Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Entity Interactive Data Current | Yes | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Mastech Digital, Inc. | |
Entity Central Index Key | 0001437226 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | MHH | |
Security Exchange Name | NYSE | |
Entity Address, State or Province | PA | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 11,033,165 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 49,543 | $ 44,292 | $ 143,214 | $ 132,519 |
Cost of revenues | 37,214 | 33,582 | 107,996 | 100,656 |
Gross profit | 12,329 | 10,710 | 35,218 | 31,863 |
Selling, general and administrative expenses: | ||||
Operating expenses | 9,259 | 8,204 | 27,768 | 23,830 |
Impairment of goodwill | 7,738 | |||
Revaluation of contingent consideration liability | (6,069) | (9,106) | ||
Total selling, general and administrative expenses | 9,259 | 8,204 | 21,699 | 22,462 |
Income from operations | 3,070 | 2,506 | 13,519 | 9,401 |
Interest income (expense), net | (413) | (535) | (1,420) | (1,623) |
Other income (expense), net | 33 | 108 | (21) | 77 |
Income before income taxes | 2,690 | 2,079 | 12,078 | 7,855 |
Income tax expense | 741 | 459 | 3,207 | 2,038 |
Net income | $ 1,949 | $ 1,620 | $ 8,871 | $ 5,817 |
Earnings per share: | ||||
Basic | $ 0.18 | $ 0.15 | $ 0.80 | $ 0.53 |
Diluted | $ 0.17 | $ 0.14 | $ 0.79 | $ 0.52 |
Weighted average common shares outstanding: | ||||
Basic | 11,039 | 10,966 | 11,022 | 10,938 |
Diluted | 11,205 | 11,217 | 11,198 | 11,153 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net income | $ 1,949 | $ 1,620 | $ 8,871 | $ 5,817 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | (116) | (215) | (71) | (376) |
Total pretax net unrealized (loss) | (129) | (188) | (232) | (179) |
Income tax expense (benefit) | (4) | 7 | (42) | 51 |
Total other comprehensive (loss), net of taxes | (125) | (195) | (190) | (230) |
Total comprehensive income | 1,824 | 1,425 | 8,681 | 5,587 |
Interest Rate Swap Contracts [Member] | ||||
Other comprehensive income (loss): | ||||
Net unrealized gain (loss) on interest rate swap contracts | $ (13) | $ 27 | $ (161) | $ 197 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 1,963 | $ 1,294 |
Accounts receivable, net of allowance for uncollectible accounts of $308 in 2019 and $408 in 2018 | 26,537 | 28,913 |
Unbilled receivables | 8,423 | 9,167 |
Prepaid and other current assets | 1,392 | 1,321 |
Total current assets | 38,315 | 40,695 |
Equipment, enterprise software, and leasehold improvements, at cost: | ||
Equipment | 1,749 | 1,538 |
Enterprise software | 2,728 | 2,096 |
Leasehold improvements | 494 | 464 |
Total equipment, enterprise software, and leasehold improvements | 4,971 | 4,098 |
Less – accumulated depreciation and amortization | (2,437) | (1,890) |
Net equipment, enterprise software, and leasehold improvements | 2,534 | 2,208 |
Operating lease right-of-use assets | 4,993 | |
Deferred income taxes | 0 | 297 |
Non-current deposits | 410 | 540 |
Goodwill, net of impairment | 26,106 | 26,106 |
Intangible assets, net | 20,721 | 22,738 |
Total assets | 93,079 | 92,584 |
Current liabilities: | ||
Current portion of long-term debt | 4,575 | 4,575 |
Accounts payable | 4,359 | 4,127 |
Accrued payroll and related costs | 9,828 | 7,728 |
Current portion of operating lease liability | 1,407 | |
Other accrued liabilities | 1,329 | 1,218 |
Deferred revenue | 246 | 258 |
Total current liabilities | 21,744 | 17,906 |
Long-term liabilities: | ||
Long-term debt, less current portion, net | 22,547 | 34,129 |
Contingent consideration liability | 6,069 | |
Long-term operating lease liability, less current portion | 3,686 | |
Long-term accrued income taxes | 204 | 204 |
Long-term deferred income taxes | 1,082 | |
Total liabilities | 49,263 | 58,308 |
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; 250,000,000 shares authorized and 12,679,585 shares issued as of September 30, 2019 and 12,636,332 shares issued as of December 31, 2018 | 127 | 126 |
Additional paid-in-capital | 21,700 | 20,829 |
Retained earnings | 26,485 | 17,614 |
Accumulated other comprehensive income (loss) | (309) | (119) |
Treasury stock, at cost; 1,646,420 shares as of September 30, 2019 and 1,643,846 as of December 31, 2018 | (4,187) | (4,174) |
Total shareholders' equity | 43,816 | 34,276 |
Total liabilities and shareholders' equity | $ 93,079 | $ 92,584 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for uncollectible accounts | $ 308 | $ 408 |
Preferred Stock, par value | $ 0 | $ 0 |
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 | 250,000,000 | 250,000,000 |
Common stock, shares issued | 12,679,585 | 12,636,332 |
Treasury stock, shares | 1,646,420 | 1,643,846 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income (loss) [Member] |
Beginning Balances at Dec. 31, 2017 | $ 27,153 | $ 126 | $ 20,241 | $ 10,923 | $ (4,154) | $ 17 |
Net income | 1,380 | 1,380 | ||||
Other comprehensive income (loss), net of taxes | 49 | 49 | ||||
Stock-based compensation expense | 105 | 105 | ||||
Stock options exercised | 2 | 2 | ||||
Ending Balances at Mar. 31, 2018 | 28,689 | 126 | 20,348 | 12,303 | (4,154) | 66 |
Beginning Balances at Dec. 31, 2017 | 27,153 | 126 | 20,241 | 10,923 | (4,154) | 17 |
Net income | 5,817 | |||||
Other comprehensive income (loss), net of taxes | (230) | |||||
Ending Balances at Sep. 30, 2018 | 33,171 | 126 | 20,692 | 16,740 | (4,174) | (213) |
Beginning Balances at Mar. 31, 2018 | 28,689 | 126 | 20,348 | 12,303 | (4,154) | 66 |
Net income | 2,817 | 2,817 | ||||
Other comprehensive income (loss), net of taxes | (84) | (84) | ||||
Stock-based compensation expense | 120 | 120 | ||||
Purchase of treasury stock | (20) | (20) | ||||
Ending Balances at Jun. 30, 2018 | 31,522 | 126 | 20,468 | 15,120 | (4,174) | (18) |
Net income | 1,620 | 1,620 | ||||
Other comprehensive income (loss), net of taxes | (195) | (195) | ||||
Stock-based compensation expense | 116 | 116 | ||||
Stock options exercised | 108 | 108 | ||||
Ending Balances at Sep. 30, 2018 | 33,171 | 126 | 20,692 | 16,740 | (4,174) | (213) |
Beginning Balances at Dec. 31, 2018 | 34,276 | 126 | 20,829 | 17,614 | (4,174) | (119) |
Net income | 964 | 964 | ||||
Other comprehensive income (loss), net of taxes | (31) | (31) | ||||
Stock-based compensation expense | 236 | 236 | ||||
Ending Balances at Mar. 31, 2019 | 35,445 | 126 | 21,065 | 18,578 | (4,174) | (150) |
Beginning Balances at Dec. 31, 2018 | 34,276 | 126 | 20,829 | 17,614 | (4,174) | (119) |
Net income | 8,871 | |||||
Other comprehensive income (loss), net of taxes | (190) | |||||
Ending Balances at Sep. 30, 2019 | 43,816 | 127 | 21,700 | 26,485 | (4,187) | (309) |
Beginning Balances at Mar. 31, 2019 | 35,445 | 126 | 21,065 | 18,578 | (4,174) | (150) |
Net income | 5,958 | 5,958 | ||||
Employee common stock purchases | 106 | 1 | 105 | |||
Other comprehensive income (loss), net of taxes | (34) | (34) | ||||
Stock-based compensation expense | 267 | 267 | ||||
Purchase of treasury stock | (13) | (13) | ||||
Ending Balances at Jun. 30, 2019 | 41,729 | 127 | 21,437 | 24,536 | (4,187) | (184) |
Net income | 1,949 | 1,949 | ||||
Other comprehensive income (loss), net of taxes | (125) | (125) | ||||
Stock-based compensation expense | 263 | 263 | ||||
Ending Balances at Sep. 30, 2019 | $ 43,816 | $ 127 | $ 21,700 | $ 26,485 | $ (4,187) | $ (309) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
OPERATING ACTIVITIES: | ||
Net income | $ 8,871 | $ 5,817 |
Adjustments to reconcile net income to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 2,577 | 2,342 |
Bad debt expense | 80 | 10 |
Interest amortization of deferred financing costs | 78 | 74 |
Stock-based compensation expense | 766 | 341 |
Deferred income taxes, net | 1,379 | 549 |
Impairment of goodwill | 7,738 | |
Revaluation of contingent consideration liability | (6,069) | (9,106) |
Operating lease assets and liabilities, net | 100 | |
Loss on disposition of fixed assets | 7 | |
Working capital items: | ||
Accounts receivable and unbilled receivables | 3,040 | (7,521) |
Prepaid and other current assets | (190) | 70 |
Accounts payable | 232 | (2,304) |
Accrued payroll and related costs | 2,100 | (919) |
Other accrued liabilities | 111 | (60) |
Deferred revenue | (12) | (311) |
Net cash flows provided by (used in) operating activities | 13,063 | (3,273) |
INVESTING ACTIVITIES: | ||
Recovery of (payment for) non-current deposits | 130 | (264) |
Capital expenditures | (886) | (536) |
Net cash flows (used in) investing activities | (756) | (800) |
FINANCING ACTIVITIES: | ||
(Repayments) borrowings on revolving credit facility, net | (8,228) | 6,999 |
(Repayments) on term loan facility | (3,432) | (2,859) |
Proceeds from the issuance of common shares | 106 | |
Payment of deferred financing costs | (71) | |
Purchase of treasury stock | (13) | (20) |
Proceeds from the exercise of stock options | 110 | |
Net cash flows (used in) provided by financing activities | (11,567) | 4,159 |
Effect of exchange rate changes on cash and cash equivalents | (71) | (376) |
Net change in cash and cash equivalents | 669 | (290) |
Cash and cash equivalents, beginning of period | 1,294 | 2,478 |
Cash and cash equivalents, end of period | $ 1,963 | $ 2,188 |
Description of Business and Bas
Description of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
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 around Salesforce.com and Digital Learning; and IT staffing services for both digital and mainstream technologies. Reflective of our 2017 acquisition of the services division of Canada-based InfoTrellis, 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, 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, 2018, 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 No. 2016-02, 2018-11. Segment Reporting The Company has two reportable segments in accordance with Accounting Standards Committee (“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 | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | 2. Revenue from Contracts with Customers The Company recognizes revenue on time-and-material Time-and-material out-of-pocket Out-of-pocket In certain situations related to client direct hire assignments, where the Company’s fee is contingent upon the hired resources continued employment with the client, revenue is not fully recognized until such employment conditions are satisfied. 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 Nine Months Ended 2019 2018 2019 2018 (Amounts in millions) (Amounts in millions) Data and Analytics Services Segment Time-and-material $ 5,415 $ 3,772 $ 14,178 $ 14,185 Fixed-price Contracts 1,665 2,015 5,324 4,257 Subtotal Data and Analytics Services $ 7,080 $ 5,787 $ 19,502 $ 18,442 IT Staffing Services Segment Time-and-material $ 42,463 $ 38,505 $ 123,712 $ 114,077 Fixed-price Contracts — — — — Subtotal IT Staffing Services $ 42,463 $ 38,505 $ 123,712 $ 114,077 Total Revenues $ 49,543 $ 44,292 $ 143,214 $ 132,519 For the three months ended September 30, 2019, the Company had one client that exceeded 10% of total revenue (CGI = 11.3%). For the nine months ended September 30, 2019, the Company had the same one client that exceeded 10% of total revenue (CGI = 11.3%). For the three and nine months ended September 30, 2018, the Company had the same one client that exceeded 10% of total revenue in both periods (CGI = 13.5% and 12.9%), respectively. The Company’s top ten clients represented approximately 45% and 48% of total revenues for the three months ended September 30, 2019 and 2018, respectively. For the nine months ended September 30, 2019 and 2018, the Company’s top ten clients represented approximately 45% and 48% of total revenues, respectively. The following table presents our revenue from external customers disaggregated by geography, based on the work location of our customers: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (Amounts in thousands) (Amounts in thousands) United States $ 48,421 $ 43,222 $ 139,739 $ 128,775 Canada 737 650 2,180 2,573 India and Other 385 420 1,295 1,171 Total revenues $ 49,543 $ 44,292 $ 143,214 $ 132,519 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, net | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, net | 3. 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 our July 13, 2017 acquisition of the services division of InfoTrellis totaled $27.4 million. During 2018, the Company recorded a goodwill impairment related to the InfoTrellis acquisition of $9.7 million. This impairment was attributable to a lower recovery in revenues from levels present at closing. Based upon the business performance subsequent to the acquisition date, we reduced our near-term outlook and lowered our revenue projections from original expectations. Also, we factored into our assessment of discounted cash flows, additional investments to the sales organization and other necessary investments which were not initially considered. The following table provides information regarding changes in the Company’s goodwill by operating segment for the periods ended September 30, 2019 and December 31, 2018. Nine Months Ended Twelve Months Ended (Amounts in thousands) IT Staffing Services: Beginning balance $ 8,427 $ 8,427 Goodwill recorded — — Impairment — — Ending balance $ 8,427 $ 8,427 Nine Months Ended Twelve Months Ended (Amounts in thousands) Data and Analytics Services: Beginning balance $ 17,679 $ 27,417 Goodwill recorded — — Impairment — (9,738 ) Ending balance $ 17,679 $ 17,679 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 September 30, 2019 and December 31, 2018: As of September 30, 2019 (Amounts in thousands) Amortization Gross Carrying Accumulative Net Carrying IT Staffing Services: Client relationships 12 $ 7,999 $ 2,861 $ 5,138 Covenant-not-to-compete 5 319 274 45 Trade name 3 249 249 — Data and Analytics Services: Client relationships 12 16,671 3,068 13,603 Covenant-not-to-compete 5 761 336 425 Trade name 5 1,221 539 682 Technology 7 1,209 381 828 Total Intangible Assets $ 28,429 $ 7,708 $ 20,721 As of December 31, 2018 (Amounts in thousands) Amortization Gross Carrying Accumulative Net Carrying IT Staffing Services: Client relationships 12 $ 7,999 $ 2,361 $ 5,638 Covenant-not-to-compete 5 319 226 93 Trade name 3 249 249 — Data and Analytics Services: Client relationships 12 16,671 2,025 14,646 Covenant-not-to-compete 5 761 222 539 Trade name 5 1,221 356 865 Technology 7 1,209 252 957 Total Intangible Assets $ 28,429 $ 5,691 $ 22,738 Amortization expense for the three and nine month periods ended September 30, 2019 totaled $673,000 and $2.0 million, respectively and is included in selling, general and administrative expenses in the Condensed Consolidated Statement of Operations. For the three and nine month periods ended September 30, 2018, amortization expense was $673,000 and $2.1 million, respectively. The estimated aggregate amortization expense for intangible assets for the years ending December 31, 2019 through 2023 is as follows: Years Ended December 31, 2019 2020 2021 2022 2023 (Amounts in thousands) Amortization expense $ 2,689 $ 2,654 $ 2,625 $ 2,443 $ 2,229 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | 4. Leases The Company rents certain office facilities and equipment under noncancelable operating leases. Approximately 88,000 square feet of office space is utilized for our sales and recruiting offices, delivery centers, and corporate headquarters as of September 30, 2019. All of our leases are classified as operating leases. The average initial lease term is five one The Company adopted ASU No. 2016-02, 2018-11. right-of-use The following table summarizes the balance sheet classification of the lease asset and related lease liability: September 30, 2019 (in thousands) Assets: Long-term operating lease right-of-use $ 4,993 Liabilities: Short-term operating lease liability $ 1,407 Long-term operating lease liability 3,686 Total Liabilities $ 5,093 Future minimum rental payments for office facilities and equipment under the Company’s noncancelable operating leases are as follows: Amount as of (in thousands) 2019 (For remainder of year) $ 419 2020 1,625 2021 1,152 2022 1,126 2023 1,106 Thereafter 287 Total $ 5,715 Less: Imputed interest (622 ) Present value of operating lease liabilities $ 5,093 The weighted average discount rate used to calculate the present value of future lease payments was 5.4%. We recognize rent expense for these leases on a straight-line basis over the lease term. Rental expense for the three and nine months ended September 30, 2019 totaled $0.4 million and $1.2 million, respectively. Rental expense for the three and nine months ended September 30, 2018 totaled $0.3 million and $1.0 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and 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 | 9 Months Ended |
Sep. 30, 2019 | |
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 | 9 Months Ended |
Sep. 30, 2019 | |
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 3,900,000 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 September 30, 2019, the Company granted 130,000 stock options Stock-based compensation expense for the three months ended September 30, 2019 and 2018 was $ 263 116 766 341 During the three and nine months September 30, 2019, the Company issued 0 and 17,460 shares, respectively, related to the vesting of restricted shares. During the three and nine months ended September 30, 2018, the Company issued 56,636 and 65,112 shares, respectively, related to the vesting of restricted shares and the exercising of stock options. In October 2018, the Board of Directors of the Company approved the Mastech Digital, Inc. 2019 Employee Stock Purchase Plan (the “Stock Purchase Plan”). The Stock Purchase Plan is intended to meet the requirements of Section 423 of the Code and required the approval of the Company’s shareholders to be qualified under Section 423 of the Code. On May 15, 2019, the Company’s shareholders approved the Stock Purchase Plan. Under the Stock Purchase Plan, 600,000 shares of Common Stock (subject to adjustment upon certain changes in the Company’s capitalization) are available for purchase by eligible employees who become participants in the Stock Purchase Plan. The purchase price per share is 85% of the lesser of (i) the fair market value per share of Common Stock on the first day of the offering period, or (ii) the fair market value per share of Common Stock on the last day of the offering period. The first offering period under the Stock Purchase Plan commenced on January 1, 2019 and concluded on June 30, 2019. The Company issued 25,793 shares related to the first offering period ended June 30, 2019 at a share price of $4.04. At September 30, 2019, there were 574,000 shares available for grants under the Plan. |
Credit Facility
Credit Facility | 9 Months Ended |
Sep. 30, 2019 | |
Text Block [Abstract] | |
Credit Facility | 8. Credit Facility On July 13, 2017, the Company entered into a Credit Agreement (as amended, 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 $60 million, consisting of (i) a revolving credit facility (the “Revolver”) in an aggregate principal amount not to exceed $22.5 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 the Company’s Forms 8-K, The Revolver expires in July 2022 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 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) 3.75% for quarterly installments payable 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. The Delayed Draw Term was not accessed and was cancelled effective July 2019. Borrowings under the Revolver and the term loan, 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 (prior to cancellation) 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 September 30, 2019, 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 $506,000, which were capitalized and are being amortized as interest expense over the life of the facility. Debt financing costs of $289,000 and $367,000 (net of amortization) as of September 30, 2019 and December 31, 2018, respectively, are presented as reductions in long-term debt in the Company’s Condensed Consolidated Balance Sheets. As of September 30, 2019 and December 31, 2018, the Company’s outstanding borrowings under the Revolver totaled $5.3 million and $13.6 million, respectively; and unused borrowing capacity available was approximately $17.2 million and $9.0 million, respectively. The Company’s outstanding borrowings under the Term Loan were $22.1 million and $25.5 million at September 30, 2019 and December 31, 2018, 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 $5.3 million net outstanding debt balance at September 30, 2019, as long-term. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
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 and nine months ended September 30, 2019 and 2018: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (Amounts in Thousands) (Amounts in Thousands) Income before income taxes: Domestic $ 1,929 $ 1,544 $ 4,095 $ 4,661 Foreign 761 535 7,983 3,194 Income before income taxes $ 2,690 $ 2,079 $ 12,078 $ 7,855 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 and nine months ended September 30, 2019 and 2018: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (Amounts in Thousands) (Amounts in Thousands) Current provision: Federal $ 508 $ 275 $ 975 $ 838 State 121 4 210 183 Foreign 203 107 621 686 Total current provision $ 832 $ 386 $ 1,806 $ 1,707 Deferred provision (benefit): Federal (45 ) 40 (48 ) 116 State (10 ) 13 (11 ) 33 Foreign (36 ) 20 1,460 182 Total deferred provision (benefit) (91 ) 73 1,401 331 Total provision for income taxes $ 741 $ 459 $ 3,207 $ 2,038 The reconciliation of income taxes computed using the statutory U.S. income tax rate and the provision for income taxes for the three and nine months ended September 30, 2019 and 2018 were as follows (amounts in thousands): Three Months Ended Three Months Ended Income taxes computed at the federal statutory rate $ 565 21.0 % $ 437 21.0 % State income taxes, net of federal tax benefit 111 4.1 17 0.8 Excess tax benefit from stock options/restricted shares — — (72 ) (3.4 ) Difference in income tax rate on foreign earnings/other 65 2.4 77 3.7 $ 741 27.5 % $ 459 22.1 % Nine Months Ended Nine Months Ended Income taxes computed at the federal statutory rate $ 2,536 21.0 % $ 1,650 21.0 % State income taxes, net of federal tax benefit 199 1.7 216 2.7 Excess tax benefit from stock options/restricted shares (6 ) (0.1 ) (84 ) (1.1 ) Difference in income tax rate on foreign earnings/other 478 4.0 256 3.3 $ 3,207 26.6 % $ 2,038 25.9 % 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) Nine Months Ended Balance as of December 31, 2018 $ 263 Additions related to current period — Additions related to prior periods — Reductions related to prior periods (243 ) Balance as of September 30, 2019 $ 20 The reductions related to prior periods in the above table largely reflect the settlement of an IRS audit for fiscal years 2015 and 2016. The impact on our 2019 income tax provision related to this settlement was immaterial. 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 $20,000 during the next twelve months due to the expiration of the statutes of limitation. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2019 | |
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 an initial notional amount of $15.0 million. Notional amounts were $10.9 million and $12.6 million at September 30, 2019 and December 31, 2018, respectively. 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 September 30, 2019 and December 31, 2018 was a liability of $56,000 and an asset of $106,000, respectively, and is reflected in the Condensed Consolidated Balance Sheets as other current liabilities and other current assets, respectively. 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 September 30, 2019: Interest-Rate Swap Contract $ (13 ) Interest Expense $ 7 Interest Expense $ — For the Nine Months Ended September 30, 2019: Interest-Rate Swap Contract $ (161 ) Interest Expense $ 36 Interest Expense $ — For the Three Months Ended September 30, 2018: Interest-Rate Swap Contract $ 27 Interest Expense $ 3 Interest Expense $ — For the Nine Months Ended September 30, 2018: Interest-Rate Swap Contract $ 197 Interest Expense $ (13 ) Interest Expense $ — Information on the location and amounts of derivative fair values in the Condensed Consolidated Balance Sheets (in thousands): September 30, 2019 December 31, 2018 Derivative Instruments Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest-Rate Swap Contracts Other Current $ 56 Other Current $ 106 The estimated amount of pretax income as of September 30, 2019 that is expected to be reclassified from other comprehensive income into earnings within the next 12 months is approximately $30,000. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019 and December 31, 2018, the Company carried the following financial assets (liabilities) at fair value measured on a recurring basis (in thousands): Fair Value as of September 30, 2019 (Amounts in thousands) Level 1 Level 2 Level 3 Total Interest-Rate Swap Contracts $ — $ (56 ) $ — $ (56 ) Fair Value as of December 31, 2018 (Amounts in thousands) Level 1 Level 2 Level 3 Total Interest-Rate Swap Contracts $ — $ 106 $ — $ 106 Contingent consideration liability $ — $ — $ (6,069 ) $ (6,069 ) 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. During the three months ended June 30, 2019, the Company revalued the contingent consideration liability related to the InfoTrellis acquisition after determining that relevant conditions for payment of such liabilities were unlikely to be fully satisfied. The revaluation resulted in a $6.1 million reduction to the contingent consideration liability related to the InfoTrellis acquisition. The following table provides information regarding changes in the Company’s contingent consideration liability for the periods ended September 30, 2019 and December 31, 2018. Nine Months Ended Twelve Months Ended September 30, 2019 December 31, 2018 (Amounts in thousands) Beginning balance $ 6,069 $ 17,125 Revaluations (6,069 ) (11,056 ) Ending balance $ — $ 6,069 At September 30, 2019 and December 31, 2018, the Company carried the following financial assets (liabilities) at fair value measured on a non-recurring Fair Value as of September 30, 2019 (Amounts in thousands) Level 1 Level 2 Level 3 Total Goodwill $ — $ — $ 26,106 $ 26,106 Fair Value as of December 31, 2018 (Amounts in thousands) Level 1 Level 2 Level 3 Total Goodwill $ — $ — $ 26,106 $ 26,106 During the three and nine month period ended September 30, 2018, the Company recorded a goodwill impairment related to the InfoTrellis acquisition of $0.0 million and $7.7 million, respectively. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
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 and nine months ended September 30, 2019, the Company purchased 0 shares and 2,574 shares at a share price of $5.05, respectively, to satisfy employee tax obligations related to the vesting of restricted stock. During the three and nine months ended September 30, 2018, the Company purchased 0 shares and 2,574 shares at a share price of $8.01, respectively, to satisfy employee tax obligations related to the vesting of restricted stock. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 13. Earnings 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 and nine months ended September 30, 2019, there were 1.1 million and 1.0 million anti-dilutive stock options excluded from the computation of diluted earnings per share, respectively. For the three and nine months ended September 30, 2018, there were no anti-dilutive stock options excluded from the computation of diluted earnings per share. |
Business Segments and Geographi
Business Segments and Geographic Information | 9 Months Ended |
Sep. 30, 2019 | |
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 InfoTrellis, Inc. This segment is a project-based consulting services business with specialized capabilities in data management and analytics. The business is marketed as Mastech InfoTrellis and utilizes a dedicated sales team with deep subject matter expertise. Mastech InfoTrellis has offices in Toronto, Canada, Atlanta, Georgia and Austin, Texas and a global delivery center in Chennai, India. Project-based delivery reflects a combination of 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; 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 Nine Months Ended 2019 2018 2019 2018 (Amounts in thousands) (Amounts in thousands) Revenues: Data and analytics services $ 7,080 $ 5,787 $ 19,502 $ 18,442 IT staffing services 42,463 38,505 123,712 114,077 Total revenues $ 49,543 $ 44,292 $ 143,214 $ 132,519 Gross Margin %: Data and analytics services 45.7 % 44.5 % 45.8 % 43.7 % IT staffing services 21.4 % 21.1 % 21.3 % 20.9 % Total gross margin % 24.9 % 24.2 % 24.6 % 24.0 % Segment operating income: Data and analytics services $ 1,530 $ 1,325 $ 3,856 $ 4,511 IT staffing services 2,103 1,854 5,501 5,437 Subtotal 3,633 3,179 9,357 9,948 Acquisition transaction expenses 110 — 110 140 Revaluation of contingent consideration liability — — 6,069 9,106 Goodwill impairment — — — (7,738 ) Amortization of acquired intangible assets (673 ) (673 ) (2,017 ) (2,055 ) Interest expenses and other, net (380 ) (427 ) (1,441 ) (1,546 ) Income before income taxes $ 2,690 $ 2,079 $ 12,078 $ 7,855 Below is a reconciliation of segment total assets to consolidated total assets: September 30, December 31, 2019 2018 (Amounts in thousands) Total assets: Data and analytics services $ 42,664 $ 43,182 IT staffing services 50,415 49,402 Total assets $ 93,079 $ 92,584 Below is geographic information related to our revenues from external customers: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (Amounts in thousands) (Amounts in thousands) United States $ 48,421 $ 43,222 $ 139,739 $ 128,775 Canada 737 650 2,180 2,573 India and Other 385 420 1,295 1,171 Total revenues $ 49,543 $ 44,292 $ 143,214 $ 132,519 |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Standards | 15. Recently Issued Accounting Standards Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, 2016-02 2016-02 right-of-use 2018-10, 2018-11, No. 2016-02 2018-20, No. 2019-01, 2018-11. In August 2017, the FASB issued ASU 2017-12, 2018-16, In February 2018, the FASB issued ASU 2018-02, In June 2018, the FASB issued ASU 2018-07, In July 2018, the FASB issued ASU 2018-09, Recent Accounting Pronouncements not yet adopted In January 2017, the FASB issued ASU 2017-04, 2017-04 2017-04 In August 2018, the FASB issued ASU 2018-13, In August 2018, the FASB issued ASU 2018-15, Other-Internal-Use 350-40): internal-use In April 2019, the FASB issued ASU 2019-04, 2016-13 2017-12 2016-01 825-10): 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. |
Description of Business and B_2
Description of Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
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 around Salesforce.com and Digital Learning; and IT staffing services for both digital and mainstream technologies. Reflective of our 2017 acquisition of the services division of Canada-based InfoTrellis, 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, 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, 2018, 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 No. 2016-02, 2018-11. |
Segment Reporting | Segment Reporting The Company has two reportable segments in accordance with Accounting Standards Committee (“ASC”) Topic 280 “Disclosures About Segments of an Enterprise and Related Information”: Data and Analytics Services and IT Staffing Services. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 Nine Months Ended 2019 2018 2019 2018 (Amounts in millions) (Amounts in millions) Data and Analytics Services Segment Time-and-material $ 5,415 $ 3,772 $ 14,178 $ 14,185 Fixed-price Contracts 1,665 2,015 5,324 4,257 Subtotal Data and Analytics Services $ 7,080 $ 5,787 $ 19,502 $ 18,442 IT Staffing Services Segment Time-and-material $ 42,463 $ 38,505 $ 123,712 $ 114,077 Fixed-price Contracts — — — — Subtotal IT Staffing Services $ 42,463 $ 38,505 $ 123,712 $ 114,077 Total Revenues $ 49,543 $ 44,292 $ 143,214 $ 132,519 |
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 Nine Months Ended 2019 2018 2019 2018 (Amounts in thousands) (Amounts in thousands) United States $ 48,421 $ 43,222 $ 139,739 $ 128,775 Canada 737 650 2,180 2,573 India and Other 385 420 1,295 1,171 Total revenues $ 49,543 $ 44,292 $ 143,214 $ 132,519 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Reconciliation of Goodwill | The following table provides information regarding changes in the Company’s goodwill by operating segment for the periods ended September 30, 2019 and December 31, 2018. Nine Months Ended Twelve Months Ended (Amounts in thousands) IT Staffing Services: Beginning balance $ 8,427 $ 8,427 Goodwill recorded — — Impairment — — Ending balance $ 8,427 $ 8,427 Nine Months Ended Twelve Months Ended (Amounts in thousands) Data and Analytics Services: Beginning balance $ 17,679 $ 27,417 Goodwill recorded — — Impairment — (9,738 ) Ending balance $ 17,679 $ 17,679 |
Components of Identifiable Intangible assets | 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 September 30, 2019 and December 31, 2018: As of September 30, 2019 (Amounts in thousands) Amortization Gross Carrying Accumulative Net Carrying IT Staffing Services: Client relationships 12 $ 7,999 $ 2,861 $ 5,138 Covenant-not-to-compete 5 319 274 45 Trade name 3 249 249 — Data and Analytics Services: Client relationships 12 16,671 3,068 13,603 Covenant-not-to-compete 5 761 336 425 Trade name 5 1,221 539 682 Technology 7 1,209 381 828 Total Intangible Assets $ 28,429 $ 7,708 $ 20,721 As of December 31, 2018 (Amounts in thousands) Amortization Gross Carrying Accumulative Net Carrying IT Staffing Services: Client relationships 12 $ 7,999 $ 2,361 $ 5,638 Covenant-not-to-compete 5 319 226 93 Trade name 3 249 249 — Data and Analytics Services: Client relationships 12 16,671 2,025 14,646 Covenant-not-to-compete 5 761 222 539 Trade name 5 1,221 356 865 Technology 7 1,209 252 957 Total Intangible Assets $ 28,429 $ 5,691 $ 22,738 |
Schedule of Estimated Amortization Expense | The estimated aggregate amortization expense for intangible assets for the years ending December 31, 2019 through 2023 is as follows: Years Ended December 31, 2019 2020 2021 2022 2023 (Amounts in thousands) Amortization expense $ 2,689 $ 2,654 $ 2,625 $ 2,443 $ 2,229 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Summary of Balance Sheet classification of lease asset and related lease liability | The following table summarizes the balance sheet classification of the lease asset and related lease liability: September 30, 2019 (in thousands) Assets: Long-term operating lease right-of-use $ 4,993 Liabilities: Short-term operating lease liability $ 1,407 Long-term operating lease liability 3,686 Total Liabilities $ 5,093 |
Schedule of Minimum Future Rental Payments | Future minimum rental payments for office facilities and equipment under the Company’s noncancelable operating leases are as follows: Amount as of (in thousands) 2019 (For remainder of year) $ 419 2020 1,625 2021 1,152 2022 1,126 2023 1,106 Thereafter 287 Total $ 5,715 Less: Imputed interest (622 ) Present value of operating lease liabilities $ 5,093 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 and nine months ended September 30, 2019 and 2018: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (Amounts in Thousands) (Amounts in Thousands) Income before income taxes: Domestic $ 1,929 $ 1,544 $ 4,095 $ 4,661 Foreign 761 535 7,983 3,194 Income before income taxes $ 2,690 $ 2,079 $ 12,078 $ 7,855 |
Provision for Income Taxes | The provision for income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three and nine months ended September 30, 2019 and 2018: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (Amounts in Thousands) (Amounts in Thousands) Current provision: Federal $ 508 $ 275 $ 975 $ 838 State 121 4 210 183 Foreign 203 107 621 686 Total current provision $ 832 $ 386 $ 1,806 $ 1,707 Deferred provision (benefit): Federal (45 ) 40 (48 ) 116 State (10 ) 13 (11 ) 33 Foreign (36 ) 20 1,460 182 Total deferred provision (benefit) (91 ) 73 1,401 331 Total provision for income taxes $ 741 $ 459 $ 3,207 $ 2,038 |
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 and nine months ended September 30, 2019 and 2018 were as follows (amounts in thousands): Three Months Ended Three Months Ended Income taxes computed at the federal statutory rate $ 565 21.0 % $ 437 21.0 % State income taxes, net of federal tax benefit 111 4.1 17 0.8 Excess tax benefit from stock options/restricted shares — — (72 ) (3.4 ) Difference in income tax rate on foreign earnings/other 65 2.4 77 3.7 $ 741 27.5 % $ 459 22.1 % Nine Months Ended Nine Months Ended Income taxes computed at the federal statutory rate $ 2,536 21.0 % $ 1,650 21.0 % State income taxes, net of federal tax benefit 199 1.7 216 2.7 Excess tax benefit from stock options/restricted shares (6 ) (0.1 ) (84 ) (1.1 ) Difference in income tax rate on foreign earnings/other 478 4.0 256 3.3 $ 3,207 26.6 % $ 2,038 25.9 % |
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) Nine Months Ended Balance as of December 31, 2018 $ 263 Additions related to current period — Additions related to prior periods — Reductions related to prior periods (243 ) Balance as of September 30, 2019 $ 20 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Effect of Derivative Instruments on 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 September 30, 2019: Interest-Rate Swap Contract $ (13 ) Interest Expense $ 7 Interest Expense $ — For the Nine Months Ended September 30, 2019: Interest-Rate Swap Contract $ (161 ) Interest Expense $ 36 Interest Expense $ — For the Three Months Ended September 30, 2018: Interest-Rate Swap Contract $ 27 Interest Expense $ 3 Interest Expense $ — For the Nine Months Ended September 30, 2018: Interest-Rate Swap Contract $ 197 Interest Expense $ (13 ) Interest Expense $ — |
Information on Location and Amounts of Derivative Fair Values in Consolidated Balance Sheets | Information on the location and amounts of derivative fair values in the Condensed Consolidated Balance Sheets (in thousands): September 30, 2019 December 31, 2018 Derivative Instruments Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest-Rate Swap Contracts Other Current $ 56 Other Current $ 106 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and (Liabilities) at Fair Value Measured on Recurring Basis | At September 30, 2019 and December 31, 2018, the Company carried the following financial assets (liabilities) at fair value measured on a recurring basis (in thousands): Fair Value as of September 30, 2019 (Amounts in thousands) Level 1 Level 2 Level 3 Total Interest-Rate Swap Contracts $ — $ (56 ) $ — $ (56 ) Fair Value as of December 31, 2018 (Amounts in thousands) Level 1 Level 2 Level 3 Total Interest-Rate Swap Contracts $ — $ 106 $ — $ 106 Contingent consideration liability $ — $ — $ (6,069 ) $ (6,069 ) |
Schedule of Changes in Contingent Consideration Liability | The following table provides information regarding changes in the Company’s contingent consideration liability for the periods ended September 30, 2019 and December 31, 2018. Nine Months Ended Twelve Months Ended September 30, 2019 December 31, 2018 (Amounts in thousands) Beginning balance $ 6,069 $ 17,125 Revaluations (6,069 ) (11,056 ) Ending balance $ — $ 6,069 |
Summary of Financial Assets (Liabilities) at Fair Value Measured on Non-recurring Basis | At September 30, 2019 and December 31, 2018, the Company carried the following financial assets (liabilities) at fair value measured on a non-recurring Fair Value as of September 30, 2019 (Amounts in thousands) Level 1 Level 2 Level 3 Total Goodwill $ — $ — $ 26,106 $ 26,106 Fair Value as of December 31, 2018 (Amounts in thousands) Level 1 Level 2 Level 3 Total Goodwill $ — $ — $ 26,106 $ 26,106 |
Business Segments and Geograp_2
Business Segments and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Summary of Operating Segments | Three Months Ended Nine Months Ended 2019 2018 2019 2018 (Amounts in thousands) (Amounts in thousands) Revenues: Data and analytics services $ 7,080 $ 5,787 $ 19,502 $ 18,442 IT staffing services 42,463 38,505 123,712 114,077 Total revenues $ 49,543 $ 44,292 $ 143,214 $ 132,519 Gross Margin %: Data and analytics services 45.7 % 44.5 % 45.8 % 43.7 % IT staffing services 21.4 % 21.1 % 21.3 % 20.9 % Total gross margin % 24.9 % 24.2 % 24.6 % 24.0 % Segment operating income: Data and analytics services $ 1,530 $ 1,325 $ 3,856 $ 4,511 IT staffing services 2,103 1,854 5,501 5,437 Subtotal 3,633 3,179 9,357 9,948 Acquisition transaction expenses 110 — 110 140 Revaluation of contingent consideration liability — — 6,069 9,106 Goodwill impairment — — — (7,738 ) Amortization of acquired intangible assets (673 ) (673 ) (2,017 ) (2,055 ) Interest expenses and other, net (380 ) (427 ) (1,441 ) (1,546 ) Income before income taxes $ 2,690 $ 2,079 $ 12,078 $ 7,855 |
Summary of Assets, Depreciation and Amortization and Capital Expenditures by Segment | Below is a reconciliation of segment total assets to consolidated total assets: September 30, December 31, 2019 2018 (Amounts in thousands) Total assets: Data and analytics services $ 42,664 $ 43,182 IT staffing services 50,415 49,402 Total assets $ 93,079 $ 92,584 |
Summary of Revenue from External Customers and Long-lived Assets | Below is geographic information related to our revenues from external customers: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (Amounts in thousands) (Amounts in thousands) United States $ 48,421 $ 43,222 $ 139,739 $ 128,775 Canada 737 650 2,180 2,573 India and Other 385 420 1,295 1,171 Total revenues $ 49,543 $ 44,292 $ 143,214 $ 132,519 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Percentage of billing expense revenues | 2.00% | |||
Sales Revenue Net [Member] | Revenue from Rights Concentration Risk [Member] | CGI [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of number of customers revenue | 11.30% | 13.50% | 11.30% | 12.90% |
Number of customers | 1 | 1 | 1 | 1 |
Top Ten Customers [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue percentage of total revenue | 45.00% | 48.00% | 45.00% | 48.00% |
Data and Analytics Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of revenue from customers | 100.00% |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Summary of Disaggregation of Our Revenues by Contract Type and Operating Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues by contract type and operating segment | $ 49,543 | $ 44,292 | $ 143,214 | $ 132,519 |
Data and Analytics Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues by contract type and operating segment | 7,080 | 5,787 | 19,502 | 18,442 |
Data and Analytics Services [Member] | Time-and-Material Contract [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues by contract type and operating segment | 5,415 | 3,772 | 14,178 | 14,185 |
Data and Analytics Services [Member] | Fixed-Price Contract [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues by contract type and operating segment | 1,665 | 2,015 | 5,324 | 4,257 |
IT Staffing Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues by contract type and operating segment | 42,463 | 38,505 | 123,712 | 114,077 |
IT Staffing Services [Member] | Time-and-Material Contract [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues by contract type and operating segment | $ 42,463 | $ 38,505 | $ 123,712 | $ 114,077 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Summary of Revenue from External Customers (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue from External Customer [Line Items] | ||||
Total | $ 49,543 | $ 44,292 | $ 143,214 | $ 132,519 |
United States [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total | 48,421 | 43,222 | 139,739 | 128,775 |
Canada [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total | 737 | 650 | 2,180 | 2,573 |
India and Other [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total | $ 385 | $ 420 | $ 1,295 | $ 1,171 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, net - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Jul. 13, 2017 | Jun. 15, 2015 | |
Goodwill and Intangible Assets [Line Items] | |||||||
Goodwill | $ 26,106 | $ 26,106 | $ 26,106 | ||||
Goodwill impairment | $ 7,738 | ||||||
Amortization expense | $ 673 | $ 673 | $ 2,017 | 2,055 | |||
Hudson IT [Member] | |||||||
Goodwill and Intangible Assets [Line Items] | |||||||
Goodwill | $ 8,400 | ||||||
Info Trellis Inc [Member] | |||||||
Goodwill and Intangible Assets [Line Items] | |||||||
Goodwill | $ 27,400 | ||||||
Goodwill impairment | $ 0 | $ 7,700 | $ 9,700 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, net - Reconciliation of Goodwill (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Beginning balance | $ 26,106 | ||
Impairment | $ 7,738 | ||
Ending balance | 26,106 | $ 26,106 | |
IT Staffing Services [Member] | |||
Beginning balance | 8,427 | 8,427 | 8,427 |
Impairment | |||
Ending balance | 8,427 | 8,427 | |
Data and Analytics Services [Member] | |||
Beginning balance | 17,679 | $ 27,417 | 27,417 |
Impairment | (9,738) | ||
Ending balance | $ 17,679 | $ 17,679 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Components of Identifiable Intangible assets (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Intangible Assets, Accumulated Amortization | $ 7,708 | $ 5,691 |
Total Intangible Assets, Gross Carrying Value | 28,429 | 28,429 |
Total Intangible Assets, Net Carrying Value | $ 20,721 | $ 22,738 |
Client Relationships [Member] | IT Staffing Services [Member] | ||
Amortization Period (In Years) | 12 years | 12 years |
Intangible Assets, Gross Carrying Value | $ 7,999 | $ 7,999 |
Intangible Assets, Accumulated Amortization | 2,861 | 2,361 |
Intangible Assets, Net Carrying Value | $ 5,138 | $ 5,638 |
Client Relationships [Member] | Data and Analytics Services [Member] | ||
Amortization Period (In Years) | 12 years | 12 years |
Intangible Assets, Gross Carrying Value | $ 16,671 | $ 16,671 |
Intangible Assets, Accumulated Amortization | 3,068 | 2,025 |
Intangible Assets, Net Carrying Value | $ 13,603 | $ 14,646 |
Covenant Not-to-Compete [Member] | IT Staffing Services [Member] | ||
Amortization Period (In Years) | 5 years | 5 years |
Intangible Assets, Gross Carrying Value | $ 319 | $ 319 |
Intangible Assets, Accumulated Amortization | 274 | 226 |
Intangible Assets, Net Carrying Value | $ 45 | $ 93 |
Covenant Not-to-Compete [Member] | Data and Analytics Services [Member] | ||
Amortization Period (In Years) | 5 years | 5 years |
Intangible Assets, Gross Carrying Value | $ 761 | $ 761 |
Intangible Assets, Accumulated Amortization | 336 | 222 |
Intangible Assets, Net Carrying Value | $ 425 | $ 539 |
Trade Name [Member] | IT Staffing Services [Member] | ||
Amortization Period (In Years) | 3 years | 3 years |
Intangible Assets, Gross Carrying Value | $ 249 | $ 249 |
Intangible Assets, Accumulated Amortization | 249 | 249 |
Intangible Assets, Net Carrying Value | $ 0 | $ 0 |
Trade Name [Member] | Data and Analytics Services [Member] | ||
Amortization Period (In Years) | 5 years | 5 years |
Intangible Assets, Gross Carrying Value | $ 1,221 | $ 1,221 |
Intangible Assets, Accumulated Amortization | 539 | 356 |
Intangible Assets, Net Carrying Value | $ 682 | $ 865 |
Technology [Member] | Data and Analytics Services [Member] | ||
Amortization Period (In Years) | 7 years | 7 years |
Intangible Assets, Gross Carrying Value | $ 1,209 | $ 1,209 |
Intangible Assets, Accumulated Amortization | 381 | 252 |
Intangible Assets, Net Carrying Value | $ 828 | $ 957 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets, net - Schedule of Estimated Amortization Expense (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Intangible Liability Disclosure [Abstract] | |
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 |
Estimated aggregate amortization expense for year ending 2023 | $ 2,229 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)ft² | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)ft² | Sep. 30, 2018USD ($) | Jan. 01, 2019USD ($) | |
Square feet of office space | ft² | 88,000 | 88,000 | |||
Average initial lease term | 5 years | 5 years | |||
Lease liability | $ 5,093 | $ 5,093 | $ 5,700 | ||
Discount rate | 5.40% | 5.40% | |||
Operating leases, rent expense, net | $ 400 | $ 300 | $ 1,200 | $ 1,000 | |
Minimum [Member] | |||||
Lease term range | 1 year | ||||
Maximum [Member] | |||||
Lease term range | 4 years 10 months 24 days | ||||
Weighted Average [Member] | |||||
Lease term range | 2 years 2 months 12 days |
Leases - Summary of Balance She
Leases - Summary of Balance Sheet classification of lease asset and related lease liability (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Assets: | ||
Long-term operating lease right-of-use assets | $ 4,993 | |
Liabilities: | ||
Short-term operating lease liability | 1,407 | |
Long-term operating lease liability | 3,686 | |
Total Liabilities | $ 5,093 | $ 5,700 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Rental Payments for Operating Leases (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
2019 (For remainder of year) | $ 419 | |
2020 | 1,625 | |
2021 | 1,152 | |
2022 | 1,126 | |
2023 | 1,106 | |
Thereafter | 287 | |
Total | 5,715 | |
Less: Imputed interest | (622) | |
Present value of operating lease liabilities | $ 5,093 | $ 5,700 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Matching contributions | $ 0 | $ 0 | $ 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 | $ 9,000 | $ 19,000 | $ 44,000 | $ 62,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | May 15, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares allocated for issuance to directors, officers and key personnel | 3,900,000 | 3,900,000 | ||||
Shares available for future grants | 150,000 | 150,000 | 549,000 | |||
Number of Options, Granted | 130,000 | 683,000 | 180,000 | |||
Stock-based compensation expense | $ 263 | $ 116 | $ 766 | $ 341 | ||
Strike price | $ / shares | $ 5.65 | $ 6.48 | $ 7.46 | |||
Restricted shares granted | 16,365 | 25,380 | ||||
Stock Options And Restricted Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares issued related to exercise of stock options | 0 | 56,636 | 17,460 | 65,112 | ||
Employee Stock Purchase Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares available for future grants | 574,000 | 574,000 | 600,000 | |||
Employee Stock Purchase Plans | 25,793 | |||||
Share price | $ 4.04 | $ 4.04 |
Credit Facility - Additional in
Credit Facility - Additional information (Detail) - USD ($) | Jul. 13, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Line of Credit Facility [Line Items] | ||||
Current borrowing capacity under line of credit facility | $ 17,200,000 | $ 9,000,000 | ||
Payment of deferred financing costs | $ 71,000 | |||
Deferred financing costs | 289,000 | 367,000 | ||
Term Loan Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Outstanding borrowings amount | $ 22,100,000 | 25,500,000 | ||
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] | ||||
Line of credit facility payment term description | The principal amount of each quarterly installment payable on the Term Loan equals the product of $30.5 million, multiplied by (i) 3.75% for quarterly installments payable 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. | |||
Revolving Line of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Percentage of eligible accounts receivable | 85.00% | |||
Outstanding borrowings amount | $ 5,300,000 | $ 13,600,000 | ||
Revolving Line of Credit [Member] | United States [Member] | ||||
Line of Credit Facility [Line Items] | ||||
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% | |||
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] | Swing Loans [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Credit facility maximum borrowing capacity | $ 5,000,000 | |||
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 | $ 60,000,000 | |||
Payment of deferred financing costs | $ 506,000 | |||
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 | |||
PNC Bank, N.A. [Member] | Revolving Line of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Credit facility maximum borrowing capacity | 22,500,000 | |||
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% | |||
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% |
Income Taxes - Components of In
Income Taxes - Components of Income Before Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income before income taxes: | ||||
Domestic | $ 1,929 | $ 1,544 | $ 4,095 | $ 4,661 |
Foreign | 761 | 535 | 7,983 | 3,194 |
Income before income taxes | $ 2,690 | $ 2,079 | $ 12,078 | $ 7,855 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Current provision: | ||||
Federal | $ 508 | $ 275 | $ 975 | $ 838 |
State | 121 | 4 | 210 | 183 |
Foreign | 203 | 107 | 621 | 686 |
Total current provision | 832 | 386 | 1,806 | 1,707 |
Deferred provision (benefit): | ||||
Federal | (45) | 40 | (48) | 116 |
State | (10) | 13 | (11) | 33 |
Foreign | (36) | 20 | 1,460 | 182 |
Total deferred provision (benefit) | (91) | 73 | 1,401 | 331 |
Total provision for income taxes | $ 741 | $ 459 | $ 3,207 | $ 2,038 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income taxes computed at the federal statutory rate, Value | $ 565 | $ 437 | $ 2,536 | $ 1,650 |
State income taxes, net of federal tax benefit, Value | 111 | 17 | 199 | 216 |
Excess tax benefits from stock options/restricted shares | (72) | (6) | (84) | |
Difference in tax rate on foreign earnings/other | 65 | 77 | 478 | 256 |
Total provision for income taxes | $ 741 | $ 459 | $ 3,207 | $ 2,038 |
Income taxes computed at the federal statutory rate | 21.00% | 21.00% | 21.00% | 21.00% |
State income taxes, net of federal tax benefit | 4.10% | 0.80% | 1.70% | 2.70% |
Excess tax benefit from stock options/restricted shares | (3.40%) | (0.10%) | (1.10%) | |
Difference in income tax rate on foreign earnings/other | 2.40% | 3.70% | 4.00% | 3.30% |
Effective for income tax rate, Total | 27.50% | 22.10% | 26.60% | 25.90% |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits Related to Uncertain Tax Positions (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Income Tax Disclosure [Abstract] | |
Balance as of December 31, 2018 | $ 263 |
Additions related to current period | 0 |
Additions related to prior periods | 0 |
Reductions related to prior periods | (243) |
Balance as of September 30, 2019 | $ 20 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Income Tax Disclosure [Abstract] | |
Estimated amount that the unrecognized tax benefit will be reduced over the next 12-months | $ 20,000 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) | 9 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2018 | Jul. 13, 2017 | |
Interest Rate Swap Contracts [Member] | Other Current Liabilities [Member] | |||
Derivative [Line Items] | |||
Liability of fair value of the interest rate swap contracts | $ 56,000 | ||
Interest Rate Swap Contracts [Member] | Other Current Assets [Member] | |||
Derivative [Line Items] | |||
Asset of fair value of the interest rate swap contracts | $ 106,000 | ||
Interest Rate Risk Management [Member] | |||
Derivative [Line Items] | |||
Notional amount | 10,900,000 | 12,600,000 | |
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 Liabilities [Member] | |||
Derivative [Line Items] | |||
Liability of fair value of the interest rate swap contracts | 56,000 | ||
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 | $ 106,000 | ||
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 | $ 30,000 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Effect of Derivative Instruments on Consolidated Statements of Operations and Comprehensive Income (Detail) - Interest rate swap contracts [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain / (Loss) recognized in OCI on Derivatives | $ (13) | $ 27 | $ (161) | $ 197 |
Cash Flow Hedging Relationships [Member] | Interest Expense [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain / (Loss) recognized in OCI on Derivatives | (13) | 27 | (161) | 197 |
Amount of Gain / (Loss) reclassified from Accumulated OCI to Income (Expense) | 7 | 3 | 36 | (13) |
Amount of Gain / (Loss) recognized in Income (Expense) on Derivatives |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Information on Location and Amounts of Derivative Fair Values in Consolidated Balance Sheets (Detail) - Interest Rate Swap Contracts [Member] - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Fair Value Liability | $ 56 | |
Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Fair Value Asset | $ 106 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Shares purchased to satisfy employee tax obligation | 0 | 0 | 2,574 | 2,574 |
Average share price for additional shares purchased | $ 5.05 | $ 8.01 | $ 5.05 | $ 8.01 |
Earnings per Share - Additional
Earnings per Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Anti-dilutive securities not included in computation of earnings per share | 1,100,000 | 0 | 1,000,000 | 0 |
Business Segments and Geograp_3
Business Segments and Geographic Information - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019Segment | |
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 Geograp_4
Business Segments and Geographic Information - Summary of Operating Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||
Revenues | $ 49,543 | $ 44,292 | $ 143,214 | $ 132,519 | |
Total gross margin % | 24.90% | 24.20% | 24.60% | 24.00% | |
Segment operating income | $ 3,070 | $ 2,506 | $ 13,519 | $ 9,401 | |
Acquisition transaction expenses | 110 | 110 | 140 | ||
Revaluation of contingent consideration liability | 6,069 | 9,106 | $ 11,056 | ||
Goodwill impairment | (7,738) | ||||
Amortization of acquired intangible assets | (673) | (673) | (2,017) | (2,055) | |
Interest expenses and other, net | (380) | (427) | (1,441) | (1,546) | |
Income before income taxes | 2,690 | 2,079 | 12,078 | 7,855 | |
Data and Analytics Services [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 7,080 | $ 5,787 | $ 19,502 | $ 18,442 | |
Total gross margin % | 45.70% | 44.50% | 45.80% | 43.70% | |
Goodwill impairment | 9,738 | ||||
IT Staffing Services [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 42,463 | $ 38,505 | $ 123,712 | $ 114,077 | |
Total gross margin % | 21.40% | 21.10% | 21.30% | 20.90% | |
Goodwill impairment | |||||
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Segment operating income | $ 3,633 | $ 3,179 | 9,357 | $ 9,948 | |
Operating Segments [Member] | Data and Analytics Services [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Segment operating income | 1,530 | 1,325 | 3,856 | 4,511 | |
Operating Segments [Member] | IT Staffing Services [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Segment operating income | $ 2,103 | $ 1,854 | $ 5,501 | $ 5,437 |
Business Segments and Geograp_5
Business Segments and Geographic Information - Summary of Assets by Segment (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 93,079 | $ 92,584 |
Data and Analytics Services [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 42,664 | 43,182 |
IT Staffing Services [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 50,415 | $ 49,402 |
Business Segments and Geograp_6
Business Segments and Geographic Information - Summary of Revenue from External Customers (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 49,543 | $ 44,292 | $ 143,214 | $ 132,519 |
United States [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 48,421 | 43,222 | 139,739 | 128,775 |
Canada [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 737 | 650 | 2,180 | 2,573 |
India and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 385 | $ 420 | $ 1,295 | $ 1,171 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Fair Value Disclosures [Line Items] | |||||
Revaluation of contingent consideration liability | $ (6,069) | $ (9,106) | $ (11,056) | ||
Goodwill impairment | 7,738 | ||||
Info Trellis Inc [Member] | |||||
Fair Value Disclosures [Line Items] | |||||
Revaluation of contingent consideration liability | $ 6,100 | ||||
Goodwill impairment | $ 0 | $ 7,700 | $ 9,700 |
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 | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liabilities | $ (6,069) | |
Interest Rate Swap Contracts [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial liability | $ (56) | |
Fair value of financial asset | 106 | |
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 liability | $ (56) | |
Fair value of financial asset | 106 | |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liabilities | $ (6,069) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Changes in Contingent Consideration Liability (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |||
Beginning balance | $ 6,069 | $ 17,125 | $ 17,125 |
Revaluation | $ (6,069) | $ (9,106) | (11,056) |
Ending balance | $ 6,069 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Financial Assets (Liabilities) at Fair Value Measured on Non-recurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||
Goodwill | $ 26,106 | $ 26,106 |
Level 3 [Member] | ||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||
Goodwill | $ 26,106 | $ 26,106 |
Recently Issued Accounting St_2
Recently Issued Accounting Standards - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating Lease, Liability | $ 5,093 | $ 5,700 |
Accounting Standards Update 2018-11 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating Lease, Liability | $ 5,700 |