Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 1-May-15 | |
Document - Document and Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | PAYC | |
Entity Registrant Name | Paycom Software, Inc. | |
Entity Central Index Key | 1590955 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 58,370,980 | |
Restricted Stock [Member] | ||
Document - Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,320,296 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (unaudited) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $35,673 | $25,144 |
Restricted cash | 371 | |
Accounts receivable | 1,684 | 2,794 |
Prepaid expenses | 3,044 | 1,952 |
Inventory | 718 | 195 |
Income tax receivable | 935 | |
Deferred tax assets, net | 869 | 1,445 |
Current assets before funds held for clients | 41,988 | 32,836 |
Funds held for clients | 591,563 | 660,557 |
Total current assets | 633,551 | 693,393 |
Property and equipment, net | 48,692 | 47,919 |
Deposits and other assets | 764 | 645 |
Goodwill | 51,889 | 51,889 |
Intangible assets, net | 4,693 | 5,096 |
Total assets | 739,589 | 798,942 |
Current liabilities: | ||
Accounts payable | 2,527 | 3,042 |
Income tax payable | 3,353 | |
Accrued commissions and bonuses | 1,568 | 5,080 |
Accrued payroll and vacation | 3,160 | 1,582 |
Deferred revenue | 2,662 | 2,535 |
Current portion of long-term debt | 862 | 855 |
Accrued expenses and other current liabilities | 7,309 | 5,121 |
Current liabilities before client funds obligation | 21,441 | 18,215 |
Client funds obligation | 591,563 | 660,557 |
Total current liabilities | 613,004 | 678,772 |
Deferred tax liabilities, net | 2,430 | 3,107 |
Long-term deferred revenue | 18,114 | 16,802 |
Long-term debt, less current portion | 25,652 | 26,123 |
Total long-term liabilities | 46,196 | 46,032 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.01 par value (100,000,000 shares authorized, 56,563,541 and 53,832,782 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively) | 566 | 538 |
Additional paid in capital | 68,165 | 67,937 |
Retained earnings | 11,658 | 5,663 |
Total stockholders' equity | 80,389 | 74,138 |
Total liabilities and stockholders' equity | $739,589 | $798,942 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 56,563,541 | 53,832,782 |
Common stock, shares outstanding | 56,563,541 | 53,832,782 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues | ||
Recurring | $54,351 | $36,454 |
Implementation and other | 871 | 531 |
Total revenues | 55,222 | 36,985 |
Cost of revenues | ||
Operating expenses | 7,471 | 6,292 |
Depreciation | 810 | 630 |
Total cost of revenues | 8,281 | 6,922 |
Administrative expenses | ||
Sales and marketing | 21,229 | 15,681 |
Research and development | 1,867 | 882 |
General and administrative | 11,984 | 9,268 |
Depreciation and amortization | 1,323 | 1,091 |
Total administrative expenses | 36,403 | 26,922 |
Total operating expenses | 44,684 | 33,844 |
Operating income | 10,538 | 3,141 |
Interest expense | -332 | -2,067 |
Other income, net | 33 | 769 |
Income before income taxes | 10,239 | 1,843 |
Provision for income taxes | 4,244 | 783 |
Net income | $5,995 | $1,060 |
Net income per share, basic | $0.11 | $0.02 |
Net income per share, diluted | $0.11 | $0.02 |
Weighted average shares outstanding: | ||
Basic | 54,749,951 | 45,721,584 |
Diluted | 56,562,661 | 48,371,169 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statement of Cash Flows (unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities | ||
Net income | $5,995 | $1,060 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,133 | 1,721 |
Amortization of debt discount | 64 | |
Amortization of debt issuance costs | 13 | 6 |
Non-cash stock-based compensation | 254 | 93 |
Net change of derivative liability | -635 | |
Deferred taxes, net | -101 | 577 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,110 | 968 |
Prepaid expenses | -1,092 | -725 |
Inventory | -523 | 126 |
Deposits and other assets | -119 | -110 |
Accounts payable | -515 | -1,710 |
Income taxes, net | 4,288 | 389 |
Accrued commissions and bonuses | -3,512 | -2,613 |
Accrued payroll and vacation | 1,578 | -911 |
Deferred revenue | 1,439 | 994 |
Accrued expenses and other current liabilities | 2,188 | 2,437 |
Net cash provided by operating activities | 13,136 | 1,731 |
Cash flows from investing activities | ||
Decrease in funds held for clients | 68,994 | 46,561 |
Decrease in restricted cash | 371 | |
Purchases of property and equipment | -2,502 | -5,160 |
Net cash provided by investing activities | 66,863 | 41,401 |
Cash flows from financing activities | ||
Proceeds from issuance of long-term debt | 4,391 | |
Principal payments on long-term debt | -464 | -105 |
Decrease in client funds obligation | -68,994 | -46,561 |
Payments of deferred offering costs | -911 | |
Capital impact of reorganization | -183 | |
Payment of debt issuance costs | -12 | |
Net cash used in financing activities | -69,470 | -43,369 |
Change in cash and cash equivalents | 10,529 | -237 |
Cash and cash equivalents | ||
Beginning of period | 25,144 | 13,362 |
End of period | $35,673 | $13,125 |
Organization_and_Description_o
Organization and Description of Business | 3 Months Ended | |
Mar. 31, 2015 | ||
Accounting Policies [Abstract] | ||
Organization and Description of Business | 1 | ORGANIZATION AND DESCRIPTION OF BUSINESS |
Description of Business | ||
Paycom Software, Inc. (“Software”) and its wholly-owned subsidiaries (collectively, the “Company”) is a leading provider of comprehensive, cloud-based human capital management (“HCM”) software delivered as Software-as-a-Service. We provide functionality and data analytics that businesses need to manage the complete employment life cycle from recruitment to retirement. Our solution requires virtually no customization and is based on a core system of record maintained in a single database for all HCM functions, including talent acquisition, time and labor management, payroll, talent management and human resources (“HR”) management applications. | ||
The Reorganization | ||
Software and its wholly-owned subsidiary, Payroll Software Merger Sub, LLC (“Merger Sub”) were formed as Delaware entities on October 31, 2013 and December 23, 2013, respectively, in anticipation of an initial public offering (“IPO”) and were wholly-owned subsidiaries of Paycom Payroll Holdings, LLC (“Holdings”) prior to December 31, 2013. | ||
On January 1, 2014, we consummated a reorganization pursuant to which (i) affiliates of Welsh, Carson, Anderson & Stowe X, L.P., WCAS Capital Partners IV, L.P. (“WCAS Capital IV”) and WCAS Management Corporation (collectively, “WCAS”), contributed WCAS Paycom Holdings, Inc. (“WCAS Holdings”) and WCAS CP IV Blocker, Inc. (“CP IV Blocker”), which collectively owned all of the Series A Preferred Units of Holdings, to Software in exchange for shares of common stock of Software and (ii) the owners of outstanding Series B Preferred Units of Holdings contributed their Series B Preferred Units of Holdings to Software in exchange for shares of common stock of Software. Immediately after these contributions, Merger Sub merged with and into Holdings with Holdings surviving the merger. Upon consummation of the merger, the remaining holders of outstanding common and incentive units of Holdings received shares of common stock and restricted stock of Software for their common and incentive units by operation of Delaware law and Holdings’ ownership interest in Software was cancelled. Outstanding common units, Series B Preferred Units and incentive units of Holdings, WCAS Holdings and CP IV Blocker were contributed to Software in exchange for, or converted into, an aggregate of 45,708,573 shares of common stock and 8,121,101 shares of restricted stock of Software. Prior to the reorganization, WCAS Holdings held Series C Preferred Units of Holdings in the amount of $46.2 million and WCAS Holdings had a note payable to a related party due April 3, 2017, in the amount of $46.2 million. Following these transactions, all outstanding Series C Preferred Units were eliminated in an intercompany transaction between Holdings and WCAS Holdings, and we assumed the 14% Note due 2017 issued by WCAS Holdings (the “2017 Note”). Following the reorganization, Software became a holding company with its principal assets being the Series B Preferred Units of Holdings and the outstanding capital stock of WCAS Holdings and CP IV Blocker (collectively, the “2014 Reorganization”). | ||
Unless we state otherwise or the context otherwise requires, the terms “we”, “our”, and the “Company” refer to Software and its consolidated subsidiaries. | ||
Initial Public Offering | ||
On April 21, 2014, we closed our initial public offering whereby an aggregate of 7,641,750 shares of our common stock were sold to the public (including 4,606,882 shares of common stock issued and sold by us and 3,034,868 shares of common stock sold by certain selling stockholders) at a public offering price of $15.00 per share. We did not receive any proceeds from the sale of shares by the selling stockholders. The total gross proceeds we received from the offering were $69.1 million. After deducting underwriting discounts and commissions and offering expenses payable by us, the aggregate net proceeds we received totaled approximately $62.8 million. We used all of the net proceeds from the offering, together with approximately $3.3 million from existing cash, for the repayment in full of the 2017 Note and the 10% Senior Note due 2022 (the “2022 Note”) issued by us to WCAS Capital IV. | ||
Follow-On Public Offering | ||
On January 21, 2015, we closed our follow-on public offering, whereby 6,422,750 shares of our common stock were sold to the public by certain selling stockholders at a public offering price of $22.50 per share. The Company did not receive any proceeds from the sale of these shares. | ||
Basis of Presentation | ||
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial statements that permit reduced disclosure for interim periods. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments necessary to fairly present our Condensed Consolidated Financial Position as of March 31, 2015 and December 31, 2014, our Condensed Consolidated Results of Operations for the three months ended March 31, 2015 and 2014 and our Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014. Such adjustments are of a normal recurring nature. In addition to these normal adjustments, on the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2014, we combined “Income tax receivable” and “Income tax payable” in order to conform to the current period presentation. The information in this Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K that was filed with the SEC on February 26, 2015. | ||
Use of Estimates | ||
The preparation of consolidated 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 accompanying notes. Significant estimates include income taxes, loss contingencies, the useful life for long-lived and intangible assets, the life of our client relationships, the fair value of our stock-based awards and the fair value of our financial instruments, intangible assets and goodwill. These estimates are based on historical experience where applicable and other assumptions that management believes are reasonable under circumstances. As such, actual results could materially differ from these estimates. | ||
Summary of Significant Accounting Policies | ||
Our significant accounting policies are discussed in “Note 2. Summary of Significant Accounting Policies” in our audited consolidated financial statements for the year ended December 31, 2014, included in the Annual Report on Form 10-K that was filed with the SEC on February 26, 2015, and have not changed. | ||
Recently Issued Accounting Pronouncements | ||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance which included a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is not permitted. Accordingly, the standard is effective for us on January 1, 2017. The standard may be delayed and become effective for us on January 1, 2018, with early adoption on January 1, 2017 permitted. We are currently evaluating the impact that the standard will have on our condensed consolidated financial statements. | ||
In June 2014, the FASB issued authoritative guidance for share-based payments which requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable for the period(s) in which the requisite service has already been rendered. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Accordingly, the standard is effective for us on January 1, 2016. We do not anticipate that the adoption of this standard will have a material impact on our condensed consolidated financial statements. | ||
In April 2015, the FASB issued authoritative guidance for intangibles related to internally developed software. The new guidance will assist entities in evaluating the accounting for fees paid by a customer in a cloud computing arrangement. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Accordingly, the standard is effective for us on January 1, 2016. We do not anticipate that the adoption of this standard will have a material impact on our condensed consolidated financial statements. | ||
In April 2015, the FASB issued authoritative guidance which simplifies the presentation of debt issuance costs. Under the new guidance, debt issuance costs related to a recognized debt liability will be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. The new guidance is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2015. Accordingly, the standard is effective for us on January 1, 2016. We are currently evaluating the impact that the standard will have on our condensed consolidated financial statements. | ||
Property_and_Equipment
Property and Equipment | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property Plant And Equipment [Abstract] | |||||||||
Property and Equipment | 2 | PROPERTY AND EQUIPMENT | |||||||
Property and equipment and associated accumulated depreciation were as follows: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Property and equipment | |||||||||
Buildings | $ | 28,154 | $ | 28,154 | |||||
Software and capitalized software costs | 9,651 | 8,671 | |||||||
Computer equipment | 8,510 | 7,638 | |||||||
Rental clocks | 6,995 | 6,596 | |||||||
Furniture, fixtures and equipment | 4,535 | 4,361 | |||||||
Vehicles | 421 | 421 | |||||||
Leasehold improvements | 178 | 174 | |||||||
58,444 | 56,015 | ||||||||
Less: accumulated depreciation and amortization | (18,820 | ) | (17,089 | ) | |||||
39,624 | 38,926 | ||||||||
Land | 8,993 | 8,993 | |||||||
Construction in process | 75 | - | |||||||
Property and equipment, net | $ | 48,692 | $ | 47,919 | |||||
Depreciation expense for property and equipment, net, was $1.7 million and $1.3 million for the three months ended March 31, 2015 and 2014, respectively. | |||||||||
We capitalize interest incurred for indebtedness related to construction of our principal executive offices. For the three months ended March 31, 2015, we paid interest costs of $0.3 million, none of which was capitalized. For the three months ended March 31, 2014, we paid interest costs of $0.2 million, of which $0.1 million was capitalized. | |||||||||
We capitalize computer software development costs related to software developed for internal use in accordance with Accounting Standards Codification (“ASC”) Topic 350-40. During the three months ended March 31, 2015 and 2014, we capitalized $0.8 million and $0.3 million of computer software development costs related to software developed for internal use, respectively. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets, Net | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||
Goodwill and Intangible Assets, Net | 3 | GOODWILL AND INTANGIBLE ASSETS, NET | |||||||||||||
Goodwill represents the excess of cost over our net tangible and identified intangible assets. We had goodwill of $51.9 million as of March 31, 2015 and December 31, 2014. We have selected June 30 as our annual goodwill impairment testing date and determined there was no impairment as of June 30, 2014. For the year ended December 31, 2014 and for the period ended March 31, 2015, there were no indicators of impairment. | |||||||||||||||
All of our intangible assets are considered to have finite lives and, as such, are subject to amortization. The components of intangible assets were as follows: | |||||||||||||||
31-Mar-15 | |||||||||||||||
Weighted Avg. Remaining | Accumulated | ||||||||||||||
Useful Life | Gross | Amortization | Net | ||||||||||||
(Years) | |||||||||||||||
Intangibles: | |||||||||||||||
Customer relationships | 2.3 | $ | 13,997 | $ | (10,848 | ) | $ | 3,149 | |||||||
Trade name | 7.3 | 3,194 | (1,650 | ) | 1,544 | ||||||||||
Total | $ | 17,191 | $ | (12,498 | ) | $ | 4,693 | ||||||||
31-Dec-14 | |||||||||||||||
Weighted Avg. Remaining | Accumulated | ||||||||||||||
Useful Life | Gross | Amortization | Net | ||||||||||||
(Years) | |||||||||||||||
Intangibles: | |||||||||||||||
Customer relationships | 2.5 | $ | 13,997 | $ | (10,498 | ) | $ | 3,499 | |||||||
Trade name | 7.5 | 3,194 | (1,597 | ) | 1,597 | ||||||||||
Total | $ | 17,191 | $ | (12,095 | ) | $ | 5,096 | ||||||||
The weighted average remaining useful life of our intangible assets was 4.0 years as of March 31, 2015. Amortization of intangible assets for the three months ended March 31, 2015 and 2014 was $0.4 million and $0.4 million, respectively. | |||||||||||||||
Funds_Held_for_Clients_and_Cli
Funds Held for Clients and Client Funds Obligation | 3 Months Ended | |
Mar. 31, 2015 | ||
Accounts Payable And Accrued Expenses [Abstract] | ||
Funds Held for Clients and Client Funds Obligation | 4 | FUNDS HELD FOR CLIENTS AND CLIENT FUNDS OBLIGATION |
As part of our payroll and tax filing application, we collect funds for federal, state and local employment taxes from clients, handle applicable regulatory tax filings, correspondence and amendments, remit the funds to appropriate tax agencies, and handle other employer-related services. Amounts collected by us from clients for their federal, state and local employment taxes earn interest during the interval between receipt and disbursement, as we invest these funds in money market funds and certificates of deposit. These collections from clients are typically disbursed from one to 30 days after receipt, with some funds being held for up to 120 days. These investments are shown in the Condensed Consolidated Balance Sheets as “Funds held for clients”, and the offsetting liability for the tax filings is shown as “Client funds obligation”. As of March 31, 2015 and December 31, 2014, the funds held for clients were invested in demand deposits, short-term certificates of deposit and money market funds. The interest earned on these funds is included in “Other income, net” on the Condensed Consolidated Statements of Income. |
LongTerm_Debt
Long-Term Debt | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Long-Term Debt | 5 | LONG-TERM DEBT | |||||||
Our long-term debt consisted of the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Term note to bank due May 30, 2021(1) | $ | 26,514 | $ | 26,978 | |||||
Total long-term debt (including current portion) | 26,514 | 26,978 | |||||||
Less: Current portion | (862 | ) | (855 | ) | |||||
Total long-term debt, net | $ | 25,652 | $ | 26,123 | |||||
-1 | Our outstanding indebtedness consisted of a term note under the 2021 Consolidated Loan due to Kirkpatrick Bank (the “2021 Consolidated Loan”) with an outstanding principal balance of $26.5 million and $27.0 million as of March 31, 2015 and December 31, 2014, respectively. The 2021 Consolidated Loan matures on May 30, 2021. Under the 2021 Consolidated Loan, interest is payable monthly and accrues at a fixed rate of 4.75% per annum. The 2021 Consolidated Loan is secured by a mortgage covering our headquarters buildings and certain personal property relating to our headquarters buildings. | ||||||||
The 2021 Consolidated Loan includes certain financial covenants, including maintaining a debt coverage ratio of EBITDA to indebtedness (defined as current maturities of long-term debt, interest expense and distributions), as defined in the agreement, of greater than 1.5 to 1.0. We were in compliance with all of the covenants as of March 31, 2015. | |||||||||
As of March 31, 2015, the carrying value of our total long-term debt, including current portion, was $26.5 million, which approximated its fair value. As of December 31, 2014, the carrying value and fair value of our total long-term debt was $27.0 million, which approximated its fair value. The fair value of fixed rate long-term debt is estimated based on the borrowing rates currently available to us for bank loans with similar terms and maturities. The fair value of variable rate long-term debt approximates market value because the cost of borrowing fluctuates based upon market conditions. | |||||||||
On March 5, 2015, the Company entered into a promissory note due to Kirkpatrick Bank allowing for principal amount borrowings of up to $1.0 million to fund the construction of a new parking lot. The note matures on September 5, 2015, with interest accruing based on the prime rate as reported in the Wall Street Journal, which was 3.75% as of March 31, 2015. There were no outstanding borrowings under the note as of March 31, 2015. |
Employee_Savings_Plan
Employee Savings Plan | 3 Months Ended | |
Mar. 31, 2015 | ||
Compensation Related Costs [Abstract] | ||
Employee Savings Plan | 6 | EMPLOYEE SAVINGS PLAN |
Our employees that are over the age of 21 and have completed ninety (90) days of service are eligible to participate in our 401(k) plan. We have made a Qualified Automatic Contribution Arrangement (“QACA”) election, whereby we make a matching contribution for our employees equal to 100% of the first 1% of salary deferrals and 50% of salary deferrals between 2% and 6%, up to a maximum matching contribution of 3.5% of salary each plan year. We are allowed to make additional discretionary matching contributions and discretionary profit sharing contributions. Employees are 100% vested in amounts attributable to salary deferrals and rollover contributions. The QACA matching contributions will be 100% vested after two years of employment from the date of hire. If an employee terminates service prior to completing two years of employment, the employee will not be vested in these QACA matching contributions. The discretionary contributions vest over a six- year period. Matching contributions amounted to $0.7 million and $0.5 million for the three months ended March 31, 2015 and 2014, respectively. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 3 Months Ended | |
Mar. 31, 2015 | ||
Fair Value Disclosures [Abstract] | ||
Fair Value of Financial Instruments | 7 | FAIR VALUE OF FINANCIAL INSTRUMENTS |
Our financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, funds held for clients, client funds obligation and long-term debt. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, funds held for clients and client funds obligation approximates fair value because of the short-term nature of the instruments. | ||
We did not have any financial instruments that were measured on a recurring basis at either March 31, 2015 or December 31, 2014. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Earnings Per Share | 8 | EARNINGS PER SHARE | |||||||
Basic earnings per share (“EPS”) is based on the weighted average number of shares of common stock outstanding for the period. Diluted EPS is computed in a similar manner to basic EPS after assuming the issuance of shares of common stock for all potentially dilutive shares of restricted stock whether or not they are vested. | |||||||||
Under the 2014 Reorganization, all the outstanding common units, Series B Preferred Units and incentive units of Holdings were exchanged for, or converted into, an aggregate of 45,708,573 shares of our common stock and 8,121,101 shares of our restricted stock as of January 1, 2014. | |||||||||
The following is a reconciliation of net income and the shares of common stock used in the computation of basic and diluted net income per share (dollars in thousands): | |||||||||
Three Months Ended | |||||||||
31-Mar-15 | 31-Mar-14 | ||||||||
Numerator: | |||||||||
Net income | $ | 5,995 | $ | 1,060 | |||||
Denominator: | |||||||||
Weighted average common shares outstanding | 50,315,455 | 45,721,584 | |||||||
Adjustment for weighted average vested restricted stock | 4,434,496 | — | |||||||
Shares for calculating basic EPS | 54,749,951 | 45,721,584 | |||||||
Dilutive effect of unvested restricted stock | 1,812,710 | 2,649,585 | |||||||
Shares for calculating diluted EPS | 56,562,661 | 48,371,169 | |||||||
Net income per share: | |||||||||
Basic | $ | 0.11 | $ | 0.02 | |||||
Diluted | $ | 0.11 | $ | 0.02 | |||||
Stockholders_Equity_and_Incent
Stockholders' Equity and Incentive Compensation | 3 Months Ended | |
Mar. 31, 2015 | ||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Stockholders' Equity and Incentive Compensation | ||
9 | STOCKHOLDERS’ EQUITY AND INCENTIVE COMPENSATION | |
On January 1, 2014, we consummated the 2014 Reorganization, pursuant to which (i) affiliates of WCAS contributed WCAS Holdings and CP IV Blocker, which collectively owned all of the Series A Preferred Units of Holdings, to Software in exchange for shares of common stock of Software and (ii) the owners of outstanding Series B Preferred Units of Holdings contributed their Series B Preferred Units of Holdings to Software in exchange for shares of common stock of Software. Immediately after these contributions, Merger Sub merged with and into Holdings with Holdings surviving the merger. Upon consummation of the merger, the remaining holders of outstanding common and incentive units of Holdings received shares of common stock of Software for their common and incentive units by operation of Delaware law and Holdings’ ownership interest in Software was cancelled. Outstanding common units, Series B Preferred Units and WCAS Holdings and CP IV Blocker were contributed to Software in exchange for, or converted into, 45,708,573 shares of common stock and 8,121,101 shares of restricted stock of Software. | ||
The shares of restricted stock were issued subject to various vesting conditions. A portion of the restricted stock was subject to time-based vesting conditions, while a portion was subject to market-based vesting conditions. The market-based vesting conditions were based on our total enterprise value exceeding certain specified thresholds. Following these transactions, all outstanding Series C Preferred Units were eliminated in an intercompany transaction between Holdings and WCAS Holdings, and we assumed the 2017 Note. As a result of the 2014 Reorganization, we recorded a one-time reclassification of $29.3 million of accumulated deficit to additional paid in capital on January 1, 2014. Following the 2014 Reorganization, Software became a holding company with its principal assets being the Series B Preferred Units of Holdings and the outstanding capital stock of WCAS Holdings and CP IV Blocker. | ||
We do not receive any cash proceeds from the vesting of our restricted stock. The capitalized non-cash stock-based compensation expense related to software developed for internal use of $2 thousand and $4 thousand was included in software and capitalized software costs in “Property and equipment, net” in our Condensed Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014, respectively. | ||
Compensation expense for restricted stock awards with time-based vesting conditions are measured based on the fair value of the award on the grant date and recognized over the requisite service period. Compensation expense relating to the issuance of restricted stock with market-based vesting conditions was measured based upon the fair value of the award on the grant date and recognized on a straight-line basis over the vesting period based upon the probability that the vesting conditions would be met. For restricted stock with market-based vesting conditions, 50% of the restricted stock vested upon reaching a total enterprise value of $1.4 billion on December 1, 2014 and the remaining 50% of the restricted stock vested upon reaching a total enterprise value of $1.8 billion on March 2, 2015. The associated compensation expense adjusted for actual forfeitures was $0.2 million for the three months ended March 31, 2015 for the vesting of the restricted stock with market-based vesting conditions on March 2, 2015. | ||
There was $0.4 million and $0.7 million of total unrecognized compensation cost related to unvested restricted stock outstanding as of March 31, 2015 and December 31, 2014, respectively. The unrecognized compensation cost is expected to be recognized over a weighted average period of 2.5 years as of March 31, 2015. |
RelatedParty_Transactions
Related-Party Transactions | 3 Months Ended | |
Mar. 31, 2015 | ||
Related Party Transactions [Abstract] | ||
Related-Party Transactions | 10 | RELATED-PARTY TRANSACTIONS |
For the three months ended March 31, 2015 and 2014, we paid rent on our Dallas office space in the amounts of $0.1 million and $0.1 million, respectively. The Dallas office building is owned by 417 Oakbend, LP, a Texas limited partnership. Our Chief Sales Officer owns a .01% general partnership interest and a 10.49% limited partnership interest in 417 Oakbend, LP. | ||
In April 2014, we paid off the balance of the 2017 Note that was issued by WCAS Holdings and was payable to Welsh, Carson, Anderson & Stowe X, L.P., a related party, with proceeds from our initial public offering. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | |
Mar. 31, 2015 | ||
Commitments And Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | 11 | COMMITMENTS AND CONTINGENCIES |
Employment Agreements | ||
We have employment agreements with certain of our executive officers. The agreements allow for annual compensation, participation in executive benefit plans, and performance-based cash bonuses. | ||
Funding Agreement | ||
In March 2010, we entered into a funding agreement with the Oklahoma City Economic Development Trust (the “Trust”) and the city of Oklahoma City. The Trust provided $2.0 million worth of certain public infrastructure improvements related to our newly constructed principal executive offices in northwest Oklahoma City. In exchange for the infrastructure improvements provided, we agreed to create at least 492 jobs over a five year period, with an average first year salary in excess of $37 thousand and make a minimum capital investment in the project of at least $15 million. We further agreed that we would be responsible for repayment of any amount that was not offset by earned job creation payments. As of December 31, 2014, we had fulfilled our obligation for the job creation payments. | ||
Legal Proceedings | ||
On September 23, 2014, National Financial Partners Corp. filed a complaint against us in the United States District Court for the Northern District of Illinois (Civil Action No. 1:14-cv-07424). The complaint alleges trademark infringement, unfair competition, deceptive trade practices, consumer fraud and deceptive business practices related to the adoption and use of our logo and seeks preliminary and permanent injunctions prohibiting us from continued infringement as well as money damages, including an accounting for sales and profits, attorneys’ fees and disgorgement of profits. On October 20, 2014, we filed a motion to transfer the action from the Northern District of Illinois to the Western District of Oklahoma, and a memorandum in support of the motion to transfer, in the Northern District of Illinois. National Financial Partners Corp. has moved for an order preliminarily enjoining us from using our logo in the Northern District of Illinois. On January 5, 2015, we filed an answer, affirmative defenses and counterclaim in the Northern District of Illinois denying the material allegations in National Financial Corp.’s complaint and seeking a declaratory judgment that we have not engaged in any trademark infringement with respect to the use of our logo. On February 15, 2015, the Northern District of Illinois denied our motion to transfer the venue and scheduled the lawsuit for trial in the Northern District of Illinois in February 2016. On April 30, 2015, we filed an opposition to motion for preliminary injunction. On May 7 and 8, 2015, the Northern District of Illinois held a hearing on National Financial Partners Corp.’s motion for a preliminary injunction, which was continued until May 15, 2015. We intend to vigorously defend this litigation. In the event that the court ultimately determines that we have infringed any of the asserted trademarks or grants National Financial Partners Corp.’s motion for a preliminary injunction, we may be subject to damages, which may include treble damages, be enjoined from using our current logo while the parties are litigating the merits of the claims or be required to modify our logo and/or undergo a rebranding of our solution and applications. We cannot predict with any degree of certainty the outcome of the litigation or determine the extent of any potential liability or damages. | ||
We are involved in various other legal proceedings in the ordinary course of business. Although we cannot predict the outcome of these proceedings, legal matters are subject to inherent uncertainties and there exists the possibility that the ultimate resolution of these matters could have a material adverse effect on our business, financial condition, results of operations and cash flows. | ||
Operating Leases and Deferred Rent | ||
We lease office space under several noncancellable operating leases with contractual terms expiring from 2015 to 2020. Minimum rent expenses are recognized over the lease term. The lease term is defined as the fixed noncancellable term of the lease plus all periods, if any, for which failure to renew the lease imposes a penalty on us in an amount that a renewal appears, at the inception of the lease, to be reasonably assured. When a lease contains a predetermined fixed escalation of the minimum rent, we recognize the related rent expense on a straight-line basis and record the difference between the recognized rent expense and the amount payable under the lease as a liability. As of March 31, 2015 and December 31, 2014, we had $0.9 million and $0.8 million, respectively, recorded as a liability for deferred rent. | ||
Rent expense under operating leases for the three months ended March 31, 2015 and 2014 was $1.1 million and $0.6 million, respectively. |
Income_Taxes
Income Taxes | 3 Months Ended | |
Mar. 31, 2015 | ||
Income Tax Disclosure [Abstract] | ||
Income Taxes | 12 | INCOME TAXES |
The provision for income taxes is based on a current estimate of the annual effective income tax rate adjusted to reflect the impact of discrete items. Significant management judgment is required in estimating operating income in order to determine our effective income tax rate. The estimated effective income tax rate was 41.45% and 42.47% for the three months ended March 31, 2015 and 2014, respectively. The lower effective income tax rate for the three months ended March 31, 2015 is primarily a result of a lower ratio of nondeductible expenses to pre-tax income. |
Subsequent_Events
Subsequent Events | 3 Months Ended | |
Mar. 31, 2015 | ||
Subsequent Events [Abstract] | ||
Subsequent Events | 13 | SUBSEQUENT EVENTS |
On May 5, 2015, the Company’s stockholders approved the Paycom Software, Inc. Employee Stock Purchase Plan (the “ESPP”) and the Paycom Software, Inc. Annual Incentive Plan (the “Incentive Plan”). The ESPP will allow eligible employees to purchase shares of the Company’s common stock using up to 10% of their compensation at a price of 85% of the fair market value of the shares on the exercise date. The Incentive Plan provides for the payment of performance-based compensation for certain employees of the Company who were designated by the Compensation Committee which are not subject to certain federal income tax deduction limitations. | ||
On May 8, 2015, (the “Effective Date”), the Company entered into a construction loan with Kirkpatrick Bank to finance the expansion of its headquarters allowing for the borrowing of a maximum aggregate principal amount equal to the lesser of (i) $11.0 million or (ii) 80% of the appraised value of the constructed property (the “Construction Loan”). We did not have any outstanding borrowings under the construction loan as of May 8, 2015. The Construction Loan matures on the earlier of the completion of construction or 12 months after the Effective Date, with variable interest accruing at the greater of (i) the prime rate, plus 50 basis points or (ii) 4.0%. | ||
Under the terms of the Construction Loan, the outstanding principal balance will be automatically converted into an eighty-four (84) month term loan once the construction is completed or 12 months after the Effective Date, whichever occurs first. The term loan accrues fixed interest at the prevailing 7/20 London Interbank Offered Rate (“LIBOR”) swap interest rate that is in effect as of the commencement date, plus 225 basis points. The promissory note in the principal amount of $1.0 million that we entered into on March 5, 2015 was rescinded and replaced when the Company entered into the Construction Loan on May 8, 2015. |
Organization_and_Description_o1
Organization and Description of Business (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business |
Paycom Software, Inc. (“Software”) and its wholly-owned subsidiaries (collectively, the “Company”) is a leading provider of comprehensive, cloud-based human capital management (“HCM”) software delivered as Software-as-a-Service. We provide functionality and data analytics that businesses need to manage the complete employment life cycle from recruitment to retirement. Our solution requires virtually no customization and is based on a core system of record maintained in a single database for all HCM functions, including talent acquisition, time and labor management, payroll, talent management and human resources (“HR”) management applications. | |
The Reorganization | The Reorganization |
Software and its wholly-owned subsidiary, Payroll Software Merger Sub, LLC (“Merger Sub”) were formed as Delaware entities on October 31, 2013 and December 23, 2013, respectively, in anticipation of an initial public offering (“IPO”) and were wholly-owned subsidiaries of Paycom Payroll Holdings, LLC (“Holdings”) prior to December 31, 2013. | |
On January 1, 2014, we consummated a reorganization pursuant to which (i) affiliates of Welsh, Carson, Anderson & Stowe X, L.P., WCAS Capital Partners IV, L.P. (“WCAS Capital IV”) and WCAS Management Corporation (collectively, “WCAS”), contributed WCAS Paycom Holdings, Inc. (“WCAS Holdings”) and WCAS CP IV Blocker, Inc. (“CP IV Blocker”), which collectively owned all of the Series A Preferred Units of Holdings, to Software in exchange for shares of common stock of Software and (ii) the owners of outstanding Series B Preferred Units of Holdings contributed their Series B Preferred Units of Holdings to Software in exchange for shares of common stock of Software. Immediately after these contributions, Merger Sub merged with and into Holdings with Holdings surviving the merger. Upon consummation of the merger, the remaining holders of outstanding common and incentive units of Holdings received shares of common stock and restricted stock of Software for their common and incentive units by operation of Delaware law and Holdings’ ownership interest in Software was cancelled. Outstanding common units, Series B Preferred Units and incentive units of Holdings, WCAS Holdings and CP IV Blocker were contributed to Software in exchange for, or converted into, an aggregate of 45,708,573 shares of common stock and 8,121,101 shares of restricted stock of Software. Prior to the reorganization, WCAS Holdings held Series C Preferred Units of Holdings in the amount of $46.2 million and WCAS Holdings had a note payable to a related party due April 3, 2017, in the amount of $46.2 million. Following these transactions, all outstanding Series C Preferred Units were eliminated in an intercompany transaction between Holdings and WCAS Holdings, and we assumed the 14% Note due 2017 issued by WCAS Holdings (the “2017 Note”). Following the reorganization, Software became a holding company with its principal assets being the Series B Preferred Units of Holdings and the outstanding capital stock of WCAS Holdings and CP IV Blocker (collectively, the “2014 Reorganization”). | |
Unless we state otherwise or the context otherwise requires, the terms “we”, “our”, and the “Company” refer to Software and its consolidated subsidiaries. | |
Initial Public Offering | Initial Public Offering |
On April 21, 2014, we closed our initial public offering whereby an aggregate of 7,641,750 shares of our common stock were sold to the public (including 4,606,882 shares of common stock issued and sold by us and 3,034,868 shares of common stock sold by certain selling stockholders) at a public offering price of $15.00 per share. We did not receive any proceeds from the sale of shares by the selling stockholders. The total gross proceeds we received from the offering were $69.1 million. After deducting underwriting discounts and commissions and offering expenses payable by us, the aggregate net proceeds we received totaled approximately $62.8 million. We used all of the net proceeds from the offering, together with approximately $3.3 million from existing cash, for the repayment in full of the 2017 Note and the 10% Senior Note due 2022 (the “2022 Note”) issued by us to WCAS Capital IV. | |
Follow-On Public Offering | Follow-On Public Offering |
On January 21, 2015, we closed our follow-on public offering, whereby 6,422,750 shares of our common stock were sold to the public by certain selling stockholders at a public offering price of $22.50 per share. The Company did not receive any proceeds from the sale of these shares. | |
Basis of Presentation | Basis of Presentation |
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial statements that permit reduced disclosure for interim periods. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments necessary to fairly present our Condensed Consolidated Financial Position as of March 31, 2015 and December 31, 2014, our Condensed Consolidated Results of Operations for the three months ended March 31, 2015 and 2014 and our Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014. Such adjustments are of a normal recurring nature. In addition to these normal adjustments, on the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2014, we combined “Income tax receivable” and “Income tax payable” in order to conform to the current period presentation. The information in this Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K that was filed with the SEC on February 26, 2015. | |
Use of Estimates | Use of Estimates |
The preparation of consolidated 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 accompanying notes. Significant estimates include income taxes, loss contingencies, the useful life for long-lived and intangible assets, the life of our client relationships, the fair value of our stock-based awards and the fair value of our financial instruments, intangible assets and goodwill. These estimates are based on historical experience where applicable and other assumptions that management believes are reasonable under circumstances. As such, actual results could materially differ from these estimates. | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies |
Our significant accounting policies are discussed in “Note 2. Summary of Significant Accounting Policies” in our audited consolidated financial statements for the year ended December 31, 2014, included in the Annual Report on Form 10-K that was filed with the SEC on February 26, 2015, and have not changed. | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance which included a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is not permitted. Accordingly, the standard is effective for us on January 1, 2017. The standard may be delayed and become effective for us on January 1, 2018, with early adoption on January 1, 2017 permitted. We are currently evaluating the impact that the standard will have on our condensed consolidated financial statements. | |
In June 2014, the FASB issued authoritative guidance for share-based payments which requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable for the period(s) in which the requisite service has already been rendered. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Accordingly, the standard is effective for us on January 1, 2016. We do not anticipate that the adoption of this standard will have a material impact on our condensed consolidated financial statements. | |
In April 2015, the FASB issued authoritative guidance for intangibles related to internally developed software. The new guidance will assist entities in evaluating the accounting for fees paid by a customer in a cloud computing arrangement. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Accordingly, the standard is effective for us on January 1, 2016. We do not anticipate that the adoption of this standard will have a material impact on our condensed consolidated financial statements. | |
In April 2015, the FASB issued authoritative guidance which simplifies the presentation of debt issuance costs. Under the new guidance, debt issuance costs related to a recognized debt liability will be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. The new guidance is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2015. Accordingly, the standard is effective for us on January 1, 2016. We are currently evaluating the impact that the standard will have on our condensed consolidated financial statements. |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property Plant And Equipment [Abstract] | |||||||||
Schedule of Property and Equipment and Associated Accumulated Depreciation | Property and equipment and associated accumulated depreciation were as follows: | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Property and equipment | |||||||||
Buildings | $ | 28,154 | $ | 28,154 | |||||
Software and capitalized software costs | 9,651 | 8,671 | |||||||
Computer equipment | 8,510 | 7,638 | |||||||
Rental clocks | 6,995 | 6,596 | |||||||
Furniture, fixtures and equipment | 4,535 | 4,361 | |||||||
Vehicles | 421 | 421 | |||||||
Leasehold improvements | 178 | 174 | |||||||
58,444 | 56,015 | ||||||||
Less: accumulated depreciation and amortization | (18,820 | ) | (17,089 | ) | |||||
39,624 | 38,926 | ||||||||
Land | 8,993 | 8,993 | |||||||
Construction in process | 75 | - | |||||||
Property and equipment, net | $ | 48,692 | $ | 47,919 | |||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets, Net (Tables) | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||
Components of Intangible Assets | The components of intangible assets were as follows: | ||||||||||||||
31-Mar-15 | |||||||||||||||
Weighted Avg. Remaining | Accumulated | ||||||||||||||
Useful Life | Gross | Amortization | Net | ||||||||||||
(Years) | |||||||||||||||
Intangibles: | |||||||||||||||
Customer relationships | 2.3 | $ | 13,997 | $ | (10,848 | ) | $ | 3,149 | |||||||
Trade name | 7.3 | 3,194 | (1,650 | ) | 1,544 | ||||||||||
Total | $ | 17,191 | $ | (12,498 | ) | $ | 4,693 | ||||||||
31-Dec-14 | |||||||||||||||
Weighted Avg. Remaining | Accumulated | ||||||||||||||
Useful Life | Gross | Amortization | Net | ||||||||||||
(Years) | |||||||||||||||
Intangibles: | |||||||||||||||
Customer relationships | 2.5 | $ | 13,997 | $ | (10,498 | ) | $ | 3,499 | |||||||
Trade name | 7.5 | 3,194 | (1,597 | ) | 1,597 | ||||||||||
Total | $ | 17,191 | $ | (12,095 | ) | $ | 5,096 | ||||||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Schedule of Long-Term Debt | Our long-term debt consisted of the following: | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Term note to bank due May 30, 2021(1) | $ | 26,514 | $ | 26,978 | |||||
Total long-term debt (including current portion) | 26,514 | 26,978 | |||||||
Less: Current portion | (862 | ) | (855 | ) | |||||
Total long-term debt, net | $ | 25,652 | $ | 26,123 | |||||
-1 | Our outstanding indebtedness consisted of a term note under the 2021 Consolidated Loan due to Kirkpatrick Bank (the “2021 Consolidated Loan”) with an outstanding principal balance of $26.5 million and $27.0 million as of March 31, 2015 and December 31, 2014, respectively. The 2021 Consolidated Loan matures on May 30, 2021. Under the 2021 Consolidated Loan, interest is payable monthly and accrues at a fixed rate of 4.75% per annum. The 2021 Consolidated Loan is secured by a mortgage covering our headquarters buildings and certain personal property relating to our headquarters buildings. | ||||||||
The 2021 Consolidated Loan includes certain financial covenants, including maintaining a debt coverage ratio of EBITDA to indebtedness (defined as current maturities of long-term debt, interest expense and distributions), as defined in the agreement, of greater than 1.5 to 1.0. We were in compliance with all of the covenants as of March 31, 2015. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Computation of Basic and Diluted Net Income Per Share | The following is a reconciliation of net income and the shares of common stock used in the computation of basic and diluted net income per share (dollars in thousands): | ||||||||
Three Months Ended | |||||||||
31-Mar-15 | 31-Mar-14 | ||||||||
Numerator: | |||||||||
Net income | $ | 5,995 | $ | 1,060 | |||||
Denominator: | |||||||||
Weighted average common shares outstanding | 50,315,455 | 45,721,584 | |||||||
Adjustment for weighted average vested restricted stock | 4,434,496 | — | |||||||
Shares for calculating basic EPS | 54,749,951 | 45,721,584 | |||||||
Dilutive effect of unvested restricted stock | 1,812,710 | 2,649,585 | |||||||
Shares for calculating diluted EPS | 56,562,661 | 48,371,169 | |||||||
Net income per share: | |||||||||
Basic | $ | 0.11 | $ | 0.02 | |||||
Diluted | $ | 0.11 | $ | 0.02 | |||||
Organization_and_Description_o2
Organization and Description of Business - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | |||
Apr. 21, 2014 | Jan. 21, 2015 | Dec. 31, 2013 | Dec. 31, 2014 | Mar. 31, 2015 | |
IPO [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Common stock issued, shares | 7,641,750 | ||||
Common stock sold by selling stockholders | 3,034,868 | ||||
Offering price per share | $15 | ||||
Proceeds from sale of shares received from selling stockholders | $0 | ||||
Gross proceeds received from public offering | 69,100,000 | ||||
Proceeds from initial public offering, net of offering costs | 62,800,000 | ||||
Public Offering [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Common stock issued, shares | 6,422,750 | ||||
Offering price per share | $22.50 | ||||
Proceeds from sale of common stock under public offering | 0 | ||||
WCAS Capital Partners IV, L.P., [Member] | IPO [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Common stock issued, shares | 4,606,882 | ||||
Restricted Stock [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Conversion of units to shares | 8,121,101 | ||||
Series C Preferred Units [Member] | WCAS Capital Partners IV, L.P., [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Preferred units held, amount | 46,200,000 | ||||
Common Stock [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Conversion of units to shares | 45,708,573 | ||||
14% Note due 2017 [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Debt instrument, interest rate | 14.00% | ||||
14% Note due 2017 [Member] | WCAS Capital Partners IV, L.P., [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Notes payable, due date | 3-Apr-17 | ||||
Notes payable, amount | 46,200,000 | ||||
2022 Note [Member] | WCAS Capital Partners IV, L.P., [Member] | IPO [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Debt instrument, interest rate | 10.00% | ||||
Repayment for senior notes | $3,300,000 |
Property_and_Equipment_Schedul
Property and Equipment - Schedule of Property and Equipment and Associated Accumulated Depreciation (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $58,444 | $56,015 |
Less: accumulated depreciation and amortization | -18,820 | -17,089 |
Property and equipment, net | 48,692 | 47,919 |
Buildings [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 28,154 | 28,154 |
Software and Capitalized Software Costs [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 9,651 | 8,671 |
Computer Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 8,510 | 7,638 |
Rental Clocks [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 6,995 | 6,596 |
Furniture, Fixtures and Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 4,535 | 4,361 |
Vehicles [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 421 | 421 |
Leasehold Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 178 | 174 |
Excluded Land and Construction in Process [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, net | 39,624 | 38,926 |
Land [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, net | 8,993 | 8,993 |
Construction in Process [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, net | $75 |
Property_and_Equipment_Additio
Property and Equipment - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Property Plant And Equipment [Line Items] | ||
Interest cost paid | $300,000 | $200,000 |
Interest costs capitalized | 0 | 100,000 |
Computer software development costs capitalized | 800,000 | 300,000 |
Property and Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Depreciation | $1,700,000 | $1,300,000 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets, Net - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2014 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Goodwill | $51,889,000 | $51,889,000 | ||
Goodwill, Impairment Loss | 0 | 0 | 0 | |
Weighted average remaining useful life | 4 years | |||
Amortization of intangible assets | $400,000 | $400,000 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets, Net - Components of Intangible Assets (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Finite Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 4 years | |
Gross | $17,191 | $17,191 |
Accumulated amortization | -12,498 | -12,095 |
Net | 4,693 | 5,096 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 2 years 3 months 18 days | 2 years 6 months |
Gross | 13,997 | 13,997 |
Accumulated amortization | -10,848 | -10,498 |
Net | 3,149 | 3,499 |
Trade Name [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 7 years 3 months 18 days | 7 years 6 months |
Gross | 3,194 | 3,194 |
Accumulated amortization | -1,650 | -1,597 |
Net | $1,544 | $1,597 |
Funds_Held_for_Clients_and_Cli1
Funds Held for Clients and Client Funds Obligation - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Accounts Payable And Accrued Expenses [Line Items] | |
Maximum holding period for funds collected from clients | 120 days |
Minimum [Member] | |
Accounts Payable And Accrued Expenses [Line Items] | |
Disbursement period of funds collected from clients | 1 day |
Maximum [Member] | |
Accounts Payable And Accrued Expenses [Line Items] | |
Disbursement period of funds collected from clients | 30 days |
LongTerm_Debt_Schedule_of_Long
Long-Term Debt - Schedule of Long-Term Debt (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Total long-term debt (including current portion) | $26,514 | $26,978 |
Less: Current portion | -862 | -855 |
Total long-term debt, net | 25,652 | 26,123 |
2021 Consolidated Loan [Member] | ||
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Construction loan | 26,514 | 26,978 |
Total long-term debt (including current portion) | $26,500 | $27,000 |
LongTerm_Debt_Schedule_of_Long1
Long-Term Debt - Schedule of Long-Term Debt (Parenthetical) (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Debt instrument outstanding principal amount | $26,514 | $26,978 |
Debt instrument, restrictive covenants | Maintaining a debt coverage ratio of EBITDA to indebtedness (defined as current maturities of long-term debt, interest expense and distributions), as defined in the agreement, of greater than 1.5 to 1.0. | |
Minimum [Member] | ||
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Debt coverage ratio of indebtedness | 1.5 | |
2021 Consolidated Loan [Member] | ||
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Debt instrument maturity date | 30-May-21 | |
Debt instrument outstanding principal amount | $26,500 | $27,000 |
Debt instrument, interest rate | 4.75% |
LongTerm_Debt_Additional_Infor
Long-Term Debt - Additional Information (Detail) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2014 | Mar. 05, 2015 | |
Debt Instrument [Line Items] | |||
Carrying value, long term debt | $26,514,000 | $26,978,000 | |
Fair value of long term debt including current maturities | 27,000,000 | ||
Promissory Note [Member] | |||
Debt Instrument [Line Items] | |||
Promissory note, principal amount | 1,000,000 | ||
Debt instrument maturity date | 5-Sep-15 | ||
Debt instrument, basis spread on variable rate | 3.75% | ||
Promissory note, outstanding borrowings | $0 |
Employee_Savings_Plan_Addition
Employee Savings Plan - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Defined Contribution Plan Disclosure [Line Items] | ||
401(k) eligibility minimum service period | 90 days | |
401(k) description of plan contributions | Contribution equal to 100% of the first 1% of salary deferrals and 50% of salary deferrals between 2% and 6%, up to a maximum matching contribution of 3.5% of salary each plan year for our employees. | |
Employee vested percentage in salary deferrals and roll over contributions | 100.00% | |
Minimum period for vesting 100% contributions | 2 years | |
Discretionary contributions vested period | 6 years | |
Matching contribution amount | $0.70 | $0.50 |
One Hundred Percent Match For Percent Of Participants Contribution [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Employer contribution percentage | 100.00% | |
Percentage of salary deferrals | 1.00% | |
50% Matching Contribution [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Employer contribution percentage | 50.00% | |
Two Years of Service [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Matching contributions, vesting percentage | 100.00% | |
Minimum [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
401(k) eligible age of employee | 21 years | |
Minimum [Member] | 50% Matching Contribution [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Percentage of salary deferrals | 2.00% | |
Maximum [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Percentage of salary deferrals | 3.50% | |
Maximum [Member] | 50% Matching Contribution [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Percentage of salary deferrals | 6.00% |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) | 0 Months Ended |
Dec. 31, 2013 | |
Common Stock [Member] | |
Earnings Per Share [Line Items] | |
Conversion of units to shares | 45,708,573 |
Restricted Stock [Member] | |
Earnings Per Share [Line Items] | |
Conversion of units to shares | 8,121,101 |
Earnings_Per_Share_Computation
Earnings Per Share - Computation of Basic and Diluted Net Income Per Share (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Numerator: | ||
Net income | $5,995 | $1,060 |
Denominator: | ||
Weighted average common shares outstanding | 50,315,455 | 45,721,584 |
Adjustment for weighted average vested restricted stock | 4,434,496 | |
Shares for calculating basic EPS | 54,749,951 | 45,721,584 |
Dilutive effect of unvested restricted stock | 1,812,710 | 2,649,585 |
Shares for calculating diluted EPS | 56,562,661 | 48,371,169 |
Net income per share: | ||
Basic | $0.11 | $0.02 |
Diluted | $0.11 | $0.02 |
Stockholders_Equity_and_Incent1
Stockholders' Equity and Incentive Compensation - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Mar. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Reclassification adjustment recorded of deficit to additional paid in capital | $29,300,000 | ||
Cash proceeds from conversion of restricted stock | 0 | ||
Compensation expense recognized | 200,000 | ||
Total unrecognized compensation cost related to unvested restricted stock | 400,000 | 700,000 | |
Unrecognized compensation expected to be recognized | 2 years 6 months | ||
Vest 50% upon reaching a total enterprise value of $1.4 billion [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Market-based vesting percentage, restricted shares | 50.00% | ||
Total enterprise value | 1,400,000,000 | ||
Vest 50% upon reaching a total enterprise value of $1.8 billion [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Market-based vesting percentage, restricted shares | 50.00% | ||
Total enterprise value | 1,800,000,000 | ||
Software and Capitalized Software Costs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Capitalized compensation cost | $2,000 | $4,000 | |
Common Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Conversion of units to shares | 45,708,573 | ||
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Conversion of units to shares | 8,121,101 |
RelatedParty_Transactions_Addi
Related-Party Transactions - Additional Information (Detail) (417 Oakbend, LP [Member], USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
417 Oakbend, LP [Member] | ||
Related Party Transaction [Line Items] | ||
Payments for rent | $0.10 | $0.10 |
General partnership ownership interest in related party, percentage | 0.01% | |
Limited partnership interest in related party, percentage | 10.49% |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | 1 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2010 | Dec. 31, 2014 | |
Other Commitments [Line Items] | ||||
Operating lease expiration period | 2015 to 2020 | |||
Liability for deferred rent | $900,000 | $800,000 | ||
Operating lease rent expense | 1,100,000 | 600,000 | ||
Oklahoma City Economic Development Trust [Member] | ||||
Other Commitments [Line Items] | ||||
Up-front job creation payment from Trust | 2,000,000 | |||
Term of agreement | 5 years | |||
Oklahoma City Economic Development Trust [Member] | Minimum [Member] | ||||
Other Commitments [Line Items] | ||||
Number of jobs created within a 5 year period | 492 | |||
Average first year wage | 37,000 | |||
Capital investment in the project | $15,000,000 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Estimated effective income tax rate | 41.45% | 42.47% |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended | ||
Mar. 31, 2015 | 8-May-15 | 5-May-15 | Mar. 05, 2015 | |
Promissory Note [Member] | ||||
Subsequent Event [Line Items] | ||||
Loan, principal amount | $1,000,000 | |||
Construction loan, outstanding borrowings | 0 | |||
Debt instrument, basis spread on variable rate | 3.75% | |||
Subsequent Event [Member] | Term loan | ||||
Subsequent Event [Line Items] | ||||
Maturity period of term loan | 84 months | |||
Subsequent Event [Member] | Construction Loan [Member] | ||||
Subsequent Event [Line Items] | ||||
Loan, principal amount | 11,000,000 | |||
Construction loan, outstanding borrowings | 0 | |||
Construction loan, percentage of appraised value of constructed property | 80.00% | |||
Construction loan, maturity date description | The Construction Loan matures on the earlier of the completion of construction or 12 months after the Effective Date, with variable interest accruing at the greater of (i) the prime rate, plus 50 basis points or (ii) 4.0%. | |||
Debt Instrument, floor interest rate | 4.00% | |||
Subsequent Event [Member] | Prime Rate | Construction Loan [Member] | ||||
Subsequent Event [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.50% | |||
Subsequent Event [Member] | London Interbank Offered Rate (LIBOR) | Term loan | ||||
Subsequent Event [Line Items] | ||||
Debt instrument, basis spread on variable rate | 2.25% | |||
Subsequent Event [Member] | Employee Stock Purchase Plan [Member] | ||||
Subsequent Event [Line Items] | ||||
Employees Company's common stock shares purchase limit percentage | 10.00% | |||
Purchase price of common stock expressed as a percentage of its fair market value | 85.00% |