Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | MHH | |
Entity Registrant Name | Mastech Digital, Inc. | |
Entity Central Index Key | 1,437,226 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 5,461,712 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Revenues | $ 43,333 | $ 33,100 |
Cost of revenues | 33,072 | 26,891 |
Gross profit | 10,261 | 6,209 |
Selling, general and administrative expenses | 7,823 | 5,806 |
Income from operations | 2,438 | 403 |
Interest income (expense), net | (473) | (102) |
Other income (expense), net | (39) | 21 |
Income before income taxes | 1,926 | 322 |
Income tax expense | 546 | 121 |
Net income | $ 1,380 | $ 201 |
Earnings per share: | ||
Basic | $ 0.25 | $ 0.04 |
Diluted | $ 0.25 | $ 0.04 |
Weighted average common shares outstanding: | ||
Basic | 5,461 | 4,499 |
Diluted | 5,529 | 4,561 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net income | $ 1,380 | $ 201 |
Other comprehensive income: | ||
Foreign currency translation adjustments | (42) | |
Total pretax net unrealized gain | 80 | 11 |
Income tax expense | 31 | 5 |
Total other comprehensive income, net of taxes | 49 | 6 |
Total comprehensive income | 1,429 | 207 |
Interest Rate Swap Contracts [Member] | ||
Other comprehensive income: | ||
Net unrealized gain on derivatives | $ 122 | $ 11 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,267 | $ 2,478 |
Accounts receivable, net of allowance for uncollectible accounts of $408 in 2018 and $398 in 2017 | 24,784 | 22,876 |
Unbilled receivables | 8,777 | 7,786 |
Prepaid and other current assets | 868 | 1,533 |
Total current assets | 35,696 | 34,673 |
Equipment, enterprise software, and leasehold improvements, at cost: | ||
Equipment | 1,411 | 1,395 |
Enterprise software | 2,100 | 1,986 |
Leasehold improvements | 365 | 365 |
Total equipment, enterprise software, and leasehold improvements | 3,876 | 3,746 |
Less - accumulated depreciation and amortization | (1,902) | (1,847) |
Net equipment, enterprise software, and leasehold improvements | 1,974 | 1,899 |
Deferred income taxes | 475 | 468 |
Non-current deposits | 294 | 255 |
Goodwill | 35,844 | 35,844 |
Intangible assets, net | 24,772 | 25,465 |
Total assets | 99,055 | 98,604 |
Current liabilities: | ||
Current portion of long-term debt | 4,194 | 4,003 |
Current portion of contingent consideration liability | 6,125 | |
Accounts payable | 4,395 | 5,028 |
Accrued payroll and related costs | 7,129 | 8,969 |
Other accrued liabilities | 2,296 | 1,679 |
Deferred revenue | 191 | 430 |
Total current liabilities | 24,330 | 20,109 |
Long-term liabilities: | ||
Long-term debt, less current portion, net | 34,968 | 34,149 |
Contingent consideration liability, less current portion | 11,000 | 17,125 |
Long-term accrued income taxes | 68 | 68 |
Total liabilities | 70,366 | 71,451 |
Commitments and contingent liabilities (Note 5) | ||
Shareholders' equity: | ||
Preferred Stock, no par value; 20,000,000 shares authorized; none outstanding | ||
Common Stock, par value $.01; 125,000,000 shares authorized and 6,282,348 shares issued as of March 31, 2018 and 6,281,235 as of December 31, 2017 | 63 | 63 |
Additional paid-in-capital | 20,411 | 20,304 |
Retained earnings | 12,303 | 10,923 |
Accumulated other comprehensive income | 66 | 17 |
Treasury stock, at cost; 820,636 shares as of March 31, 2018 and as of December 31, 2017 | (4,154) | (4,154) |
Total shareholders' equity | 28,689 | 27,153 |
Total liabilities and shareholders' equity | $ 99,055 | $ 98,604 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for uncollectible accounts | $ 408 | $ 398 |
Preferred Stock, par value | ||
Preferred Stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred Stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 6,282,348 | 6,281,235 |
Treasury stock, shares | 820,636 | 820,636 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
OPERATING ACTIVITIES: | ||
Net income | $ 1,380 | $ 201 |
Adjustments to reconcile net income to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 748 | 252 |
Bad debt expense | 10 | |
Interest amortization of deferred financing costs | 22 | 9 |
Stock-based compensation expense | 105 | 107 |
Deferred income taxes, net | (7) | 8 |
Loss of disposition of fixed assets | 4 | |
Working capital items: | ||
Accounts receivable and unbilled receivables | (2,909) | (2,275) |
Prepaid and other current assets | 756 | (23) |
Accounts payable | (633) | 989 |
Accrued payroll and related costs | (1,840) | (2,365) |
Other accrued liabilities | 617 | (50) |
Deferred revenue | (239) | (111) |
Net cash flows (used in) operating activities | (1,990) | (3,254) |
INVESTING ACTIVITIES: | ||
Payment for non-current deposits | (39) | (6) |
Capital expenditures | (130) | (37) |
Net cash flows (used in) investing activities | (169) | (43) |
FINANCING ACTIVITIES: | ||
Borrowings on revolving credit facility, net | 1,941 | 3,794 |
(Repayments) on term loan facility | (953) | (450) |
Proceeds from the exercise of stock options | 2 | |
Net cash flows provided by financing activities | 990 | 3,344 |
Effect of exchange rate changes on cash and cash equivalents | (42) | |
Net change in cash and cash equivalents | (1,211) | 47 |
Cash and cash equivalents, beginning of period | 2,478 | 829 |
Cash and cash equivalents, end of period | $ 1,267 | $ 876 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation: Basis of Presentation References in this Quarterly Report on Form 10-Q Description of Business We are a provider of Digital Transformation IT Services. Our portfolio of offerings includes data management and analytics services; other digital transformation services such as Salesforce.com, SAP HANA, and Digital Learning services; and IT staffing services that span across digital and mainstream technologies. Reflective of our recent acquisition of the services division of Canada-based InfoTrelllis, Inc., we have added specialized capabilities in delivering data management and analytics services to our customers globally. This business offers project-based consulting services in the areas of Master Data Management, Enterprise Data Integration, Big Data and Analytics, and Digital Transformation, with such services delivered using on-site Our IT staffing business combines technical expertise with business process experience to deliver a broad range of staffing services in digital and mainstream technologies. Our digital technologies include data management, analytics, cloud, mobility, social and artificial intelligence. We work with businesses and institutions with significant IT spending and recurring staffing service needs. We also support smaller organizations with their “project focused” temporary IT staffing requirements. Accounting Principles The accompanying Financial Statements have been prepared by management in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments, consisting principally of normal recurring adjustments, considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Financial Statements and the accompanying notes. Actual results could differ from these estimates. These Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the year ended December 31, 2017, included in our Annual Report on Form 10-K Principles of Consolidation The Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. Critical Accounting Policies Please refer to Note 1 “Summary of Significant Accounting Policies” of the Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K Segment Reporting The Company has two reportable segments, in accordance with ASC Topic 280 “Disclosures About Segments of an Enterprise and Related Information”: Data and Analytics Services and IT Staffing Services. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | 2. Revenue from Contracts with Customers As of January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, The Company recognizes revenue on time-and-material Time-and-material out-of-pocket Out-of-pocket The Company recognizes revenue on fixed price contracts as services are rendered and uses a cost-based input method to measure progress. Determining a measure of progress requires management to make judgments that affect the timing of revenue recognized. Under the cost-based input method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. The company has determined that the cost-based input method provides a faithful depiction of the transfer of goods or services to the customer. Estimated losses are recognized immediately in the period in which current estimates indicate a loss. We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which may be refundable. We do not sell, lease or otherwise market computer software or hardware, and essentially 100 % of our revenue is derived from the sale of data and analytics, IT staffing and digital transformation services. We expense sales commissions in the same period in which revenues are realized. These costs are recorded within sales and marketing expenses. Our data and analytics services segment provides specialized capabilities in delivering data management and analytics services to customers globally. This business offers project-based consulting services in the areas of Master Data Management, Enterprise Data Integration, Data and Analytics and Digital Transformation, which can be delivered using onsite and offshore resources. Our IT staffing business combines technical expertise with business process experience to deliver a broad range of services in digital and mainstream technologies. Our digital technology stack includes data management and analytics, cloud, mobility, social and automation. Our mainstream technologies include business intelligence / data warehousing; web services; enterprise resource planning & customer resource management; and e-Business IT-spend The following table depicts the disaggregation of our revenues by contract type and operating segment: Three Months Ended March 31, 2018 2017 (Amounts in millions) Data and Analytics Services Segment Time-and-material $ 5.6 $ — Fixed-price Contracts 1.0 — Subtotal Data and Analytics Services $ 6.6 $ — IT Staffing Services Segment Time-and-material $ 36.7 $ 33.0 Fixed-price Contracts — 0.1 Subtotal IT Staffing Services $ 36.7 $ 33.1 Total Revenues $ 43.3 $ 33.1 For the three months ended March 31, 2018, the Company had one client (CGI = 12.1%) that exceeded 10% of total revenues. For the three months ended March 31, 2017, the Company had the same one client (CGI = 13.0%) that exceeded 10% of total revenues. The Company’s top ten clients represented approximately 45% and 47% of total revenues for the three months ended March 31, 2018 and 2017, respectively. The following table presents our revenue from external customers disaggregated by geography, based on the work location of our customers: Three Months Ended March 31, 2018 2017 (Amounts in millions) United States $ 42.0 $ 33.1 Canada 1.1 — India and other 0.2 — Total $ 43.3 $ 33.1 |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | 3. Business Combinations On July 7, 2017, Mastech Digital, Inc., through its wholly-owned subsidiaries Mastech InfoTrellis, Inc., Mastech InfoTrellis Digital, Ltd., Mastech Digital Data, Inc. and Mastech Digital Private Limited (collectively, the “Company Entities”), entered into two Asset Purchase Agreements and a Share Purchase Agreement (collectively, the “Purchase Agreements”) to acquire substantially all of the assets comprising the consulting services business in the areas of master data management, data integration and big data (the “Acquired Business”) of InfoTrellis Inc., InfoTrellis, Inc. and 2291496 Ontario Inc., including all outstanding shares of InfoTrellis India Private Limited (collectively, “InfoTrellis”). The aforementioned transaction was closed on July 13, 2017. Under the terms of the Purchase Agreements, the Company Entities paid at the closing of the acquisition $35.75 million in cash, less certain working capital adjustments which totaled $861,000. The Purchase Agreements also provided for contingent consideration of $19.25 million in deferred cash payments, with up to $8.25 million payable if the EBIT of the Acquired Business for the 12-month 12-month To fund the acquisition, the Company entered into a new credit agreement on July 13, 2017 with PNC Bank, National Association, as administrative agent, swing loan lender and issuing lender, PNC Capital Markets LLC, as sole lead arranger and sole book runner, and certain financial institutions party thereto as lenders. The Credit Agreement provides for a total aggregate commitment of $65.0 million, consisting of (i) a revolving credit facility in an aggregate principal amount not to exceed $27.5 million, subject to increases to an aggregate amount not to exceed $37.5 million upon satisfaction of certain conditions; (ii) a $30.5 million term loan facility; and (iii) a $7.0 million delayed draw term loan facility to be used exclusively toward contingent consideration payments. In addition, the Company entered into Securities Purchase Agreements with Ashok Trivedi and Sunil Wadhwani (collectively, the “Investors”) on July 7, 2017 pursuant to which the Company issued and sold an aggregate 857,144 shares (the “Shares”) of its common stock, par value $0.01 per share (the “Common Stock”), to the Investors on July 13, 2017 for $6.0 million in aggregate gross proceeds (the “Private Placement Transactions”). The Company used the proceeds from the Private Placement Transactions to fund a portion of the cash paid at the closing of the acquisition. On April 20, 2018, we entered into an amendment to the Credit Agreement. Refer to Note 16 “Subsequent Event” to our Condensed Consolidated Financial Statements included in Item 1 herein for further details regarding this amendment. The acquisition was accounted for using the acquisition method of accounting. The acquisition method of accounting requires that the assets acquired and liabilities assumed be measured at their fair value as of the closing date. The following table summarizes the fair value of consideration for the Acquired Business on the July 13, 2017 closing date: (in thousands) Amounts Cash purchase price at closing $ 35,750 Working capital adjustments (861 ) Estimated payout of contingent consideration (1) 17,125 Total Fair Value of Consideration $ 52,014 (1) Based on a valuation conducted by an independent third party, the fair value of contingent consideration at the closing date was determined to be $17.1 million. The cash purchase price at closing was paid with funds obtained from the following sources: (in thousands) Amounts Cash balances on hand $ 341 Sale of common stock in a private placement transactions 6,000 Term loan debt facility 30,500 Revolving line of credit 9,000 Payoff of previous credit facility (10,091 ) Cash paid at Closing $ 35,750 The preliminary allocation of the purchase price was based on estimates of the fair value of assets acquired and liabilities assumed as of July 13, 2017, as set forth below. The excess purchase price over the fair values of the net tangible assets and identifiable intangible assets was recorded as goodwill, which includes value associated with the assembled workforce. Goodwill is expected to be largely deductible for tax purposes. The fair value of net assets acquired is as follows: (in thousands) Amounts Current Assets $ 6,909 Fixed Assets and Other 215 Identifiable intangible assets: Client relationships 16,671 Covenant not-to-compete 761 Trade name 1,221 Technology 1,209 Total identifiable intangible assets 19,862 Goodwill 27,417 Current liabilities (2,389 ) Net Assets Acquired $ 52,014 The fair value of identifiable intangible assets has been estimated using the income approach through a discounted cash flow analysis. Specifically, the Company used the income approach through an excess earnings analysis to determine the fair value of client relationships. The value applied to the covenant not-to-compete The Company incurred $2.0 million of transaction costs related to the acquisition in 2017. No transaction costs were incurred for the three months ended March 31, 2018 and 2017. Included in the Condensed Consolidated Statement of Operations for the three months ended March 31, 2018 are revenues of $6.6 million and net income of $0.9 million applicable to the InfoTrellis operations acquired on July 13, 2017. The following reflects the Company’s unaudited pro forma results had the results of InfoTrellis been included for all periods presented: Three Months Ended 2018 2017 (Amounts in thousands) Revenue $ 43,333 $ 38,713 Net income $ 1,380 $ 854 Earnings per share-diluted $ 0.25 $ 0.16 The information above does not reflect all of the operating efficiencies or inefficiencies that may have resulted from the InfoTrellis acquisition in those periods prior to such acquisition. Therefore, the unaudited pro forma information above is not necessarily indicative of results that would have been achieved had the business been combined during all periods presented. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, net | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, net | 4. Goodwill and Other Intangible Assets, net Goodwill related to our June 15, 2015 acquisition of Hudson Global Resources Management’s U.S. IT staffing business (“Hudson IT”) totaled $8.4 million. Goodwill related to or July 13, 2017 acquisition of the services division of InfoTrellis totaled $27.4 million. The Company is amortizing the identifiable intangible assets on a straight-line basis over estimated average lives ranging from 3 to 12 years. Identifiable intangible assets were comprised of the following as of March 31, 2018 and December 31, 2017: March 31, 2018 (Amounts in thousands) Amortization Gross Carrying Accumulative Net Carrying IT staffing services: Client relationships 12 $ 7,999 $ 1,861 $ 6,138 Covenant-not-to-compete 5 319 178 141 Trade name 3 249 232 17 Data and analytics services: Client relationships 12 16,671 983 15,688 Covenant-not-to-compete 5 761 108 653 Trade name 5 1,221 173 1,048 Technology 7 1,209 122 1,087 Total Intangible Assets $ 28,429 $ 3,657 $ 24,772 December 31, 2017 (Amounts in thousands) Amortization Gross Carrying Accumulative Net Carrying IT staffing services: Client relationships 12 $ 7,999 $ 1,694 $ 6,305 Covenant-not-to-compete 5 319 162 157 Trade name 3 249 211 38 Data and analytics services: Client relationships 12 16,671 636 16,035 Covenant-not-to-compete 5 761 70 691 Trade name 5 1,221 112 1,109 Technology 7 1,209 79 1,130 Total Intangible Assets $ 28,429 $ 2,964 $ 25,465 Amortization expense for the three months ended March 31, 2018 and 2017 totaled $693,000 and $203,000, respectively and is included in selling, general and administrative expenses in the Condensed Consolidated Statement of Operations. The estimated aggregate amortization expense for intangible assets for the years ending December 31, 2018 through 2022 is as follows: Years Ended December 31, 2018 2019 2020 2021 2022 (Amounts in thousands) Amortization expense $ 2,727 $ 2,689 $ 2,654 $ 2,625 $ 2,443 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies Lease Commitments The Company rents certain office space and equipment under non-cancelable 10-K Contingencies In the ordinary course of our business, the Company is involved in a number of lawsuits and administrative proceedings. While uncertainties are inherent in the final outcome of these matters, the Company’s management believes, after consultation with legal counsel, that the disposition of these proceedings should not have a material adverse effect on our financial position, results of operations or cash flows. |
Employee Benefit Plan
Employee Benefit Plan | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | 6. Employee Benefit Plan The Company provides an Employee Retirement Savings Plan (the “Retirement Plan”) under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”), that covers substantially all U.S. based salaried employees. Concurrent with the acquisition of Hudson IT, the Company expanded employee eligibility under the Retirement Plan to include all U.S. based W-2 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 7. Stock-Based Compensation In 2008, the Company adopted a Stock Incentive Plan (the “Plan”) which, as amended, provides that up to 1,400,000 shares of the Company’s Common Stock shall be allocated for issuance to directors, officers and key personnel. Grants under the Plan can be made in the form of stock options, stock appreciation rights, performance shares or stock awards. During the three months ended March 31, 2018, the Company granted 12,690 restricted share units and 90,000 stock options at a strike price of $14.92 under the Plan. During the three months ended March 31, 2017, no grants were made under the Plan. As of March 31, 2018 and December 31, 2017, there were 29,000 shares and 132,000, respectively available for future grant under the Plan. Stock-based compensation expense for the three months ended March 31, 2018 and 2017 was $105,000 and $107,000, respectively, and is included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. During the three months ended March 31, 2018 and 2017, the Company issued 1,113 and 0 shares, respectively, related to the exercising of stock options. |
Credit Facility
Credit Facility | 3 Months Ended |
Mar. 31, 2018 | |
Text Block [Abstract] | |
Credit Facility | 8. Credit Facility On July 13, 2017, the Company entered into a Credit Agreement (the “Credit Agreement”) with PNC Bank, as administrative agent, swing loan lender and issuing lender, PNC Capital Markets LLC, as sole lead arranger and sole book-runner, and certain financial institution parties thereto as lenders (the “Lenders”). The Credit Agreement provides for a total aggregate commitment of $65 million, consisting of (i) a revolving credit facility (the “Revolver”) in an aggregate principal amount not to exceed $27.5 million (subject to increase by up to an additional $10 million upon satisfaction of certain conditions); (ii) a $30.5 million term loan facility (the “Term Loan”); and a (iii) $7.0 million delayed draw term loan facility (the “Delayed Draw Term Loan”), as more fully described in Exhibit 10.1 to the Company’s Form 8-K, The Revolver expires in five years and includes swing loan and letter of credit sub-limits Amounts borrowed under the Term Loan are required to be repaid in consecutive quarterly installments commencing on October 1, 2017 through and including July 1, 2022 and on the maturity date of July 13, 2022. The principal amount of each quarterly installment payable on the Term Loan equals the product of $30.5 million, multiplied by (i) 3.125% for quarterly installments due on October 1, 2017 through and including July 1, 2018; (ii) 3.75% for quarterly installments payable on October 1, 2018 through and including July 1, 2021; and (iii) 5.00% for quarterly installments payable on October 1, 2021 through and including the maturity date, with the maturity date payment equal to the outstanding amount of the loan on that date. The Delayed Draw Term Loan may be used through the date of the final contingent consideration payment (referred to as the final “Deferred Amount Payment” in the Credit Agreement) on no more than two separate occasions in borrowing multiples of $1.0 million up to the lesser of contingent consideration earned or $7.0 million. Amounts borrowed under the Delayed Draw Term Loan will be payable in consecutive quarterly installments commencing on the first payment date after disbursement of such borrowings. The principal amount of each quarterly installment payable of each Delayed Draw Term Loan equals the product of the original balance of such Loan, multiplied by (i) 3.75% for quarterly installments due on October 1, 2018 through and including July 1, 2021; and (ii) 5.00% for quarterly installments payable on October 1, 2021 through and including the maturity date, with the maturity date payment equal to the outstanding amount of the loan on that date. Borrowings under the revolver and the term loans, at the Company’s election, bear interest at either (a) the higher of PNC’s prime rate or the federal funds rate plus 0.50%, plus an applicable margin determined based upon the Company’s senior leverage ratio or (b) an adjusted London Interbank Offered Rate (“LIBOR”), plus an applicable margin determined based upon the Company’s senior leverage ratio. The applicable margin on the base rate is between 0.50% and 1.25% on revolver borrowings and between 1.75% and 2.50% on term loans. The applicable margin on the adjusted LIBOR is between 1.50% and 2.25% on revolver borrowings and between 2.75% and 3.50% on term loans. A 20 to 30 basis point per annum commitment fee on the unused portion of the revolver facility and the delayed draw term loan is charged and due monthly in arrears. The applicable commitment fee is determined based upon the Company’s senior leverage ratio. The Company pledged substantially all of its assets in support of the Credit Agreement. The credit agreement contains standard financial covenants, including, but not limited to, covenants related to the Company’s senior leverage ratio and fixed charge ratio (as defined under the credit agreement) and limitations on liens, indebtedness, guarantees, contingent liabilities, loans and investments, distributions, leases, asset sales, stock repurchases and mergers and acquisitions. As of March 31, 2018, the Company was in compliance with all provisions under the facility. In connection with securing the commitments under the Credit Agreement, the Company paid a commitment fee and incurred deferred financing costs totaling $435,000, which were capitalized and are being amortized as interest expense over the life of the facility. Debt financing costs of $373,000 and $395,000 (net of amortization) as of March 31, 2018 and December 31, 2017, respectively, are presented as reductions in long-term debt in the Company’s Condensed Consolidated Balance Sheets. As of March 31, 2018 and December 31, 2017, the Company’s outstanding borrowings under the Revolver totaled $11.0 million and $9.0 million, respectively; and unused borrowing capacity available was approximately $13.5 million and $13 million, respectively. The Company’s outstanding borrowings under the term loan were $28.6 million and $29.5 million at March 31, 2018 and December 31, 2017, respectively. The Company believes the eligible borrowing base on the revolver will not fall below current outstanding borrowings for a period of time exceeding one year and has classified the $11.0 million net outstanding debt balance at March 31, 2018, as long-term. On April 20, 2018, we entered into an amendment to the Credit Agreement. Refer to Note 16 “Subsequent Event” to our Condensed Consolidated Financial Statements included in Item 1 herein for further details regarding this amendment. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes The components of income before income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three months ended March 31, 2018 and, 2017: Three Months Ended 2018 2017 (Amounts in thousands) Income before income taxes: Domestic $ 1,297 $ 197 Foreign 629 125 Income before income taxes $ 1,926 $ 322 The Company has foreign subsidiaries in Canada and India, both of which generate revenues from foreign clients. Additionally, the Company has foreign subsidiaries in Canada and India which provide services to its U.S. operations. Accordingly, the Company allocates a portion of its income to these subsidiaries based on a “transfer pricing” model and reports such income as foreign in the above table. The provision for income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three months ended March 31, 2018 and 2017: Three Months Ended 2018 2017 (Amounts in thousands) Current provision: Federal $ 324 $ 67 State 90 8 Foreign 171 42 Total current provision 585 117 Deferred provision (benefit): Federal (33 ) 3 State (9 ) 1 Foreign 3 — Total deferred provision (benefit) (39 ) 4 Total provision for income taxes $ 546 $ 121 The Tax Cut and Jobs Act of 2017 (the “Tax Act”) enacted on December 22, 2017 introduced significant changes to U.S. income tax law. Effective 2018, the Tax Act reduced the U.S. statutory tax rate from 34% to 21% and created new taxes on certain foreign-sourced We have not fully completed our accounting for the income tax effects of the Tax Act. As discussed in the SEC Staff Accounting Bulletin No. 118, the accounting for the Tax Act should be completed within one year from the Tax Act enactment. During the three months ended March 31, 2018, we have made no adjustments to the provisional amounts recorded at December 31, 2017. Any adjustments to the provisional amounts recorded at December 31, 2017 will be reflected upon the completion of our accounting for the Tax Act. The reconciliation of income taxes computed using the statutory U.S. income tax rate and the provision for income taxes for the three months ended March 31, 2018 and 2017 were as follows (amounts in thousands): Three Months Ended Three Months Ended Income taxes computed at the federal statutory rate $ 404 21.0 % $ 109 34.0 % State income taxes, net of federal tax benefit 81 4.2 9 2.8 Excess tax benefits from stock options/restricted shares (2 ) (0.1 ) — — Difference in income tax rate on foreign earnings/other 63 3.3 3 0.8 $ 546 28.4 % $ 121 37.6 % A reconciliation of the beginning and ending amounts of unrecognized tax benefits related to uncertain tax positions, including interest and penalties, are as follows: (Amounts in thousands) Three Months Ended Balance as of December 31, 2017 $ 95 Additions related to current period — Additions related to prior periods — Reductions related to prior periods — Balance as of March 31, 2018 $ 95 Although it is difficult to anticipate the final outcome of these uncertain tax positions, the Company believes that the total amount of unrecognized tax benefits could be reduced by approximately $40,000 during the next twelve months due to the expiration of the statutes of limitation. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | 10. Derivative Instruments and Hedging Activities Interest Rate Risk Management Concurrent with the Company’s July 13, 2017 borrowings under its new credit facility, the Company entered into a 44–month interest-rate swap to convert the debt’s variable interest rate to a fixed rate of interest. Under the swap contracts, the Company pays interest at a fixed rate of 1.99% and receives interest at a variable rate equal to the daily U.S. LIBOR on a notional amount of $15,000,000. These swap contracts have been designated as cash flow hedging instruments and qualified as effective hedges at inception under ASC Topic 815, “Derivatives and Hedging”. These contracts are recognized on the balance sheet at fair value. The effective portion of the changes in fair value on these instruments is recorded in other comprehensive income (loss) and is reclassified into the Condensed Consolidated Statements of Operations as interest expense in the same period in which the underlying hedge transaction affects earnings. Changes in the fair value of interest-rate swap contracts deemed ineffective are recognized in the Consolidated Statements of Operations as interest expense. Prior to July 13, 2017, the Company had outstanding interest-rate swap contracts related to term loan borrowings under the Company’s previous credit agreement. The fair value of the interest-rate swap contracts at March 31, 2018 and December 31, 2017 was an asset of $131,000 and $9,000, respectively, and is reflected in the Condensed Consolidated Balance Sheets as other current assets. The effect of derivative instruments on the Condensed Consolidated Statements of Operations and Comprehensive Income are as follows (in thousands): Derivatives in ASC Topic 815 Cash Flow Hedging Relationships Amount of Location of Amount of Location of Amount of (Effective Portion) (Effective Portion) (Effective Portion) (Ineffective Portion/Amounts excluded from effectiveness testing) For the Three Months Ended March 31, 2018: Interest-Rate Swap Contract $ 122 Interest Expense $ (14 ) Interest Expense $ — Derivatives in ASC Topic 815 Cash Flow Hedging Relationships Amount of Location of Amount of Location of Amount of (Effective Portion) (Effective Portion) (Effective Portion) (Ineffective Portion/Amounts excluded from effectiveness testing) For the Three Months Ended March 31, 2017: Interest-Rate Swap Contract $ 11 Interest Expense $ (6 ) Interest Expense $ — Information on the location and amounts of derivative fair values in the Condensed Consolidated Balance Sheets (in thousands): March 31, 2018 December 31, 2017 Derivative Instruments Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest-Rate Swap Contracts Other Current Assets $ 131 Other Current Assets $ 9 The estimated amount of pretax (losses) as of March 31, 2018 that is expected to be reclassified from other comprehensive income (loss) into earnings within the next 12 months is approximately ($50,000). |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 11. Fair Value Measurements The Company has adopted the provisions of ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), related to certain financial and nonfinancial assets and liabilities. ASC 820 establishes the authoritative definition of fair value; sets out a framework for measuring fair value; and expands the required disclosures about fair value measurements. The valuation techniques required by ASC 820 are based on observable and unobservable inputs using the following three-tier hierarchy: • Level 1 - Inputs are observable quoted prices (unadjusted) in active markets for identical assets and liabilities. • Level 2 - Inputs are observable, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are directly or indirectly observable in the marketplace. • Level 3 - Inputs are unobservable that are supported by little or no market activity. At March 31, 2018 and December 31, 2017, the Company carried the following financial assets (liabilities) at fair value measured on a recurring basis (in thousands): Fair Value as of March 31, 2018 (Amounts in thousands) Level 1 Level 2 Level 3 Total Interest-Rate Swap Contracts $ — $ 131 $ — $ 131 Contingent consideration liability $ — $ — $ (17,125 ) $ (17,125 ) Fair Value as of December 31, 2017 (Amounts in thousands) Level 1 Level 2 Level 3 Total Interest-Rate Swap Contracts $ — $ 9 $ — $ 9 Contingent consideration liability $ — $ — $ (17,125 ) $ (17,125 ) The fair value of interest rate swap contracts are based on quoted prices for similar instruments from a commercial bank, and therefore, the fair value measurement is considered to be within level 2. The fair value of the contingent consideration liability was estimated by utilizing a probability weighted simulation model to determine the fair value of contingent consideration, and therefore, the fair value measurement is considered to be within level 3. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Shareholders' Equity | 12. Shareholders’ Equity The Company purchases shares to satisfy employee tax obligations related to its Stock Incentive Plan. During the three months ended March 31, 2018 and 2017, no purchases were made to satisfy employee tax obligations related to the vesting of restricted stock. |
Earning Per Share
Earning Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earning Per Share | 13. Earning Per Share The computation of basic earnings per share is based on the Company’s net income divided by the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if outstanding stock options were exercised. The dilutive effect of stock options was calculated using the treasury stock method. For the three months ended March 31, 2018, there were 90,000 anti-dilutive stock options excluded from the computation of diluted earnings per share. For the three months ended March 31, 2017, there were 250,000 anti-dilutive stock options excluded from the computation of diluted earnings per share. |
Business Segments and Geographi
Business Segments and Geographic Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Business Segments and Geographic Information | 14. Business Segments and Geographic Information Our reporting segments are: 1) Data and Analytics Services; and 2) IT Staffing Services. The data and analytics services segment was acquired through the July 13, 2017 acquisition of the services division of Canada-based on-site The IT staffing services segment offers staffing services in digital and mainstream technologies; digital transformation services focused on providing CRM on the cloud through Salesforce.com; driving IT efficiencies through SAP HANA; and using digital methods to enhance organizational learning. These services are marketed using a common sales force and delivered via our global recruitment center. While the vast majority of our assignments are based on time and materials, we do have the capabilities to deliver our digital transformation services on a fixed price basis. Three Months Ended March 31, 2018 2017 (Amounts in thousands) Revenues: Data and analytics services $ 6,572 $ — IT staffing services 36,761 33,100 Total revenues $ 43,333 $ 33,100 Gross Margin %: Data and analytics services 44.3 % — IT staffing services 20.0 % 18.8 % Total gross margin % 23.7 % 18.8 % Segment operating income: Data and analytics services $ 1,775 $ — IT staffing services 1,356 606 Subtotal 3,131 606 Amortization of acquired intangible assets (693 ) (203 ) Interest expenses and other, net (512 ) (81 ) Income before income taxes $ 1,926 $ 322 Below is a reconciliation of segment total assets to consolidated total assets: At March 31, 2018 2017 (Amounts in thousands) Total assets: Data and analytics services $ 53,174 $ — IT staffing services 45,881 41,575 Total assets $ 99,055 $ 41,575 Below is geographic information related to our revenues from external customers: Three Months Ended March 31, 2018 2017 (Amounts in thousands) United States $ 42,017 $ 33,100 Canada 1,085 — India and Other 231 — Total revenues $ 43,333 $ 33,100 |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Standards | 15. Recently Issued Accounting Standards Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, 2016-08, 2016-10, 2016-12 2016-20 2014-09 non-cash In January 2016, the FASB issued ASU 2016-01, 825-10) In August 2016, the FASB issued ASU 2016-15 In May 2017, the FASB issued ASU 2017-09, In March 2018, the FASB issued ASU 2018-05, one-time, non-cash re-measurement one-time Recent Accounting Pronouncements not yet adopted In February 2016, the FASB issued ASU No. 2016-02, 2016-02 2016-02 right-of-use 2016-02 2016-02 In January 2017, the FASB issued ASU 2017-04, 2017-04 2017-04 In August 2017, the FASB issued ASU 2017-12, In February 2018, the FASB issued ASU 2018-02, A variety of proposed or otherwise potential accounting standards are currently under consideration by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, management has not yet determined the effect, if any, that the implementation of such proposed standards would have on the Company’s consolidated financial statements. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | 16. Subsequent Event On April 20, 2018, we entered into an amendment to our Credit Agreement dated as of July 13, 2017. This amendment: (i) reduces the aggregate commitment amount of the revolving credit facility from $27.5 million to $22.5 million, which amount is subject to increase to an aggregate commitment amount not exceeding $32.5 million upon satisfaction of certain conditions; (ii) increases the aggregate commitment amount of the swing loan subfacility under the revolving credit facility from $3.0 million to $5.0 million; and (iii) amends the financial covenant in the Credit Agreement related to the Company’s leverage ratio (as defined in the Credit Agreement) by increasing the maximum permitted leverage ratio for each of the fiscal quarters ending on or prior to September 30, 2019. Our desired results of entering into this amendment were to increase our financial flexibility; lower our unused line fees and improve the mechanics of how we manage our cash balances. On April 25, 2018, the Company filed with the Securities and Exchange Commission, a current report on Form 8-K |
Description of Business and B23
Description of Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation References in this Quarterly Report on Form 10-Q |
Description of Business | Description of Business We are a provider of Digital Transformation IT Services. Our portfolio of offerings includes data management and analytics services; other digital transformation services such as Salesforce.com, SAP HANA, and Digital Learning services; and IT staffing services that span across digital and mainstream technologies. Reflective of our recent acquisition of the services division of Canada-based InfoTrelllis, Inc., we have added specialized capabilities in delivering data management and analytics services to our customers globally. This business offers project-based consulting services in the areas of Master Data Management, Enterprise Data Integration, Big Data and Analytics, and Digital Transformation, with such services delivered using on-site Our IT staffing business combines technical expertise with business process experience to deliver a broad range of staffing services in digital and mainstream technologies. Our digital technologies include data management, analytics, cloud, mobility, social and artificial intelligence. We work with businesses and institutions with significant IT spending and recurring staffing service needs. We also support smaller organizations with their “project focused” temporary IT staffing requirements. |
Accounting Principles | Accounting Principles The accompanying Financial Statements have been prepared by management in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments, consisting principally of normal recurring adjustments, considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Financial Statements and the accompanying notes. Actual results could differ from these estimates. These Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the year ended December 31, 2017, included in our Annual Report on Form 10-K |
Principles of Consolidation | Principles of Consolidation The Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. |
Critical Accounting Policies | Critical Accounting Policies Please refer to Note 1 “Summary of Significant Accounting Policies” of the Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K |
Segment Reporting | Segment Reporting The Company has two reportable segments, in accordance with ASC Topic 280 “Disclosures About Segments of an Enterprise and Related Information”: Data and Analytics Services and IT Staffing Services. |
Revenue from Contracts with C24
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Revenue from External Customers | Below is geographic information related to our revenues from external customers: Three Months Ended March 31, 2018 2017 (Amounts in thousands) United States $ 42,017 $ 33,100 Canada 1,085 — India and Other 231 — Total revenues $ 43,333 $ 33,100 |
Accounting Standards Update 2014-09 [Member] | |
Summary of Disaggregation of Our Revenues by Contract Type and Operating Segment | The following table depicts the disaggregation of our revenues by contract type and operating segment: Three Months Ended March 31, 2018 2017 (Amounts in millions) Data and Analytics Services Segment Time-and-material $ 5.6 $ — Fixed-price Contracts 1.0 — Subtotal Data and Analytics Services $ 6.6 $ — IT Staffing Services Segment Time-and-material $ 36.7 $ 33.0 Fixed-price Contracts — 0.1 Subtotal IT Staffing Services $ 36.7 $ 33.1 Total Revenues $ 43.3 $ 33.1 |
Summary of Revenue from External Customers | The following table presents our revenue from external customers disaggregated by geography, based on the work location of our customers: Three Months Ended March 31, 2018 2017 (Amounts in millions) United States $ 42.0 $ 33.1 Canada 1.1 — India and other 0.2 — Total $ 43.3 $ 33.1 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Summary of Fair Value of Consideration for Acquired Business | The following table summarizes the fair value of consideration for the Acquired Business on the July 13, 2017 closing date: (in thousands) Amounts Cash purchase price at closing $ 35,750 Working capital adjustments (861 ) Estimated payout of contingent consideration (1) 17,125 Total Fair Value of Consideration $ 52,014 (1) Based on a valuation conducted by an independent third party, the fair value of contingent consideration at the closing date was determined to be $17.1 million. |
Schedule of Sources of Funds in Business Acquisition | The cash purchase price at closing was paid with funds obtained from the following sources: (in thousands) Amounts Cash balances on hand $ 341 Sale of common stock in a private placement transactions 6,000 Term loan debt facility 30,500 Revolving line of credit 9,000 Payoff of previous credit facility (10,091 ) Cash paid at Closing $ 35,750 |
Schedule of Fair Value of Net Assets Acquired | The fair value of net assets acquired is as follows: (in thousands) Amounts Current Assets $ 6,909 Fixed Assets and Other 215 Identifiable intangible assets: Client relationships 16,671 Covenant not-to-compete 761 Trade name 1,221 Technology 1,209 Total identifiable intangible assets 19,862 Goodwill 27,417 Current liabilities (2,389 ) Net Assets Acquired $ 52,014 |
Summary of Unaudited Pro Forma Results | The following reflects the Company’s unaudited pro forma results had the results of InfoTrellis been included for all periods presented: Three Months Ended 2018 2017 (Amounts in thousands) Revenue $ 43,333 $ 38,713 Net income $ 1,380 $ 854 Earnings per share-diluted $ 0.25 $ 0.16 |
Goodwill and Other Intangible26
Goodwill and Other Intangible Assets, net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Components of Identifiable Intangible assets | Identifiable intangible assets were comprised of the following as of March 31, 2018 and December 31, 2017: March 31, 2018 (Amounts in thousands) Amortization Gross Carrying Accumulative Net Carrying IT staffing services: Client relationships 12 $ 7,999 $ 1,861 $ 6,138 Covenant-not-to-compete 5 319 178 141 Trade name 3 249 232 17 Data and analytics services: Client relationships 12 16,671 983 15,688 Covenant-not-to-compete 5 761 108 653 Trade name 5 1,221 173 1,048 Technology 7 1,209 122 1,087 Total Intangible Assets $ 28,429 $ 3,657 $ 24,772 December 31, 2017 (Amounts in thousands) Amortization Gross Carrying Accumulative Net Carrying IT staffing services: Client relationships 12 $ 7,999 $ 1,694 $ 6,305 Covenant-not-to-compete 5 319 162 157 Trade name 3 249 211 38 Data and analytics services: Client relationships 12 16,671 636 16,035 Covenant-not-to-compete 5 761 70 691 Trade name 5 1,221 112 1,109 Technology 7 1,209 79 1,130 Total Intangible Assets $ 28,429 $ 2,964 $ 25,465 |
Schedule of Estimated Amortization Expense | The estimated aggregate amortization expense for intangible assets for the years ending December 31, 2018 through 2022 is as follows: Years Ended December 31, 2018 2019 2020 2021 2022 (Amounts in thousands) Amortization expense $ 2,727 $ 2,689 $ 2,654 $ 2,625 $ 2,443 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Components of Income Before Income Taxes | The components of income before income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three months ended March 31, 2018 and, 2017: Three Months Ended 2018 2017 (Amounts in thousands) Income before income taxes: Domestic $ 1,297 $ 197 Foreign 629 125 Income before income taxes $ 1,926 $ 322 |
Provision for Income Taxes | The provision for income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three months ended March 31, 2018 and 2017: Three Months Ended 2018 2017 (Amounts in thousands) Current provision: Federal $ 324 $ 67 State 90 8 Foreign 171 42 Total current provision 585 117 Deferred provision (benefit): Federal (33 ) 3 State (9 ) 1 Foreign 3 — Total deferred provision (benefit) (39 ) 4 Total provision for income taxes $ 546 $ 121 |
Reconciliation of Income Taxes | The reconciliation of income taxes computed using the statutory U.S. income tax rate and the provision for income taxes for the three months ended March 31, 2018 and 2017 were as follows (amounts in thousands): Three Months Ended Three Months Ended Income taxes computed at the federal statutory rate $ 404 21.0 % $ 109 34.0 % State income taxes, net of federal tax benefit 81 4.2 9 2.8 Excess tax benefits from stock options/restricted shares (2 ) (0.1 ) — — Difference in income tax rate on foreign earnings/other 63 3.3 3 0.8 $ 546 28.4 % $ 121 37.6 % |
Unrecognized Tax Benefits Related to Uncertain Tax Positions | A reconciliation of the beginning and ending amounts of unrecognized tax benefits related to uncertain tax positions, including interest and penalties, are as follows: (Amounts in thousands) Three Months Ended Balance as of December 31, 2017 $ 95 Additions related to current period — Additions related to prior periods — Reductions related to prior periods — Balance as of March 31, 2018 $ 95 |
Derivative Instruments and He28
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Effect of Derivative Instruments on Condensed Consolidated Statements of Operations and Comprehensive Income | The effect of derivative instruments on the Condensed Consolidated Statements of Operations and Comprehensive Income are as follows (in thousands): Derivatives in ASC Topic 815 Cash Flow Hedging Relationships Amount of Location of Amount of Location of Amount of (Effective Portion) (Effective Portion) (Effective Portion) (Ineffective Portion/Amounts excluded from effectiveness testing) For the Three Months Ended March 31, 2018: Interest-Rate Swap Contract $ 122 Interest Expense $ (14 ) Interest Expense $ — Derivatives in ASC Topic 815 Cash Flow Hedging Relationships Amount of Location of Amount of Location of Amount of (Effective Portion) (Effective Portion) (Effective Portion) (Ineffective Portion/Amounts excluded from effectiveness testing) For the Three Months Ended March 31, 2017: Interest-Rate Swap Contract $ 11 Interest Expense $ (6 ) Interest Expense $ — |
Information on Location and Amounts of Derivative Fair Values in Condensed Consolidated Balance Sheets | Information on the location and amounts of derivative fair values in the Condensed Consolidated Balance Sheets (in thousands): March 31, 2018 December 31, 2017 Derivative Instruments Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest-Rate Swap Contracts Other Current Assets $ 131 Other Current Assets $ 9 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets (Liabilities) at Fair Value Measured on Recurring Basis | At March 31, 2018 and December 31, 2017, the Company carried the following financial assets (liabilities) at fair value measured on a recurring basis (in thousands): Fair Value as of March 31, 2018 (Amounts in thousands) Level 1 Level 2 Level 3 Total Interest-Rate Swap Contracts $ — $ 131 $ — $ 131 Contingent consideration liability $ — $ — $ (17,125 ) $ (17,125 ) Fair Value as of December 31, 2017 (Amounts in thousands) Level 1 Level 2 Level 3 Total Interest-Rate Swap Contracts $ — $ 9 $ — $ 9 Contingent consideration liability $ — $ — $ (17,125 ) $ (17,125 ) |
Business Segments and Geograp30
Business Segments and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Summary of Operating Segments | Three Months Ended March 31, 2018 2017 (Amounts in thousands) Revenues: Data and analytics services $ 6,572 $ — IT staffing services 36,761 33,100 Total revenues $ 43,333 $ 33,100 Gross Margin %: Data and analytics services 44.3 % — IT staffing services 20.0 % 18.8 % Total gross margin % 23.7 % 18.8 % Segment operating income: Data and analytics services $ 1,775 $ — IT staffing services 1,356 606 Subtotal 3,131 606 Amortization of acquired intangible assets (693 ) (203 ) Interest expenses and other, net (512 ) (81 ) Income before income taxes $ 1,926 $ 322 |
Summary of Assets by Segments | Below is a reconciliation of segment total assets to consolidated total assets: At March 31, 2018 2017 (Amounts in thousands) Total assets: Data and analytics services $ 53,174 $ — IT staffing services 45,881 41,575 Total assets $ 99,055 $ 41,575 |
Description of Business and B31
Description of Business and Basis of Presentation - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2018SegmentsSegment | |
Significant Accounting Policies [Line Items] | |
Number of reportable segment | Segments | 2 |
Info Trellis Inc [Member] | |
Significant Accounting Policies [Line Items] | |
Number of reportable segment | Segment | 2 |
Revenue from Contract with Cust
Revenue from Contract with Customer - Additional Information (Detail) - Accounting Standards Update 2014-09 [Member] - Customer | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Percentage of revenue from customers | 2.00% | |
Sales Revenue Net [Member] | Revenue from Rights Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of number of customers revenue | 12.10% | 13.00% |
Number of customers | 1 | 1 |
Top Ten Customers [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue percentage of total revenue | 45.00% | 47.00% |
Data and Analytics Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of revenue from customers | 100.00% |
Revenue from Contracts with C33
Revenue from Contracts with Customers - Summary of Disaggregation of Our Revenues by Contract Type and Operating Segment (Detail) - Accounting Standards Update 2014-09 [Member] - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | $ 43.3 | $ 33.1 |
Data and Analytics Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | 6.6 | |
Data and Analytics Services [Member] | Time-and-Material Contract [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | 5.6 | |
Data and Analytics Services [Member] | Fixed-Price Contract [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | 1 | |
IT Staffing Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | 36.7 | 33.1 |
IT Staffing Services [Member] | Time-and-Material Contract [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | $ 36.7 | 33 |
IT Staffing Services [Member] | Fixed-Price Contract [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | $ 0.1 |
Revenue from Contracts with C34
Revenue from Contracts with Customers - Summary of Revenue from External Customers (Detail) - Accounting Standards Update 2014-09 [Member] - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue from External Customer [Line Items] | ||
Total | $ 43.3 | $ 33.1 |
United States [Member] | ||
Revenue from External Customer [Line Items] | ||
Total | 42 | $ 33.1 |
Canada [Member] | ||
Revenue from External Customer [Line Items] | ||
Total | 1.1 | |
India and Other [Member] | ||
Revenue from External Customer [Line Items] | ||
Total | $ 0.2 |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) | Jul. 13, 2017USD ($) | Jul. 07, 2017USD ($)Agreement$ / sharesshares | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | |||||
Revolving credit availability | $ 13,500,000 | $ 13,000,000 | |||
Revenues | 43,333,000 | $ 33,100,000 | |||
Net income | $ 1,380,000 | $ 201,000 | |||
PNC Bank, National Association [Member] | |||||
Business Acquisition [Line Items] | |||||
Credit agreement provides for total aggregate commitment | $ 65,000,000 | ||||
Share price for purposes of calculation (in dollars per share) | $ / shares | $ 0.01 | ||||
Gross proceeds from private placement | 6,000,000 | ||||
Revolving Line of Credit [Member] | |||||
Business Acquisition [Line Items] | |||||
Revolving credit availability | 27,500,000 | ||||
Term Loan Facility [Member] | PNC Bank, National Association [Member] | |||||
Business Acquisition [Line Items] | |||||
Term loan facility | 30,500,000 | ||||
Delayed Draw Term Loan Facility [Member] | PNC Bank, National Association [Member] | |||||
Business Acquisition [Line Items] | |||||
Term loan facility | 7,000,000 | ||||
Ashok Trivedi and Sunil Wadhwani [Member] | PNC Bank, National Association [Member] | |||||
Business Acquisition [Line Items] | |||||
Stock issued (in shares) | shares | 857,144 | ||||
Maximum [Member] | Revolving Line of Credit [Member] | PNC Bank, National Association [Member] | |||||
Business Acquisition [Line Items] | |||||
Revolving credit availability | 27,500,000 | ||||
Revolving credit facility | 37,500,000 | ||||
Info Trellis Inc [Member] | |||||
Business Acquisition [Line Items] | |||||
Date of acquisition | Jul. 13, 2017 | ||||
Business acquisition, description | On July 7, 2017, Mastech Digital, Inc., through its wholly-owned subsidiaries Mastech InfoTrellis, Inc., Mastech InfoTrellis Digital, Ltd., Mastech Digital Data, Inc. and Mastech Digital Private Limited (collectively, the “Company Entities”), entered into two Asset Purchase Agreements and a Share Purchase Agreement (collectively, the “Purchase Agreements”) to acquire substantially all of the assets comprising the consulting services business in the areas of master data management, data integration and big data (the “Acquired Business”) of InfoTrellis Inc., InfoTrellis, Inc. and 2291496 Ontario Inc., including all outstanding shares of InfoTrellis India Private Limited (collectively, “InfoTrellis”). The aforementioned transaction was closed on July 13, 2017. | ||||
Cash consideration | 35,750,000 | ||||
Working capital adjustments excluded | 861,000 | ||||
Contingent consideration in deferred cash payments | 19,250,000 | ||||
Contingent consideration payable on reaching milestone | $ 17,125,000 | ||||
Transaction costs related to acquisition | $ 2,000,000 | ||||
Revenues | 6,600,000 | ||||
Net income | $ 900,000 | ||||
Info Trellis Inc [Member] | Asset Purchase Agreements [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of purchase agreement | Agreement | 2 | ||||
Info Trellis Inc [Member] | Share Purchase Agreement [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of purchase agreement | Agreement | 1 | ||||
Info Trellis Inc [Member] | Actual Year 1 EBIT [Member] | |||||
Business Acquisition [Line Items] | |||||
EBIT set as milestone | $ 10,000,000 | ||||
Info Trellis Inc [Member] | Actual Year 1 EBIT [Member] | Maximum [Member] | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration payable on reaching milestone | 8,250,000 | ||||
Info Trellis Inc [Member] | Actual Year 2 EBIT [Member] | |||||
Business Acquisition [Line Items] | |||||
EBIT set as milestone | 10,700,000 | ||||
Info Trellis Inc [Member] | Actual Year 2 EBIT [Member] | Maximum [Member] | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration payable on reaching milestone | $ 11,000,000 |
Business Combinations - Summary
Business Combinations - Summary of Fair Value of Consideration for Acquired Business (Detail) - Info Trellis Inc [Member] $ in Thousands | Jul. 13, 2017USD ($) |
Business Acquisition [Line Items] | |
Cash purchase price at closing | $ 35,750 |
Working capital adjustments | (861) |
Estimated payout of contingent consideration | 17,125 |
Total Fair Value of Consideration | $ 52,014 |
Business Combinations - Summa37
Business Combinations - Summary of Fair Value of Consideration for Acquired Business (Parenthetical) (Detail) $ in Thousands | Jul. 13, 2017USD ($) |
Info Trellis Inc [Member] | |
Business Acquisition [Line Items] | |
Fair value of contingent consideration | $ 17,125 |
Business Combinations - Summa38
Business Combinations - Summary of Source of Funds (Detail) - USD ($) $ in Thousands | Jul. 13, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Revolving Line of Credit [Member] | |||
Business Acquisition [Line Items] | |||
Outstanding borrowings amount | $ 11,000 | $ 9,000 | |
Info Trellis Inc [Member] | |||
Business Acquisition [Line Items] | |||
Cash balances on hand | $ 341 | ||
Sale of common stock in a private placement transactions | 6,000 | ||
Payoff of previous credit facility | (10,091) | ||
Cash paid at Closing | 35,750 | ||
Info Trellis Inc [Member] | Term Loan Debt Facility [Member] | |||
Business Acquisition [Line Items] | |||
Outstanding borrowings amount | 30,500 | ||
Info Trellis Inc [Member] | Revolving Line of Credit [Member] | |||
Business Acquisition [Line Items] | |||
Outstanding borrowings amount | $ 9,000 |
Business Combinations - Schedul
Business Combinations - Schedule of Fair Value of Net Assets Acquired (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Jul. 13, 2017 |
Identifiable intangible assets: | |||
Goodwill | $ 35,844 | $ 35,844 | |
Info Trellis Inc [Member] | |||
Business Acquisition [Line Items] | |||
Current Assets | $ 6,909 | ||
Fixed Assets and Other | 215 | ||
Identifiable intangible assets: | |||
Identifiable intangible assets | 19,862 | ||
Goodwill | 27,417 | ||
Current liabilities | (2,389) | ||
Net Assets Acquired | 52,014 | ||
Info Trellis Inc [Member] | Client Relationships [Member] | |||
Identifiable intangible assets: | |||
Identifiable intangible assets | 16,671 | ||
Info Trellis Inc [Member] | Covenant Not-to-Compete [Member] | |||
Identifiable intangible assets: | |||
Identifiable intangible assets | 761 | ||
Info Trellis Inc [Member] | Trade Name [Member] | |||
Identifiable intangible assets: | |||
Identifiable intangible assets | 1,221 | ||
Info Trellis Inc [Member] | Technology [Member] | |||
Identifiable intangible assets: | |||
Identifiable intangible assets | $ 1,209 |
Business Combinations - Summa40
Business Combinations - Summary of Unaudited Pro Forma Results (Detail) - Info Trellis Inc [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Business Acquisition [Line Items] | ||
Revenue | $ 43,333 | $ 38,713 |
Net income | $ 1,380 | $ 854 |
Earnings per share-diluted | $ 0.25 | $ 0.16 |
Goodwill and Other Intangible41
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Jul. 13, 2017 | Jun. 15, 2015 | |
Goodwill and Intangible Assets [Line Items] | |||||
Goodwill | $ 35,844 | $ 35,844 | |||
Amortization expense | $ 693 | $ 203 | |||
Hudson IT [Member] | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Goodwill | $ 8,400 | ||||
Info Trellis Inc [Member] | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Goodwill | $ 27,417 |
Goodwill and Other Intangible42
Goodwill and Other Intangible Assets - Components of Identifiable Intangible assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets [Line Items] | ||
Total Intangible Assets, Gross Carrying Value | $ 28,429 | $ 28,429 |
Intangible Assets, Accumulated Amortization | (3,657) | (2,964) |
Total Intangible Assets, Net Carrying Value | $ 24,772 | $ 25,465 |
Client Relationships [Member] | IT Staffing Services [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Amortization Period (In Years) | 12 years | 12 years |
Intangible Assets, Gross Carrying Value | $ 7,999 | $ 7,999 |
Intangible Assets, Accumulated Amortization | 1,861 | 1,694 |
Intangible Assets, Net Carrying Value | $ 6,138 | $ 6,305 |
Client Relationships [Member] | Data and Analytics Services [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Amortization Period (In Years) | 12 years | 12 years |
Intangible Assets, Gross Carrying Value | $ 16,671 | $ 16,671 |
Intangible Assets, Accumulated Amortization | 983 | 636 |
Intangible Assets, Net Carrying Value | $ 15,688 | $ 16,035 |
Covenant Not-to-Compete [Member] | IT Staffing Services [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Amortization Period (In Years) | 5 years | 5 years |
Intangible Assets, Gross Carrying Value | $ 319 | $ 319 |
Intangible Assets, Accumulated Amortization | 178 | 162 |
Intangible Assets, Net Carrying Value | $ 141 | $ 157 |
Covenant Not-to-Compete [Member] | Data and Analytics Services [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Amortization Period (In Years) | 5 years | 5 years |
Intangible Assets, Gross Carrying Value | $ 761 | $ 761 |
Intangible Assets, Accumulated Amortization | 108 | 70 |
Intangible Assets, Net Carrying Value | $ 653 | $ 691 |
Trade Name [Member] | IT Staffing Services [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Amortization Period (In Years) | 3 years | 3 years |
Intangible Assets, Gross Carrying Value | $ 249 | $ 249 |
Intangible Assets, Accumulated Amortization | 232 | 211 |
Intangible Assets, Net Carrying Value | $ 17 | $ 38 |
Trade Name [Member] | Data and Analytics Services [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Amortization Period (In Years) | 5 years | 5 years |
Intangible Assets, Gross Carrying Value | $ 1,221 | $ 1,221 |
Intangible Assets, Accumulated Amortization | 173 | 112 |
Intangible Assets, Net Carrying Value | $ 1,048 | $ 1,109 |
Technology [Member] | Data and Analytics Services [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Amortization Period (In Years) | 7 years | 7 years |
Intangible Assets, Gross Carrying Value | $ 1,209 | $ 1,209 |
Intangible Assets, Accumulated Amortization | 122 | 79 |
Intangible Assets, Net Carrying Value | $ 1,087 | $ 1,130 |
Goodwill and Other Intangible43
Goodwill and Other Intangible Assets - Schedule of Estimated Amortization Expense (Detail) $ in Thousands | Mar. 31, 2018USD ($) |
Intangible Liability Disclosure [Abstract] | |
Estimated aggregate amortization expense for year ending 2018 | $ 2,727 |
Estimated aggregate amortization expense for year ending 2019 | 2,689 |
Estimated aggregate amortization expense for year ending 2020 | 2,654 |
Estimated aggregate amortization expense for year ending 2021 | 2,625 |
Estimated aggregate amortization expense for year ending 2022 | $ 2,443 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Matching contributions | $ 0 | $ 0 |
Hudson Employee Retirement Savings Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Percentage of company's matching contribution | 50.00% | |
Percentage of employees eligible earnings for company's matching contribution | 6.00% | |
Total contributions to the retirement plan | $ 21,000 | $ 30,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares allocated for issuance to directors, officers and key personnel | 1,400,000 | ||
Strike price | $ 14.92 | ||
Shares available for future grants | 29,000 | 132,000 | |
Stock-based compensation expense | $ 105 | $ 107 | |
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted | 12,690 | ||
Equity Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted | 90,000 | 0 | |
Number of shares issued related to exercise of stock options | 1,113 | 0 |
Credit Facility - Additional in
Credit Facility - Additional information (Detail) - USD ($) | Jul. 13, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Line of Credit Facility [Line Items] | |||
Debt financing costs | $ 373,000 | $ 395,000 | |
Current borrowing capacity under line of credit facility | 13,500,000 | 13,000,000 | |
Long term debt | $ 34,968,000 | 34,149,000 | |
Revolving Line of Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Credit facility expiration period | 5 years | ||
Outstanding borrowings amount | $ 11,000,000 | 9,000,000 | |
Current borrowing capacity under line of credit facility | $ 27,500,000 | ||
Long term debt | 11,000,000 | ||
Revolving Line of Credit [Member] | Swing Loans [Member] | |||
Line of Credit Facility [Line Items] | |||
Credit facility maximum borrowing capacity | 3,000,000 | 3,000,000 | |
Revolving Line of Credit [Member] | Line of Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Credit facility maximum borrowing capacity | $ 5,000,000 | ||
Revolving Line of Credit [Member] | United States [Member] | |||
Line of Credit Facility [Line Items] | |||
Percentage of eligible accounts receivable | 85.00% | ||
Percentage of eligible unbilled accounts | 60.00% | ||
Revolving Line of Credit [Member] | Canada [Member] | |||
Line of Credit Facility [Line Items] | |||
Credit facility maximum borrowing capacity | $ 10,000,000 | ||
Percentage of eligible accounts receivable | 85.00% | ||
Percentage of eligible unbilled accounts | 60.00% | ||
Term Loan Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit, maturity date | Jul. 13, 2022 | ||
Outstanding borrowings amount | $ 28,600,000 | $ 29,500,000 | |
Term Loan Facility [Member] | Installments Due on October 1 2017 Through and Including July 1 2018 [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit, periodic payment percentage | 3.125% | ||
Term Loan Facility [Member] | Installments Payable on October 1 2018 Through and Including July 1 2021 [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit, periodic payment percentage | 3.75% | ||
Term Loan Facility [Member] | Installments Payable on October 1 2021 Through and Including Maturity Date [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit, periodic payment percentage | 5.00% | ||
Delayed Draw Term Loan [Member] | |||
Line of Credit Facility [Line Items] | |||
Credit facility maximum borrowing capacity | $ 7,000,000 | ||
Continent consideration payment arrangement borrowings multiplier amount | $ 1,000,000 | ||
Line of credit facility payment term description | The principal amount of each quarterly installment payable of each Delayed Draw Term Loan equals the product of the original balance of such Loan, multiplied by (i) 3.75% for quarterly installments due on October 1, 2018 through and including July 1, 2021; and (ii) 5.00% for quarterly installments payable on October 1, 2021 through and including the maturity date, with the maturity date payment equal to the outstanding amount of the loan on that date. | ||
Delayed Draw Term Loan [Member] | Installments Payable on October 1 2021 Through and Including Maturity Date [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit, periodic payment percentage | 5.00% | ||
Delayed Draw Term Loan [Member] | Installments Due On October 1, 2018 Through and Including July 1, 2021 [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit, periodic payment percentage | 3.75% | ||
Federal Funds Rate [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
PNC Bank, N.A. [Member] | |||
Line of Credit Facility [Line Items] | |||
Credit facility maximum borrowing capacity | 65,000,000 | ||
Payment of deferred financing costs | 435,000 | ||
PNC Bank, N.A. [Member] | Revolving Line of Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Credit facility maximum borrowing capacity | 27,500,000 | ||
PNC Bank, N.A. [Member] | Term Loan Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Credit facility maximum borrowing capacity | 30,500,000 | ||
PNC Bank, N.A. [Member] | Delayed Draw Term Loan [Member] | |||
Line of Credit Facility [Line Items] | |||
Credit facility maximum borrowing capacity | 7,000,000 | ||
Maximum [Member] | |||
Line of Credit Facility [Line Items] | |||
Revolving credit facility percentage margin over base rate | 1.25% | ||
Term loan percentage margin over base rate | 2.50% | ||
Revolving credit facility percentage margin adjusted LIBOR rate | 2.25% | ||
Term loan percentage margin adjusted LIBOR rate | 3.50% | ||
Commitment fee | 0.30% | ||
Maximum [Member] | PNC Bank, N.A. [Member] | Revolving Line of Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Credit facility additional borrowing capacity upon certain conditions | $ 10,000,000 | ||
Minimum [Member] | |||
Line of Credit Facility [Line Items] | |||
Revolving credit facility percentage margin over base rate | 0.50% | ||
Term loan percentage margin over base rate | 1.75% | ||
Revolving credit facility percentage margin adjusted LIBOR rate | 1.50% | ||
Term loan percentage margin adjusted LIBOR rate | 2.75% | ||
Commitment fee | 0.20% |
Income Taxes - Components of In
Income Taxes - Components of Income Before Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income before income taxes: | ||
Domestic | $ 1,297 | $ 197 |
Foreign | 629 | 125 |
Income before income taxes | $ 1,926 | $ 322 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Current provision: | ||
Federal | $ 324 | $ 67 |
State | 90 | 8 |
Foreign | 171 | 42 |
Total current provision | 585 | 117 |
Deferred provision (benefit): | ||
Federal | (33) | 3 |
State | (9) | 1 |
Foreign | 3 | |
Total deferred provision (benefit) | (39) | 4 |
Total provision for income taxes | $ 546 | $ 121 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income taxes computed at the federal statutory rate | 21.00% | 34.00% | 34.00% |
Unrecognized tax benefits to be reduced during the next twelve months | $ 40,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income taxes computed at the federal statutory rate, Value | $ 404 | $ 109 | |
State income taxes, net of federal tax benefit, Value | 81 | 9 | |
Excess tax benefits from stock options/restricted shares | (2) | ||
Difference in income tax rate on foreign earnings/other | 63 | 3 | |
Total provision for income taxes | $ 546 | $ 121 | |
Income taxes computed at the federal statutory rate, Rate | 21.00% | 34.00% | 34.00% |
State income taxes, net of federal tax benefit, Rate | 4.20% | 2.80% | |
Excess tax benefits from stock options/restricted shares | (0.10%) | ||
Difference in income tax rate on foreign earnings/other | 3.30% | 0.80% | |
Effective for income tax rate, Total | 28.40% | 37.60% |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits Related to Uncertain Tax Positions (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Income Tax Disclosure [Abstract] | |
Unrecognized tax benefits, beginning balance | $ 95 |
Additions related to current period | 0 |
Additions related to prior periods | 0 |
Reductions related to prior periods | 0 |
Unrecognized tax benefits, ending balance | $ 95 |
Derivative Instruments and He52
Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Interest Rate Swap Contracts [Member] | Other Current Assets [Member] | ||
Derivative [Line Items] | ||
Asset of fair value of the interest rate swap contracts | $ 131,000 | $ 9,000 |
Interest Rate Risk Management [Member] | Interest Rate Swap Contracts [Member] | ||
Derivative [Line Items] | ||
Notional amount | $ 15,000,000 | |
Fixed rate of interest in swap contracts | 1.99% | |
Interest Rate Risk Management [Member] | Interest Rate Swap Contracts [Member] | Other Current Assets [Member] | ||
Derivative [Line Items] | ||
Asset of fair value of the interest rate swap contracts | $ 131,000 | $ 9,000 |
Designated as Hedging Instrument [Member] | Currency Hedge and Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Estimated amount of pretax losses from other comprehensive income (loss) during the next 12-months | $ (50,000) |
Derivative Instruments and He53
Derivative Instruments and Hedging Activities - Effect of Derivative Instruments on Condensed Consolidated Statements of Operations and Comprehensive Income (Detail) - Interest Rate Swap Contracts [Member] - Cash Flow Hedging Relationships [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) recognized in OCI on Derivatives | $ 122 | $ 11 |
Interest Expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) reclassified from Accumulated OCI to Income (Expense) | (14) | (6) |
Amount of Gain / (Loss) recognized in Income (Expense) on Derivatives | $ 0 | $ 0 |
Derivative Instruments and He54
Derivative Instruments and Hedging Activities - Information on Location and Amounts of Derivative Fair Values in Condensed Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Interest Rate Swap Contracts [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Fair Value Asset | $ 131 | $ 9 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets (Liabilities) at Fair Value Measured on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | $ (17,125) | $ (17,125) |
Interest Rate Swap Contracts [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial asset | 131 | 9 |
Level 2 [Member] | Interest Rate Swap Contracts [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial asset | 131 | 9 |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | $ (17,125) | $ (17,125) |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Equity [Abstract] | ||
Shares purchased to satisfy employee tax obligation | 0 | 0 |
Earnings per Share - Additional
Earnings per Share - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive securities not included in computation of earnings per share | 90,000 | 250,000 |
Business Segments and Geograp58
Business Segments and Geographic Information - Additional Information (Detail) - Segments | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 2 | |
Data and Analytics Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Business acquisition date | Jul. 13, 2017 |
Business Segments and Geograp59
Business Segments and Geographic Information - Summary of Operating Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 43,333 | $ 33,100 |
Total gross margin % | 23.70% | 18.80% |
Segment operating income | $ 2,438 | $ 403 |
Amortization of acquired intangible assets | (693) | (203) |
Interest expenses and other, net | (512) | (81) |
Income before income taxes | 1,926 | 322 |
Data and Analytics Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 6,572 | |
Total gross margin % | 44.30% | |
IT Staffing Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 36,761 | $ 33,100 |
Total gross margin % | 20.00% | 18.80% |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment operating income | $ 3,131 | $ 606 |
Operating Segments [Member] | Data and Analytics Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment operating income | 1,775 | |
Operating Segments [Member] | IT Staffing Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment operating income | $ 1,356 | $ 606 |
Business Segments and Geograp60
Business Segments and Geographic Information - Summary of Assets by Segment (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | $ 99,055 | $ 98,604 | $ 41,575 |
Data and Analytics Services [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 53,174 | ||
IT Staffing Services [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | $ 45,881 | $ 41,575 |
Business Segments and Geograp61
Business Segments and Geographic Information - Summary of Revenue from External Customers (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 43,333 | $ 33,100 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 42,017 | $ 33,100 |
Canada [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 1,085 | |
India and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 231 |
Recently Issued Accounting St62
Recently Issued Accounting Standards - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Contractual obligations on lease arrangements | $ 2,700,000 |
Accounting Standards Update 2018-05 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
One-time, non-cash charge related to enactment of the Act | 372,000 |
Re-measurement of deferred tax assets arising from a lower U.S. corporate tax rate | 294,000 |
One-time transition tax applicable to new dividend exemption system related to foreign earnings | $ 78,000 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - USD ($) | Apr. 20, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Jul. 13, 2017 |
Subsequent Event [Line Items] | ||||
Revolving credit availability | $ 13,500,000 | $ 13,000,000 | ||
Revolving Line of Credit [Member] | ||||
Subsequent Event [Line Items] | ||||
Revolving credit availability | $ 27,500,000 | |||
Revolving Line of Credit [Member] | Swing Loans [Member] | ||||
Subsequent Event [Line Items] | ||||
Credit facility maximum borrowing capacity | $ 3,000,000 | $ 3,000,000 | ||
Subsequent Event [Member] | Revolving Line of Credit [Member] | ||||
Subsequent Event [Line Items] | ||||
Revolving credit availability | $ 22,500,000 | |||
Credit facility maximum borrowing capacity | 32,500,000 | |||
Subsequent Event [Member] | Revolving Line of Credit [Member] | Swing Loans [Member] | ||||
Subsequent Event [Line Items] | ||||
Credit facility maximum borrowing capacity | $ 5,000,000 |