Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 30, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
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 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity File Number | 001-34099 | |
Entity Incorporation, State or Country Code | PA | |
Entity Tax Identification Number | 26-2753540 | |
Entity Address, Address Line One | 1305 Cherrington Parkway | |
Entity Address, Address Line Two | Building 210 | |
Entity Address, Address Line Three | Suite 400 | |
Entity Address, City or Town | Moon Township | |
Entity Address, Postal Zip Code | 15108 | |
Entity Address, State or Province | PA | |
City Area Code | 412 | |
Local Phone Number | 787-2100 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | MHH | |
Security Exchange Name | NYSEAMER | |
Entity Common Stock, Shares Outstanding | 11,599,334 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenues | $ 59,755 | $ 49,775 |
Cost of revenues | 43,823 | 36,971 |
Gross profit | 15,932 | 12,804 |
Selling, general and administrative expenses: | ||
Selling, general and administrative expenses | 12,625 | 10,935 |
Income from operations | 3,307 | 1,869 |
Interest income (expense), net | (114) | (195) |
Other income (expense), net | 54 | (37) |
Income before income taxes | 3,247 | 1,637 |
Income tax expense | 915 | 443 |
Net income | $ 2,332 | $ 1,194 |
Earnings Per Share: | ||
Basic | $ 0.20 | $ 0.10 |
Diluted | $ 0.19 | $ 0.10 |
Weighted average common shares outstanding: | ||
Basic | 11,509 | 11,415 |
Diluted | 12,035 | 11,997 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Net income | $ 2,332 | $ 1,194 |
Other comprehensive income (loss): | ||
Net unrealized gain on interest-rate swap contracts | 0 | 35 |
Foreign currency translation adjustments | (147) | (19) |
Total pretax net unrealized gain (loss) | (147) | 16 |
Income tax expense | 0 | 9 |
Total other comprehensive gain (loss), net of taxes | (147) | 7 |
Total comprehensive income | $ 2,185 | $ 1,201 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 7,185 | $ 6,622 |
Accounts receivable, net of allowance for uncollectible accounts of $375 in 2022 and $375 in 2021 | 35,137 | 34,153 |
Unbilled receivables | 11,701 | 9,240 |
Prepaid and other current assets | 3,191 | 3,890 |
Total current assets | 57,214 | 53,905 |
Equipment, enterprise software, and leasehold improvements, at cost: | ||
Equipment | 2,741 | 2,356 |
Enterprise software | 4,172 | 3,753 |
Leasehold improvements | 760 | 842 |
Total equipment, enterprise software, and leasehold improvements | 7,673 | 6,951 |
Less – accumulated depreciation and amortization | (4,133) | (3,913) |
Net equipment, enterprise software, and leasehold improvements | 3,540 | 3,038 |
Operating lease right-of-use assets | 5,033 | 4,894 |
Non-current deposits | 511 | 595 |
Goodwill, net of impairment | 32,510 | 32,510 |
Intangible assets, net of amortization | 17,968 | 18,760 |
Total assets | 116,776 | 113,702 |
Current liabilities: | ||
Current portion of long-term debt | 4,400 | 4,400 |
Accounts payable | 6,242 | 4,954 |
Accrued payroll and related costs | 13,367 | 14,240 |
Current portion of operating lease liability | 1,571 | 1,479 |
Other accrued liabilities | 779 | 1,227 |
Deferred revenue | 443 | 544 |
Total current liabilities | 26,802 | 26,844 |
Long-term liabilities: | ||
Long-term debt, less current portion, net | 7,252 | 8,334 |
Long-term operating lease liability, less current portion | 3,677 | 3,706 |
Long-term accrued income taxes | 125 | 125 |
Deferred income taxes | 888 | 265 |
Total liabilities | 38,744 | 39,274 |
Commitments and contingent liabilities (Note 6) | ||
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 13,233,767 shares issued as of March 31, 2022 and 13,112,202 shares issued as of December 31, 2021 | 133 | 131 |
Additional paid-in-capital | 29,667 | 28,250 |
Retained earnings | 53,173 | 50,841 |
Accumulated other comprehensive income (loss) | (754) | (607) |
Treasury stock, at cost; 1,646,420 shares as of March 31, 2022 and as of December 31, 2021 | (4,187) | (4,187) |
Total shareholders' equity | 78,032 | 74,428 |
Total liabilities and shareholders' equity | $ 116,776 | $ 113,702 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for uncollectible accounts | $ 375 | $ 375 |
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 | 13,233,767 | 13,112,202 |
Treasury stock, shares | 1,646,420 | 1,646,420 |
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, 2020 | $ 59,533 | $ 130 | $ 25,509 | $ 38,620 | $ (4,187) | $ (539) |
Net income | 1,194 | 1,194 | ||||
Other comprehensive gain (loss), net of taxes | 7 | 7 | ||||
Stock-based compensation expense | 621 | 621 | ||||
Stock options exercised | 101 | 101 | ||||
Ending Balances at Mar. 31, 2021 | 61,456 | 130 | 26,231 | 39,814 | (4,187) | (532) |
Beginning Balances at Dec. 31, 2021 | 74,428 | 131 | 28,250 | 50,841 | (4,187) | (607) |
Net income | 2,332 | 2,332 | ||||
Other comprehensive gain (loss), net of taxes | (147) | (147) | ||||
Stock-based compensation expense | 526 | 526 | ||||
Stock options exercised | 893 | 2 | 891 | |||
Ending Balances at Mar. 31, 2022 | $ 78,032 | $ 133 | $ 29,667 | $ 53,173 | $ (4,187) | $ (754) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
OPERATING ACTIVITIES: | ||
Net income | $ 2,332,000 | $ 1,194,000 |
Adjustments to reconcile net income to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 1,020,000 | 997,000 |
Interest amortization of deferred financing costs | 18,000 | 20,000 |
Stock-based compensation expense | 526,000 | 621,000 |
Deferred income taxes, net | 623,000 | (8,000) |
Operating lease assets and liabilities, net | (76,000) | 12,000 |
Working capital items: | ||
Accounts receivable and unbilled receivables | (3,445,000) | (4,072,000) |
Prepaid and other current assets | 699,000 | 108,000 |
Accounts payable | 1,288,000 | 1,326,000 |
Accrued payroll and related costs | (873,000) | 508,000 |
Other accrued liabilities | (448,000) | 141,000 |
Deferred revenue | (101,000) | (73,000) |
Net cash flows provided by operating activities | 1,563,000 | 774,000 |
INVESTING ACTIVITIES: | ||
Recovery of (payment for) non-current deposits | 84,000 | (63,000) |
Capital expenditures | (730,000) | (128,000) |
Net cash flows (used in) investing activities | (646,000) | (191,000) |
FINANCING ACTIVITIES: | ||
(Repayments) on term loan facility | (1,100,000) | (1,100,000) |
Proceeds from exercise of stock options | 893,000 | 101,000 |
Net cash flows (used in) financing activities | (207,000) | (999,000) |
Effect of exchange rate changes on cash and cash equivalents | (147,000) | (19,000) |
Net change in cash and cash equivalents | 563,000 | (435,000) |
Cash and cash equivalents, beginning of period | 6,622,000 | 7,677,000 |
Cash and cash equivalents, end of period | $ 7,185,000 | $ 7,242,000 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
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 to mostly large and medium-sized Our portfolio of offerings includes data management and analytics services; digital learning services; and IT staffing services. In our 2017 acquisition of the services division of Canada-based InfoTrellis, Inc., we added specialized capabilities in delivering data and analytics services to our customers globally, which became our Data and Analytics Services segment. This segment offers project-based consulting services in the areas of data management, data engineering and data science, with such services delivered using on-site Our IT Staffing Services segment 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. The COVID-19 roll-out COVID-19 COVID-19 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, 2021, included in our Annual Report on Form 10-K Principles of Consolidation The Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. Critical Accounting Policies Please refer to Note 1 “Summary of Significant Accounting Policies” of the Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K Segment Reporting The Company has two reportable segments, in accordance with 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 | 3 Months Ended |
Mar. 31, 2022 | |
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 The Company recognizes revenue on fixed price contracts over time 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. The Company’s time-and-material 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. 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. Each contract the Company enters into is assessed to determine the promised services to be performed and includes identification of the performance obligations required by the contract. In substantially all of our contracts, we have identified a single performance obligation for each contract either because the promised services are distinct or the promised services are highly interrelated and interdependent and therefore represent a combined single performance obligation. 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 Engineering and Analytics, which can be delivered using onsite and offshore resources. Our IT Staffing Services segment 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 The following table depicts the disaggregation of our revenues by contract type and operating segment: Three Months Ended March 31, 2022 2021 (Amounts in thousands) Data and Analytics Services Segment Time-and-material $ 6,181 $ 5,854 Fixed-price Contracts 3,971 2,940 Subtotal Data and Analytics Services $ 10,152 $ 8,794 Three Months Ended March 31, 2022 2021 (Amounts in thousands) IT Staffing Services Segment Time-and-material $ 49,399 $ 40,981 Fixed-price Contracts 204 — Subtotal IT Staffing Services $ 49,603 $ 40,981 Total Revenues $ 59,755 $ 49,775 For the three months ended March 31, 2022, the Company had one client (CGI =17.8%) that exceeded 10% of total revenues. For the three months ended March 31, 2021, the Company had the same one client (CGI = 15.0%) that exceeded 10% of total revenues. The Company’s top ten clients represented approximately 51% and 47% of total revenues for the three months ended March 31, 2022 and 2021, respectively. The following table presents our revenue from external customers disaggregated by geography, based on the work location of our customers: Three Months Ended March 31, 2022 2021 (Amounts in thousands) United States $ 58,347 $ 47,942 Canada 1,019 1,264 India and other 389 569 Total $ 59,755 $ 49,775 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, net | 3 Months Ended |
Mar. 31, 2022 | |
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. Goodwill related to our October 1, 2020, acquisition of AmberLeaf totaled $6.4 million. The Company is amortizing the identifiable intangible assets on a straight-line basis over estimated average lives ranging from 3 to 12 years. Identifiable intangible assets were comprised of the following as of March 31, 2022, and December 31, 2021: As of March 31, 2022 (Amounts in thousands) Amortization Period (In Years) Gross Carrying Value Accumulative Amortization Net Carrying Value IT Staffing Services: Client relationships 12 $ 7,999 $ 4,528 $ 3,471 Covenant-not-to-compete 5 319 319 — Trade name 3 249 249 — Data and Analytics Services: Client relationships 12 19,641 6,911 12,730 Covenant-not-to-compete 5 1,201 848 353 Trade name 5 1,711 1,297 414 Technology 7 1,979 979 1,000 Total Intangible Assets $ 33,099 $ 15,131 $ 17,968 As of December 31, 2021 (Amounts in thousands) Amortization Period (In Years) Gross Carrying Value Accumulative Amortization Net Carrying Value IT Staffing Services: Client relationships 12 $ 7,999 $ 4,361 $ 3,638 Covenant-not-to-compete 5 319 319 — Trade name 3 249 249 — Data and Analytics Services: Client relationships 12 19,641 6,503 13,138 Covenant-not-to-compete 5 1,201 788 413 Trade name 5 1,711 1,211 500 Technology 7 1,979 908 1,071 Total Intangible Assets $ 33,099 $ 14,339 $ 18,760 Amortization expense for the three months ended March 31, 2022 and 2021 totaled $792,000 and $793,000, respectively, and is included in selling, general and administrative expenses in the Condensed Consolidated Statement of Operations. The estimated aggregate amortization expense for intangible assets for the years ending December 31, 2022 through 2026 is as follows: Years Ended December 31, 2022 2023 2024 2025 2026 (Amounts in thousands) Amortization expense $ 2,987 $ 2,772 $ 2,693 $ 2,553 $ 2,413 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | 4. Leases The Company rents certain office facilities and equipment under noncancelable operating leases. As of March 31, 2022, approximately 97,000 square feet of office space is utilized for our sales and recruiting offices, delivery centers, and corporate headquarters. All of our leases are classified as operating leases. The average initial lease term is four years. Several leases have an option to renew, at our sole discretion, for an additional term. Our present lease terms range from less than one year to 5 years with a weighted average of 3.8 years. Leases with an initial term of twelve months or less are not recorded on the balance sheet. The following table summarizes the balance sheet classification of the lease assets and related lease liabilities: March 31, 2022 December 31, 2021 ( in thousands) Assets: Long-term operating lease right-of-use $ 5,033 $ 4,894 Liabilities: Short-term operating lease liability $ 1,571 $ 1,479 Long-term operating lease liability 3,677 3,706 Total liabilities $ 5,248 $ 5,185 Future minimum rental payments for office facilities and equipment under the Company’s noncancelable operating leases are as follows: Amount as of March 31, 2022 (in thousands) 2022 (For remainder of year) $ 1,299 2023 1,732 2024 1,002 2025 734 2026 717 Amount as of March 31, 2022 (in thousands) Thereafter 171 Total 5,655 Less: Imputed interest (407 ) Present value of operating lease liabilities $ 5,248 The weighted average discount rate used to calculate the present value of future lease payments was 4.0%. We recognize rent expense for these leases on a straight-line basis over the lease term. Rental expense for the three months ended March 31, 2022 and 2021 totaled $0.4 million and $0.4 million, respectively. Total cash paid for lease liabilities for the three months ended March 31, 2022 and 2021 totaled $0.4 million and $0.4 million, respectively. New leases entered into during the three months ended March 31, 2022 and 2021 totaled $0.5 million and $0.3 million, respectively, and are considered non cash transactions. |
Payroll Tax Liability
Payroll Tax Liability | 3 Months Ended |
Mar. 31, 2022 | |
Payroll Tax Liability [Abstract] | |
Payroll Tax Liability | 5. Payroll Tax Liability As allowed under the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Company elected to defer payment of the employer’s share of social security tax. As of March 31, 2022, and December 31, 2021, the balance of this liability is $2.3 million and $2.3 million, respectively. The Company is required to repay the $2.3 million by December 31, 2022, which is reflected as part of current liabilities under the caption accrued payroll and related costs. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. 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 | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | 7. 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 and W-2 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 8. Stock-Based Compensation In 2008, the Company adopted a Stock Incentive Plan (the “Plan”) which, as amended, provides that up to 4,900,000 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 March 31, 2022, the Company granted 11,304 restricted share units and 400,000 stock options at a strike price of $18.41 under the Plan. During the three months ended March 31, 2021, the Company granted restricted share units of 11,955 and 270,000 stock options at an average strike price of $17.65. As of March 31, 2022 there were 244,000 shares available for grants under the Plan. Stock-based compensation expense for the three months ended March 31, 2022 and 2021 was $526,000 and $621,000, respectively, and is included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. During the three months ended March 31, 2022 and 2021, the Company issued 90,933 and 29,739 shares, respectively, related to the grant of restricted share units and the exercise of stock options. In October 2018, the Board of Directors of the Company approved the Mastech Digital, Inc. 2019 Employee Stock Purchase Plan (the “Employee Stock Purchase Plan”). The Employee Stock Purchase Plan is intended to meet the requirements of Section 423 of the Code and was approved by the Company’s shareholders to be qualified. On May 15, 2019, the Company’s shareholders approved the Employee Stock Purchase Plan. Under the Employee 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 Employee 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 Company’s eligible full-time employees are able to contribute up to 15% of their base compensation into the Employee Stock Purchase Plan, subject to an annual limit of $25,000 per person. Employees are able to purchase Company Common Stock at a 15% discount to the lower of the fair market value of the Company’s Common Stock on the initial or final trading dates of each six-month six-month six-month During the three months ended March 31, 2022 and 2021, there were no shares issued under the Employee Stock Purchase Plan. As of March 31, 2022, there were 516,399 shares available for purchases under the Employee Stock Purchase Plan. |
Credit Facility
Credit Facility | 3 Months Ended |
Mar. 31, 2022 | |
Text Block [Abstract] | |
Credit Facility | 9. Credit Facility On July 13, 2017, the Company entered into a Credit Agreement (the “Credit Agreement”) with PNC Bank, as administrative agent, swing loan lender and issuing lender, PNC Capital Markets LLC, as sole lead arranger and sole book-runner, and certain financial institution parties thereto as lenders (the “Lenders”). The Credit Agreement, as amended, provides for a total aggregate commitment of $53.1 million, consisting of (i) a revolving credit facility (the “Revolver”) in an aggregate principal amount not to exceed $40 million and; (ii) a $13.1 million term loan facility (the “Term Loan), as more fully described in Exhibit 10.1 to the Company’s Form 8-Ks 8-K/A The Revolver expires in December 2026 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 the maturity date of October 1, 2024. The principal amount of each quarterly installment payable on the Term Loan equals $1.1 million through and including the maturity date, with the maturity date payment equal to the outstanding amount of the loan on that date. Borrowings under the revolver and the term 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) the Bloomberg Short-Term Bank Yield Index (“BSBY”), 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 BSBY 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 The Company pledged substantially all of its assets in support of the Credit Agreement. The Credit Agreement contains standard financial covenants, including, but not limited to, covenants related to the Company’s senior leverage ratio and fixed charge ratio (as defined under the Credit Agreement) and limitations on liens, indebtedness, guarantees, contingent liabilities, loans and investments, distributions, leases, asset sales, stock repurchases and mergers and acquisitions. As of March 31, 2022, the Company was in compliance with all provisions under the facility. In connection with securing the commitments under the Credit Agreement and the April 20, 2018, October 1, 2020, and December 29, 2021 amendments to the Credit Agreement, the Company paid a commitment fee and incurred deferred financing costs totaling $975,000, which were capitalized and are being amortized as interest expense over the life of the facility. Deferred financing costs of $348,000 and $366,000 (net of amortization) as of March 31, 2022, and December 31, 2021, respectively, are presented as reductions in long-term debt in the Company’s Consolidated Balance Sheets. As of March 31, 2022, and December 31, 2021, the Company’s outstanding borrowings under the Revolver totaled $0 million and $0 million, respectively; and unused borrowing capacity available was approximately $35.5 million and $32.4 million, respectively. The Company’s outstanding borrowings under the term loan were $12.0 million and $13.1 million as of March 31, 2022 and December 31, 2021, respectively. Additionally, under the Term Loan agreement there is a mandatory repayment requirement related to excess cash flows (as defined in the Credit Agreement) generated in a given fiscal year. This provision takes effect in first quarter of 2023 should the Company senior leverage ratio exceeds 1.50x. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The components of income before income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three months ended March 31, 2022, and 2021: Three Months Ended March 31, 2022 2021 (Amounts in thousands) Income before income taxes: Domestic $ 3,315 $ 1,881 Foreign (68 ) (244 ) Income before income taxes $ 3,247 $ 1,637 The Company has foreign subsidiaries outside the United States, which generate revenues from non-US The provision for income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three months ended March 31, 2022, and 2021: Three Months Ended March 31, 2022 2021 (Amounts in thousands) Current provision: Federal $ 98 $ 358 State 25 93 Foreign 86 10 Total current provision 209 461 Deferred provision (benefit): Federal 542 (6 ) State 137 (2 ) Foreign (56 ) (42 ) Total deferred provision (benefit) 623 (50 ) Change in valuation allowance 83 32 Total provision for income taxes $ 915 $ 443 The reconciliation of income taxes computed using the statutory U.S. income tax rate and the provision for income taxes for the three months ended March 31, 2022, and 2021 were as follows (amounts in thousands): Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Income taxes computed at the federal statutory rate $ 682 21.0 % $ 344 21.0 % State income taxes, net of federal tax benefit 176 5.4 104 6.3 Excess tax benefits from stock options/restricted shares (77 ) (2.4 ) (67 ) (4.1 ) Difference in tax rate on foreign earnings/other 51 1.6 30 1.9 Change in valuation allowance 83 2.6 32 2.0 $ 915 28.2 % $ 443 27.1 % We evaluate deferred income taxes quarterly to determine if valuation allowances are required or should be adjusted. GAAP accounting guidance requires us to assess whether valuation allowances should be established against deferred tax assets based on all available evidence, both positive and negative using a “more likely than not” standard. Our assessment considers, among other things, the nature of cumulative losses; forecasts of future profitability; the duration of statutory carry-forward periods; and tax planning alternatives. As of March 31, 2022, our valuation allowance was comprised of balances within locations of Singapore and the United Kingdom. The valuation allowance balances at these locations totaled $394,000 and $311,000 as of March 31, 2022, and December 31, 2021, respectively, and reflect net operating losses which may not be realizable in the future. The Company’s Canadian subsidiary are currently under audit by Revenue Canada for the years 2018 and 2019. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | 11. Derivative Instruments and Hedging Activities Interest Rate Risk Management Concurrent with the Company’s July 13, 2017 borrowings under its 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. The swap contracts, which matured on April 1, 2021, were designated as cash flow hedging instruments and qualified as effective hedges at inception under ASC Topic 815, “Derivatives and Hedging”. These contracts were recognized on the balance sheet at fair value. The effective portion of the changes in fair value on these instruments was recorded in other comprehensive income (loss) and was reclassified into the Consolidated Statements of Operations as interest expense in the same period in which the underlying hedge transaction affected earnings. Because the interest-rate swap contracts matured, they had no value as of March 31, 2022, and December 31, 2021, therefore there is no balance reflected in the Consolidated Balance Sheets for these periods. There was no impact on the Consolidated Statements of Operations and Comprehensive Income (“OCI”) for the three months ended March 31, 2022. The effect of derivative instruments on the Consolidated Statements of Operations and OCI for the three months ended March 31, 2021 are as follows (in thousands): Derivatives in ASC Topic 815 Cash Flow Hedging Relationships Amount of Gain recognized in OCI on Derivatives Location of Gain reclassified from Accumulated OCI to Income Amount of Gain reclassified from Accumulated OCI to Income Location of Gain reclassified in Income on Derivatives Amount of Gain recognized Income on Derivatives (Effective Portion) (Effective Portion) (Effective Portion) (Ineffective Portion/Amounts excluded from effectiveness testing) Interest-Rate Swap Contracts $35 Interest Expense $34 Interest Expense $— |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 12. 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. In prior periods, the company carried interest-rate swap contracts and contingent consideration liabilities at fair value measured on a recurring basis. As of March 31, 2022, and December 31, 2021, the Company did not have any balances in the financial statements related to these items as the swap matured on April 1, 2021 and the contingent consideration was revalued to zero as of December 31, 2021. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Shareholders' Equity | 13. Shareholders’ Equity The Company purchases shares to satisfy employee tax obligations related to its Stock Incentive Plan. During the three months ended March 31, 2022, and 2021, no purchases were made to satisfy employee tax obligations. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 14. 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 months ended March 31, 2022, there were 0 anti-dilutive stock options excluded from the computation of diluted earnings per share. For the three months ended March 31, 2021, there were 150,000 anti-dilutive stock options excluded from the computation of diluted earnings per share. |
Business Segments and Geographi
Business Segments and Geographic Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Business Segments and Geographic Information | 15. 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 Atlanta, Toronto, London, Dublin and Singapore, 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 and uses digital methods to enhance organizational learning. These services are marketed using a common sales force and delivered via our domestic and global recruitment centers. While the vast majority of our assignments are based on time and materials, we do have the capabilities to deliver our digital transformation services on a fixed price basis. Three Months Ended March 31, 2022 2021 (Amounts in thousands) Revenues: Data and Analytics Services $ 10,152 $ 8,794 IT Staffing Services 49,603 40,981 Total revenues $ 59,755 $ 49,775 Gross Margin %: Data and Analytics Services 45.2 % 45.7 % IT Staffing Services 22.9 % 21.4 % Total gross margin % 26.7 % 25.7 % Segment operating income: Data and Analytics Services $ 972 $ 394 IT Staffing Services 3,127 2,268 Subtotal 4,099 2,662 Amortization of acquired intangible assets (792 ) (793 ) Interest expenses and other, net (60 ) (232 ) Income before income taxes $ 3,247 $ 1,637 Below is a reconciliation of segment total assets to consolidated total assets: March 31, 2022 December 31, 2021 (Amounts in thousands) Total assets: Data and Analytics Services $ 57,571 $ 56,634 IT Staffing Services 59,205 57,068 Total assets $ 116,776 $ 113,702 Below is geographic information related to our revenues from external customers: Three Months Ended March 31, 2022 2021 (Amounts in thousands) United States $ 58,347 $ 47,942 Canada 1,019 1,264 India and Other 389 569 Total revenues $ 59,755 $ 49,775 |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Standards | 16. Recently Issued Accounting Standards Recently Adopted Accounting Pronouncements In November 2021, the FASB issued ASU 2021-10, Recent Accounting Pronouncements not yet adopted In October 2021, the FASB issued ASU 2021-08, 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) | 3 Months Ended |
Mar. 31, 2022 | |
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 to mostly large and medium-sized Our portfolio of offerings includes data management and analytics services; digital learning services; and IT staffing services. In our 2017 acquisition of the services division of Canada-based InfoTrellis, Inc., we added specialized capabilities in delivering data and analytics services to our customers globally, which became our Data and Analytics Services segment. This segment offers project-based consulting services in the areas of data management, data engineering and data science, with such services delivered using on-site Our IT Staffing Services segment 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. The COVID-19 roll-out COVID-19 COVID-19 |
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, 2021, included in our Annual Report on Form 10-K |
Principles of Consolidation | Principles of Consolidation The Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. |
Critical Accounting Policies | Critical Accounting Policies Please refer to Note 1 “Summary of Significant Accounting Policies” of the Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K |
Segment Reporting | Segment Reporting The Company has two reportable segments, in accordance with 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) | 3 Months Ended |
Mar. 31, 2022 | |
Summary of Disaggregation of Our Revenues by Contract Type and Operating Segment | The following table depicts the disaggregation of our revenues by contract type and operating segment: Three Months Ended March 31, 2022 2021 (Amounts in thousands) Data and Analytics Services Segment Time-and-material $ 6,181 $ 5,854 Fixed-price Contracts 3,971 2,940 Subtotal Data and Analytics Services $ 10,152 $ 8,794 Three Months Ended March 31, 2022 2021 (Amounts in thousands) IT Staffing Services Segment Time-and-material $ 49,399 $ 40,981 Fixed-price Contracts 204 — Subtotal IT Staffing Services $ 49,603 $ 40,981 Total Revenues $ 59,755 $ 49,775 |
Summary of Revenue from External Customers | The following table presents our revenue from external customers disaggregated by geography, based on the work location of our customers: Three Months Ended March 31, 2022 2021 (Amounts in thousands) United States $ 58,347 $ 47,942 Canada 1,019 1,264 India and other 389 569 Total $ 59,755 $ 49,775 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
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 March 31, 2022, and December 31, 2021: As of March 31, 2022 (Amounts in thousands) Amortization Period (In Years) Gross Carrying Value Accumulative Amortization Net Carrying Value IT Staffing Services: Client relationships 12 $ 7,999 $ 4,528 $ 3,471 Covenant-not-to-compete 5 319 319 — Trade name 3 249 249 — Data and Analytics Services: Client relationships 12 19,641 6,911 12,730 Covenant-not-to-compete 5 1,201 848 353 Trade name 5 1,711 1,297 414 Technology 7 1,979 979 1,000 Total Intangible Assets $ 33,099 $ 15,131 $ 17,968 As of December 31, 2021 (Amounts in thousands) Amortization Period (In Years) Gross Carrying Value Accumulative Amortization Net Carrying Value IT Staffing Services: Client relationships 12 $ 7,999 $ 4,361 $ 3,638 Covenant-not-to-compete 5 319 319 — Trade name 3 249 249 — Data and Analytics Services: Client relationships 12 19,641 6,503 13,138 Covenant-not-to-compete 5 1,201 788 413 Trade name 5 1,711 1,211 500 Technology 7 1,979 908 1,071 Total Intangible Assets $ 33,099 $ 14,339 $ 18,760 |
Schedule of Estimated Amortization Expense | The estimated aggregate amortization expense for intangible assets for the years ending December 31, 2022 through 2026 is as follows: Years Ended December 31, 2022 2023 2024 2025 2026 (Amounts in thousands) Amortization expense $ 2,987 $ 2,772 $ 2,693 $ 2,553 $ 2,413 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Summary of Balance Sheet classification of lease assets and related lease liabilities | The following table summarizes the balance sheet classification of the lease assets and related lease liabilities: March 31, 2022 December 31, 2021 ( in thousands) Assets: Long-term operating lease right-of-use $ 5,033 $ 4,894 Liabilities: Short-term operating lease liability $ 1,571 $ 1,479 Long-term operating lease liability 3,677 3,706 Total liabilities $ 5,248 $ 5,185 |
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 March 31, 2022 (in thousands) 2022 (For remainder of year) $ 1,299 2023 1,732 2024 1,002 2025 734 2026 717 Amount as of March 31, 2022 (in thousands) Thereafter 171 Total 5,655 Less: Imputed interest (407 ) Present value of operating lease liabilities $ 5,248 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Components of Income Before Income Taxes | The components of income before income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three months ended March 31, 2022, and 2021: Three Months Ended March 31, 2022 2021 (Amounts in thousands) Income before income taxes: Domestic $ 3,315 $ 1,881 Foreign (68 ) (244 ) Income before income taxes $ 3,247 $ 1,637 |
Provision for Income Taxes | The provision for income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three months ended March 31, 2022, and 2021: Three Months Ended March 31, 2022 2021 (Amounts in thousands) Current provision: Federal $ 98 $ 358 State 25 93 Foreign 86 10 Total current provision 209 461 Deferred provision (benefit): Federal 542 (6 ) State 137 (2 ) Foreign (56 ) (42 ) Total deferred provision (benefit) 623 (50 ) Change in valuation allowance 83 32 Total provision for income taxes $ 915 $ 443 |
Reconciliation of Income Taxes | The reconciliation of income taxes computed using the statutory U.S. income tax rate and the provision for income taxes for the three months ended March 31, 2022, and 2021 were as follows (amounts in thousands): Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Income taxes computed at the federal statutory rate $ 682 21.0 % $ 344 21.0 % State income taxes, net of federal tax benefit 176 5.4 104 6.3 Excess tax benefits from stock options/restricted shares (77 ) (2.4 ) (67 ) (4.1 ) Difference in tax rate on foreign earnings/other 51 1.6 30 1.9 Change in valuation allowance 83 2.6 32 2.0 $ 915 28.2 % $ 443 27.1 % |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Effect of Derivative Instruments on Consolidated Statements of Operations and Comprehensive Income | There was no impact on the Consolidated Statements of Operations and Comprehensive Income (“OCI”) for the three months ended March 31, 2022. The effect of derivative instruments on the Consolidated Statements of Operations and OCI for the three months ended March 31, 2021 are as follows (in thousands): Derivatives in ASC Topic 815 Cash Flow Hedging Relationships Amount of Gain recognized in OCI on Derivatives Location of Gain reclassified from Accumulated OCI to Income Amount of Gain reclassified from Accumulated OCI to Income Location of Gain reclassified in Income on Derivatives Amount of Gain recognized Income on Derivatives (Effective Portion) (Effective Portion) (Effective Portion) (Ineffective Portion/Amounts excluded from effectiveness testing) Interest-Rate Swap Contracts $35 Interest Expense $34 Interest Expense $— |
Business Segments and Geograp_2
Business Segments and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Summary of Operating Segments | Three Months Ended March 31, 2022 2021 (Amounts in thousands) Revenues: Data and Analytics Services $ 10,152 $ 8,794 IT Staffing Services 49,603 40,981 Total revenues $ 59,755 $ 49,775 Gross Margin %: Data and Analytics Services 45.2 % 45.7 % IT Staffing Services 22.9 % 21.4 % Total gross margin % 26.7 % 25.7 % Segment operating income: Data and Analytics Services $ 972 $ 394 IT Staffing Services 3,127 2,268 Subtotal 4,099 2,662 Amortization of acquired intangible assets (792 ) (793 ) Interest expenses and other, net (60 ) (232 ) Income before income taxes $ 3,247 $ 1,637 |
Summary of Assets, Depreciation and Amortization and Capital Expenditures by Segment | Below is a reconciliation of segment total assets to consolidated total assets: March 31, 2022 December 31, 2021 (Amounts in thousands) Total assets: Data and Analytics Services $ 57,571 $ 56,634 IT Staffing Services 59,205 57,068 Total assets $ 116,776 $ 113,702 |
Summary of Revenue from External Customers and Long-lived Assets | Below is geographic information related to our revenues from external customers: Three Months Ended March 31, 2022 2021 (Amounts in thousands) United States $ 58,347 $ 47,942 Canada 1,019 1,264 India and Other 389 569 Total revenues $ 59,755 $ 49,775 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Additional Information (Detail) - Agreement | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
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 total revenues | 17.80% | 15.00% |
Number of customers | 1 | 1 |
Top Ten Customers [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue percentage of total revenue | 51.00% | 47.00% |
Data and Analytics Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percent of revenue from services | 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 | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | $ 59,755 | $ 49,775 |
Data and Analytics Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | 10,152 | 8,794 |
Data and Analytics Services [Member] | Time-and-Material Contract [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | 6,181 | 5,854 |
Data and Analytics Services [Member] | Fixed-Price Contract [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | 3,971 | 2,940 |
IT Staffing Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | 49,603 | 40,981 |
IT Staffing Services [Member] | Time-and-Material Contract [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | 49,399 | 40,981 |
IT Staffing Services [Member] | Fixed-Price Contract [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | $ 204 | $ 0 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Summary of Revenue from External Customers (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue from External Customer [Line Items] | ||
Total | $ 59,755 | $ 49,775 |
United States [Member] | ||
Revenue from External Customer [Line Items] | ||
Total | 58,347 | 47,942 |
Canada [Member] | ||
Revenue from External Customer [Line Items] | ||
Total | 1,019 | 1,264 |
India and other [Member] | ||
Revenue from External Customer [Line Items] | ||
Total | $ 389 | $ 569 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, net - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2018 | Dec. 31, 2021 | Oct. 01, 2020 | Jul. 13, 2017 | Jun. 15, 2015 | |
Goodwill and Intangible Assets [Line Items] | |||||||
Goodwill | $ 32,510 | $ 32,510 | |||||
Amortization expense | $ 792 | $ 793 | |||||
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 | $ 9,700 | ||||||
Amber Leaf Partners Inc [Member] | |||||||
Goodwill and Intangible Assets [Line Items] | |||||||
Goodwill | $ 6,400 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Components of Identifiable Intangible assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Intangible Assets, Accumulated Amortization | $ 15,131 | $ 14,339 |
Total Intangible Assets, Gross Carrying Value | 33,099 | 33,099 |
Total Intangible Assets, Net Carrying Value | $ 17,968 | $ 18,760 |
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 | 4,528 | 4,361 |
Intangible Assets, Net Carrying Value | $ 3,471 | $ 3,638 |
Client Relationships [Member] | Data and Analytics Services [Member] | ||
Amortization Period (In Years) | 12 years | 12 years |
Intangible Assets, Gross Carrying Value | $ 19,641 | $ 19,641 |
Intangible Assets, Accumulated Amortization | 6,911 | 6,503 |
Intangible Assets, Net Carrying Value | $ 12,730 | $ 13,138 |
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 | 319 | 319 |
Intangible Assets, Net Carrying Value | $ 0 | $ 0 |
Covenant Not-to-Compete [Member] | Data and Analytics Services [Member] | ||
Amortization Period (In Years) | 5 years | 5 years |
Intangible Assets, Gross Carrying Value | $ 1,201 | $ 1,201 |
Intangible Assets, Accumulated Amortization | 848 | 788 |
Intangible Assets, Net Carrying Value | $ 353 | $ 413 |
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 | $ 1,711 | $ 1,711 |
Intangible Assets, Accumulated Amortization | 1,297 | 1,211 |
Intangible Assets, Net Carrying Value | $ 414 | $ 500 |
Technology [Member] | Data and Analytics Services [Member] | ||
Amortization Period (In Years) | 7 years | 7 years |
Intangible Assets, Gross Carrying Value | $ 1,979 | $ 1,979 |
Intangible Assets, Accumulated Amortization | 979 | 908 |
Intangible Assets, Net Carrying Value | $ 1,000 | $ 1,071 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets, net - Schedule of Estimated Amortization Expense (Detail) $ in Thousands | Mar. 31, 2022USD ($) |
Intangible Liability Disclosure [Abstract] | |
Estimated aggregate amortization expense for year ending 2022 | $ 2,987 |
Estimated aggregate amortization expense for year ending 2023 | 2,772 |
Estimated aggregate amortization expense for year ending 2024 | 2,693 |
Estimated aggregate amortization expense for year ending 2025 | 2,553 |
Estimated aggregate amortization expense for year ending 2026 | $ 2,413 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Millions | 3 Months Ended | |
Mar. 31, 2022USD ($)ft² | Mar. 31, 2021USD ($) | |
Square feet of office space | ft² | 97,000 | |
Average initial lease term | 4 years | |
Discount rate | 4.00% | |
Operating leases, rent expense, net | $ 0.4 | $ 0.4 |
Total lease payments | 0.4 | 0.4 |
Lease obligation incurred | $ 0.5 | $ 0.3 |
Minimum [Member] | ||
Lease term range | 1 year | |
Maximum [Member] | ||
Lease term range | 5 years | |
Weighted Average [Member] | ||
Lease term range | 3 years 9 months 18 days |
Leases - Summary of Balance She
Leases - Summary of Balance Sheet classification of lease asset and related lease liability (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Long-term operating lease right-of-use assets | $ 5,033 | $ 4,894 |
Liabilities: | ||
Short-term operating lease liability | 1,571 | 1,479 |
Long-term operating lease liability | 3,677 | 3,706 |
Total liabilities | $ 5,248 | $ 5,185 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Rental Payments for Operating Leases (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
2022 (For remainder of year) | $ 1,299 | |
2023 | 1,732 | |
2024 | 1,002 | |
2025 | 734 | |
2026 | 717 | |
Thereafter | 171 | |
Total | 5,655 | |
Less: Imputed interest | (407) | |
Present value of operating lease liabilities | $ 5,248 | $ 5,185 |
Payroll Tax Liability - Additio
Payroll Tax Liability - Additional Information (Detail) - Coronavirus Aid, Relief and Economic Security Act [Member] - Social Security Tax [Member] - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Deferred tax Payment | $ 2.3 | $ 2.3 |
Short-term Payroll Tax Liabilities [Member] | ||
Deferred Current Liability | $ 2.3 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Matching contributions | $ 0 | $ 0 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | May 15, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares allocated for issuance to directors, officers and key personnel | 4,900,000 | ||
Number of Options, Granted | 400,000 | 270,000 | |
Stock-based compensation expense | $ 526,000 | $ 621,000 | |
Strike price | $ / shares | $ 18.41 | $ 17.65 | |
Restricted shares granted | 11,304 | 11,955 | |
Fair value estimation | The fair value of the six-month “look-back” option in the Company’s Employee Stock Purchase Plan is estimated by adding the fair value of 15% of one share of stock to 85% of the fair value of an option on one share of stock. | ||
Stock Options And Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock issued during period share-based compensation | 90,933 | 29,739 | |
Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future grants | 516,399 | 600,000 | |
Percentage of maximum contribution of salary towards plan | 15.00% | ||
Maximum contribution towards plan | $ 25,000 | ||
Discount on purchase of common stock | 15.00% | ||
Stock Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future grants | 244,000 |
Credit Facility - Additional in
Credit Facility - Additional information (Detail) - USD ($) | Jan. 04, 2022 | Oct. 01, 2020 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2020 | Dec. 31, 2021 |
Line of Credit Facility [Line Items] | ||||||
Current borrowing capacity under line of credit facility | $ 35,500,000 | $ 32,400,000 | ||||
Deferred financing costs | 348,000 | 366,000 | ||||
Senior leverage ratio | 1.50% | |||||
Term Loan Facility [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Outstanding borrowings amount | $ 12,000,000 | $ 13,100,000 | ||||
Revolving Line of Credit [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Percentage of eligible accounts receivable | 85.00% | |||||
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 | $ 6,000,000 | |||||
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 | $ 53,100,000 | |||||
Payment of deferred financing costs | $ 975,000 | |||||
PNC Bank, N.A. [Member] | Term Loan Facility [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility maximum borrowing capacity | $ 13,100,000 | |||||
Credit facility, periodic payment | 1,100,000 | |||||
PNC Bank, N.A. [Member] | Revolving Line of Credit [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility maximum borrowing capacity | $ 40,000,000 | |||||
Maximum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving credit facility percentage margin over base rate | 1.25% | |||||
Term loan percentage margin over base rate | 2.50% | |||||
Revolving credit facility percentage margin adjusted LIBOR rate | 2.25% | |||||
Term loan percentage margin adjusted LIBOR rate | 3.50% | |||||
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 | $ 20,000,000 | |||||
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 | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income before income taxes: | ||
Domestic | $ 3,315 | $ 1,881 |
Foreign | (68) | (244) |
Income before income taxes | $ 3,247 | $ 1,637 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Current provision: | ||
Federal | $ 98 | $ 358 |
State | 25 | 93 |
Foreign | 86 | 10 |
Total current provision | 209 | 461 |
Deferred provision (benefit): | ||
Federal | 542 | (6) |
State | 137 | (2) |
Foreign | (56) | (42) |
Total deferred provision (benefit) | 623 | (50) |
Change in valuation allowance | 83 | 32 |
Total provision for income taxes | $ 915 | $ 443 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income taxes computed at the federal statutory rate, Value | $ 682 | $ 344 |
State income taxes, net of federal tax benefit, Value | 176 | 104 |
Excess tax benefit from stock options/restricted shares | (77) | (67) |
Difference in tax rate on foreign earnings/other | 51 | 30 |
Change in valuation allowance | 83 | 32 |
Total provision for income taxes | $ 915 | $ 443 |
Income taxes computed at the federal statutory rate | 21.00% | 21.00% |
State income taxes, net of federal tax benefit | 5.40% | 6.30% |
Excess tax benefit from stock options/restricted shares | (2.40%) | (4.10%) |
Difference in tax rate on foreign earnings/other | 1.60% | 1.90% |
Change in valuation allowance[Percent] | 2.60% | 2.00% |
Effective for income tax rate, Total | 28.20% | 27.10% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Deferred Tax Liabilities Valuation Allowance | $ 394,000 | $ 311,000 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Effect of Derivative Instruments on Consolidated Statements of Operations and Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain recognized in OCI on Derivatives | $ 0 | $ 35 |
Interest rate swap contracts [Member] | Cash Flow Hedging Relationships [Member] | Interest Expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain recognized in OCI on Derivatives | 35 | |
Amount of Gain reclassified from Accumulated OCI to Income | 34 | |
Amount of Gain recognized in Income on Derivatives | $ 0 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - Interest Rate Swap [Member] - USD ($) | Mar. 01, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Line Items] | ||
Fair value of contingent consideration | $ 0 | |
Foreign Currency Contracts, Liability, Fair Value Disclosure | $ 0 | $ 0 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Equity, Class of Treasury Stock [Line Items] | ||
Shares purchased to satisfy employee tax obligation | 0 | 0 |
Earnings per Share - Additional
Earnings per Share - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive securities not included in computation of earnings per share | 0 | 150,000 |
Business Segments and Geograp_3
Business Segments and Geographic Information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2022 | |
Data and Analytics Services [Member] | Business Combination Credit Agreement. [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 | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 59,755 | $ 49,775 |
Total gross margin % | 26.70% | 25.70% |
Segment operating income | $ 3,307 | $ 1,869 |
Amortization of acquired intangible assets | (792) | (793) |
Interest expenses and other, net | (60) | (232) |
Income before income taxes | 3,247 | 1,637 |
Data and analytics services [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 10,152 | $ 8,794 |
Total gross margin % | 45.20% | 45.70% |
IT staffing services [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 49,603 | $ 40,981 |
Total gross margin % | 22.90% | 21.40% |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment operating income | $ 4,099 | $ 2,662 |
Operating Segments [Member] | Data and analytics services [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment operating income | 972 | 394 |
Operating Segments [Member] | IT staffing services [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment operating income | $ 3,127 | $ 2,268 |
Business Segments and Geograp_5
Business Segments and Geographic Information - Summary of Assets by Segment (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 116,776 | $ 113,702 |
Data and analytics services [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 57,571 | 56,634 |
IT Staffing Services [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 59,205 | $ 57,068 |
Business Segments and Geograp_6
Business Segments and Geographic Information - Summary of Revenue from External Customers (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 59,755 | $ 49,775 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 58,347 | 47,942 |
Canada [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 1,019 | 1,264 |
India and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 389 | $ 569 |