instruments include outstanding borrowings of $59.3 million at September 30, 2013 and $63.1 million at December 31, 2012, which are carried at amortized cost. The fair values of these instruments are classified within Level 3 of the fair value hierarchy. The fair value of the Company’s outstanding borrowings is approximately $59.1 million and $62.9 million at September 30, 2013 and December 31, 2012, respectively. The fair values of these instruments have been estimated using a discounted cash flow analysis based on the Company’s incremental borrowing rate for similar borrowing arrangements. The incremental borrowing rate used to discount future cash flows ranged from 3.68% to 3.77% at September 30, 2013. | |
The Company’s contingent consideration liability was $3.4 million and $2.8 million at September 30, 2013 and December 31, 2012, respectively. During the quarter ended September 30, 2013, the Company increased the contingent consideration liability by $0.1 million based on the latest estimates of future profit levels for the year ended December 31, 2013. The fair value measurement of this contingent consideration is classified within Level 3 of the fair value hierarchy and reflects the Company’s own assumptions in measuring fair values using the income approach. In developing these estimates, the Company considered certain performance projections, historical results, and industry trends. This amount was estimated through a valuation model that incorporated probability-weighted assumptions related to the achievement of these milestones and thus the likelihood of us making payments. These cash outflow projections have been discounted using a rate of 2.3%, which is the after-tax cost of debt financing for market participants. | |
Recently Issued Accounting Pronouncements | |
In January 2013, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance to address implementation issues regarding the scope of disclosures about offsetting assets and liabilities. The amendments only applies to certain derivatives accounted for in accordance with the Derivatives and Hedging topic including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements and securities borrowing and securities lending transactions that are either offset or subject to an enforceable master netting arrangement or similar agreement. The amendments are effective for reporting periods beginning on or after January 1, 2013. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows. | |
In February 2013, the FASB issued new accounting guidance that improves the reporting of reclassifications out of accumulated other comprehensive income. This new guidance requires entities to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income when applicable or to cross-reference the reclassifications with other disclosures that provide additional detail about the reclassifications made when the reclassifications are not made to net income. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2012. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows. | |
In March 2013, the FASB issued new accounting guidance clarifying the accounting for the release of cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2013. The Company does not anticipate that the adoption of this standard will have a significant impact on the Company’s financial position, results of operations or cash flows. | |
In July 2013, the FASB issued new accounting guidance requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. No new recurring disclosures are required. The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2013, and are to be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The Company does not anticipate that the adoption of this standard will have a significant impact on the Company’s financial position, results of operations or cash flows. |
NET_INCOME_PER_COMMON_SHARE
NET INCOME PER COMMON SHARE | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
NET INCOME PER COMMON SHARE | ' | |||||||||||||
NET INCOME PER COMMON SHARE | ' | |||||||||||||
NOTE 4—NET INCOME PER COMMON SHARE | ||||||||||||||
Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. The 250,000 restricted shares related to the acquisition of STA Consulting were excluded from basic and diluted earnings per share since the contingency has not been met as of the reporting period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would share in the net income of the Company. For the three and nine months ended September 30, 2013, the effect of 0.1 million stock appreciation rights (“SARs”) have not been considered in the diluted earnings per share, since the market price of the stock was less than the exercise price during the period in the computation. In addition, 0.03 million and 0.8 million restricted shares have not been considered in the diluted earnings per share calculation for the three and nine months ended September 30, 2013, respectively, as the effect would be anti-dilutive. For the three and nine months ended September 30, 2012, the effect of 5.0 million warrants and 0.3 million SARs have not been considered in the diluted earnings per share calculation, since the market price of the Company’s common stock was less than the exercise price during the period in the computation. In addition, 1.2 million restricted shares have not been considered in the diluted earnings per share calculation for the three and nine months ended September 30, 2012, as the effect would be anti-dilutive. | ||||||||||||||
The following tables set forth the computation of basic and diluted earnings per share: | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Basic: | ||||||||||||||
Net income | $ | 411 | $ | 210 | $ | 3,819 | $ | 454 | ||||||
Weighted average common shares | 36,781 | 36,159 | 36,723 | 36,210 | ||||||||||
Basic income per share | $ | 0.01 | $ | 0.01 | $ | 0.1 | $ | 0.01 | ||||||
Diluted: | ||||||||||||||
Net income | $ | 411 | $ | 210 | $ | 3,819 | $ | 454 | ||||||
Interest expense of convertible debt, net of tax | 19 | 8 | 93 | 35 | ||||||||||
Net income, as adjusted | $ | 430 | $ | 218 | $ | 3,912 | $ | 489 | ||||||
Basic weighted average common shares | 36,781 | 36,159 | 36,723 | 36,210 | ||||||||||
Potential common shares | 2,049 | 1,923 | 1,989 | 1,254 | ||||||||||
Diluted weighted average common shares | 38,830 | 38,082 | 38,712 | 37,464 | ||||||||||
Diluted income per share | $ | 0.01 | $ | 0.01 | $ | 0.1 | $ | 0.01 |
INCOME_TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2013 | |
INCOME TAXES | ' |
INCOME TAXES | ' |
NOTE 5—INCOME TAXES | |
The Company’s effective tax rate for the three and nine months ended September 30, 2013 was 63.0% and 42.8% based on pretax income of $1.1 million and $6.7 million, respectively. Our effective tax rate for the quarter is higher than the statutory rate primarily due to the tax impacts of our foreign operations. This compared to 86.5% and 80.5% for the three and nine months ended September 30, 2012, respectively. The effective tax rate was higher for the three and nine months ended September 30, 2012 primarily due to shortfalls associated with vested restricted stock units. | |
As of September 30, 2013, the Company had total unrecognized tax benefits of approximately $2.8 million of which approximately $2.8 million of this benefit would impact the Company’s effective tax rate if recognized. The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax provision in its condensed consolidated statement of operations. As of September 30, 2013, the Company’s accrual of interest and penalties amounted to $0.4 million. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2013 | |
COMMITMENTS AND CONTINGENCIES | ' |
COMMITMENTS AND CONTINGENCIES | ' |
NOTE 6—COMMITMENTS AND CONTINGENCIES | |
The Company is subject to contingencies which arise through the ordinary course of business. All liabilities of which management is aware are properly reflected in the financial statements at September 30, 2013 and December 31, 2012. | |
STA Consulting Contingent Consideration | |
As of September 30, 2013, we have recorded a liability of $3.4 million representing the estimated fair value of contingent consideration related to the acquisition of STA Consulting, of which $2.0 million is classified as noncurrent. During the quarter ended September 30, 2013, the Company increased the contingent consideration liability by $0.1 million based on the latest estimates of future profit levels for the year ended December 31, 2013. The Company expects to pay the remaining contingent liability in the first quarter of 2014, the first quarter of 2015 and the first quarter of 2016. No payments were made or anticipated in 2013 related to 2012 performance. |
SEGMENT_AND_GEOGRAPHICAL_INFOR
SEGMENT AND GEOGRAPHICAL INFORMATION | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
SEGMENT AND GEOGRAPHICAL INFORMATION | ' | |||||||||||||
SEGMENT AND GEOGRAPHICAL INFORMATION | ' | |||||||||||||
NOTE 7—SEGMENT AND GEOGRAPHICAL INFORMATION | ||||||||||||||
The Company operates as one reportable segment consisting primarily of fact-based sourcing advisory services. The Company operates principally in the Americas, Europe and Asia Pacific. | ||||||||||||||
Geographical revenue information for the segment is as follows: | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Revenues | ||||||||||||||
Americas | $ | 28,496 | $ | 26,842 | $ | 87,532 | $ | 77,927 | ||||||
Europe | 17,605 | 14,240 | 53,832 | 46,008 | ||||||||||
Asia Pacific | 5,270 | 5,387 | 16,178 | 19,290 | ||||||||||
$ | 51,371 | $ | 46,469 | $ | 157,542 | $ | 143,225 | |||||||
The segregation of revenues by geographic region is based upon the location of the legal entity performing the services. The Company does not measure or monitor gross profit or operating income by geography for the purposes of making operating decisions or allocating resources. |
STOCK_BASED_COMPENSATION
STOCK BASED COMPENSATION | 9 Months Ended | |||
Sep. 30, 2013 | ||||
STOCK BASED COMPENSATION | ' | |||
STOCK BASED COMPENSATION | ' | |||
NOTE 8—STOCK BASED COMPENSATION | ||||
Market-Based Awards | ||||
Stock-based compensation for the awards is recognized on a straight-line basis over the requisite service period, primarily four years. The market-based shares vest 100% upon the earlier of (1) the market condition is achieved or (2) the completion of four years of service. All compensation cost related to the market-based awards will be recognized if the requisite service period is fulfilled, even if the market condition is not achieved. | ||||
On July 1 and August 1, 2013, the Company granted 804,000 and 75,000 restricted share units (“RSU”) with grant prices of $1.90 and $2.72, respectively. These RSUs contain a market condition that should the closing price of ISG shares meet or exceed $3.50 for three consecutive trading days, 100% of the RSUs will vest immediately at that time. The Company assessed the fair value of the awards on the grant date utilizing a lattice model. The weighted-average grant date fair value per market-based share for these awards granted was computed using the Monte Carlo pricing model using the following assumptions: | ||||
Expected term of award | 4 years | |||
Risk-free interest rate | 1.1 | % | ||
Expected volatility | 50 | % | ||
The expected term of the awards was based on the requisite service period. The risk-free interest rate was based on the U.S Treasury Bill in effect at the time of grant for four years. The expected volatility was based on our historical volatility. | ||||
All RSUs under these grants have vested since the market condition was achieved during the quarter ended September 30, 2013. As a result, the Company recorded $1.7 million of stock compensation expense in selling, general and administrative in the accompanying consolidated statement of comprehensive income (loss). |
FINANCING_ARRANGEMENTS_AND_LON
FINANCING ARRANGEMENTS AND LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2013 | |
FINANCING ARRANGEMENTS AND LONG-TERM DEBT | ' |
FINANCING ARRANGEMENTS AND LONG-TERM DEBT | ' |
NOTE 9—FINANCING ARRANGEMENTS AND LONG-TERM DEBT | |
The Company’s current outstanding debt, may limit our ability to fund general corporate requirements and obtain additional financing, impact our flexibility in responding to business opportunities and competitive developments and increase our vulnerability to adverse economic and industry conditions. | |
On November 16, 2007, our wholly-owned subsidiary International Consulting Acquisition Corp. (“ICAC”) entered into a senior secured credit facility comprised of a $95.0 million term loan facility and a $10.0 million revolving credit facility (“the 2007 Credit Agreement”). On November 16, 2007, ICAC borrowed $95.0 million under the term loan facility to finance the purchase price for our acquisition of TPI and to pay transaction costs. In connection with entering into a new credit facility on May 3, 2013, the Company repaid in full all obligations and liabilities owing under, and terminated, the 2007 Credit Agreement, dated as of November 16, 2007. No early termination penalties were incurred by the Company in connection with the termination of the 2007 Credit Agreement. As a result of this transaction, the Company recognized a loss of $0.4 million in the second quarter of 2013 relating to the write down of unamortized debt financing costs relating to the 2007 Credit Agreement. This amount was recorded in Gain on Extinguishment of Debt in the accompanying consolidated statement of comprehensive income (loss). | |
On May 3, 2013 (the “Closing”), the Company entered into a five year senior secured credit facility (the “2013 Credit Agreement”) comprised of a $45.0 million term loan facility and a $25.0 million revolving credit facility. On May 3, 2013, the Company borrowed $55.0 million under the 2013 Credit Agreement to refinance our existing debt under the 2007 Credit Agreement and to pay transaction costs. The material terms of the senior secured credit facility under the 2013 Credit Agreement are as follows: | |
· Each of the term loan facility and revolving credit facility has a maturity date of five years from the Closing. | |
· The credit facility is secured by all of the equity interests owned by the Company, and its direct and indirect domestic subsidiaries and, subject to agreed exceptions, the Company’s direct and indirect “first-tier” foreign subsidiaries and a perfected first priority security interest in all of the Company’s and its direct and indirect domestic subsidiaries’ tangible and intangible assets. | |
· The Company’s direct and indirect existing and future wholly-owned domestic subsidiaries serve as guarantors to the Company’s obligations under the senior secured facility. | |
· At the Company’s option, the credit facility bears interest at a rate per annum equal to either (i) the “Base Rate” (which is the highest of (a) the rate publicly announced from time to time by the administrative agent as its “prime rate”, (b) the Federal Funds Rate plus 0.5% per annum and (c) the Eurodollar Rate, plus 1.0%), plus the applicable margin (as defined below) or (ii) Eurodollar Rate (adjusted for maximum reserves) as determined by the Administrative Agent, plus the applicable margin. The applicable margin is adjusted quarterly based upon the Company’s quarterly leverage ratio. Prior to the end of the first full quarter following the closing of the credit facility, the applicable margin shall be a percentage per annum equal to 2.5% for the term loans and the revolving loans maintained as Base Rate loans or 3.5% for the term loans and revolving loans maintained as Eurodollar loans. | |
· The Term Loan is repayable in eight consecutive quarterly installments of $843,750 each, commencing September 30, 2013, followed by eleven consecutive quarterly installments in the amount of $1,125,000 each, commencing September 30, 2015, and a final payment of the outstanding principal amount of the Term Loan on the Maturity Date. | |
· Mandatory repayments of term loans shall be required from (subject to agreed exceptions) (i) 100% of the proceeds from asset sales by the Company and its subsidiaries, (ii) 100% of the net proceeds from issuances of debt and equity by the Company and its subsidiaries, and (iii) 100% of the net proceeds from insurance recovery and condemnation events of the Company and its subsidiaries. | |
· The senior secured credit facility contains a number of covenants that, among other things, place restrictions on matters customarily restricted in senior secured credit facilities, including restrictions on indebtedness (including guarantee obligations), liens, fundamental changes, sales or disposition of property or assets, investments (including loans, advances, guarantees and acquisitions), transaction with affiliates, dividends and other payments in respect of capital stock, optional payments and modifications of other material debt instruments, negative pledges and agreements restricting subsidiary distributions and changes in line of business. In addition, the Company is required to comply with a total leverage ratio and fixed charge coverage ratio. As of September 30, 2013, we are in compliance with all covenants contained in the 2013 Credit Agreement. | |
· The senior secured credit facility contains customary events of default, including cross-default to other material agreements, judgment default and change of control. | |
We are required under the 2013 Credit Agreement to establish a fixed or maximum interest rate covering a notional amount of not less than 50% of the aggregate outstanding indebtedness for borrowed money (other than the total revolving outstanding) for a period of three years from the closing date of our 2013 Credit Agreement. Subsequent to May 3, 2013, we entered into an agreement to cap the interest rate at 5% on the LIBOR component of our borrowings under the term loan facility until May 3, 2016. This interest rate cap is not designated for hedging or speculative purposes. The expense related to this interest rate cap was nominal. | |
On January 4, 2011, as part of the consideration for the acquisition of Compass, we issued an aggregate of $6.3 million in convertible notes to Compass (the “Notes”). The Notes mature on January 4, 2018 and interest is payable on the outstanding principal amount, computed daily, at the rate of 3.875% per annum on January 31 of each calendar year and on the seventh anniversary of the date of the Notes. The Notes were subject to transfer restrictions until January 31, 2013. If the price of our common stock on the Nasdaq Global Market exceeds $4 per share for 60 consecutive trading days (the “Trigger Event”), the holder of the Notes may convert all (but not less than all) of the outstanding principal amount of the Notes into shares of our common stock at the rate of 1 share for every $4 in principal amount outstanding. After the Trigger Event, we may prepay all or any portion of the outstanding principal amount of the Notes by giving the holder 30 days written notice. | |
On April 26, 2013, the Company settled a portion of the Notes. The payee agreed to accept from the Company an amount equal to $650,000 as satisfaction in full of all indebtedness of $1.1 million owing by the Company to such payee. As a result of this transaction, the Company recognized a gain of $0.5 million in the second quarter of 2013 representing the difference between the fair value of the consideration issued in the settlement transaction and the carrying value of the amounts due to the payee. This amount was recorded in Gain on Extinguishment of Debt in the accompanying consolidated statement of comprehensive income (loss). | |
We anticipate that our current cash and the ongoing cash flows from our operations will be adequate to meet our working capital and capital expenditure needs for at least the next twelve months. The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if economic conditions change from those currently prevailing or from those now anticipated, or if other unexpected circumstances arise that may have a material effect on the cash flow or profitability of our business. If we require additional capital resources to grow our business, either internally or through acquisition, we may seek to sell additional equity securities or to secure debt financing. The sale of additional equity securities or certain forms of debt financing could result in additional dilution to our stockholders. We may not be able to obtain financing arrangements in amounts or on terms acceptable to us in the future. | |
As of September 30, 2013, the total principal outstanding under the term loan facility and revolving credit facility was $44.2 million and $10.0 million, respectively. Additional mandatory principal repayments totaling $0.8 million and $3.4 million will be due in 2013 and 2014, respectively. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results may differ from those estimates. The complexity of the estimation process and issues related to the assumptions, risks and uncertainties inherent in the application of the proportional performance method of accounting affect the amounts of revenues, expenses, unbilled receivables and deferred revenue. Numerous internal and external factors can affect estimates. Estimates are also used for but not limited to: allowance for doubtful accounts, useful lives of furniture, fixtures and equipment, depreciation expense, contingent consideration, fair value assumptions in analyzing goodwill and intangible asset impairments, income taxes and deferred tax asset valuation, and the valuation of stock based compensation. | |
Fair Value | ' |
Fair Value | |
The carrying value of the Company’s cash and cash equivalents, receivables, accounts payable, debt, other current liabilities, and accrued interest approximate fair value. | |
Fair value is the price that would be received upon a sale of an asset or paid upon a transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). Market participants can use market data or assumptions in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable. The use of unobservable inputs is intended to allow for fair value determinations in situations where there is little, if any, market activity for the asset or liability at the measurement date. Under the fair-value hierarchy: | |
· Level 1 measurements include unadjusted quoted market prices for identical assets or liabilities in an active market; | |
· Level 2 measurements include quoted market prices for identical assets or liabilities in an active market that have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets; and | |
· Level 3 measurements include those that are unobservable and of a highly subjective measure. | |
The Company held investments in cash equivalent money market funds of $20,000 at September 30, 2013 and December 31, 2012. The Company considers the fair value of cash equivalent money market funds to be classified within Level 1 of the fair value hierarchy. | |
The Company’s financial instruments include outstanding borrowings of $59.3 million at September 30, 2013 and $63.1 million at December 31, 2012, which are carried at amortized cost. The fair values of these instruments are classified within Level 3 of the fair value hierarchy. The fair value of the Company’s outstanding borrowings is approximately $59.1 million and $62.9 million at September 30, 2013 and December 31, 2012, respectively. The fair values of these instruments have been estimated using a discounted cash flow analysis based on the Company’s incremental borrowing rate for similar borrowing arrangements. The incremental borrowing rate used to discount future cash flows ranged from 3.68% to 3.77% at September 30, 2013. | |
The Company’s contingent consideration liability was $3.4 million and $2.8 million at September 30, 2013 and December 31, 2012, respectively. During the quarter ended September 30, 2013, the Company increased the contingent consideration liability by $0.1 million based on the latest estimates of future profit levels for the year ended December 31, 2013. The fair value measurement of this contingent consideration is classified within Level 3 of the fair value hierarchy and reflects the Company’s own assumptions in measuring fair values using the income approach. In developing these estimates, the Company considered certain performance projections, historical results, and industry trends. This amount was estimated through a valuation model that incorporated probability-weighted assumptions related to the achievement of these milestones and thus the likelihood of us making payments. These cash outflow projections have been discounted using a rate of 2.3%, which is the after-tax cost of debt financing for market participants. | |
Recently Issued Accounting Pronouncements | ' |
Recently Issued Accounting Pronouncements | |
In January 2013, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance to address implementation issues regarding the scope of disclosures about offsetting assets and liabilities. The amendments only applies to certain derivatives accounted for in accordance with the Derivatives and Hedging topic including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements and securities borrowing and securities lending transactions that are either offset or subject to an enforceable master netting arrangement or similar agreement. The amendments are effective for reporting periods beginning on or after January 1, 2013. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows. | |
In February 2013, the FASB issued new accounting guidance that improves the reporting of reclassifications out of accumulated other comprehensive income. This new guidance requires entities to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income when applicable or to cross-reference the reclassifications with other disclosures that provide additional detail about the reclassifications made when the reclassifications are not made to net income. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2012. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows. | |
In March 2013, the FASB issued new accounting guidance clarifying the accounting for the release of cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2013. The Company does not anticipate that the adoption of this standard will have a significant impact on the Company’s financial position, results of operations or cash flows. | |
In July 2013, the FASB issued new accounting guidance requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. No new recurring disclosures are required. The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2013, and are to be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The Company does not anticipate that the adoption of this standard will have a significant impact on the Company’s financial position, results of operations or cash flows. |
NET_INCOME_PER_COMMON_SHARE_Ta
NET INCOME PER COMMON SHARE (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
NET INCOME PER COMMON SHARE | ' | |||||||||||||
Schedule of computation of basic and diluted earnings per share | ' | |||||||||||||
Three Months | Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Basic: | ||||||||||||||
Net income | $ | 411 | $ | 210 | $ | 3,819 | $ | 454 | ||||||
Weighted average common shares | 36,781 | 36,159 | 36,723 | 36,210 | ||||||||||
Basic income per share | $ | 0.01 | $ | 0.01 | $ | 0.1 | $ | 0.01 | ||||||
Diluted: | ||||||||||||||
Net income | $ | 411 | $ | 210 | $ | 3,819 | $ | 454 | ||||||
Interest expense of convertible debt, net of tax | 19 | 8 | 93 | 35 | ||||||||||
Net income, as adjusted | $ | 430 | $ | 218 | $ | 3,912 | $ | 489 | ||||||
Basic weighted average common shares | 36,781 | 36,159 | 36,723 | 36,210 | ||||||||||
Potential common shares | 2,049 | 1,923 | 1,989 | 1,254 | ||||||||||
Diluted weighted average common shares | 38,830 | 38,082 | 38,712 | 37,464 | ||||||||||
Diluted income per share | $ | 0.01 | $ | 0.01 | $ | 0.1 | $ | 0.01 |
SEGMENT_AND_GEOGRAPHICAL_INFOR1
SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
SEGMENT AND GEOGRAPHICAL INFORMATION | ' | |||||||||||||
Schedule of geographical revenue information for the segment | ' | |||||||||||||
Three Months | Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Revenues | ||||||||||||||
Americas | $ | 28,496 | $ | 26,842 | $ | 87,532 | $ | 77,927 | ||||||
Europe | 17,605 | 14,240 | 53,832 | 46,008 | ||||||||||
Asia Pacific | 5,270 | 5,387 | 16,178 | 19,290 | ||||||||||
$ | 51,371 | $ | 46,469 | $ | 157,542 | $ | 143,225 |
STOCK_BASED_COMPENSATION_Table
STOCK BASED COMPENSATION (Tables) | 3 Months Ended | |||
Sep. 30, 2013 | ||||
STOCK BASED COMPENSATION | ' | |||
Schedule of assumptions used for computing weighted-average grant date fair value per market-based share of awards granted | ' | |||
Expected term of award | 4 years | |||
Risk-free interest rate | 1.1 | % | ||
Expected volatility | 50 | % |
DESCRIPTION_OF_ORGANIZATION_AN1
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) | Sep. 30, 2013 | Sep. 30, 2013 | Feb. 10, 2011 |
business | Compass | STA Consulting | |
employee | professional | ||
client | |||
country | |||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ' | ' | ' |
Number of employees | ' | 180 | ' |
Number of countries | ' | 16 | ' |
Number of clients worldwide | ' | 250 | ' |
Number of experienced professionals | ' | ' | 40 |
Number of globally integrated business | 1 | ' | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 9 Months Ended | 9 Months Ended | 3 Months Ended | |||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | |
Minimum | Maximum | Carrying Amount | Carrying Amount | Fair Value | Fair Value | Fair Value | Fair Value | |||||
Level 3 | Level 3 | Level 1 | Level 1 | Level 3 | Level 3 | |||||||
Money market funds | Money market funds | |||||||||||
Fair value of assets and liabilities measured on recurring and non-recurring basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash equivalents | $23,577,000 | $14,987,000 | $23,499,000 | $24,469,000 | ' | ' | ' | ' | $20,000 | $20,000 | ' | ' |
Outstanding borrowings | ' | ' | ' | ' | ' | ' | 59,300,000 | 63,100,000 | ' | ' | 59,100,000 | 62,900,000 |
Incremental borrowing rate used to discount future cash flows from financial instruments (as a percent) | ' | ' | ' | ' | 3.68% | 3.77% | ' | ' | ' | ' | ' | ' |
Contingent consideration liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,400,000 | 2,800,000 |
Increase in contingent consideration | ($564,000) | $1,918,000 | ' | ' | ' | ' | ' | ' | ' | ' | $100,000 | ' |
Rate used to discount future cash outflow projections related to contingent consideration (as a percent) | 2.30% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NET_INCOME_PER_COMMON_SHARE_De
NET INCOME PER COMMON SHARE (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Restricted shares related to the acquisition of STA Consulting | ' | ' | ' | ' |
Antidilutive securities | ' | ' | ' | ' |
Shares excluded from basic and diluted earnings per share since the contingency has not been met | 250,000 | ' | 250,000 | ' |
Warrants | ' | ' | ' | ' |
Antidilutive securities | ' | ' | ' | ' |
Securities considered antidilutive (in shares) | ' | 5,000,000 | ' | 5,000,000 |
SARs | ' | ' | ' | ' |
Antidilutive securities | ' | ' | ' | ' |
Securities considered antidilutive (in shares) | 100,000 | 300,000 | 100,000 | 300,000 |
Restricted shares | ' | ' | ' | ' |
Antidilutive securities | ' | ' | ' | ' |
Securities considered antidilutive (in shares) | 30,000 | 1,200,000 | 800,000 | 1,200,000 |
NET_INCOME_PER_COMMON_SHARE_De1
NET INCOME PER COMMON SHARE (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Basic: | ' | ' | ' | ' |
Net income | $411 | $210 | $3,819 | $454 |
Weighted average common shares | 36,781 | 36,159 | 36,723 | 36,210 |
Basic income per share (in dollars per share) | $0.01 | $0.01 | $0.10 | $0.01 |
Diluted: | ' | ' | ' | ' |
Net income | 411 | 210 | 3,819 | 454 |
Interest expense of convertible debt, net of tax | 19 | 8 | 93 | 35 |
Net income, as adjusted | $430 | $218 | $3,912 | $489 |
Basic weighted average common shares | 36,781 | 36,159 | 36,723 | 36,210 |
Potential common shares | 2,049 | 1,923 | 1,989 | 1,254 |
Diluted weighted average common shares | 38,830 | 38,082 | 38,712 | 37,464 |
Diluted income per share (in dollars per share) | $0.01 | $0.01 | $0.10 | $0.01 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
INCOME TAXES | ' | ' | ' | ' |
Effective tax rate (as a percent) | 63.00% | 86.50% | 42.80% | 80.50% |
Pretax income (loss) | $1,111,000 | $1,557,000 | $6,682,000 | $2,331,000 |
Unrecognized tax benefits | 2,800,000 | ' | 2,800,000 | ' |
Unrecognized tax benefits that would impact the company's effective tax rate | 2,800,000 | ' | 2,800,000 | ' |
Interest and penalties accrued | $400,000 | ' | $400,000 | ' |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 9 Months Ended | 3 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | |
STA Consulting | |||
Contingent Consideration | ' | ' | ' |
Contingent consideration liability | ' | ' | $3,400,000 |
Contingent consideration classified as noncurrent | ' | ' | 2,000,000 |
Increase in contingent consideration | -564,000 | 1,918,000 | 100,000 |
Amount paid for contingent consideration | ' | ' | 0 |
Amount expected to be paid in 2013 related to 2012 performance | ' | ' | $0 |
SEGMENT_AND_GEOGRAPHICAL_INFOR2
SEGMENT AND GEOGRAPHICAL INFORMATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
segment | ||||
SEGMENT AND GEOGRAPHICAL INFORMATION | ' | ' | ' | ' |
Number of reportable segments | ' | ' | 1 | ' |
SEGMENT AND GEOGRAPHICAL INFORMATION | ' | ' | ' | ' |
Revenues | $51,371 | $46,469 | $157,542 | $143,225 |
Americas | ' | ' | ' | ' |
SEGMENT AND GEOGRAPHICAL INFORMATION | ' | ' | ' | ' |
Revenues | 28,496 | 26,842 | 87,532 | 77,927 |
Europe | ' | ' | ' | ' |
SEGMENT AND GEOGRAPHICAL INFORMATION | ' | ' | ' | ' |
Revenues | 17,605 | 14,240 | 53,832 | 46,008 |
Asia Pacific | ' | ' | ' | ' |
SEGMENT AND GEOGRAPHICAL INFORMATION | ' | ' | ' | ' |
Revenues | $5,270 | $5,387 | $16,178 | $19,290 |
STOCK_BASED_COMPENSATION_Detai
STOCK BASED COMPENSATION (Details) (USD $) | 0 Months Ended | 9 Months Ended | |
In Millions, except Share data, unless otherwise specified | Aug. 01, 2013 | Jul. 02, 2013 | Sep. 30, 2013 |
STOCK BASED COMPENSATION | ' | ' | ' |
Award vesting percentage | ' | ' | 100.00% |
Award vesting period | ' | ' | '4 years |
Restricted share units (RSUs) | ' | ' | ' |
Stock based compensation | ' | ' | ' |
Number of shares granted (in shares) | 75,000 | 804,000 | ' |
Granted (in dollars per share) | $2.72 | $1.90 | ' |
Closing price of RSUs to be met for specific days based on the market condition for the immediate the vesting of awards | ' | ' | $3.50 |
Number of consecutive trading days for which the closing price of RSUs is to be met based on the market condition for the immediate vesting of awards | ' | ' | '3 days |
Percentage of awards vesting immediately based on the market condition | ' | ' | 100.00% |
Assumptions used for computing weighted-average grant date fair value per market-based share of awards granted | ' | ' | ' |
Risk-free interest rate (as a percent) | ' | ' | 1.10% |
Expected volatility (as a percent) | ' | ' | 50.00% |
Stock compensation expense | ' | ' | $1.70 |
FINANCING_ARRANGEMENTS_AND_LON1
FINANCING ARRANGEMENTS AND LONG-TERM DEBT (Details) (USD $) | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Apr. 26, 2013 | Jan. 04, 2011 | Jun. 30, 2013 | 3-May-13 | Jun. 30, 2013 | Nov. 16, 2007 | Nov. 16, 2007 | 3-May-13 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | 3-May-13 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | 3-May-13 | Sep. 30, 2013 | Sep. 30, 2013 |
Term loan facility | Revolving credit facility | Convertible notes | Convertible notes | Convertible notes | 2007 Credit Agreement | 2007 Credit Agreement | 2007 Credit Agreement | 2007 Credit Agreement | 2013 Credit Agreement | 2013 Credit Agreement | 2013 Credit Agreement | 2013 Credit Agreement | 2013 Credit Agreement | 2013 Credit Agreement | 2013 Credit Agreement | 2013 Credit Agreement | 2013 Credit Agreement | 2013 Credit Agreement | 2013 Credit Agreement | 2013 Credit Agreement | 2013 Credit Agreement | 2013 Credit Agreement | 2013 Credit Agreement | ||
Compass | Compass | Compass | Term loan facility | Revolving credit facility | Base Rate | Prime rate | Federal Funds Rate | Eurodollar Rate | Term loan facility | Term loan facility | Term loan facility | Term loan facility | Term loan facility | Term loan facility | Term loan facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | |||||||
International Consulting Acquisition Corp (ICAC) | International Consulting Acquisition Corp (ICAC) | Commencing September 30, 2013 | Commencing September 30, 2015 | Base Rate | Eurodollar Rate | LIBOR | Base Rate | Eurodollar Rate | |||||||||||||||||
item | item | ||||||||||||||||||||||||
FINANCING ARRANGEMENTS AND LONG-TERM DEBT | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity under senior secured credit facility | ' | ' | ' | ' | ' | ' | ' | ' | $95,000,000 | $10,000,000 | ' | ' | ' | ' | ' | $45,000,000 | ' | ' | ' | ' | ' | ' | $25,000,000 | ' | ' |
Outstanding borrowings | ' | 44,200,000 | 10,000,000 | ' | ' | ' | ' | ' | 95,000,000 | ' | 55,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Early termination penalties incurred | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of gain (loss) recognized | ' | ' | ' | ' | ' | 500,000 | ' | -400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of senior secured credit facility (in years) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | '5 years | ' | ' |
Interest rate basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Base Rate | 'prime rate | 'Federal Funds Rate | 'Eurodollar Rate | ' | ' | ' | ' | 'Base Rate loans | 'Eurodollar loans | 'LIBOR | ' | 'Base Rate loans | 'Eurodollar loans |
Applicable margin (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | 1.00% | ' | ' | ' | ' | 2.50% | 3.50% | 5.00% | ' | 2.50% | 3.50% |
Numbers of consecutive quarterly installments in which principal amount is repaid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 | 11 | ' | ' | ' | ' | ' | ' |
Principal repayments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 843,750 | 1,125,000 | ' | ' | ' | ' | ' | ' |
Percentage of proceeds from asset sales used for mandatory repayments of the debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of net proceeds from issuances of debt and equity used for mandatory repayments of the debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of net proceeds from insurance recovery and condemnation events used for mandatory repayments of the debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum notional amount required as a percentage of aggregate outstanding indebtedness other than revolving outstanding for establishment of fixed or maximum interest rate covering | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate covering period for specified percentage of notional amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of debt | ' | ' | ' | ' | 6,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Rate of interest (as a percent) | ' | ' | ' | ' | 3.88% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Trigger Event condition related to minimum market price of common stock on the Nasdaq Global market (in dollars per share) | ' | ' | ' | ' | $4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Trigger event condition related to number of consecutive trading days on which market price of common stock exceeds $4 per share on the Nasdaq Global Market | ' | ' | ' | ' | '60 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion rate | ' | ' | ' | ' | 0.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Written notice period after trigger event, that company need to serve for prepayment of all or portion of the outstanding principal amount of the Notes | ' | ' | ' | ' | '30 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount paid in satisfaction of full of all indebtedness owing by the Company under the Note | ' | ' | ' | 650,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount outstanding | ' | ' | ' | 1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional principal repayment due in 2013 | 800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional principal repayment due in 2014 | $3,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |