Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 19, 2019 | Jun. 29, 2018 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | VEC | ||
Entity Registrant Name | Vectrus, Inc. | ||
Entity Central Index Key | 1,601,548 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 11,266,906 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 340,106,528 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 28, 2018 | Jun. 29, 2018 | Mar. 30, 2018 | Dec. 31, 2017 | Sep. 29, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||||||||||
Revenue | $ 1,279,304 | $ 1,114,788 | $ 1,190,519 | ||||||||
Cost of revenue | 1,164,609 | 1,012,840 | 1,083,607 | ||||||||
Selling, general and administrative expenses | 66,372 | 60,728 | 64,086 | ||||||||
Operating income | $ 12,648 | $ 14,006 | $ 12,998 | $ 8,671 | $ 10,277 | $ 10,090 | $ 9,204 | $ 11,649 | 48,323 | 41,220 | 42,826 |
Interest expense, net | (5,071) | (4,640) | (5,639) | ||||||||
Income from operations before income taxes | 43,252 | 36,580 | 37,187 | ||||||||
Income tax expense (benefit) | 7,956 | (22,917) | 13,532 | ||||||||
Net income | $ 10,124 | $ 9,866 | $ 9,195 | $ 6,111 | $ 41,568 | $ 5,800 | $ 5,461 | $ 6,668 | $ 35,296 | $ 59,497 | $ 23,655 |
Earnings Per Share | |||||||||||
Basic (in dollars per share) | $ 0.90 | $ 0.88 | $ 0.82 | $ 0.55 | $ 3.77 | $ 0.52 | $ 0.50 | $ 0.61 | $ 3.14 | $ 5.40 | $ 2.21 |
Diluted (in dollars per share) | $ 0.89 | $ 0.86 | $ 0.81 | $ 0.54 | $ 3.70 | $ 0.51 | $ 0.49 | $ 0.60 | $ 3.10 | $ 5.31 | $ 2.16 |
Weighted average common shares outstanding - basic (in shares) | 11,262 | 11,248 | 11,235 | 11,146 | 11,026 | 11,075 | 10,987 | 10,909 | 11,224 | 11,021 | 10,714 |
Weighted average common shares outstanding - diluted (in shares) | 11,369 | 11,406 | 11,383 | 11,338 | 11,234 | 11,272 | 11,191 | 11,075 | 11,378 | 11,209 | 10,974 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 35,296 | $ 59,497 | $ 23,655 |
Changes in derivative instrument: | |||
Net change in fair value of interest rate swaps | 292 | (240) | 216 |
Net change in fair value of foreign currency forwards | (358) | (1) | (2) |
Tax benefit (expense) | 14 | 86 | (76) |
Net change in derivative instrument | (52) | (155) | 138 |
Foreign currency translation adjustments | (1,426) | 3,052 | (975) |
Other comprehensive (loss) income, net of tax | (1,478) | 2,897 | (837) |
Total comprehensive income | $ 33,818 | $ 62,394 | $ 22,818 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash | $ 66,145 | $ 77,453 |
Receivables | 232,119 | 174,995 |
Costs incurred in excess of billings | 0 | 12,751 |
Other current assets | 15,063 | 6,747 |
Total current assets | 313,327 | 271,946 |
Property, plant, and equipment, net | 13,419 | 3,733 |
Goodwill | 233,619 | 216,930 |
Intangible assets, net | 8,630 | 121 |
Other non-current assets | 3,248 | 2,821 |
Total non-current assets | 258,916 | 223,605 |
Total Assets | 572,243 | 495,551 |
Current liabilities | ||
Accounts payable | 156,393 | 115,899 |
Billings in excess of costs | 0 | 3,766 |
Compensation and other employee benefits | 41,790 | 39,304 |
Short-term debt | 4,500 | 4,000 |
Other accrued liabilities | 22,303 | 19,209 |
Total current liabilities | 224,986 | 182,178 |
Non-current liabilities | ||
Long-term debt | 69,137 | 73,211 |
Deferred tax liability | 55,358 | 55,329 |
Other non-current liabilities | 1,462 | 1,461 |
Total non-current liabilities | 125,957 | 130,001 |
Total liabilities | 350,943 | 312,179 |
Commitments and contingencies (Note 17) | ||
Shareholders' Equity | ||
Preferred stock; $0.01 par value; 10,000,000 shares authorized; No shares issued and outstanding | 0 | 0 |
Common stock; $0.01 par value; 100,000,000 shares authorized; 11,266,906 and 11,120,528 shares issued and outstanding as of December 31, 2018 and 2017, respectively | 113 | 111 |
Additional paid in capital | 71,729 | 67,526 |
Retained earnings | 152,616 | 117,415 |
Accumulated other comprehensive loss | (3,158) | (1,680) |
Total shareholders' equity | 221,300 | 183,372 |
Total Liabilities and Shareholders' Equity | $ 572,243 | $ 495,551 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Stockholders' Equity Attributable to Parent [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 11,266,906 | 11,120,528 |
Common stock, shares outstanding (in shares) | 11,266,906 | 11,120,528 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities | |||
Net income | $ 35,296 | $ 59,497 | $ 23,655 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation expense | 1,798 | 1,686 | 1,920 |
Amortization of intangible assets | 1,999 | 0 | 0 |
Loss on disposal of property, plant, and equipment | 348 | 0 | 405 |
Stock-based compensation | 4,096 | 4,467 | 4,649 |
Amortization of debt issuance costs | 426 | 1,464 | 1,198 |
Changes in assets and liabilities: | |||
Receivables | (24,646) | 178 | 37,814 |
Other assets | (8,193) | 3,455 | (13,903) |
Accounts payable | 29,960 | (4,346) | (3,766) |
Billings in excess of costs | 0 | 2,345 | (4,605) |
Deferred taxes | 475 | (35,321) | (2,163) |
Compensation and other employee benefits | 178 | 3,256 | (1,808) |
Other liabilities | (1,681) | (1,271) | (6,778) |
Net cash provided by operating activities | 40,056 | 35,410 | 36,618 |
Investing activities | |||
Purchases of capital assets | (10,025) | (2,344) | (741) |
Proceeds from the disposition of assets | 33 | 0 | 116 |
Acquisition of business, net of cash acquired | (36,855) | 0 | 0 |
Distributions from equity investment | 0 | 0 | 573 |
Net cash (used in) investing activities | (46,847) | (2,344) | (52) |
Financing activities | |||
Proceeds from issuance of long-term debt | 0 | 80,000 | 0 |
Repayments of long-term debt | (4,000) | (86,000) | (29,000) |
Proceeds from revolver | 207,000 | 42,500 | 74,000 |
Repayments of revolver | (207,000) | (42,500) | (74,000) |
Proceeds from exercise of stock options | 1,595 | 2,031 | 2,146 |
Payment of debt issuance costs | 0 | (1,844) | (221) |
Payments of employee withholding taxes on share-based compensation | (880) | (1,317) | (987) |
Net cash (used in) financing activities | (3,285) | (7,130) | (28,062) |
Exchange rate effect on cash | (1,232) | 3,866 | (848) |
Net change in cash | (11,308) | 29,802 | 7,656 |
Cash-beginning of year | 77,453 | 47,651 | 39,995 |
Cash-end of year | 66,145 | 77,453 | 47,651 |
Supplemental Disclosure of Cash Flow Information: | |||
Interest paid | 4,973 | 5,886 | 5,278 |
Income taxes paid | 11,588 | 4,802 | 26,068 |
Purchase of capital assets on account | $ 1,128 | $ 0 | $ 0 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock Issued | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Balance (in shares) at Dec. 31, 2015 | 10,612 | ||||
Balance at Dec. 31, 2015 | $ 89,310 | $ 106 | $ 58,640 | $ 34,304 | $ (3,740) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 23,655 | 23,655 | |||
Foreign currency translation adjustments | (975) | (975) | |||
Unrealized gain (loss) on cash flow hedge | 138 | 138 | |||
Employee stock awards and stock options (in shares) | 283 | ||||
Employee stock awards and stock options | 1,291 | $ 3 | 1,288 | ||
Stock-based compensation | 3,982 | 3,982 | |||
Balance (in shares) at Dec. 31, 2016 | 10,895 | ||||
Balance at Dec. 31, 2016 | 117,401 | $ 109 | 63,910 | 57,959 | (4,577) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Adoption of ASU | 41 | (41) | |||
Net income | 59,497 | 59,497 | |||
Foreign currency translation adjustments | 3,052 | 3,052 | |||
Unrealized gain (loss) on cash flow hedge | (155) | (155) | |||
Employee stock awards and stock options (in shares) | 226 | ||||
Employee stock awards and stock options | 714 | $ 2 | 712 | ||
Stock-based compensation | 2,863 | 2,863 | |||
Balance (in shares) at Dec. 31, 2017 | 11,121 | ||||
Balance at Dec. 31, 2017 | 183,372 | $ 111 | 67,526 | 117,415 | (1,680) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Adoption of ASU | (95) | (95) | |||
Net income | 35,296 | 35,296 | |||
Foreign currency translation adjustments | (1,426) | (1,426) | |||
Unrealized gain (loss) on cash flow hedge | (52) | (52) | |||
Employee stock awards and stock options (in shares) | 146 | ||||
Employee stock awards and stock options | 715 | $ 2 | 713 | ||
Stock-based compensation | 3,490 | 3,490 | |||
Balance (in shares) at Dec. 31, 2018 | 11,267 | ||||
Balance at Dec. 31, 2018 | $ 221,300 | $ 113 | $ 71,729 | $ 152,616 | $ (3,158) |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business and Basis of Presentation Our Business Vectrus, Inc. is a leading provider of services to the U.S. government worldwide. We operate as one segment and offer facility and logistics services and information technology and network communications services. Vectrus was incorporated in the State of Indiana on February 4, 2014. On September 27, 2014, Exelis Inc. (Exelis) completed the spin-off (the Spin-off) of Vectrus and Vectrus became an independent, publicly traded company. The Consolidated Financial Statements reflect the consolidated operations of Vectrus as a separate stand-alone entity. Unless the context otherwise requires, references in these notes to "Vectrus", "we," "us," "our," "the Company" and "our Company" refer to Vectrus, Inc. References in these notes to Exelis or "Former Parent" refer to Exelis Inc., an Indiana corporation, and its consolidated subsidiaries (other than Vectrus). Exelis was acquired by Harris Corporation in May 2015. Equity Investment In 2011, we entered into a joint venture agreement with Shaw Environmental & Infrastructure, Inc., which is now Aptim Federal Services LLC. Pursuant to the joint venture agreement, High Desert Support Services, LLC (HDSS) was established to pursue and perform work on the Ft. Irwin Installation Support Services Contract, which was awarded to HDSS in October 2012. We account for our investment in HDSS under the equity method as we have the ability to exercise significant influence, but do not hold a controlling interest. We record our proportionate 40% share of income or losses, which has historically been insignificant, in the Consolidated Statements of Income. Our investment in HDSS is recorded in other non-current assets in the Consolidated Balance Sheets. When we receive cash distributions from HDSS, the cash distribution is compared to cumulative earnings and any excess is recorded as a distribution from equity investment in the Consolidated Statements of Cash Flows. Any remaining cash distribution is recorded in other assets in the Consolidated Statements of Cash Flows. As of December 31, 2018 and December 31, 2017, our investment balance in HDSS was $2.4 million and $1.7 million , respectively. Summary of Significant Accounting Policies Principles of Consolidation Vectrus consolidates companies in which it has a controlling financial interest. All intercompany transactions and balances have been eliminated. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Estimates are revised as additional information becomes available. Estimates and assumptions are used for, but not limited to, revenue recognition, income taxes, fair value and impairment of goodwill and valuation of assets and certain contingent liabilities. Actual results could differ from these estimates. Reclassifications Certain reclassifications have been made to the presentation of amounts in our Consolidated Balance Sheet as of December 31, 2017 to conform to the current year presentation. Specifically, certain intangible assets were reclassified from non-current assets and are now presented separately on our Consolidated Balance Sheets. Revenue Recognition In 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). Several ASUs have been issued since the issuance of ASU 2014-09, which modify certain sections of ASU 2014-09 and are intended to promote a more consistent interpretation and application of the principles outlined in the standard. We adopted the new standard, Accounting Standards Codification (ASC) Topic 606, on January 1, 2018, using the modified retrospective method with a cumulative-effect adjustment to opening retained earnings. See Note 3, "Revenue," for the quantification of these adjustments. As a defense contractor engaging in long-term contracts, substantially all of our revenue is derived from long-term service contracts. The unit of account for revenue in ASC Topic 606 is a performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. To determine the proper revenue recognition method, consideration is given as to whether a single contract should be accounted for as more than one performance obligation. For most of our contracts, the customer contracts with us to perform an integrated set of tasks and deliverables as a single service solution, whereby each service is not separately identifiable from other promises in the contract and therefore is not distinct. As a result, when this integrated set of tasks exists, the contract is accounted for as one performance obligation. The vast majority of our contracts have a single performance obligation. Unexercised contract options and indefinite delivery and indefinite quantity (IDIQ) contracts are considered to be separate contracts when the option or IDIQ task order is exercised or awarded. Our performance obligations are satisfied over time as services are provided throughout the contract term. We recognize revenue over time using the input method (e.g., costs incurred to date relative to total estimated costs at completion) to measure progress. Our over time recognition is reinforced by the fact that our customers simultaneously receive and consume the benefits of our services as they are performed. For most U.S. Government contracts, this continuous transfer of control to the customer is supported by clauses in the contract that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process. This continuous transfer of control requires that we track progress towards completion of performance obligations in order to measure and recognize revenue. Accounting for contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For contracts, we estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract. Contract estimates are based on various assumptions to project the outcome of future events. These assumptions include labor productivity and availability; the complexity of the services being performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer. The nature of our contracts gives rise to several types of variable consideration, including award and incentive fees, inspection of supplies and services, and fluctuation in allowable indirect reimbursable costs. We include award or incentive fees in the estimated transaction price when there is certainty and a basis to reasonably estimate the amount of the fee. These estimates are based on historical award experience, anticipated performance and our best judgment at the time. The inspection of supplies and services is a factor because the U.S. government can reduce the transaction price if we do not perform the services in compliance with contract requirements. The fluctuation of allowable indirect reimbursable costs is a factor because the U.S. government has the right to review our accounting records and retroactively adjust the reimbursable rate. Any prior adjustments are reflected in the U.S. government reserve amounts recorded in our financial statements. We estimate variable consideration at the most likely amount that we expect to be entitled to receive. Refer to Note 17, "Commitments and Contingencies" for additional information regarding U.S. government reserve amounts. As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract estimates regularly. We recognize adjustments in estimated profit on executed contracts cumulatively. The impact of the adjustments on profit recorded to date is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the quarter it is identified. Contracts are often modified to account for changes in contract specifications and requirements. If the modification either creates new enforceable rights and obligations or changes the existing enforceable rights and obligations, the modification will be treated as a separate contract. Historically, our contract modifications have not been distinct from the existing contract and have been accounted for as if they were part of that existing contract. The impact of adjustments in contract estimates on our operating income can be reflected in either revenue or cost of revenue. Cumulative adjustments for the years ended December 31, 2018 , 2017 and 2016 are presented in the following table: Year Ended December 31, (In thousands) 2018 2017 2016 Favorable adjustments $ 14,962 $ 18,256 $ 15,296 Unfavorable adjustments (13,359 ) (6,704 ) (7,837 ) Net favorable adjustments $ 1,603 $ 11,552 $ 7,459 The timing of revenue recognition, billings and cash collections results in billed and unbilled accounts receivable (contract assets) and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheets. Amounts are billed as work progresses in accordance with agreed-upon contractual terms at periodic intervals (e.g., biweekly or monthly). Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, we may receive advances or deposits from our customers, before revenue is recognized, resulting in contract liabilities. These advance billings and payments are not considered significant financing components because they are frequently intended to fund current operating expenses under the contract. These assets and liabilities are reported on the Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. Our primary customer is the U.S. Department of Defense, with a high concentration in the U.S. Army. For the year ended December 31, 2018 , 2017 and 2016, we had total revenue of $1.3 billion , $1.1 billion , and $1.2 billion , all of which was derived from U.S. government customers. For the years ended December 31, 2018 , 2017 and 2016 , we generated approximately 73% , 82% and 84% , respectively, of our total revenue from the U.S. Army. Income Taxes We determine the provision or benefit for income taxes using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In assessing the need for a valuation allowance, we look to the future reversal of existing taxable temporary differences, taxable income in carryback years, the feasibility of tax planning strategies, and estimated future taxable income. The valuation allowance can be affected by changes to tax laws, changes to statutory tax rates and changes to future taxable income estimates. Goodwill Goodwill represents purchase consideration paid in a business combination that exceeds the fair values assigned to the net assets of acquired businesses. Goodwill is not amortized, but instead is tested for impairment annually (or more frequently if impairment indicators arise, such as changes to the reporting unit structure or significant adverse changes in the business climate). We conduct our annual impairment testing during the fourth fiscal quarter. In reviewing goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the estimated fair value of a reporting unit is less than its carrying amount. If we elect to perform a qualitative assessment and determine that an impairment is more likely than not, the entity is then required to perform the existing two-step quantitative impairment test as described below. Otherwise, no further analysis is required. We also may elect not to perform the qualitative assessment and, instead, proceed directly to the two-step quantitative impairment test. The quantitative impairment test is a two-step test. In the first step, the estimated fair value of the reporting unit is developed and compared to the carrying value of the reporting unit. If the estimated fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and the second step of the impairment test is not performed. If the carrying value of the reporting unit exceeds its estimated fair value, then the second step of the impairment test is performed in order to measure the impairment loss to be recorded. If the carrying value of the reporting unit's goodwill exceeds its implied fair value, then we record an impairment loss equal to the difference. We estimate the fair value of our reporting unit using an income approach and a market approach. Under the income approach, we estimate fair value based on the present value of estimated future cash flows. Under the market approach, we compare our company to select reasonably similar publicly traded companies. We acquired SENTEL in 2018. See Note 5, "SENTEL Acquisition" for further discussion of goodwill recognized in the SENTEL acquisition. Intangible Assets We recognize an acquired intangible asset apart from goodwill whenever the intangible arises from contractual or other legal rights, or whenever it can be separated or divided from the acquired entity and sold, transferred, licensed, rented or exchanged, either individually or in combination with a related contract, asset or liability. Such intangibles are amortized over their estimated useful lives unless the estimated useful life is determined to be indefinite. Amortizable intangible assets are being amortized over useful lives of four to eight years. The straight-line method of amortization is used as it has been determined to approximate the use pattern of the assets. Severance Expense We periodically initiate management approved restructuring activities to achieve cost savings through reduced operational redundancies and to strategically position ourselves in the market in response to prevailing economic conditions and associated customer demand. Costs associated with restructuring actions can include severance and related benefit charges. For involuntary separation plans, a liability is recognized when it is probable, reasonably estimable, and communicated to employees. For voluntary separation plans, a liability is recognized when the employee irrevocably accepts the termination. Foreign Currency Translation The financial statements of programs for which the functional currency is not the U.S. dollar are translated into U.S. dollars. Balance sheet accounts are translated at the exchange rate in effect at the end of each period; income statement accounts are translated at the average rates of exchange prevailing during the period. Gains and losses on foreign currency translations are recorded as translation adjustments to other comprehensive (loss) income. Net gains or losses from foreign currency transactions are reported in selling, general and administrative (SG&A) expenses and have historically been immaterial. Receivables Receivables include amounts billed and currently due from customers, amounts unbilled, certain estimated contract change amounts, estimates related to expected award fees, claims or requests for equitable adjustment in negotiation that are probable of recovery, and amounts retained by the customer pending contract completion. Property, Plant and Equipment, Net Property, plant and equipment, net are stated at cost less accumulated depreciation. Major improvements are capitalized at cost while expenditures for maintenance, repairs and minor improvements are expensed. For asset sales or retirements, the assets and related accumulated depreciation and amortization are eliminated from the accounts and any resulting gain or loss is reflected in operating income. Depreciation and amortization is generally computed using either an accelerated or straight-line method and is based on estimated useful lives or lease term as follows: Years Building improvements 3 – 10 Machinery, equipment and vehicles 3 – 12 Furniture, fixtures, and office equipment 3 – 7 Operating Leases Many of our real property lease agreements contain incentives for tenant improvements, rent holidays, or rent escalation clauses. For incentives for tenant improvements, the Company records a deferred rent liability and amortizes the deferred rent over the term of the lease as a reduction to rent expense. For rent holidays and rent escalation clauses during the lease term, the Company records minimum rental expenses on a straight-line basis over the term of the lease. Leasehold improvements capitalized in property, plant and equipment are amortized over the lesser of the remaining life of the lease or the estimated useful life of the improvement. Long-Lived Asset Impairment Long-lived assets are tested for impairment whenever events or changes in circumstances indicate their carrying value may not be recoverable. We assess the recoverability of long-lived assets based on the undiscounted future cash flow the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When an impairment is identified, we reduce the carrying value of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. Stock-Based Compensation We recognize stock-based compensation expense primarily within selling, general and administrative expenses based on the grant date fair values for all share-based awards granted over the requisite service periods of the awards, which is generally equivalent to the vesting terms. Fair Value Measurements We determine fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In measuring fair value, a fair value hierarchy is applied which categorizes and prioritizes the inputs used to estimate fair value into three levels. The fair value hierarchy is based on maximizing the use of observable inputs and minimizing the use of unobservable inputs when measuring fair value. Classification within the fair value hierarchy is based on the lowest level input that is significant to the fair value measurement. There are three levels of the fair value hierarchy. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices (in nonactive markets or in active markets for similar assets or liabilities), inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 inputs are unobservable inputs for the assets or liabilities. Segment Information Management has concluded that the Company operates as one segment based upon the information used by the chief operating decision maker in evaluating the performance of the Company’s business and allocating resources and capital. Although we perform services worldwide, all of our revenue for the years ended December 31, 2018 , 2017 and 2016 was with the U.S. government. Commitments and Contingencies We record accruals for commitments and loss contingencies when they are probable of occurrence and the amounts can be reasonably estimated. In addition, legal fees are accrued for cases where a loss is probable and the related fees can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount of loss. We review these accruals quarterly and adjust the accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other updated information. Earnings Per Share We compute earnings per common share on the basis of the weighted average number of common shares, and, where dilutive, common share equivalents, outstanding during the indicated periods. Derivative Instruments Derivative instruments are recognized as either an asset or liability at fair value in our Consolidated Balance Sheets and are classified as current or long-term based on the scheduled maturity of the instrument. Our derivative instruments have been formally designated and qualify as part of a cash flow hedging relationship under applicable accounting standards. The interest rate derivative instruments are adjusted to fair value through accumulated other comprehensive income (loss). If we were to determine that a derivative was no longer highly effective as a hedge, we would discontinue the hedge accounting prospectively. Gains or losses would be immediately reclassified from accumulated other comprehensive income (loss) to earnings relating to hedged forecasted transactions that are no longer probable of occurring. Gains or losses relating to terminations of effective cash flow hedges in which the forecasted transactions would still be probable of occurring would be deferred and recognized consistent with the income or loss recognition of the underlying hedged item. Refer to Note 9, "Derivative Instruments," for additional information regarding our derivative activities. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS Accounting Standards Issued But Not Yet Effective In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02). The objective of ASU 2016-02 is to recognize lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. ASU 2016-02 requires lessees to account for leases as finance leases or operating leases. Both finance and operating leases will result in the lessee recognizing a right-of-use asset and corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset and, for operating leases, the lessee would recognize a straight-line lease expense. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. We have substantially completed our implementation plan. We have revised our controls and processes to address the lease standard and have completed the implementation and data input for our lease accounting software tool. We have elected the package of practical expedients, which, among other things, allows us to carry forward our prior lease classifications under ASC 840. We have not elected, however, to adopt the hindsight practical expedient and are therefore maintaining the lease terms we previously determined under ASC 840. Adoption of the standard is expected to have an impact of approximately $10 million on our Consolidated Balance Sheet for the addition of lease assets and liabilities related to operating leases. ASU 2016-02 also requires expanded disclosure regarding the amounts, timing and uncertainties of cash flows related to our lease portfolio. We are incorporating the collection of relevant data into our processes in preparation for disclosure in 2019. We do not expect ASU 2016-02 to have a material impact on our results of operations or cash flows. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment (ASU 2017-04). The objective of ASU 2017-04 is to simplify the subsequent measurement of goodwill by entities performing their annual goodwill impairment tests by comparing the fair value of a reporting unit, including income tax effects from any tax-deductible goodwill, with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds fair value. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of ASU 2017-04 is permitted on goodwill impairment tests performed after January 1, 2017. ASU 2017-04 should be applied on a prospective basis. The standard is not expected to have a material impact on our consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12). The objective of ASU 2017-12 is to improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities, and to reduce the complexity of and simplify the application of hedge accounting by preparers. The standard is effective in annual periods beginning after December 15, 2018, and interim periods within those periods. The standard is not expected to have a material impact on our consolidated financial statements. Accounting Standards That Were Adopted In 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Several ASUs have been issued since the issuance of ASU 2014-09, which modify certain sections of ASU 2014-09 and are intended to promote a more consistent interpretation and application of the principles outlined in the standard. We adopted the new revenue recognition standard, ASC Topic 606, using the modified retrospective method with a cumulative-effect adjustment to opening retained earnings as of January 1, 2018. See Note 1, "Description of Business and Summary of Significant Accounting Policies," and Note 3, "Revenue" for a discussion of this new standard. Other new pronouncements issued but not effective until after December 31, 2018 are not expected to have a material impact on our financial position, results of operations or cash flows. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue in ASC Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. To determine the proper revenue recognition method, consideration is given as to whether a single contract should be accounted for as more than one performance obligation. For most of our contracts, the customer contracts with us to perform an integrated set of tasks and deliverables as a single service solution, whereby each service is not separately identifiable from other promises in the contract and therefore is not distinct. As a result, when this integrated set of tasks exists, the contract is accounted for as one performance obligation. The vast majority of our contracts have a single performance obligation. Unexercised contract options and indefinite delivery and indefinite quantity (IDIQ) contracts are considered to be separate contracts when the option or IDIQ task order is exercised or awarded. Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct, and therefore, are accounted for as part of the existing contract. Our performance obligations are satisfied over time as services are provided throughout the contract term. We recognize revenue over time using the input method (e.g., costs incurred to date relative to total estimated costs at completion) to measure progress. Our over time recognition is reinforced by the fact that our customers simultaneously receive and consume the benefits of our services as they are performed. This continuous transfer of control requires that we track progress towards completion of performance obligations in order to measure and recognize revenue. Determining progress on performance obligations requires us to make judgments that affect the timing of revenue recognition. Remaining performance obligations represent firm orders by the customer and excludes potential orders under IDIQ contracts, unexercised contract options and contracts awarded to us that are being protested by competitors with the U.S. Government Accountability Office (GAO) or in the U.S. Court of Federal Claims. The level of order activity related to programs can be affected by the timing of government funding authorizations and their project evaluation cycles. Year-over-year comparisons could, at times, be impacted by these factors, among others. Our contracts are multi-year contracts and typically include an initial period of one year or less with annual one-year (or less) option periods. The number of option periods varies by contract, and there is no guarantee that an option period will be exercised. The right to exercise an option period is at the sole discretion of the U.S. government when we are the prime contractor or of the prime contractor when we are a subcontractor. We expect to recognize a substantial portion of our performance obligations as revenue within the next 12 months. However, the U.S. government or the prime contractor may cancel any contract at any time through a termination for convenience or for cause. Substantially all of our contracts have terms that would permit us to recover all or a portion of our incurred costs and fees for work performed in the event of a termination for convenience. Remaining performance obligations increased by $139.1 million as of December 31, 2018 as compared to December 31, 2017 . We expect to recognize approximately 100% of the remaining performance obligations as of December 31, 2018 as revenue in 2019. Remaining performance obligations as of December 31, 2018 and December 31, 2017 are presented in the following table: Year Ended December 31, (In millions) 2018 2017 Performance Obligations $ 858 $ 719 Contract Estimates Accounting for contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For contracts, we estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract. Contract estimates are based on various assumptions to project the outcome of future events. These assumptions include labor productivity and availability; the complexity of the services being performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer. The impact of adjustments in contract estimates on our operating income can be reflected in either revenue or cost of revenue. Cumulative adjustments to operating income for the years ended December 31, 2018 , December 31, 2017 and December 31, 2016 are presented in the following table: Year Ended December 31, (In thousands) 2018 2017 2016 Favorable adjustments $ 14,962 $ 18,256 $ 15,296 Unfavorable adjustments (13,359 ) (6,704 ) (7,837 ) Net favorable adjustments $ 1,603 $ 11,552 $ 7,459 For the years ended December 31, 2018 , 2017 , and 2016 , the net favorable adjustments to operating income increased revenue by $0.8 million, $9.7 million and $7.2 million , respectively. Revenue by Category Generally, the sales price elements for our contracts are cost-plus, cost-reimbursable or firm-fixed-price. We commonly have elements of cost-plus, cost-reimbursable and firm-fixed-price contracts on a single contract. On a cost-plus type contract, we are paid our allowable incurred costs plus a profit, which can be fixed or variable depending on the contract’s fee arrangement, up to funding levels predetermined by our customers. On cost-plus type contracts, we do not bear the risks of unexpected cost overruns, provided that we do not incur costs that exceed the predetermined funded amounts. Most of our cost-plus contracts also contain a firm-fixed-price element. Cost-plus type contracts with award and incentive fee provisions are our primary variable contract fee arrangement. Award fees provide for a fee based on actual performance relative to contractually specified performance criteria. Incentive fees provide for a fee based on the relationship between total allowable and target cost. On most of our contracts, a cost-reimbursable element captures consumable materials required for the program. Typically, these costs do not bear fees. On a firm-fixed-price type contract, we agree to perform the contractual statement of work for a predetermined contract price. A firm-fixed-price type contract typically offers higher profit margin potential than a cost-plus type contract, which is commensurate with the greater levels of risk we assume on a firm-fixed-price type contract. Although a firm-fixed-price type contract generally permits us to retain profits if the total actual contract costs are less than the estimated contract costs, we bear the risk that increased or unexpected costs may reduce our profit or cause us to sustain losses on the contract. Although the overall scope of work required under the contract may not change, profit may be adjusted as experience is gained and as efficiencies are realized or costs are incurred. The following tables present our revenue disaggregated by different categories. Revenue by contract type for the years 2018 , 2017 and 2016 are as follows: Year Ended December 31, (In thousands) 2018 2017 2016 Cost-plus and cost-reimbursable ¹ $ 995,415 $ 818,908 $ 892,842 Firm-fixed-price 283,889 295,880 297,677 Total revenue $ 1,279,304 $ 1,114,788 $ 1,190,519 ¹ Includes time and material contracts Revenue by geographic region in which the contract is performed for the years 2018 , 2017 and 2016 are as follows: Year Ended December 31, (In thousands) 2018 2017 2016 Middle East $ 889,620 $ 871,821 $ 976,586 United States 269,750 168,003 157,161 Europe 119,934 74,964 56,772 Total revenue $ 1,279,304 $ 1,114,788 $ 1,190,519 Revenue by contract relationship for the years 2018 , 2017 and 2016 are as follows: Year Ended December 31, (In thousands) 2018 2017 2016 Prime contractor $ 1,200,726 $ 1,083,485 $ 1,131,773 Subcontractor 78,578 31,303 58,746 Total revenue $ 1,279,304 $ 1,114,788 $ 1,190,519 Revenue by customer for the years 2018 , 2017 and 2016 are as follows: Year Ended December 31, (In thousands) 2018 2017 2016 Army $ 934,427 $ 915,554 $ 1,004,842 Air Force 259,511 177,338 165,611 Navy 38,802 21,896 20,066 Other 46,564 — — Total revenue $ 1,279,304 $ 1,114,788 $ 1,190,519 Contract Balances The timing of revenue recognition, billings and cash collections results in billed and unbilled accounts receivable (contract assets) and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheets. Amounts are billed as work progresses in accordance with agreed-upon contractual terms at periodic intervals (e.g., biweekly or monthly). Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, we may receive advances or deposits from our customers, before revenue is recognized, resulting in contract liabilities. These advance billings and payments are not considered significant financing components because they are frequently intended to ensure that both parties are in conformance with the primary contract terms. These assets and liabilities are reported on the Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. During the year ended December 31, 2018 , we recognized $0.9 million in revenue from performance obligations that were satisfied in prior periods. As of December 31, 2018 , we had contract assets of $181.0 million . Refer to Note 7, "Receivables," for additional information regarding the composition of our receivables balances. As of December 31, 2018 , our contract liabilities were insignificant. ASC Topic 606 Impact We adopted ASC Topic 606 on January 1, 2018, using the modified retrospective method with an unfavorable cumulative-effect adjustment of $0.1 million to opening retained earnings. The new ASC Topic 606 guidance was applied to contracts that were not completed as of the effective date of the guidance. During implementation of the standard, we identified performance obligations on the basis of the current version of the executed contract, including any contract modifications since inception; determined the transaction price, including any variable consideration, as of the effective date; and allocated the transaction price determined to the performance obligation identified. ASC Topic 606 differs from former ASC Topic 605 as we no longer recognize adjustments in estimated costs at completion as costs incurred in excess of billings on the balance sheet for firm-fixed price contracts. Adjustments in contract estimates for firm-fixed price contracts will result in more variability to revenue from period to period. The cumulative impact of an adjustment in estimated profit recorded to date on a contract will continue to be recognized in the period it is identified. We determined that certain incentive bonuses met the criteria of incremental costs of acquiring contracts. We capitalize these bonuses and recognize these costs ratably over the terms of the related contracts, including the base year and any subsequent anticipated option years. Prior to the adoption of ASC 606, we recognized these costs as they were incurred. As of December 31, 2018 , we have capitalized $0.4 million and recognized less than $0.1 million of amortization expense related to certain incentive bonuses for the year ended December 31, 2018 . The adoption of ASC Topic 606 had the most significant impact to our accounting for firm-fixed-price contracts. Under ASC Topic 606 guidance, our firm-fixed-price contracts recognize revenue and earnings over time with the continuous transfer of services to the customer, using an input measure (e.g., costs incurred to date relative to total estimated costs at completion) to reflect progress. Adjustments in estimated costs at completion were previously recorded as costs incurred in excess of billings or billings in excess of costs on the Consolidated Balance Sheets. Adjustments in contract estimates for firm-fixed-price contracts are now recorded as unbilled receivables. This change will result in more variability to revenue from period to period. Despite this variability, a firm-fixed-price contract’s cash flows and overall profitability at contract completion are the same. The effects of the adoption of ASC Topic 606, using the modified retrospective method on January 1, 2018, are outlined in the following table: (In thousands) Year Ended December 31, 2017 Impact January 1, 2018 Receivables (unbilled) $ 121,601 $ 10,457 $ 132,058 Costs incurred in excess of billings $ 12,751 $ (12,751 ) $ — Billings in excess of costs $ 3,766 $ (3,766 ) $ — Impact to contract liabilities $ — $ 1,621 $ 1,621 Retained earnings, net of tax $ 117,415 $ (95 ) $ 117,320 The following table reflects the balances of financial statement line items under the ASC Topic 606 revenue recognition guidance compared to the former ASC Topic 605 revenue guidance for the year ended December 31, 2018 : Year Ended December 31, 2018 New Guidance Former Guidance (In thousands) ASC Topic 606 ASC Topic 605 Revenue $ 1,279,304 $ 1,269,560 Cost of revenue $ 1,164,609 $ 1,148,199 Selling, general and administrative expenses $ 66,372 $ 66,372 Operating income $ 48,323 $ 54,989 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES We determine the provision for income taxes using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In assessing the need for a valuation allowance, we look to the future reversal of existing taxable temporary differences, taxable income in carryback years, the feasibility of tax planning strategies and estimated future taxable income. The valuation allowance can be affected by changes to tax laws, changes to statutory tax rates and changes to future taxable income estimates. For the year ended December 31, 2018 , we did not establish or release an additional valuation allowance. We provide for U.S. deferred taxes on the excess of financial reporting basis over the U.S. tax basis for our foreign earnings when we do not plan to reinvest such earnings indefinitely outside the United States. The sources of pre-tax income and the components of income tax expense for the years ended December 31, 2018 , 2017 and 2016 , respectively, are as follows: (in thousands) 2018 2017 2016 Income Components United States $ 41,449 $ 34,386 $ 37,276 Foreign 1,803 2,194 (89 ) Total pre-tax income from continuing operations $ 43,252 $ 36,580 $ 37,187 Income tax expense components Current income tax provision United States-Federal $ 6,305 $ 11,952 $ 15,106 United States-State and local 653 206 311 Foreign 515 758 371 Total current income tax provision 7,473 12,916 15,788 Deferred income tax provision (benefit) United States-Federal (79 ) (35,486 ) (1,733 ) United States-State and local 52 (260 ) (278 ) Foreign 510 (87 ) (245 ) Total deferred income tax provision (benefit) 483 (35,833 ) (2,256 ) Total income tax expense (benefit) $ 7,956 $ (22,917 ) $ 13,532 Effective income tax rate 18.4 % (62.6 )% 36.4 % A reconciliation of the income tax provision at the U.S. statutory rate to the effective income tax rate as reported is as follows: 2018 2017 2016 Tax provision at U.S. statutory rate 21.0 % 35.0 % 35.0 % State and local income tax, net of federal benefit 1.3 % (0.1 )% 0.1 % Foreign taxes 0.3 % (2.5 )% — % Uncertain tax positions 3.4 % — % — % Prior year true-ups 0.4 % 0.3 % — % Foreign derived intangible income deduction (2.9 )% — % — % Credits (0.8 )% — % — % Other 0.4 % 1.7 % 1.3 % Impact of federal rate change (4.7 )% (97.0 )% — % Effective income tax rate 18.4 % (62.6 )% 36.4 % Deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and tax bases of assets and liabilities, applying enacted tax rates in effect for the year in which we expect the differences will reverse. Deferred tax assets and liabilities include the following: (in thousands) 2018 2017 Deferred Tax Assets Costs incurred in excess of billings $ — $ 814 Compensation and benefits 4,444 4,667 Reserves 3,028 2,473 Other 802 854 Net operating losses 295 133 Total deferred tax assets $ 8,569 $ 8,941 Deferred Tax Liabilities Goodwill and intangibles $ (46,832 ) $ (46,890 ) Unbilled receivables (15,112 ) (16,635 ) Property, plant and equipment, net (709 ) 774 Other liabilities (1,192 ) (1,169 ) Total deferred tax liabilities (63,845 ) (63,920 ) Net deferred tax liabilities $ (55,276 ) $ (54,979 ) Uncertain Tax Position A reconciliation of the beginning and ending amount of unrecognized tax benefits as of December 31, 2018 , 2017 and 2016 is as follows: (in thousands) 2018 2017 2016 Unrecognized tax benefits-January 1, $ — $ 429 $ — Additions for: Current year tax positions 1,275 — 429 Prior year tax positions 480 — — Reductions for: Settlements with tax authorities — (429 ) — Prior year tax positions — — — Unrecognized tax benefits-December 31, $ 1,755 $ — $ 429 As of December 31, 2018 , 2017 and 2016 , unrecognized tax benefits from uncertain tax positions were $1.8 million , $0.0 million and $0.4 million , respectively. We generated $1.3 million of unrecognized benefits during the year ended December 31, 2018 related to a current year position, as we are awaiting further guidance on the foreign derived intangible income (FDII) deduction. We generated $0.5 million of unrecognized tax benefits during the year ended December 31, 2018 related to prior year positions as a result of timing differences that were included on our 2017 income tax return that will be reversed and effectively settled with the filing of our 2018 income tax return. We effectively settled $0.4 million of unrecognized tax benefits during the year ended December 31, 2017 with the filing of our 2016 income tax returns during 2017. We classify interest relating to tax matters as a component of interest expense and tax penalties as a component of income tax expense in our Consolidated Statements of Income. During 2018 , 2017 and 2016 , we recognized interest expense related to tax matters of $0.0 million , $0.0 million and $0.0 million , respectively. The Company's earliest open tax year in the U.S. is 2015. Tax Cuts and Jobs Act As the result of the passage of the Tax Cuts and Jobs Act (the Tax Act), on December 22, 2017 the Securities and Exchange Commission released Staff Accounting Bulletin 118 (SAB 118) to provide guidance for companies that had not completed accounting for the income tax effects of the Tax Act prior to the release of their financial statements. SAB 118 provides guidance regarding disclosure on positions taken in the financial reports under three scenarios; (i) where the accounting for the income tax effects is complete, (ii) where the accounting for the income tax effects is incomplete but a reasonable estimate is available, and (iii) where the accounting for the income tax effects is incomplete and a reasonable estimate is not available. We have concluded our analysis of the tax impacts of the Tax Act as of December 31, 2018 with respect to the currently available guidance. In addition to the tax benefit of $35.1 million recorded as of December 31, 2017 , we have recorded an additional benefit of $2.0 million . This additional benefit relates to tax planning with regard to the impact of the federal rate change as included in the filing of the 2017 income tax returns in 2018. We analyzed further the adjustments to our stock compensation deferred tax assets for the changes to Section 162(m) of the Internal Revenue Code, as well as the final calculations of earnings and profits for our transition tax calculation. The changes to both calculations resulting from the additional analysis were minimal and are included in the tax provision. Under GAAP, we are allowed to make an accounting policy choice of either (i) treating taxes due on future U.S. inclusions in taxable income related to global intangible low taxed income (GILTI) as a current-period expense when incurred (the “period cost method”) or (ii) factoring such amounts into a company’s measurement of its deferred taxes (the “deferred method”). We have chosen to account for GILTI under the period cost method as an accounting policy, and therefore the anticipated future expense associated with GILTI is not reflected in our financial statements. As of the close of the SAB 118 period, there are impacts of the Tax Act regarding both federal and state income taxes that we expect will require additional analysis due to the lack of guidance. As such, we will continue to re-evaluate the impacts of these provisions as additional guidance is released. Such guidance may affect our federal and state tax liabilities in the future. Any additional income tax benefit or expense recorded will occur outside of the SAB 118 period. In addition to the Tax Act items analyzed as part of SAB 118, we included the impacts of GILTI and foreign derived FDII as part of the income tax provision. For the year ended December 31, 2018, GILTI resulted in additional income tax expense of $0.1 million and FDII resulted in an income tax benefit of $1.3 million . We have provided for a full reserve on the FDII until the U.S. Treasury issues additional guidance in this area. We will continue to analyze further guidance on these topics as it is released at both the federal and state level. |
SENTEL Acquisition
SENTEL Acquisition | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
SENTEL Acquisition | SENTEL ACQUISITION On January 23, 2018, we acquired 100% of the outstanding common stock of SENTEL. In accordance with ASC Topic 805, Business Combinations, we accounted for this transaction using the acquisition method. We conducted valuations of certain acquired assets and assumed liabilities for inclusion in our Consolidated Balance Sheets as of the date of acquisition. Assets that normally would not be recorded in ordinary operations (i.e., intangibles related to contractual relationships) were recorded at their estimated fair values. The excess of the purchase price over the estimated fair value of the net assets acquired was recorded as goodwill. The total net consideration paid for the acquisition was $36.9 million , consisting of the purchase price of $36.0 million and $0.9 million in excess of the working capital requirement agreed upon in the stock purchase agreement entered into among our wholly-owned subsidiary VSC, SENTEL, R&R Enterprises, Inc. and Russell T. Wright. The acquisition was funded by utilizing cash on hand and available capacity from our Amended Revolver (as defined in Note 8, "Debt"). (In thousands) Allocation of Purchase Price Receivables $ 23,339 Property, plant and equipment 810 Goodwill 16,689 Intangible assets 10,500 Other current assets 975 Accounts payable (10,012 ) Other current liabilities (5,446 ) Purchase price, net of cash acquired $ 36,855 We completed the purchase accounting for this acquisition as of December 31, 2018. We recognized two intangible assets related to customer contracts, the backlog and the contract re-competes arising from the acquisition. The fair value of the backlog was $6.5 million and the fair value of the contract re-competes was $4.0 million with amortization periods of 4.0 years and 8.0 years, respectively. The weighted-average remaining useful life of these two intangible assets is 4.7 years. During the year ended December 31, 2018 , we recorded amortization expense of $2.0 million . The amortization expense is included in cost of revenue in our Consolidated Statements of Income. Additionally, we recognized goodwill of $16.7 million arising from the acquisition, which relates primarily to growth opportunities based on a broader service offering in the converging physical and digital infrastructure market, and enhancing our information technology, technical solutions and logistics capabilities, while expanding our client base to customers in the U.S. intelligence community. The goodwill recognized for the SENTEL acquisition is fully deductible for income tax purposes. Through December 31, 2018 , we have recorded acquisition-related costs of $0.8 million , which are included in selling, general and administrative expenses in our Consolidated Statements of Income. We do not believe that any additional costs related to the acquisition will be significant. These costs do not reflect internal non-recurring integration costs. SENTEL’s results of operations for 2018 have been included in our Consolidated Statements of Income for the period subsequent to the acquisition on January 23, 2018. For the year ended December 31, 2018 , SENTEL contributed $112.3 million of revenue. For the year ended December 31, 2017 , SENTEL recognized revenue of $107.0 million . Income from operations before income taxes for SENTEL was insignificant in both years. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic earnings per share (EPS) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects potential dilution that could occur if securities to issue common stock were exercised or converted into common stock. Diluted EPS includes the dilutive effect of share-based compensation outstanding after application of the treasury stock method. Year Ended December 31, (In thousands, except per share data) 2018 2017 2016 Net Income $ 35,296 $ 59,497 $ 23,655 Weighted average common shares outstanding 11,224 11,021 10,714 Add: Dilutive impact of stock options 63 67 97 Add: Dilutive impact of restricted stock units 91 121 163 Diluted weighted average common shares outstanding 11,378 11,209 10,974 Earnings per share Basic $ 3.14 $ 5.40 $ 2.21 Diluted $ 3.10 $ 5.31 $ 2.16 The table below provides a summary of securities that could potentially dilute basic earnings per share in the future that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the period presented. Year Ended December 31, (In thousands) 2018 2017 2016 Anti-dilutive stock options 3 8 — Anti-dilutive restricted stock units — — 9 Total 3 8 9 |
Receivables
Receivables | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Receivables | RECEIVABLES Receivables were comprised of the following: December 31, (In thousands) 2018 2017 Billed receivables $ 44,868 $ 50,595 Unbilled receivables (contract assets) 181,009 121,601 Other 6,242 2,799 Receivables $ 232,119 $ 174,995 As of December 31, 2018 and 2017 , all billed receivables are due from the U.S. government, either directly as prime contractor to the U.S. government or as subcontractor to another prime contractor to the U.S. government. Because the Company’s billed receivables are with the U.S. government, the Company does not believe it has a material credit risk exposure. Unbilled receivables are contract assets that represent revenue recognized on long-term contracts in excess of amounts billed as of the balance sheet date. We estimate that approximately $0.9 million of our unbilled receivables as of December 31, 2018 may not be collected within the next twelve months. These amounts relate to the timing of the U.S. government review of indirect rates and contract line item realignments with our customers. Changes in the balance of receivables are primarily due to the timing differences between our performance and customer payments. Refer to Note 3, "Revenue," for a discussion of the impact of the adoption of ASC Topic 606 on our receivables. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Senior Secured Credit Facilities Term Loan and Revolver. In September 2014, we and our wholly-owned subsidiary, VSC, entered into a credit agreement with a group of lenders, including JPMorgan Chase Bank, N.A. as administrative agent. The credit agreement was amended as of April 19, 2016, to modify certain financial and negative covenants (as so amended, the Credit Agreement). On November 15, 2017, we and VSC entered into an Amendment and Restatement Agreement (the Amendment Agreement) with a group of lenders including JPMorgan Chase Bank, N.A., as administrative agent, which provides for the amendment and restatement of the Credit Agreement. The Amendment Agreement provides for $200.0 million in senior secured financing, consisting of a $80.0 million five -year term loan facility (the Amended Term Loan) and a $120.0 million five -year senior secured revolving credit facility (the Amended Revolver, and together with the Amended Term Loan, the Amended Credit Facilities). We used $74.6 million from the Amended Term Loan to repay principal and accrued but unpaid interest on the Credit Agreement. We also used $1.8 million from the Amended Term Loan to pay debt financing fees, which are included in "Long-term debt, net" in the Consolidated Balance Sheets and are being amortized as an adjustment to interest expense over the life of the Amendment Agreement. Amortization expense relating to debt issuance costs on the Amendment Agreement was $0.4 million for the year ended December 31, 2018 . Amortization expense relating to debt issuance costs on the Credit Agreement was $1.4 million for the year ended December 31, 2017 , which included $0.8 million of unamortized debt issuance costs as of the date of the Amendment Agreement. Amortization expense relating to debt issuance costs on the Credit Agreement was $ 1.2 million for the year ended December 31, 2016 . All debt issuance amortization costs are included in interest expense in the Consolidated Statements of Income. The Amended Term Loan amortizes in an amount equal to $1.0 million per quarter for the fiscal quarters ending December 31, 2017 through September 30, 2019, $1.5 million per quarter for the fiscal quarters ending December 31, 2019 through September 30, 2020, $2.0 million per quarter for the fiscal quarters ending December 31, 2020 through September 30, 2021, $2.6 million for the fiscal quarters ending December 31, 2021 through September 30, 2022, with the balance of $47.6 million due on November 15, 2022. Amounts borrowed under the Amended Term Loan that are repaid or prepaid may not be re-borrowed. Any unpaid amounts must be repaid by the maturity dates. As of December 31, 2018 , the balance outstanding under the Amended Term Loan was $75.0 million . The Amended Revolver is available for working capital, capital expenditures, and other general corporate purposes. The Amended Revolver will mature and the commitments thereunder will terminate on November 15, 2022. There were no outstanding borrowings under the Amended Revolver at December 31, 2018. Up to $25.0 million of the Amended Revolver is available for the issuance of letters of credit. As of December 31, 2018 , there were six letters of credit outstanding in the aggregate amount of $10.1 million , which reduced our borrowing availability under the Amended Revolver to $109.9 million . The Company's aggregate scheduled maturities of the Amended Term Loan as of December 31, 2018 , are as follows: (In thousands) Payments due 2019 $ 4,500 2020 6,500 2021 8,600 2022 55,400 Total $ 75,000 Guarantees and Collateral . The indebtedness and other obligations under the Amended Credit Facilities are unconditionally guaranteed jointly and severally on a senior secured basis by us and certain of our restricted subsidiaries and are secured, subject to permitted liens and other exceptions, by a first-priority lien on substantially all of our tangible and intangible assets and those of each domestic guarantor. Voluntary Prepayments . We may voluntarily prepay the Amended Term Loan in whole or in part at any time without premium or penalty, subject to the payment of customary breakage costs under certain conditions. Voluntary prepayments of the Amended Term Loan will be applied to the remaining installments thereof as directed by us. We may reduce the commitments under the Amended Revolver in whole or in part at any time without premium or penalty. Covenants . The Amended Credit Facilities contain customary covenants, including covenants that, under certain circumstances and subject to certain qualifications and exceptions: limit or restrict our ability to incur additional indebtedness; merge, dissolve, liquidate or consolidate; make acquisitions, investments, advances or loans; dispose of or transfer assets; pay dividends; redeem or repurchase certain debt; and enter into certain restrictive agreements. As of December 31, 2018 , the maximum amount of dividends we could pay was $19.3 million . In addition, we are required to comply with (a) a maximum ratio of total consolidated indebtedness to consolidated earnings before interest, tax, depreciation and amortization (EBITDA) of 3.00 to 1.00 (or 3.25 to 1.00 for the 12 months following a qualified acquisition), and (b) a minimum ratio of consolidated EBITDA to consolidated interest expense (net of cash interest income) of 4.50 to 1.00 . As of December 31, 2018 , we had a ratio of total consolidated indebtedness to EBITDA of 1.25 to 1.00 and a ratio of consolidated EBITDA to consolidated interest expense of 11.61 to 1.00 . We were in compliance with all covenants related to the Amended Credit Facilities as of December 31, 2018 . Interest Rates and Fees . Outstanding borrowings under the Amended Credit Facilities accrue interest, at our option, at a per annum rate of (i) LIBOR plus the applicable margin, which ranges from 1.75% to 2.50% depending on the leverage ratio, or (ii) a base rate plus the applicable margin, which ranges from 0.75% to 1.50% depending on the leverage ratio. The interest rate under the Amended Credit Facilities at December 31, 2018 was 4.53% . We pay a commitment fee on the undrawn portion of the Amended Revolver ranging from 0.30% to 0.45% , depending on the leverage ratio. Carrying Value and Fair Value . The fair value of the Amended Credit Facilities approximates the carrying value as of December 31, 2018 because the debt bears interest at a floating rate of interest. The fair value is based on observable inputs of interest rates that are currently available to us for debt with similar terms and maturities for non-public debt. Carrying values and fair values of the Amended Term Loan on the Consolidated Balance Sheet as of December 31, 2018 were as follows: December 31, 2018 (In thousands) Carrying Amount Fair Value Short-term debt $ 4,500 $ 4,500 Long-term debt 70,500 70,500 Total debt 75,000 $ 75,000 Debt financing fees (1,363 ) Total debt with debt financing fees $ 73,637 Carrying values and fair values of the Amended Term Loan on the Consolidated Balance Sheet as of December 31, 2017 were as follows: December 31, 2017 (In thousands) Carrying Amount Fair Value Short-term debt $ 4,000 $ 4,000 Long-term debt 75,000 75,000 Total debt 79,000 $ 79,000 Debt financing fees (1,789 ) Total debt with debt financing fees $ 77,211 |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS Interest Rate Derivative Instruments We are exposed to the risk that our earnings and cash flows could be adversely impacted due to fluctuations in interest rates. We will periodically enter into interest rate swaps to manage interest costs in which we agree to exchange, at specified intervals, the difference between variable and fixed interest amounts calculated by reference to an agreed-upon notional amount. Derivative instruments are not used for trading purposes or to manage exposure to changes in interest rates for investment securities, and our outstanding derivative instruments do not contain credit risk related contingent features. Collateral is generally not required. In December 2017, we terminated the derivative instruments entered into during May 2016 and May 2015 and entered into a new derivative instrument to hedge a portion of our exposure to interest rate risk under the Amended Term Loan. As a result of terminating the derivatives, we received $0.4 million in cash for the fair value of the derivative instruments, reduced other current and other non-current assets by $0.4 million , and reduced accumulated other comprehensive loss by $0.4 million on the Consolidated Balance Sheet as of December 31, 2017. In addition, we decreased interest expense on the Consolidated Statements of Income by $0.4 million for the year ended December 31, 2017. No other derivative gains or losses were recognized in 2017. In addition to the new hedge entered into during December 2017, during February 2018, and April 2018 we entered into additional derivative instruments to hedge a portion of our exposure to interest rate risk under the variable-rate portion of the Amended Term Loan (the interest rate swaps). The interest rate swaps are designated and qualify as effective cash flow hedges. The contracts, with a notional amount totaling $56.4 million at December 31, 2018 and expiration dates through November 2022, are recorded at fair value. The interest rate swaps are measured at fair value on a recurring basis and are determined using the income approach based on a discounted cash flow model to determine the present value of future cash flows over the remaining term of the contract incorporating observable market inputs such as prevailing interest rates as of the reporting date (Level 2). Changes in fair value of the interest rate swap are recorded, net of tax, as a component of accumulated other comprehensive loss in the accompanying Consolidated Balance Sheets. We reclassify the effective gain or loss from accumulated other comprehensive loss, net of tax, to interest expense on the Consolidated Statements of Income as the interest expense is recognized on the related debt. The ineffective portion of the change in fair value of the interest rate swap, if any, is recognized directly in earnings in interest expense. Net interest rate derivative losses of approximately $0.2 million were reclassified from accumulated other comprehensive loss to interest expense in our Consolidated Statements of Income during 2018. The following table summarizes the amount at fair value and location of the derivative instrument in the Consolidated Balance Sheet as of December 31, 2018 : Fair Value (In thousands) Balance sheet caption Amount Interest rate swap designated as cash flow hedge Other current assets $ 121 Interest rate swap designated as cash flow hedge Other non-current assets $ 104 The following table summarizes the amount at fair value and location of the terminated derivative instruments in the Consolidated Balance Sheet as of December 31, 2017 : Fair Value (In thousands) Balance sheet caption Amount Interest rate swap designated as cash flow hedge Other accrued liabilities $ 127 Interest rate swap designated as cash flow hedge Other non-current assets $ 60 By utilizing interest rate swaps, we are exposed to credit-related losses in the event that the counterparty fails to perform under the terms of the derivative contract. To mitigate this risk, we entered into the interest rate swap with a major financial institution based upon credit ratings and other factors. We regularly assess the creditworthiness of the counterparty. As of December 31, 2018 , the counterparty to the interest rate swap had performed in accordance with its contractual obligations. Both the counterparty credit risk and our credit risk were considered in the fair value determination. Foreign Currency Derivative Instrument We transact business in various foreign countries and are therefore exposed to foreign currency exchange rate risk that impacts the reported U.S. dollar amounts of revenues, costs, and certain foreign currency monetary assets and liabilities. In order to manage exposure to fluctuations in foreign currency and to reduce the volatility in cash flows and earnings caused by fluctuations in foreign exchange rates, we entered into forward contracts to buy and sell foreign currency. By policy, we do not enter into these contracts for trading purposes or speculation. As of December 31, 2018, we had economically hedged certain portions of our foreign currency risk in anticipated transactions using derivative instruments with expiration dates through May 2020. Counterparty default risk is considered low because the forward contracts that we entered into are over-the-counter instruments transacted with highly-rated financial institutions. We were not required to, and did not, post collateral as of December 31, 2018. Our foreign currency derivative instruments are recorded at fair value as a derivative asset or liability in the Consolidated Balance Sheets. The foreign currency forward contracts are measured at fair value on a recurring basis and are determined using the income approach based on a discounted cash flow model to determine the present value of future cash flows over the remaining term of the contract incorporating observable market inputs such as prevailing foreign currency exchange rates as of the reporting date (Level 2). Forward contracts acquired prior to December 31, 2017 were not designated as hedging instruments and changes in fair value of these contracts were recognized within selling, general and administrative expense in the Consolidated Statements of Income. Forward contracts entered into after December 31, 2017 were designated and qualify as hedging instruments. Changes in the fair value of these instruments are recorded, net of tax, as a component of accumulated other comprehensive loss in the accompanying Consolidated Balance Sheets. We reclassify the effective gain or loss from accumulated other comprehensive loss, net of tax, within selling, general and administrative expense on the Consolidated Statements of Income as the forward contracts are settled. The ineffective portion of the change in fair value of the forward contracts, if any, is recognized directly in earnings in selling, general and administrative expense. In the Consolidated Statements of Cash Flows, we classify cash flows from foreign currency derivative instruments at settlement in the same category as the cash flows from the related hedged item, generally within cash provided by operating activities. During 2018, net foreign currency derivative losses of less than $0.1 million were recognized in selling, general and administrative expense. These losses related to our non-designated hedges, all of which were settled in 2018. During 2017 no foreign currency derivative gains or losses were recognized in our Consolidated Statements of Income. The following table summarizes the amount at fair value and location of the derivative instruments used for our forward contract hedges in the Consolidated Balance Sheet as of December 31, 2018. Fair Value (In thousands) Balance sheet caption Amount Foreign currency forward contracts designated as cash flow hedge Other accrued liabilities $ 351 Foreign currency forward contracts designated as cash flow hedge Other non-current liabilities $ 7 At December 31, 2018, the notional amount of our outstanding foreign currency foreign exchange contracts, all of which were for the exchange of U.S. dollars and Euros, was $7.4 million . |
Composition of Certain Financia
Composition of Certain Financial Statement Captions | 12 Months Ended |
Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Composition of Certain Financial Statement Captions | COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS The following tables present financial information underlying certain balance sheet captions. Compensation and other employee benefits Compensation and other employee benefits are affected by short-term fluctuations in the timing of payments and were comprised of the following at December 31: (In thousands) 2018 2017 Accrued salaries and wages $ 20,435 $ 21,879 Accrued bonus 7,261 4,210 Accrued employee benefits 14,094 13,215 Total $ 41,790 $ 39,304 Other accrued liabilities Other accrued liabilities were comprised of the following at December 31: (In thousands) 2018 2017 Workers' compensation, auto and general liability reserve $ 5,369 $ 4,615 Contract related reserves 7,133 7,426 Other accrued liabilities 9,801 7,168 Total $ 22,303 $ 19,209 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Plant, Property and Equipment, Net | PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net consisted of the following at December 31 : (In thousands) 2018 2017 Buildings and improvements $ 1,168 $ 5,197 Machinery and equipment 14,242 5,556 Furniture, fixtures and office equipment 5,877 4,895 Property, plant and equipment, gross 21,287 15,648 Less: accumulated depreciation and amortization (7,868 ) (11,915 ) Property, plant and equipment, net $ 13,419 $ 3,733 Depreciation expense of property, plant and equipment was $1.8 million , $1.7 million and $1.9 million in 2018 , 2017 , and 2016 , respectively. |
Leases and Rentals
Leases and Rentals | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Leases and Rentals | LEASES AND RENTALS Operating Leases The Company leases certain offices, buildings, automobiles, computers, land and other equipment under operating leases. As of December 31, 2018, such leases expire at various dates through 2028 and may include renewal and payment escalation clauses. The Company often pays maintenance, insurance and tax expense related to leased assets. Rental expenses under our operating leases were approximately $6.3 million , $3.5 million and $6.0 million for 2018 , 2017 and 2016 , respectively. Future operating lease payments under non-cancellable operating leases with an initial term in excess of one year as of December 31, 2018 are shown below: (In thousands) Payments due 2019 $ 3,480 2020 2,986 2021 1,730 2022 894 2023 893 2024 and later 3,872 Total minimum lease payments $ 13,855 |
Post Employment Benefit Plans
Post Employment Benefit Plans | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Post Employment Benefit Plans | POST EMPLOYMENT BENEFIT PLANS We sponsor two defined contribution savings plans, with the addition of SENTEL, which allow employees to contribute a portion of their pre-tax and/or after-tax income in accordance with specified guidelines. The Company matches a percentage of the employee contributions up to certain limits of employee base pay. Our portion of the matching contributions charged to income amounted to $5.2 million and $3.0 million for the years ended December 31, 2018 and 2017 , respectively. On September 11, 2014, our Board of Directors adopted and approved the Vectrus Systems Corporation Excess Savings Plan (the Excess Savings Plan). Since federal law limits the amount of compensation that can be used to determine employee and employer contribution amounts to our tax-qualified plans, we established the Excess Savings Plan to allow for Company contributions based on an eligible employee's base salary in excess of these limits. No employee contributions are permitted. All balances under the Excess Savings Plan are maintained on the books of the Company and credits and deductions are made to the accumulated savings under the plan based on the earnings or losses attributable to a stable value fund as defined in the Excess Savings Plan. Benefits will be paid in a lump sum generally in the seventh month following the date on which the employee's separation from service occurs. Employees are 100% vested at all times in any amounts credited to their accounts. As of both December 31, 2018 and December 31, 2017, we had accrued $0.1 million of contributions under the Excess Savings Plan. On November 9, 2016, the Compensation Committee approved an amendment and restatement of the Company’s Senior Executive Severance Pay Plan (as amended and restated, the “Amended Plan”), effective as of November 9, 2016. The Amended Plan removed (i) a provision that disallowed severance pay in the event of a termination of the executive’s employment by the Company with a scheduled termination date after the executive’s “Normal Retirement Date” (i.e., the first of the month which coincides with or follows the executive’s 65th birthday) and (ii) a provision that used the executive’s Normal Retirement Date in determining the maximum period of time for which severance pay is calculated. The Amended Plan did not change the schedule of severance pay. Termination benefits offered under the Company’s Amended Plan are other post employment benefits as defined by ASC 712-10 - Compensation - Nonretirement Postemployment Benefits. Benefits under the Amended Plan vest or accumulate with the employee’s years of service; however, the payment of benefits is not probable and the Company does not have the ability to reliably estimate when there will be an involuntary termination without cause under the Amended Plan. Accordingly, the Company does not accrue a benefit obligation for severance costs under the Amended Plan over the duration of executive employment. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION The Company maintains an equity incentive plan, the 2014 Omnibus Incentive Plan, as amended and restated effective as of May 13, 2016 (the 2014 Omnibus Plan), to govern awards granted to Vectrus employees and directors, including nonqualified stock options (NQOs), restricted stock units (RSUs), total shareholder return (TSR) awards and other awards. We account for NQOs and stock-settled RSUs as equity-based compensation awards. TSR awards, described below, and cash-settled RSUs are accounted for as liability-based compensation awards. The maximum number of shares of the Company's common stock authorized for issuance under the 2014 Omnibus Plan is 2.6 million shares. As of December 31, 2018 , there were 1.1 million shares remaining available for future awards. Stock-based compensation expense and the associated tax benefits impacting our Consolidated Statements of Income were as follows: Year Ended December 31, (In thousands) 2018 2017 Compensation costs for equity-based awards $ 3,490 $ 2,863 Compensation costs for liability-based awards 606 1,604 Total compensation costs, pre-tax $ 4,096 $ 4,467 Future tax benefit $ 888 $ 965 Liability-based awards are revalued at the end of each reporting period to reflect changes in fair value. The Company paid $1.0 million and $0.1 million related to liability-based compensation awards during the years ended December 31, 2018 and 2017 , respectively. At December 31, 2018 , total unrecognized compensation costs related to equity-based awards and liability-based awards were $4.1 million and $1.3 million , respectively, which are expected to be recognized ratably over a weighted average period of 1.75 years and 1.69 years, respectively. Non-Qualified Stock Options NQOs vest in one-third increments on the first, second and third anniversaries of the grant date and expire 10 years from the date of grant. A summary of the status of our NQOs as of December 31, 2018 , 2017 and 2016 and changes during the years then ended is presented below: Year Ended December 31, 2018 2017 2016 (In thousands, except per share data) Shares Weighted Average Exercise Price Per Share Shares Weighted Average Exercise Price Per Share Shares Weighted Average Exercise Price Per Share Outstanding at January 1, 325 $22.74 384 $21.47 486 $19.25 Granted — $0.00 75 $22.82 87 $20.06 Exercised (73 ) $21.87 (110 ) $18.41 (158 ) $13.63 Forfeited, canceled or expired (1 ) $20.62 (24 ) $22.61 (31 ) $22.51 Outstanding at December 31, 251 $23.00 325 $22.74 384 $21.47 Options exercisable 184 $23.35 201 $22.57 214 $20.35 The following table summarizes information about NQOs outstanding and exercisable as of December 31, 2018 : (In thousands, except per share data) Options Outstanding Options Exercisable Range of Exercise Prices Per Share Number Weighted Average Remaining Contractual Life (In Years) Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Number Weighted Average Remaining Contractual Life (In Years) Weighted Average Exercise Price Per Share Aggregate Intrinsic Value $12.94 - $21.98 172 6.80 $ 20.25 $ 250 112 6.24 $ 19.69 $ 211 $22.16 - $32.49 79 6.12 29.00 — 72 5.90 29.03 — Total options and aggregate intrinsic value 251 6.58 $ 23.00 $ 250 184 6.11 $ 23.35 $ 211 The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on our closing stock price of $21.58 per share on December 31, 2018 , which would have been received by the option holders if all option holders had exercised their options as of that date. There were approximately 0.1 million exercisable options "out of the money" as of December 31, 2018 . The aggregate intrinsic value of options exercised during the years ended December 31, 2018 , 2017 and 2016 was $0.1 million , $1.4 million and $1.6 million , respectively. As of December 31, 2018 , the total number of stock options expected to vest (including those that have already vested) was 0.3 million . These stock options have a weighted-average exercise price of $23.00 per share, an aggregate intrinsic value of $0.2 million and a weighted average remaining contractual life of 6.6 years . The fair value of stock options is determined on the date of grant utilizing a Black-Scholes valuation model. No stock options were granted in 2018. The following weighted-average assumptions were utilized in deriving the fair value for NQOs: Year Ended December 31, 2017 2016 Expected volatility 30.8 % 30.2 % Expected life (in years) 7 7 Risk-free rates 2.30 % 1.69 % Weighted-average grant date fair value per share $ 8.48 $ 7.06 Black-Scholes model volatility is based on daily average volatility of our peer group over seven years , which is consistent with the expected term. Peer group companies were selected from companies within the aerospace and defense industry that most closely match our business, including size, diversification, and customer base. The expected term of the stock option represents the estimated period of time until exercise and is based on the vesting period of the award and the estimated exercise patterns of employees. The risk-free rate is based on the U.S. Treasury stripped coupon rates with maturities corresponding to the expected term of 7 years, measured as of the grant date. Restricted Stock Units The fair value of RSUs is determined based on the closing price of Vectrus common stock on the date of the grant. In general, under the 2014 Omnibus Plan, for employee RSUs granted in 2014 and after, one-third of the award vests on each of the three anniversary dates following the grant date. Director RSUs are granted on the date of the annual meeting and vest the business day immediately prior to the next annual meeting. RSUs have no voting rights. If an employee leaves the Company prior to vesting, whether through resignation or termination for cause, the RSUs are forfeited. If an employee retires or is terminated by the Company other than for cause, all or a pro rata portion of the RSUs may vest. The table below provides a roll-forward of outstanding RSUs for the years ended December 31, 2018, 2017, and 2016. Year Ended December 31, 2018 2017 2016 (In thousands, except per share data) Shares Weighted Average Grant Date Fair Value Per Share Shares Weighted Average Grant Date Fair Value Per Share Shares Weighted Average Grant Date Fair Value Per Share Outstanding at January 1, 221 $ 23.58 285 $ 23.01 350 $22.47 Granted 163 $ 33.08 144 $ 23.74 181 $21.25 Vested (110 ) $ 24.93 (171 ) $ 23.18 (206 ) $20.56 Forfeited or canceled (17 ) $ 25.54 (37 ) $ 21.69 (40 ) $22.68 Outstanding at December 31, 257 $ 28.90 221 $ 23.58 285 $23.01 The total grant date fair value of RSUs that vested during the years ended December 31, 2018 , 2017 and 2016 was $3.3 million , $4.5 million and $3.4 million , respectively. Total Shareholder Return Awards TSR awards are performance-based cash awards that are subject to a three -year performance period. Any payments earned are made in cash following completion of the performance period according to the achievement of specified performance goals. During the years ended December 31, 2018 , 2017 , and 2016 , we granted TSR awards with aggregate target TSR values of $2.2 million , $1.5 million , and $1.5 million , respectively. The fair value of TSR awards is measured quarterly and is based on the Company’s performance relative to the performance of the Aerospace and Defense Companies in the S&P 1500 Index. Depending on the Company’s performance during the three -year performance period, payments can range from 0% to 200% of the target value. For the years ended December 31, 2018 , 2017, and 2016, we recorded $0.3 million , $1.0 million and $0.6 million , respectively, in compensation expense related to TSR awards. Payments of $0.5 million were made in January 2019 for the 2016 TSR awards, and payments of $0.6 million were made in January 2018 for the 2015 TSR awards. Payments, if any, for the 2017 and 2018 TSR awards are expected to be made in January 2020 and January 2021, respectively. As of December 31, 2018 and 2017 , we had $1.5 million and $1.9 million , respectively, recorded as a liability related to TSR awards in compensation and other employee benefits and other non-current liabilities on the Consolidated Balance Sheets. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Shareholders' Equity | SHAREHOLDERS' EQUITY In connection with the Spin-off, each of the shareholders of our Former Parent received one share of Vectrus common stock for every 18 shares of common stock of our Former Parent held on the record date resulting in the distribution of 10.5 million shares of Vectrus common stock to our Former Parent shareholders. As of December 31, 2018 , our authorized capital was comprised of 100.0 million shares of common stock and 10.0 million shares of preferred stock. At December 31, 2018 , there were 11.3 million shares of common stock issued and outstanding. No preferred stock was issued and outstanding at December 31, 2018 and 2017 . We issue shares of our common stock in connection with our 2014 Omnibus Plan. There are 2.6 million shares of common stock authorized under this plan. At December 31, 2018 , we had a remaining balance of 1.1 million shares of common stock available for future grants under this plan. Any shares related to awards that terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of shares, are settled in cash in lieu of shares or are exchanged with the Committee's permission for awards not involving shares and are available again for grant under the 2014 Omnibus Plan. |
Agreements With Former Parent
Agreements With Former Parent | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Agreements With Former Parent | AGREEMENTS WITH FORMER PARENT Agreements with Former Parent Following the Spin-off, Vectrus and our Former Parent began operating independently of each other, and neither has any ownership interest in the other. In order to govern certain ongoing relationships between Vectrus and our Former Parent following the Spin-off and to provide mechanisms for an orderly transition, on September 27, 2014, Vectrus and our Former Parent executed various agreements that govern the ongoing relationships between the companies after the Spin-off and provide for the allocation of employee benefits, income taxes, and certain other liabilities and obligations attributable to periods prior to the Spin-off. The executed agreements include a Distribution Agreement, Employee Matters Agreement, Tax Matters Agreement, Master Transition Services Agreement, Technology License Agreement and Transitional Trademark License Agreement. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES General From time to time, we are involved in legal proceedings that are incidental to the operation of our business. Some of these proceedings seek remedies relating to employment matters, matters in connection with our contracts and matters arising under laws relating to the protection of the environment. Additionally, U.S. government customers periodically advise the Company of claims and penalties concerning certain potential disallowed costs. When such findings are presented, Vectrus and the U.S. government representatives engage in discussions to enable Vectrus to evaluate the merits of these claims as well as to assess the amounts being claimed. Where appropriate, provisions are made to reflect probable losses related to the matters raised by the U.S. government representatives. Such assessments, along with any assessments regarding provisions for legal proceedings, are reviewed on a quarterly basis for sufficiency based on the most recent information available to us. We have estimated and accrued $7.8 million and $5.8 million as of December 31, 2018 and 2017 , respectively, in other accrued liabilities in the Consolidated Balance Sheets for legal proceedings and for claims with respect to our government contracts as discussed below, including years where the U.S. government has not completed its incurred cost audits. Although the ultimate outcome of any legal matter or claim cannot be predicted with certainty, based on present information, including our assessment of the merits of the particular claim, we do not expect that any asserted or unasserted legal or contractual claims or proceedings, individually or in the aggregate, will have a material adverse effect on our cash flow, results of operations or financial condition. Legal Proceedings We recently settled a class action employment lawsuit that was initiated in the United States District Court for the Western District of Washington in April 2010 against the predecessor of our Former Parent by individuals who worked on a particular contract in Kuwait after April 12, 2009. The plaintiffs alleged a breach of employment contract by the predecessor of our Former Parent due to an alleged violation of Kuwait labor law. Although we disputed the liability, the parties have negotiated a settlement, the terms of which include a settlement fund of up to $3.75 million , plus payroll taxes for wages paid to class members. The settlement fund includes the judge’s award of attorney’s fees, costs and class representative fees, with the remainder available to eligible class members pursuant to an allocation formula. The Company received final approval of the settlement by the District Court following a fairness hearing on October 16, 2018. Payments to eligible class members were made on February 1, 2019. U.S. Government Contracts, Investigations and Claims We have U.S. government contracts that are funded incrementally on a year-to-year basis. Changes in government policies, priorities or funding levels through agency or program budget reductions by the U.S. Congress or executive agencies could have a material adverse effect on our financial condition or results of operations. Furthermore, our contracts with the U.S. government may be terminated or suspended by the U.S. government at any time, with or without cause. Such contract suspensions or terminations could result in unreimbursable expenses or charges or otherwise adversely affect our financial condition and results of operations. Departments and agencies of the U.S. government have the authority to investigate various transactions and operations of the Company, and the results of such investigations may lead to administrative, civil or criminal proceedings, the ultimate outcome of which could be fines, penalties, repayments or compensatory or treble damages. U.S. government regulations provide that certain findings against a contractor may lead to suspension or debarment from future U.S. government contracts or the loss of export privileges for a company or an operating division or subdivision. Suspension or debarment could have a material adverse effect on the Company because of its reliance on U.S. government contracts. U.S. government agencies, including the Defense Contract Audit Agency (DCAA), the Defense Contract Management Agency (DCMA) and others, routinely audit and review our performance on government contracts, indirect rates and pricing practices, and compliance with applicable contracting and procurement laws, regulations and standards. Accordingly, costs billed or billable to U.S. government customers are subject to potential adjustment upon audit by such agencies. The U.S. government agencies also review the adequacy of our compliance with government standards for our business systems, including our accounting, earned value management, estimating, materials management and accounting, purchasing, and property management systems. As a result of final indirect rate negotiations between the U.S. government and our Former Parent, we may be subject to potential adjustments to costs previously allocated by our Former Parent to our business, which was formerly Exelis’ Mission Systems Business, from 2007 through 2014. Because we do not participate in indirect rate negotiations between the U.S. government and our Former Parent, we cannot reasonably predict the likelihood of such adjustments or the ultimate responsible party. We have recently been in discussions with our Former Parent regarding the negotiated adjustments for 2007-2012 and believe our potential cumulative liability for these years is insignificant. We currently do not have insight into the 2013 and 2014 negotiations or potential adjustments. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) The following table comprises selected financial data for the years ended December 31, 2018 and 2017 : 2018 QUARTERS 2017 QUARTERS (In thousands, except per share data) 1st 2nd 3rd 4th 1st 2nd 3rd 4th Total revenue $ 320,516 $ 321,132 $ 308,095 $ 329,561 $ 290,063 $ 259,318 $ 269,625 $ 295,782 Gross Profit 26,466 29,068 29,131 30,030 25,362 25,735 24,406 26,445 Operating income 8,671 12,998 14,006 12,648 11,649 9,204 10,090 10,277 Net income 6,111 9,195 9,866 10,124 6,668 5,461 5,800 41,568 Basic earnings per share $ 0.55 $ 0.82 $ 0.88 $ 0.90 $ 0.61 $ 0.50 $ 0.52 $ 3.77 Diluted earnings per share $ 0.54 $ 0.81 $ 0.86 $ 0.89 $ 0.60 $ 0.49 $ 0.51 $ 3.70 Weighted average number of shares outstanding Basic 11,146 11,235 11,248 11,262 10,909 10,987 11,075 11,026 Diluted 11,338 11,383 11,406 11,369 11,075 11,191 11,272 11,234 |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Our Business | Our Business Vectrus, Inc. is a leading provider of services to the U.S. government worldwide. We operate as one segment and offer facility and logistics services and information technology and network communications services. Vectrus was incorporated in the State of Indiana on February 4, 2014. On September 27, 2014, Exelis Inc. (Exelis) completed the spin-off (the Spin-off) of Vectrus and Vectrus became an independent, publicly traded company. The Consolidated Financial Statements reflect the consolidated operations of Vectrus as a separate stand-alone entity. Unless the context otherwise requires, references in these notes to "Vectrus", "we," "us," "our," "the Company" and "our Company" refer to Vectrus, Inc. References in these notes to Exelis or "Former Parent" refer to Exelis Inc., an Indiana corporation, and its consolidated subsidiaries (other than Vectrus). Exelis was acquired by Harris Corporation in May 2015. |
Equity Investments | Equity Investment In 2011, we entered into a joint venture agreement with Shaw Environmental & Infrastructure, Inc., which is now Aptim Federal Services LLC. Pursuant to the joint venture agreement, High Desert Support Services, LLC (HDSS) was established to pursue and perform work on the Ft. Irwin Installation Support Services Contract, which was awarded to HDSS in October 2012. We account for our investment in HDSS under the equity method as we have the ability to exercise significant influence, but do not hold a controlling interest. We record our proportionate 40% share of income or losses, which has historically been insignificant, in the Consolidated Statements of Income. Our investment in HDSS is recorded in other non-current assets in the Consolidated Balance Sheets. When we receive cash distributions from HDSS, the cash distribution is compared to cumulative earnings and any excess is recorded as a distribution from equity investment in the Consolidated Statements of Cash Flows. Any remaining cash distribution is recorded in other assets in the Consolidated Statements of Cash Flows. |
Principles of Consolidation | Principles of Consolidation Vectrus consolidates companies in which it has a controlling financial interest. All intercompany transactions and balances have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Estimates are revised as additional information becomes available. Estimates and assumptions are used for, but not limited to, revenue recognition, income taxes, fair value and impairment of goodwill and valuation of assets and certain contingent liabilities. Actual results could differ from these estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made to the presentation of amounts in our Consolidated Balance Sheet as of December 31, 2017 to conform to the current year presentation. Specifically, certain intangible assets were reclassified from non-current assets and are now presented separately on our Consolidated Balance Sheets. |
Revenue Recognition | Revenue Recognition In 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). Several ASUs have been issued since the issuance of ASU 2014-09, which modify certain sections of ASU 2014-09 and are intended to promote a more consistent interpretation and application of the principles outlined in the standard. We adopted the new standard, Accounting Standards Codification (ASC) Topic 606, on January 1, 2018, using the modified retrospective method with a cumulative-effect adjustment to opening retained earnings. See Note 3, "Revenue," for the quantification of these adjustments. As a defense contractor engaging in long-term contracts, substantially all of our revenue is derived from long-term service contracts. The unit of account for revenue in ASC Topic 606 is a performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. To determine the proper revenue recognition method, consideration is given as to whether a single contract should be accounted for as more than one performance obligation. For most of our contracts, the customer contracts with us to perform an integrated set of tasks and deliverables as a single service solution, whereby each service is not separately identifiable from other promises in the contract and therefore is not distinct. As a result, when this integrated set of tasks exists, the contract is accounted for as one performance obligation. The vast majority of our contracts have a single performance obligation. Unexercised contract options and indefinite delivery and indefinite quantity (IDIQ) contracts are considered to be separate contracts when the option or IDIQ task order is exercised or awarded. Our performance obligations are satisfied over time as services are provided throughout the contract term. We recognize revenue over time using the input method (e.g., costs incurred to date relative to total estimated costs at completion) to measure progress. Our over time recognition is reinforced by the fact that our customers simultaneously receive and consume the benefits of our services as they are performed. For most U.S. Government contracts, this continuous transfer of control to the customer is supported by clauses in the contract that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process. This continuous transfer of control requires that we track progress towards completion of performance obligations in order to measure and recognize revenue. Accounting for contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For contracts, we estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract. Contract estimates are based on various assumptions to project the outcome of future events. These assumptions include labor productivity and availability; the complexity of the services being performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer. The nature of our contracts gives rise to several types of variable consideration, including award and incentive fees, inspection of supplies and services, and fluctuation in allowable indirect reimbursable costs. We include award or incentive fees in the estimated transaction price when there is certainty and a basis to reasonably estimate the amount of the fee. These estimates are based on historical award experience, anticipated performance and our best judgment at the time. The inspection of supplies and services is a factor because the U.S. government can reduce the transaction price if we do not perform the services in compliance with contract requirements. The fluctuation of allowable indirect reimbursable costs is a factor because the U.S. government has the right to review our accounting records and retroactively adjust the reimbursable rate. Any prior adjustments are reflected in the U.S. government reserve amounts recorded in our financial statements. We estimate variable consideration at the most likely amount that we expect to be entitled to receive. Refer to Note 17, "Commitments and Contingencies" for additional information regarding U.S. government reserve amounts. As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract estimates regularly. We recognize adjustments in estimated profit on executed contracts cumulatively. The impact of the adjustments on profit recorded to date is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the quarter it is identified. Contracts are often modified to account for changes in contract specifications and requirements. If the modification either creates new enforceable rights and obligations or changes the existing enforceable rights and obligations, the modification will be treated as a separate contract. Historically, our contract modifications have not been distinct from the existing contract and have been accounted for as if they were part of that existing contract. The impact of adjustments in contract estimates on our operating income can be reflected in either revenue or cost of revenue. Cumulative adjustments for the years ended December 31, 2018 , 2017 and 2016 are presented in the following table: Year Ended December 31, (In thousands) 2018 2017 2016 Favorable adjustments $ 14,962 $ 18,256 $ 15,296 Unfavorable adjustments (13,359 ) (6,704 ) (7,837 ) Net favorable adjustments $ 1,603 $ 11,552 $ 7,459 The timing of revenue recognition, billings and cash collections results in billed and unbilled accounts receivable (contract assets) and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheets. Amounts are billed as work progresses in accordance with agreed-upon contractual terms at periodic intervals (e.g., biweekly or monthly). Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, we may receive advances or deposits from our customers, before revenue is recognized, resulting in contract liabilities. These advance billings and payments are not considered significant financing components because they are frequently intended to fund current operating expenses under the contract. These assets and liabilities are reported on the Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. Our primary customer is the U.S. Department of Defense, with a high concentration in the U.S. Army. For the year ended December 31, 2018 , 2017 and 2016, we had total revenue of $1.3 billion , $1.1 billion , and $1.2 billion , all of which was derived from U.S. government customers. For the years ended December 31, 2018 , 2017 and 2016 , we generated approximately 73% , 82% and 84% , respectively, of our total revenue from the U.S. Army. |
Income Taxes | Income Taxes We determine the provision or benefit for income taxes using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In assessing the need for a valuation allowance, we look to the future reversal of existing taxable temporary differences, taxable income in carryback years, the feasibility of tax planning strategies, and estimated future taxable income. The valuation allowance can be affected by changes to tax laws, changes to statutory tax rates and changes to future taxable income estimates. |
Goodwill | Goodwill Goodwill represents purchase consideration paid in a business combination that exceeds the fair values assigned to the net assets of acquired businesses. Goodwill is not amortized, but instead is tested for impairment annually (or more frequently if impairment indicators arise, such as changes to the reporting unit structure or significant adverse changes in the business climate). We conduct our annual impairment testing during the fourth fiscal quarter. In reviewing goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the estimated fair value of a reporting unit is less than its carrying amount. If we elect to perform a qualitative assessment and determine that an impairment is more likely than not, the entity is then required to perform the existing two-step quantitative impairment test as described below. Otherwise, no further analysis is required. We also may elect not to perform the qualitative assessment and, instead, proceed directly to the two-step quantitative impairment test. The quantitative impairment test is a two-step test. In the first step, the estimated fair value of the reporting unit is developed and compared to the carrying value of the reporting unit. If the estimated fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and the second step of the impairment test is not performed. If the carrying value of the reporting unit exceeds its estimated fair value, then the second step of the impairment test is performed in order to measure the impairment loss to be recorded. If the carrying value of the reporting unit's goodwill exceeds its implied fair value, then we record an impairment loss equal to the difference. We estimate the fair value of our reporting unit using an income approach and a market approach. Under the income approach, we estimate fair value based on the present value of estimated future cash flows. Under the market approach, we compare our company to select reasonably similar publicly traded companies. We acquired SENTEL in 2018. See Note 5, "SENTEL Acquisition" for further discussion of goodwill recognized in the SENTEL acquisition. |
Intangible Assets | Intangible Assets We recognize an acquired intangible asset apart from goodwill whenever the intangible arises from contractual or other legal rights, or whenever it can be separated or divided from the acquired entity and sold, transferred, licensed, rented or exchanged, either individually or in combination with a related contract, asset or liability. Such intangibles are amortized over their estimated useful lives unless the estimated useful life is determined to be indefinite. Amortizable intangible assets are being amortized over useful lives of four to eight years. The straight-line method of amortization is used as it has been determined to approximate the use pattern of the assets. |
Severance Expense | Severance Expense We periodically initiate management approved restructuring activities to achieve cost savings through reduced operational redundancies and to strategically position ourselves in the market in response to prevailing economic conditions and associated customer demand. Costs associated with restructuring actions can include severance and related benefit charges. For involuntary separation plans, a liability is recognized when it is probable, reasonably estimable, and communicated to employees. For voluntary separation plans, a liability is recognized when the employee irrevocably accepts the termination. |
Foreign Currency Transactions | Foreign Currency Translation The financial statements of programs for which the functional currency is not the U.S. dollar are translated into U.S. dollars. Balance sheet accounts are translated at the exchange rate in effect at the end of each period; income statement accounts are translated at the average rates of exchange prevailing during the period. Gains and losses on foreign currency translations are recorded as translation adjustments to other comprehensive (loss) income. Net gains or losses from foreign currency transactions are reported in selling, general and administrative (SG&A) expenses and have historically been immaterial. |
Receivables | Receivables Receivables include amounts billed and currently due from customers, amounts unbilled, certain estimated contract change amounts, estimates related to expected award fees, claims or requests for equitable adjustment in negotiation that are probable of recovery, and amounts retained by the customer pending contract completion. |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment, net are stated at cost less accumulated depreciation. Major improvements are capitalized at cost while expenditures for maintenance, repairs and minor improvements are expensed. For asset sales or retirements, the assets and related accumulated depreciation and amortization are eliminated from the accounts and any resulting gain or loss is reflected in operating income. Depreciation and amortization is generally computed using either an accelerated or straight-line method and is based on estimated useful lives or lease term as follows: Years Building improvements 3 – 10 Machinery, equipment and vehicles 3 – 12 Furniture, fixtures, and office equipment 3 – 7 |
Operating Leases | Operating Leases Many of our real property lease agreements contain incentives for tenant improvements, rent holidays, or rent escalation clauses. For incentives for tenant improvements, the Company records a deferred rent liability and amortizes the deferred rent over the term of the lease as a reduction to rent expense. For rent holidays and rent escalation clauses during the lease term, the Company records minimum rental expenses on a straight-line basis over the term of the lease. Leasehold improvements capitalized in property, plant and equipment are amortized over the lesser of the remaining life of the lease or the estimated useful life of the improvement. |
Long-Lived Asset Impairment | Long-Lived Asset Impairment Long-lived assets are tested for impairment whenever events or changes in circumstances indicate their carrying value may not be recoverable. We assess the recoverability of long-lived assets based on the undiscounted future cash flow the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When an impairment is identified, we reduce the carrying value of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. |
Share-Based Compensation | Stock-Based Compensation We recognize stock-based compensation expense primarily within selling, general and administrative expenses based on the grant date fair values for all share-based awards granted over the requisite service periods of the awards, which is generally equivalent to the vesting terms. |
Fair Value Measurements | Fair Value Measurements We determine fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In measuring fair value, a fair value hierarchy is applied which categorizes and prioritizes the inputs used to estimate fair value into three levels. The fair value hierarchy is based on maximizing the use of observable inputs and minimizing the use of unobservable inputs when measuring fair value. Classification within the fair value hierarchy is based on the lowest level input that is significant to the fair value measurement. There are three levels of the fair value hierarchy. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices (in nonactive markets or in active markets for similar assets or liabilities), inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 inputs are unobservable inputs for the assets or liabilities. |
Segment Information | Segment Information Management has concluded that the Company operates as one segment based upon the information used by the chief operating decision maker in evaluating the performance of the Company’s business and allocating resources and capital. Although we perform services worldwide, all of our revenue for the years ended December 31, 2018 , 2017 and 2016 was with the U.S. government. |
Commitments and Contingencies | Commitments and Contingencies We record accruals for commitments and loss contingencies when they are probable of occurrence and the amounts can be reasonably estimated. In addition, legal fees are accrued for cases where a loss is probable and the related fees can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount of loss. We review these accruals quarterly and adjust the accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other updated information. |
Earnings Per Share | Earnings Per Share We compute earnings per common share on the basis of the weighted average number of common shares, and, where dilutive, common share equivalents, outstanding during the indicated periods. |
Derivative Instruments | Derivative Instruments Derivative instruments are recognized as either an asset or liability at fair value in our Consolidated Balance Sheets and are classified as current or long-term based on the scheduled maturity of the instrument. Our derivative instruments have been formally designated and qualify as part of a cash flow hedging relationship under applicable accounting standards. The interest rate derivative instruments are adjusted to fair value through accumulated other comprehensive income (loss). If we were to determine that a derivative was no longer highly effective as a hedge, we would discontinue the hedge accounting prospectively. Gains or losses would be immediately reclassified from accumulated other comprehensive income (loss) to earnings relating to hedged forecasted transactions that are no longer probable of occurring. Gains or losses relating to terminations of effective cash flow hedges in which the forecasted transactions would still be probable of occurring would be deferred and recognized consistent with the income or loss recognition of the underlying hedged item. |
Recent Accounting Pronouncements | Accounting Standards Issued But Not Yet Effective In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02). The objective of ASU 2016-02 is to recognize lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. ASU 2016-02 requires lessees to account for leases as finance leases or operating leases. Both finance and operating leases will result in the lessee recognizing a right-of-use asset and corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset and, for operating leases, the lessee would recognize a straight-line lease expense. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. We have substantially completed our implementation plan. We have revised our controls and processes to address the lease standard and have completed the implementation and data input for our lease accounting software tool. We have elected the package of practical expedients, which, among other things, allows us to carry forward our prior lease classifications under ASC 840. We have not elected, however, to adopt the hindsight practical expedient and are therefore maintaining the lease terms we previously determined under ASC 840. Adoption of the standard is expected to have an impact of approximately $10 million on our Consolidated Balance Sheet for the addition of lease assets and liabilities related to operating leases. ASU 2016-02 also requires expanded disclosure regarding the amounts, timing and uncertainties of cash flows related to our lease portfolio. We are incorporating the collection of relevant data into our processes in preparation for disclosure in 2019. We do not expect ASU 2016-02 to have a material impact on our results of operations or cash flows. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment (ASU 2017-04). The objective of ASU 2017-04 is to simplify the subsequent measurement of goodwill by entities performing their annual goodwill impairment tests by comparing the fair value of a reporting unit, including income tax effects from any tax-deductible goodwill, with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds fair value. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of ASU 2017-04 is permitted on goodwill impairment tests performed after January 1, 2017. ASU 2017-04 should be applied on a prospective basis. The standard is not expected to have a material impact on our consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12). The objective of ASU 2017-12 is to improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities, and to reduce the complexity of and simplify the application of hedge accounting by preparers. The standard is effective in annual periods beginning after December 15, 2018, and interim periods within those periods. The standard is not expected to have a material impact on our consolidated financial statements. Accounting Standards That Were Adopted In 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Several ASUs have been issued since the issuance of ASU 2014-09, which modify certain sections of ASU 2014-09 and are intended to promote a more consistent interpretation and application of the principles outlined in the standard. We adopted the new revenue recognition standard, ASC Topic 606, using the modified retrospective method with a cumulative-effect adjustment to opening retained earnings as of January 1, 2018. See Note 1, "Description of Business and Summary of Significant Accounting Policies," and Note 3, "Revenue" for a discussion of this new standard. Other new pronouncements issued but not effective until after December 31, 2018 are not expected to have a material impact on our financial position, results of operations or cash flows. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary Cumulative Catch-Up Adjustments | Cumulative adjustments for the years ended December 31, 2018 , 2017 and 2016 are presented in the following table: Year Ended December 31, (In thousands) 2018 2017 2016 Favorable adjustments $ 14,962 $ 18,256 $ 15,296 Unfavorable adjustments (13,359 ) (6,704 ) (7,837 ) Net favorable adjustments $ 1,603 $ 11,552 $ 7,459 |
Schedule of Useful Lives | Depreciation and amortization is generally computed using either an accelerated or straight-line method and is based on estimated useful lives or lease term as follows: Years Building improvements 3 – 10 Machinery, equipment and vehicles 3 – 12 Furniture, fixtures, and office equipment 3 – 7 Property, plant and equipment, net consisted of the following at December 31 : (In thousands) 2018 2017 Buildings and improvements $ 1,168 $ 5,197 Machinery and equipment 14,242 5,556 Furniture, fixtures and office equipment 5,877 4,895 Property, plant and equipment, gross 21,287 15,648 Less: accumulated depreciation and amortization (7,868 ) (11,915 ) Property, plant and equipment, net $ 13,419 $ 3,733 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Summary Impact of Adoption of new ASU | The effects of the adoption of ASC Topic 606, using the modified retrospective method on January 1, 2018, are outlined in the following table: (In thousands) Year Ended December 31, 2017 Impact January 1, 2018 Receivables (unbilled) $ 121,601 $ 10,457 $ 132,058 Costs incurred in excess of billings $ 12,751 $ (12,751 ) $ — Billings in excess of costs $ 3,766 $ (3,766 ) $ — Impact to contract liabilities $ — $ 1,621 $ 1,621 Retained earnings, net of tax $ 117,415 $ (95 ) $ 117,320 The following table reflects the balances of financial statement line items under the ASC Topic 606 revenue recognition guidance compared to the former ASC Topic 605 revenue guidance for the year ended December 31, 2018 : Year Ended December 31, 2018 New Guidance Former Guidance (In thousands) ASC Topic 606 ASC Topic 605 Revenue $ 1,279,304 $ 1,269,560 Cost of revenue $ 1,164,609 $ 1,148,199 Selling, general and administrative expenses $ 66,372 $ 66,372 Operating income $ 48,323 $ 54,989 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation | Remaining performance obligations as of December 31, 2018 and December 31, 2017 are presented in the following table: Year Ended December 31, (In millions) 2018 2017 Performance Obligations $ 858 $ 719 |
Contract with Customer, Asset and Liability | Cumulative adjustments to operating income for the years ended December 31, 2018 , December 31, 2017 and December 31, 2016 are presented in the following table: Year Ended December 31, (In thousands) 2018 2017 2016 Favorable adjustments $ 14,962 $ 18,256 $ 15,296 Unfavorable adjustments (13,359 ) (6,704 ) (7,837 ) Net favorable adjustments $ 1,603 $ 11,552 $ 7,459 |
Summary Impact of Adoption of new ASU | The effects of the adoption of ASC Topic 606, using the modified retrospective method on January 1, 2018, are outlined in the following table: (In thousands) Year Ended December 31, 2017 Impact January 1, 2018 Receivables (unbilled) $ 121,601 $ 10,457 $ 132,058 Costs incurred in excess of billings $ 12,751 $ (12,751 ) $ — Billings in excess of costs $ 3,766 $ (3,766 ) $ — Impact to contract liabilities $ — $ 1,621 $ 1,621 Retained earnings, net of tax $ 117,415 $ (95 ) $ 117,320 The following table reflects the balances of financial statement line items under the ASC Topic 606 revenue recognition guidance compared to the former ASC Topic 605 revenue guidance for the year ended December 31, 2018 : Year Ended December 31, 2018 New Guidance Former Guidance (In thousands) ASC Topic 606 ASC Topic 605 Revenue $ 1,279,304 $ 1,269,560 Cost of revenue $ 1,164,609 $ 1,148,199 Selling, general and administrative expenses $ 66,372 $ 66,372 Operating income $ 48,323 $ 54,989 |
Disaggregation of Revenue | The following tables present our revenue disaggregated by different categories. Revenue by contract type for the years 2018 , 2017 and 2016 are as follows: Year Ended December 31, (In thousands) 2018 2017 2016 Cost-plus and cost-reimbursable ¹ $ 995,415 $ 818,908 $ 892,842 Firm-fixed-price 283,889 295,880 297,677 Total revenue $ 1,279,304 $ 1,114,788 $ 1,190,519 ¹ Includes time and material contracts Revenue by geographic region in which the contract is performed for the years 2018 , 2017 and 2016 are as follows: Year Ended December 31, (In thousands) 2018 2017 2016 Middle East $ 889,620 $ 871,821 $ 976,586 United States 269,750 168,003 157,161 Europe 119,934 74,964 56,772 Total revenue $ 1,279,304 $ 1,114,788 $ 1,190,519 Revenue by contract relationship for the years 2018 , 2017 and 2016 are as follows: Year Ended December 31, (In thousands) 2018 2017 2016 Prime contractor $ 1,200,726 $ 1,083,485 $ 1,131,773 Subcontractor 78,578 31,303 58,746 Total revenue $ 1,279,304 $ 1,114,788 $ 1,190,519 Revenue by customer for the years 2018 , 2017 and 2016 are as follows: Year Ended December 31, (In thousands) 2018 2017 2016 Army $ 934,427 $ 915,554 $ 1,004,842 Air Force 259,511 177,338 165,611 Navy 38,802 21,896 20,066 Other 46,564 — — Total revenue $ 1,279,304 $ 1,114,788 $ 1,190,519 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | The sources of pre-tax income and the components of income tax expense for the years ended December 31, 2018 , 2017 and 2016 , respectively, are as follows: (in thousands) 2018 2017 2016 Income Components United States $ 41,449 $ 34,386 $ 37,276 Foreign 1,803 2,194 (89 ) Total pre-tax income from continuing operations $ 43,252 $ 36,580 $ 37,187 Income tax expense components Current income tax provision United States-Federal $ 6,305 $ 11,952 $ 15,106 United States-State and local 653 206 311 Foreign 515 758 371 Total current income tax provision 7,473 12,916 15,788 Deferred income tax provision (benefit) United States-Federal (79 ) (35,486 ) (1,733 ) United States-State and local 52 (260 ) (278 ) Foreign 510 (87 ) (245 ) Total deferred income tax provision (benefit) 483 (35,833 ) (2,256 ) Total income tax expense (benefit) $ 7,956 $ (22,917 ) $ 13,532 Effective income tax rate 18.4 % (62.6 )% 36.4 % |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the income tax provision at the U.S. statutory rate to the effective income tax rate as reported is as follows: 2018 2017 2016 Tax provision at U.S. statutory rate 21.0 % 35.0 % 35.0 % State and local income tax, net of federal benefit 1.3 % (0.1 )% 0.1 % Foreign taxes 0.3 % (2.5 )% — % Uncertain tax positions 3.4 % — % — % Prior year true-ups 0.4 % 0.3 % — % Foreign derived intangible income deduction (2.9 )% — % — % Credits (0.8 )% — % — % Other 0.4 % 1.7 % 1.3 % Impact of federal rate change (4.7 )% (97.0 )% — % Effective income tax rate 18.4 % (62.6 )% 36.4 % |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities include the following: (in thousands) 2018 2017 Deferred Tax Assets Costs incurred in excess of billings $ — $ 814 Compensation and benefits 4,444 4,667 Reserves 3,028 2,473 Other 802 854 Net operating losses 295 133 Total deferred tax assets $ 8,569 $ 8,941 Deferred Tax Liabilities Goodwill and intangibles $ (46,832 ) $ (46,890 ) Unbilled receivables (15,112 ) (16,635 ) Property, plant and equipment, net (709 ) 774 Other liabilities (1,192 ) (1,169 ) Total deferred tax liabilities (63,845 ) (63,920 ) Net deferred tax liabilities $ (55,276 ) $ (54,979 ) |
Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits as of December 31, 2018 , 2017 and 2016 is as follows: (in thousands) 2018 2017 2016 Unrecognized tax benefits-January 1, $ — $ 429 $ — Additions for: Current year tax positions 1,275 — 429 Prior year tax positions 480 — — Reductions for: Settlements with tax authorities — (429 ) — Prior year tax positions — — — Unrecognized tax benefits-December 31, $ 1,755 $ — $ 429 |
SENTEL Acquisition (Tables)
SENTEL Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | (In thousands) Allocation of Purchase Price Receivables $ 23,339 Property, plant and equipment 810 Goodwill 16,689 Intangible assets 10,500 Other current assets 975 Accounts payable (10,012 ) Other current liabilities (5,446 ) Purchase price, net of cash acquired $ 36,855 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic and Diluted Weighted Average Shares Outstanding | Year Ended December 31, (In thousands, except per share data) 2018 2017 2016 Net Income $ 35,296 $ 59,497 $ 23,655 Weighted average common shares outstanding 11,224 11,021 10,714 Add: Dilutive impact of stock options 63 67 97 Add: Dilutive impact of restricted stock units 91 121 163 Diluted weighted average common shares outstanding 11,378 11,209 10,974 Earnings per share Basic $ 3.14 $ 5.40 $ 2.21 Diluted $ 3.10 $ 5.31 $ 2.16 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The table below provides a summary of securities that could potentially dilute basic earnings per share in the future that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the period presented. Year Ended December 31, (In thousands) 2018 2017 2016 Anti-dilutive stock options 3 8 — Anti-dilutive restricted stock units — — 9 Total 3 8 9 |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of Receivables | Receivables were comprised of the following: December 31, (In thousands) 2018 2017 Billed receivables $ 44,868 $ 50,595 Unbilled receivables (contract assets) 181,009 121,601 Other 6,242 2,799 Receivables $ 232,119 $ 174,995 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Term Facility | The Company's aggregate scheduled maturities of the Amended Term Loan as of December 31, 2018 , are as follows: (In thousands) Payments due 2019 $ 4,500 2020 6,500 2021 8,600 2022 55,400 Total $ 75,000 |
Schedule of Carrying Values and Fair Values of Term Facility | Carrying values and fair values of the Amended Term Loan on the Consolidated Balance Sheet as of December 31, 2018 were as follows: December 31, 2018 (In thousands) Carrying Amount Fair Value Short-term debt $ 4,500 $ 4,500 Long-term debt 70,500 70,500 Total debt 75,000 $ 75,000 Debt financing fees (1,363 ) Total debt with debt financing fees $ 73,637 Carrying values and fair values of the Amended Term Loan on the Consolidated Balance Sheet as of December 31, 2017 were as follows: December 31, 2017 (In thousands) Carrying Amount Fair Value Short-term debt $ 4,000 $ 4,000 Long-term debt 75,000 75,000 Total debt 79,000 $ 79,000 Debt financing fees (1,789 ) Total debt with debt financing fees $ 77,211 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liabilities at Fair Value | The following table summarizes the amount at fair value and location of the derivative instrument in the Consolidated Balance Sheet as of December 31, 2018 : Fair Value (In thousands) Balance sheet caption Amount Interest rate swap designated as cash flow hedge Other current assets $ 121 Interest rate swap designated as cash flow hedge Other non-current assets $ 104 The following table summarizes the amount at fair value and location of the terminated derivative instruments in the Consolidated Balance Sheet as of December 31, 2017 : Fair Value (In thousands) Balance sheet caption Amount Interest rate swap designated as cash flow hedge Other accrued liabilities $ 127 Interest rate swap designated as cash flow hedge Other non-current assets $ 60 |
Schedule of Foreign Exchange Contracts | The following table summarizes the amount at fair value and location of the derivative instruments used for our forward contract hedges in the Consolidated Balance Sheet as of December 31, 2018. Fair Value (In thousands) Balance sheet caption Amount Foreign currency forward contracts designated as cash flow hedge Other accrued liabilities $ 351 Foreign currency forward contracts designated as cash flow hedge Other non-current liabilities $ 7 |
Composition of Certain Financ_2
Composition of Certain Financial Statement Captions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Compensation and Other Employee Benefits | Compensation and other employee benefits are affected by short-term fluctuations in the timing of payments and were comprised of the following at December 31: (In thousands) 2018 2017 Accrued salaries and wages $ 20,435 $ 21,879 Accrued bonus 7,261 4,210 Accrued employee benefits 14,094 13,215 Total $ 41,790 $ 39,304 |
Schedule of Other Accrued Liabilities | Other accrued liabilities were comprised of the following at December 31: (In thousands) 2018 2017 Workers' compensation, auto and general liability reserve $ 5,369 $ 4,615 Contract related reserves 7,133 7,426 Other accrued liabilities 9,801 7,168 Total $ 22,303 $ 19,209 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Depreciation and amortization is generally computed using either an accelerated or straight-line method and is based on estimated useful lives or lease term as follows: Years Building improvements 3 – 10 Machinery, equipment and vehicles 3 – 12 Furniture, fixtures, and office equipment 3 – 7 Property, plant and equipment, net consisted of the following at December 31 : (In thousands) 2018 2017 Buildings and improvements $ 1,168 $ 5,197 Machinery and equipment 14,242 5,556 Furniture, fixtures and office equipment 5,877 4,895 Property, plant and equipment, gross 21,287 15,648 Less: accumulated depreciation and amortization (7,868 ) (11,915 ) Property, plant and equipment, net $ 13,419 $ 3,733 |
Leases and Rentals (Tables)
Leases and Rentals (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Schedule of Future Operating Lease Payments Under Non-Cancellable Operating Leases | Future operating lease payments under non-cancellable operating leases with an initial term in excess of one year as of December 31, 2018 are shown below: (In thousands) Payments due 2019 $ 3,480 2020 2,986 2021 1,730 2022 894 2023 893 2024 and later 3,872 Total minimum lease payments $ 13,855 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Impact of Stock-Based Compensation in Consolidated and Combined Statements of Income | Stock-based compensation expense and the associated tax benefits impacting our Consolidated Statements of Income were as follows: Year Ended December 31, (In thousands) 2018 2017 Compensation costs for equity-based awards $ 3,490 $ 2,863 Compensation costs for liability-based awards 606 1,604 Total compensation costs, pre-tax $ 4,096 $ 4,467 Future tax benefit $ 888 $ 965 |
Schedule of Non-Qualified Stock Options, Activity | A summary of the status of our NQOs as of December 31, 2018 , 2017 and 2016 and changes during the years then ended is presented below: Year Ended December 31, 2018 2017 2016 (In thousands, except per share data) Shares Weighted Average Exercise Price Per Share Shares Weighted Average Exercise Price Per Share Shares Weighted Average Exercise Price Per Share Outstanding at January 1, 325 $22.74 384 $21.47 486 $19.25 Granted — $0.00 75 $22.82 87 $20.06 Exercised (73 ) $21.87 (110 ) $18.41 (158 ) $13.63 Forfeited, canceled or expired (1 ) $20.62 (24 ) $22.61 (31 ) $22.51 Outstanding at December 31, 251 $23.00 325 $22.74 384 $21.47 Options exercisable 184 $23.35 201 $22.57 214 $20.35 |
Schedule of Non-Qualified Stock Options Outstanding and Exercisable | The following table summarizes information about NQOs outstanding and exercisable as of December 31, 2018 : (In thousands, except per share data) Options Outstanding Options Exercisable Range of Exercise Prices Per Share Number Weighted Average Remaining Contractual Life (In Years) Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Number Weighted Average Remaining Contractual Life (In Years) Weighted Average Exercise Price Per Share Aggregate Intrinsic Value $12.94 - $21.98 172 6.80 $ 20.25 $ 250 112 6.24 $ 19.69 $ 211 $22.16 - $32.49 79 6.12 29.00 — 72 5.90 29.03 — Total options and aggregate intrinsic value 251 6.58 $ 23.00 $ 250 184 6.11 $ 23.35 $ 211 |
Schedule of Weighted Average Assumptions | The following weighted-average assumptions were utilized in deriving the fair value for NQOs: Year Ended December 31, 2017 2016 Expected volatility 30.8 % 30.2 % Expected life (in years) 7 7 Risk-free rates 2.30 % 1.69 % Weighted-average grant date fair value per share $ 8.48 $ 7.06 |
Schedule of Restricted Stock Units, Activity | The table below provides a roll-forward of outstanding RSUs for the years ended December 31, 2018, 2017, and 2016. Year Ended December 31, 2018 2017 2016 (In thousands, except per share data) Shares Weighted Average Grant Date Fair Value Per Share Shares Weighted Average Grant Date Fair Value Per Share Shares Weighted Average Grant Date Fair Value Per Share Outstanding at January 1, 221 $ 23.58 285 $ 23.01 350 $22.47 Granted 163 $ 33.08 144 $ 23.74 181 $21.25 Vested (110 ) $ 24.93 (171 ) $ 23.18 (206 ) $20.56 Forfeited or canceled (17 ) $ 25.54 (37 ) $ 21.69 (40 ) $22.68 Outstanding at December 31, 257 $ 28.90 221 $ 23.58 285 $23.01 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following table comprises selected financial data for the years ended December 31, 2018 and 2017 : 2018 QUARTERS 2017 QUARTERS (In thousands, except per share data) 1st 2nd 3rd 4th 1st 2nd 3rd 4th Total revenue $ 320,516 $ 321,132 $ 308,095 $ 329,561 $ 290,063 $ 259,318 $ 269,625 $ 295,782 Gross Profit 26,466 29,068 29,131 30,030 25,362 25,735 24,406 26,445 Operating income 8,671 12,998 14,006 12,648 11,649 9,204 10,090 10,277 Net income 6,111 9,195 9,866 10,124 6,668 5,461 5,800 41,568 Basic earnings per share $ 0.55 $ 0.82 $ 0.88 $ 0.90 $ 0.61 $ 0.50 $ 0.52 $ 3.77 Diluted earnings per share $ 0.54 $ 0.81 $ 0.86 $ 0.89 $ 0.60 $ 0.49 $ 0.51 $ 3.70 Weighted average number of shares outstanding Basic 11,146 11,235 11,248 11,262 10,909 10,987 11,075 11,026 Diluted 11,338 11,383 11,406 11,369 11,075 11,191 11,272 11,234 |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018USD ($) | Sep. 28, 2018USD ($) | Jun. 29, 2018USD ($) | Mar. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 29, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Accounting Policies [Line Items] | |||||||||||
Revenue | $ 1,279,304 | $ 1,114,788 | $ 1,190,519 | ||||||||
Number of reportable segments | segment | 1 | ||||||||||
Revenue | $ 329,561 | $ 308,095 | $ 321,132 | $ 320,516 | $ 295,782 | $ 269,625 | $ 259,318 | $ 290,063 | |||
Goodwill impairment charges | $ 0 | 0 | 0 | ||||||||
Goodwill, acquired | $ 0 | 0 | 0 | ||||||||
Buildings improvements | Minimum | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Estimated useful life | 3 years | ||||||||||
Buildings improvements | Maximum | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Estimated useful life | 10 years | ||||||||||
Machinery, equipment and vehicles | Minimum | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Estimated useful life | 3 years | ||||||||||
Machinery, equipment and vehicles | Maximum | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Estimated useful life | 12 years | ||||||||||
Furniture, fixtures, and office equipment | Minimum | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Estimated useful life | 3 years | ||||||||||
Furniture, fixtures, and office equipment | Maximum | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Estimated useful life | 7 years | ||||||||||
Government customers | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Revenue | $ 1,100,000 | $ 1,200,000 | |||||||||
Total revenue | Credit risk | U.S. Army | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Concentration risk, percentage | 73.00% | 82.00% | 84.00% | ||||||||
High Desert Support Services (HDSS) | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Ownership percentage | 40.00% | 40.00% | |||||||||
Equity investment balance | $ 2,400 | $ 1,700 | $ 2,400 | $ 1,700 |
Description of Business and S_5
Description of Business and Summary of Significant Accounting Policies - Summary of Cumulative Catch-Up Adjustments (Details) - Contracts accounted for under percentage of completion - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | |||
Favorable adjustments | $ 14,962 | $ 18,256 | $ 15,296 |
Unfavorable adjustments | (13,359) | (6,704) | (7,837) |
Net favorable adjustments | $ 1,603 | $ 11,552 | $ 7,459 |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements Recent Accounting Pronouncements (Details) - Subsequent Event - Scenario, Forecast - Accounting Standards Update 2016-02 $ in Millions | Jan. 01, 2019USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Right-of-use asset | $ 10 |
Operating lease liability | $ 10 |
Revenue - Performance Obligatio
Revenue - Performance Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue from Contract with Customer [Abstract] | ||
Performance obligation timing | Our contracts are multi-year contracts and typically include an initial period of one year or less with annual one-year (or less) option periods. | |
Increase in remaining performance obligations | $ 139.1 | |
Performance Obligations | $ 858 | $ 719 |
Revenue - Performance Obligat_2
Revenue - Performance Obligations (Percentage and Remaining Period of Time) (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Dec. 31, 2018 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 100.00% |
Remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue - Contract Estimates (D
Revenue - Contract Estimates (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue from Contract with Customer [Abstract] | |||
Favorable adjustments | $ 14,962 | $ 18,256 | $ 15,296 |
Unfavorable adjustments | (13,359) | (6,704) | (7,837) |
Net favorable adjustments | 1,603 | 11,552 | 7,459 |
Net favorable adjustment to operating income | $ (800) | $ (9,700) | $ (7,200) |
Revenue - Revenue by Contract T
Revenue - Revenue by Contract Type (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 1,279,304 | $ 1,114,788 | $ 1,190,519 |
Cost-plus and cost-reimbursable | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 995,415 | 818,908 | 892,842 |
Firm-fixed-price | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 283,889 | $ 295,880 | $ 297,677 |
Revenue - Revenue by Geographic
Revenue - Revenue by Geographic Region (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 1,279,304 | $ 1,114,788 | $ 1,190,519 |
Middle East | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 889,620 | 871,821 | 976,586 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 269,750 | 168,003 | 157,161 |
Europe | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 119,934 | $ 74,964 | $ 56,772 |
Revenue - Revenue by Contract R
Revenue - Revenue by Contract Relationship (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 1,279,304 | $ 1,114,788 | $ 1,190,519 |
Prime contractor | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,200,726 | 1,083,485 | 1,131,773 |
Subcontractor | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 78,578 | $ 31,303 | $ 58,746 |
Revenue - Revenue by Customer (
Revenue - Revenue by Customer (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 1,279,304 | $ 1,114,788 | $ 1,190,519 |
Army | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 934,427 | 915,554 | 1,004,842 |
Air Force | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 259,511 | 177,338 | 165,611 |
Navy | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 38,802 | 21,896 | 20,066 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 46,564 | $ 0 | $ 0 |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Jan. 01, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Revnue from performance obligations, satisfied in previous period | $ 900 | |
Contract assets | 181,000 | |
Contract liability | $ 0 | $ 1,621 |
Revenue - ASC Topic 606 Impact
Revenue - ASC Topic 606 Impact (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 28, 2018 | Jun. 29, 2018 | Mar. 30, 2018 | Dec. 31, 2017 | Sep. 29, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Capitalized bonus incentives | $ 400 | $ 400 | ||||||||||
Costs incurred in excess of billings | 100 | |||||||||||
Effects of the Adoption of ASC 606 compared to Former ASC Topic 605 [Abstract] | ||||||||||||
Receivables (unbilled) | $ 132,058 | |||||||||||
Costs incurred in excess of billings | 0 | $ 12,751 | 0 | $ 12,751 | 0 | |||||||
Billings in excess of costs | 0 | 3,766 | 0 | 3,766 | 0 | |||||||
Impact to contract liabilities | 0 | 0 | 1,621 | |||||||||
Retained earnings, net of tax | 152,616 | 117,415 | 152,616 | 117,415 | 117,320 | |||||||
Revenue | 1,279,304 | 1,114,788 | $ 1,190,519 | |||||||||
Cost of revenue | 1,164,609 | 1,012,840 | 1,083,607 | |||||||||
Selling, general and administrative expenses | 66,372 | 60,728 | 64,086 | |||||||||
Operating income | $ 12,648 | $ 14,006 | $ 12,998 | $ 8,671 | 10,277 | $ 10,090 | $ 9,204 | $ 11,649 | 48,323 | 41,220 | $ 42,826 | |
Calculated under Revenue Guidance in Effect before Topic 606 | ||||||||||||
Effects of the Adoption of ASC 606 compared to Former ASC Topic 605 [Abstract] | ||||||||||||
Receivables (unbilled) | 121,601 | 121,601 | ||||||||||
Costs incurred in excess of billings | 12,751 | 12,751 | ||||||||||
Billings in excess of costs | 3,766 | 3,766 | ||||||||||
Impact to contract liabilities | 0 | 0 | ||||||||||
Retained earnings, net of tax | $ 117,415 | $ 117,415 | ||||||||||
Revenue | 1,269,560 | |||||||||||
Cost of revenue | 1,148,199 | |||||||||||
Selling, general and administrative expenses | 66,372 | |||||||||||
Operating income | $ 54,989 | |||||||||||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||||||||
Effects of the Adoption of ASC 606 compared to Former ASC Topic 605 [Abstract] | ||||||||||||
Receivables (unbilled) | 10,457 | |||||||||||
Costs incurred in excess of billings | (12,751) | |||||||||||
Billings in excess of costs | (3,766) | |||||||||||
Impact to contract liabilities | 1,621 | |||||||||||
Retained earnings, net of tax | $ (95) |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Components | |||
United States | $ 41,449 | $ 34,386 | $ 37,276 |
Foreign | 1,803 | 2,194 | (89) |
Income from operations before income taxes | 43,252 | 36,580 | 37,187 |
Current income tax provision | |||
United States-Federal | 6,305 | 11,952 | 15,106 |
United States-State and local | 653 | 206 | 311 |
Foreign | 515 | 758 | 371 |
Total current income tax provision | 7,473 | 12,916 | 15,788 |
Deferred income tax provision (benefit) | |||
United States-Federal | (79) | (35,486) | (1,733) |
United States-State and local | 52 | (260) | (278) |
Foreign | 510 | (87) | (245) |
Total deferred income tax provision (benefit) | 483 | (35,833) | (2,256) |
Total income tax expense (benefit) | $ 7,956 | $ (22,917) | $ 13,532 |
Effective income tax rate | 18.40% | (62.60%) | 36.40% |
SENTEL Acquisition - Additional
SENTEL Acquisition - Additional Information (Details) - USD ($) $ in Thousands | Jan. 23, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Purchase price, net of cash acquired | $ 36,855 | $ 0 | $ 0 | |
Amortization of intangible assets | 1,999 | 0 | $ 0 | |
Goodwill | $ 233,619 | 216,930 | ||
SENTEL | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Percentage of outstanding common stock acquired | 100.00% | |||
Purchase price, net of cash acquired | $ 36,855 | |||
Consideration transferred | 36,000 | |||
Working capital adjustment | 900 | |||
Weighted average remaining useful life | 4 years 8 months 20 days | |||
Amortization of intangible assets | $ 2,000 | |||
Goodwill | 16,689 | |||
Acquisition related costs | 800 | |||
Revenue of acquiree since acquisition date | $ 112,300 | |||
Order or Production Backlog | SENTEL | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets | 6,500 | |||
Amortization period | 4 years | |||
Contract Re-competes | SENTEL | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 4,000 | |||
Amortization period | 8 years | |||
SENTEL | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Recognized revenue from acquired entity | $ 107,000 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Tax provision at U.S. statutory rate | 21.00% | 35.00% | 35.00% |
State and local income tax, net of federal benefit | 1.30% | (0.10%) | 0.10% |
Foreign taxes | 0.30% | (2.50%) | 0.00% |
Uncertain tax positions | 3.40% | 0.00% | 0.00% |
Prior year true-ups | 0.40% | 0.30% | 0.00% |
Foreign derived intangible income deduction | (2.90%) | (0.00%) | (0.00%) |
Credits | (0.80%) | (0.00%) | (0.00%) |
Other | 0.40% | 1.70% | 1.30% |
Impact of federal rate change | (4.70%) | (97.00%) | 0.00% |
Effective income tax rate | 18.40% | (62.60%) | 36.40% |
SENTEL Acquisition - Business A
SENTEL Acquisition - Business Acquisition (Details) - USD ($) $ in Thousands | Jan. 23, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 233,619 | $ 216,930 | ||
Purchase price, net of cash acquired | $ 36,855 | $ 0 | $ 0 | |
SENTEL | ||||
Business Acquisition [Line Items] | ||||
Receivables | $ 23,339 | |||
Property, plant and equipment | 810 | |||
Goodwill | 16,689 | |||
Intangible assets | 10,500 | |||
Other current assets | 975 | |||
Accounts payable | (10,012) | |||
Other current liabilities | (5,446) | |||
Purchase price, net of cash acquired | $ 36,855 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets | ||
Costs incurred in excess of billings | $ 0 | $ 814 |
Compensation and benefits | 4,444 | 4,667 |
Reserves | 3,028 | 2,473 |
Other | 802 | 854 |
Net operating losses | 295 | 133 |
Total deferred tax assets | 8,569 | 8,941 |
Deferred Tax Liabilities | ||
Goodwill and intangibles | (46,832) | (46,890) |
Unbilled receivables | (15,112) | (16,635) |
Property, plant and equipment, net | (709) | 774 |
Other liabilities | (1,192) | (1,169) |
Total deferred tax liabilities | (63,845) | (63,920) |
Deferred Tax Liabilities, Net | $ 55,276 | $ 54,979 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits-January 1, | $ 0 | $ 429 | $ 0 |
Additions for: | |||
Current year tax positions | 1,275 | 0 | 429 |
Prior year tax positions | 480 | 0 | 0 |
Reductions for: | |||
Settlements with tax authorities | 0 | (429) | 0 |
Prior year tax positions | 0 | 0 | 0 |
Unrecognized tax benefits-December 31, | $ 1,755 | $ 0 | $ 429 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Unrecognized tax benefits | $ 1,755 | $ 0 | $ 429 | $ 0 |
Unrecognized tax benefits, resulting from current year tax positions | 1,275 | 0 | 429 | |
Settlements with tax authorities | 0 | 429 | 0 | |
Interest expense related to tax matters | 0 | 0 | $ 0 | |
Tax Cuts and Jobs Act of 2017, income tax benefit | 35,100 | |||
Tax Cuts and Jobs Act of 2017, additional income tax benefit | $ 2,000 | |||
GILTI income tax benefit | 100 | |||
FDII income tax expense benefit | $ 1,300 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Basic and Diluted Weighted Average Shares Outstanding (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 28, 2018 | Jun. 29, 2018 | Mar. 30, 2018 | Dec. 31, 2017 | Sep. 29, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Net income | $ 10,124 | $ 9,866 | $ 9,195 | $ 6,111 | $ 41,568 | $ 5,800 | $ 5,461 | $ 6,668 | $ 35,296 | $ 59,497 | $ 23,655 |
Weighted average common shares outstanding - basic (in shares) | 11,262 | 11,248 | 11,235 | 11,146 | 11,026 | 11,075 | 10,987 | 10,909 | 11,224 | 11,021 | 10,714 |
Add: Dilutive impact of stock options (in shares) | 63 | 67 | 97 | ||||||||
Weighted average number of shares outstanding - diluted (in shares) | 11,369 | 11,406 | 11,383 | 11,338 | 11,234 | 11,272 | 11,191 | 11,075 | 11,378 | 11,209 | 10,974 |
Basic earnings per share (in dollars per share) | $ 0.90 | $ 0.88 | $ 0.82 | $ 0.55 | $ 3.77 | $ 0.52 | $ 0.50 | $ 0.61 | $ 3.14 | $ 5.40 | $ 2.21 |
Diluted earnings per share (in dollars per share) | $ 0.89 | $ 0.86 | $ 0.81 | $ 0.54 | $ 3.70 | $ 0.51 | $ 0.49 | $ 0.60 | $ 3.10 | $ 5.31 | $ 2.16 |
Anti-dilutive restricted stock units | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Add: Dilutive impact of restricted stock units (in shares) | 91 | 121 | 163 |
Earnings Per Share Earnings Per
Earnings Per Share Earnings Per Share - Anti-dilutive Options (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive stock options (in shares) | 3 | 8 | 9 |
Anti-dilutive stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive stock options (in shares) | 3 | 8 | 0 |
Anti-dilutive restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive stock options (in shares) | 0 | 0 | 9 |
Receivables - Schedule of Recei
Receivables - Schedule of Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Billed receivables | $ 44,868 | $ 50,595 |
Unbilled receivables (contract assets) | 181,009 | 121,601 |
Other | 6,242 | 2,799 |
Receivables | 232,119 | $ 174,995 |
Estimated contract receivables | $ 900 |
Debt - Additional Information (
Debt - Additional Information (Details) | Nov. 15, 2017USD ($) | Dec. 31, 2018USD ($)letters_of_credit | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | ||||
Payments of debt issuance costs | $ 0 | $ 1,844,000 | $ 221,000 | |
Amortization expense | $ 426,000 | 1,464,000 | 1,198,000 | |
Letters of credit | ||||
Debt Instrument [Line Items] | ||||
Credit facility, maximum borrowing capacity | $ 25,000,000 | |||
Number of letters of credit outstanding | letters_of_credit | 6 | |||
Letters of credit outstanding | $ 10,100,000 | |||
Senior secured credit facilities | ||||
Debt Instrument [Line Items] | ||||
Credit facility, maximum borrowing capacity | 200,000,000 | |||
Maximum allowed dividend distribution | $ 19,300,000 | |||
Covenant terms, ratio of total indebtedness to combined EBITDA | 3 | |||
Covenant terms, maximum debt to EBITDA ratio, 12 months following purchase | 3.25 | |||
Covenant terms, ratio of combined EBITDA to combined interest expense | 4.50 | |||
Ratio of total indebtedness to combined EBITDA | 1.25 | |||
Ratio of combined EBITDA to combined interest expense | 11.61 | |||
Interest rate | 4.53% | |||
Senior secured credit facilities | Minimum | ||||
Debt Instrument [Line Items] | ||||
Undrawn portion of revolving facility, commitment fee percentage | 0.30% | |||
Senior secured credit facilities | Maximum | ||||
Debt Instrument [Line Items] | ||||
Undrawn portion of revolving facility, commitment fee percentage | 0.45% | |||
Senior secured credit facilities | London Interbank Offered Rate (LIBOR) | Minimum | ||||
Debt Instrument [Line Items] | ||||
Spread on variable rate | 1.75% | |||
Senior secured credit facilities | London Interbank Offered Rate (LIBOR) | Maximum | ||||
Debt Instrument [Line Items] | ||||
Spread on variable rate | 2.50% | |||
Senior secured credit facilities | Base rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Spread on variable rate | 0.75% | |||
Senior secured credit facilities | Base rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Spread on variable rate | 1.50% | |||
Senior secured credit facilities | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Amortization expense | 1,400,000 | $ 1,200,000 | ||
Write off of deferred debt issuance costs | $ 800,000 | |||
Term facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit | $ 75,000,000 | |||
Term facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Credit facility, maximum borrowing capacity | $ 80,000,000 | |||
Debt instrument, term | 5 years | |||
Distribution to subsidiary of Exelis | $ 74,600,000 | |||
Payments of debt issuance costs | 1,800,000 | |||
Amortization expense | 400,000 | |||
Revolver | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Credit facility, maximum borrowing capacity | $ 120,000,000 | |||
Debt instrument, term | 5 years | |||
Available borrowing capacity | 109,900,000 | |||
Quarterly Through September 30, 2019 | Term facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit | 1,000,000 | |||
Quarterly December 31, 2019 | Term facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit | 1,500,000 | |||
Quarterly Fiscal Quarters December 31, 2020 Through September 30, 2021 | Term facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit | 2,000,000 | |||
Quarterly December 31, 2021 Through September 30, 2022 | Term facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit | 2,600,000 | |||
Due November 15, 2022 | Term facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit | $ 47,600,000 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Term Facility (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Total | $ 73,637 | $ 77,211 |
Term facility | ||
Debt Instrument [Line Items] | ||
2,019 | 4,500 | |
2,020 | 6,500 | |
2,021 | 8,600 | |
2,022 | 55,400 | |
Total | $ 75,000 |
Debt - Schedule of Carrying Val
Debt - Schedule of Carrying Values and Fair Values of Term Facility (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt financing fees | $ (1,363) | $ (1,789) |
Total | 73,637 | 77,211 |
Carrying Amount | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | 75,000 | 79,000 |
Carrying Amount | Short-term debt | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | 4,500 | 4,000 |
Carrying Amount | Long-term debt | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | 70,500 | 75,000 |
Fair Value | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | 75,000 | 79,000 |
Fair Value | Short-term debt | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | 4,500 | 4,000 |
Fair Value | Long-term debt | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | $ 70,500 | $ 75,000 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||||
Reduction of accumulated other comprehensive loss | $ 358 | $ 1 | $ 2 | |
Decreased interest expense on sale of derivatives | (5,071) | $ (4,640) | $ (5,639) | |
Interest rate swap | Cash flow hedging | ||||
Derivative [Line Items] | ||||
Proceeds from sale of derivative instrument | $ 400 | |||
Increase (decrease) in derivative assets | (400) | |||
Reduction of accumulated other comprehensive loss | 400 | |||
Interest rate swap | Cash flow hedging | Designated as hedging instrument | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | 56,400 | |||
Foreign exchange forward | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | 7,400 | |||
Gain (loss) on derivative instruments | 100 | |||
Reclassification out of Accumulated Other Comprehensive Income | Interest rate swap | ||||
Derivative [Line Items] | ||||
Gain (loss) on derivative instruments | $ 200 | |||
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent | Reclassification out of Accumulated Other Comprehensive Income | Interest rate swap | Cash flow hedging | ||||
Derivative [Line Items] | ||||
Decreased interest expense on sale of derivatives | $ 400 |
Derivative Instruments Derivati
Derivative Instruments Derivative Instruments - Interest Rate Hedges in the Consolidated Balance Sheets (Details) - Designated as hedging instrument - Cash flow hedging - Interest rate swap - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other current assets | ||
Derivative [Line Items] | ||
Interest rate swap liabilities designated as cash flow hedge | $ 121 | |
Other non-current assets | ||
Derivative [Line Items] | ||
Interest rate swap assets designated as cash flow hedge | $ 104 | $ 60 |
Other accrued liabilities | ||
Derivative [Line Items] | ||
Interest rate swap liabilities designated as cash flow hedge | $ 127 |
Derivative Instruments Deriva_2
Derivative Instruments Derivative instruments - Forward Contract Hedges in the Consolidated Balance Sheets (Details) - Foreign exchange forward - Designated as hedging instrument - Cash flow hedging $ in Thousands | Dec. 31, 2018USD ($) |
Other accrued liabilities | |
Derivative [Line Items] | |
Foreign currency forward contracts designated as cash flow hedge | $ 351 |
Other non-current liabilities | |
Derivative [Line Items] | |
Foreign currency forward contracts designated as cash flow hedge | $ 7 |
Composition of Certain Financ_3
Composition of Certain Financial Statement Captions - Schedule of Compensation and Other Employee Benefits (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Compensation and Other Employee Benefits | ||
Accrued salaries and wages | $ 20,435 | $ 21,879 |
Accrued bonus | 7,261 | 4,210 |
Accrued employee benefits | 14,094 | 13,215 |
Total | $ 41,790 | $ 39,304 |
Composition of Certain Financ_4
Composition of Certain Financial Statement Captions - Schedule of Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other Accrued Liabilities | ||
Workers' compensation, auto and general liability reserve | $ 5,369 | $ 4,615 |
Contract related reserves | 7,133 | 7,426 |
Other accrued liabilities | 9,801 | 7,168 |
Total | $ 22,303 | $ 19,209 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net - Plant, Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 21,287 | $ 15,648 |
Less: accumulated depreciation and amortization | (7,868) | (11,915) |
Property, plant and equipment, net | 13,419 | 3,733 |
Buildings improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,168 | 5,197 |
Machinery, equipment and vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 14,242 | 5,556 |
Furniture, fixtures, and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 5,877 | $ 4,895 |
Property, Plant and Equipment_4
Property, Plant and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 1,798 | $ 1,686 | $ 1,920 |
Leases and Rentals - Schedule o
Leases and Rentals - Schedule of Future Operating Lease Payments Under Non-Cancellable Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Leases [Abstract] | |||
Operating leases, rental expenses | $ 6,300 | $ 3,500 | $ 6,000 |
2,019 | 3,480 | ||
2,020 | 2,986 | ||
2,021 | 1,730 | ||
2,022 | 894 | ||
2,023 | 893 | ||
2024 and later | 3,872 | ||
Total minimum lease payments | $ 13,855 |
Post Employment Benefit Plans (
Post Employment Benefit Plans (Details) - USD ($) $ in Millions | Sep. 11, 2014 | Dec. 31, 2018 | Dec. 31, 2017 |
Retirement Benefits [Abstract] | |||
Portion of contributions charged to income | $ 5.2 | $ 3 | |
Benefits plan vesting percentage | 100.00% | ||
Benefit contributions accrued | $ 0.1 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2019 | Jan. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of exercisable options, out of the money (less than 0.1 million) | 0.1 | ||||
Vested or expected to vest (in shares) | 0.3 | ||||
Vested or expected to vest, weighted average exercise price (in dollars per share) | $ 23 | ||||
Vested or expected to vest, aggregate intrinsic value | $ 200 | ||||
Vested or expected to vest, weighted average remaining contractual life | 6 years 6 months 29 days | ||||
Expected life | 7 years | ||||
Compensation cost for awards | $ 4,096 | $ 4,467 | |||
Equity Based Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation costs | $ 4,100 | ||||
Unrecognized compensation costs, period for recognition | 1 year 9 months | ||||
Compensation cost for awards | $ 3,490 | 2,863 | |||
Liability Based Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based liabilities paid | 1,000 | 100 | |||
Unrecognized compensation costs | $ 1,300 | ||||
Unrecognized compensation costs, period for recognition | 1 year 8 months 9 days | ||||
Compensation cost for awards | $ 606 | 1,604 | |||
Non-Qualified Stock Options (NQO) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expiration from the date of grant | 10 years | ||||
Stock price (in dollars per share) | $ 21.58 | ||||
Options exercised in period, intrinsic value | $ 100 | $ 1,400 | $ 1,600 | ||
Expected life | 7 years | 7 years | 7 years | ||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
RSU's vested in period, fair value | $ 3,300 | $ 4,500 | $ 3,400 | ||
Key Employees | Total Shareholder Return Awards (TSR) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Aggregate award target value | $ 2,200 | 1,500 | 1,500 | ||
Compensation cost for awards | 300 | 1,000 | $ 600 | ||
Cash paid to settle awards | $ 600 | ||||
Compensation and other employee benefits non-current | $ 1,500 | $ 1,900 | |||
Key Employees | Minimum | Total Shareholder Return Awards (TSR) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of shareholder return award target | 0.00% | ||||
Key Employees | Maximum | Total Shareholder Return Awards (TSR) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of shareholder return award target | 200.00% | ||||
2014 Omnibus Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum number of shares of Company's common stock authorized for issuance (in shares) | 2.6 | ||||
Shares available (in shares) | 1.1 | ||||
Share-based Compensation Award, Tranche One | Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting increments | 33.33% | ||||
Share-based Compensation Award, Tranche One | Capital lease obligations | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting increments | 33.33% | ||||
Share-based Compensation Award, Tranche Two | Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting increments | 33.33% | ||||
Share-based Compensation Award, Tranche Two | Capital lease obligations | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting increments | 33.33% | ||||
Share-based Compensation Award, Tranche Three | Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting increments | 33.33% | ||||
Share-based Compensation Award, Tranche Three | Capital lease obligations | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting increments | 33.33% | ||||
Subsequent event | Key Employees | Total Shareholder Return Awards (TSR) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Cash paid to settle awards | $ 500 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Impact of Stock-Based Compensation in Consolidated and Combined Statements of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Compensation cost for awards | $ 4,096 | $ 4,467 |
Future tax benefit | 888 | 965 |
Compensation costs for equity-based awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Compensation cost for awards | 3,490 | 2,863 |
Compensation costs for liability-based awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Compensation cost for awards | $ 606 | $ 1,604 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Non-Qualified Stock Options, Activity (Details) - Non-Qualified Stock Options (NQO) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Shares | |||
Outstanding at beginning of year (in shares) | 325 | 384 | 486 |
Granted (in shares) | 0 | 75 | 87 |
Exercised (in shares) | (73) | (110) | (158) |
Forfeited, canceled or expired (in shares) | (1) | (24) | (31) |
Outstanding at end of year (in shares) | 251 | 325 | 384 |
Options exercisable (in shares) | 184 | 201 | 214 |
Weighted Average Exercise Price Per Share | |||
Outstanding at beginning of year (in dollars per share) | $ 22.74 | $ 21.47 | $ 19.25 |
Granted (in dollars per share) | 0 | 22.82 | 20.06 |
Exercised (in dollars per share) | 21.87 | 18.41 | 13.63 |
Forfeited, canceled or expired (in dollars per share) | 20.62 | 22.61 | 22.51 |
Outstanding at end of year (in dollars per share) | 23 | 22.74 | 21.47 |
Options exercisable (in dollars per share) | $ 23.35 | $ 22.57 | $ 20.35 |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Non-Qualified Stock Options Outstanding and Exercisable (Details) - Non-Qualified Stock Options (NQO) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Options outstanding (in shares) | 251 | 325 | 384 | 486 |
Options outstanding, weighted average remaining contractual life | 6 years 6 months 29 days | |||
Options outstanding, weighted average price per share (in dollars per share) | $ 23 | $ 22.74 | $ 21.47 | $ 19.25 |
Options outstanding, aggregate intrinsic value | $ 250 | |||
Options exercisable (in shares) | 184 | 201 | 214 | |
Options exercisable, weighted average remaining contractual life | 6 years 1 month 10 days | |||
Options exercisable, weighted average exercise price per share (in dollars per share) | $ 23.35 | $ 22.57 | $ 20.35 | |
Options exercisable, aggregate intrinsic value | $ 211 | |||
Range of exercise prices one | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Options outstanding (in shares) | 172 | |||
Options outstanding, weighted average remaining contractual life | 6 years 9 months 18 days | |||
Options outstanding, weighted average price per share (in dollars per share) | $ 20.25 | |||
Options outstanding, aggregate intrinsic value | $ 250 | |||
Options exercisable (in shares) | 112 | |||
Options exercisable, weighted average remaining contractual life | 6 years 2 months 27 days | |||
Options exercisable, weighted average exercise price per share (in dollars per share) | $ 19.69 | |||
Options exercisable, aggregate intrinsic value | $ 211 | |||
Exercise price per share, lower range (in dollars per share) | $ 12.94 | |||
Exercise price per share, upper range (in dollars per share) | $ 21.98 | |||
Range of exercise prices two | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Options outstanding (in shares) | 79 | |||
Options outstanding, weighted average remaining contractual life | 6 years 1 month 13 days | |||
Options outstanding, weighted average price per share (in dollars per share) | $ 29 | |||
Options outstanding, aggregate intrinsic value | $ 0 | |||
Options exercisable (in shares) | 72 | |||
Options exercisable, weighted average remaining contractual life | 5 years 10 months 24 days | |||
Options exercisable, weighted average exercise price per share (in dollars per share) | $ 29.03 | |||
Options exercisable, aggregate intrinsic value | $ 0 | |||
Exercise price per share, lower range (in dollars per share) | $ 22.16 | |||
Exercise price per share, upper range (in dollars per share) | $ 32.49 |
Stock-Based Compensation - Sc_4
Stock-Based Compensation - Schedule of Weighted Average Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life (in years) | 7 years | ||
Non-Qualified Stock Options (NQO) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 30.80% | 30.20% | |
Expected life (in years) | 7 years | 7 years | 7 years |
Risk-free rates | 2.30% | 1.69% | |
Weighted-average grant date fair value per share (in dollars per share) | $ 8.48 | $ 7.06 |
Stock-Based Compensation - Sc_5
Stock-Based Compensation - Schedule of Restricted Stock Units, Activity (Details) - Restricted Stock Units (RSUs) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Shares | |||
Outstanding at beginning of year (in shares) | 221 | 285 | 350 |
Granted (in shares) | 163 | 144 | 181 |
Vested (in shares) | (110) | (171) | (206) |
Forfeited or canceled (in shares) | (17) | (37) | (40) |
Outstanding at end of year (in shares) | 257 | 221 | 285 |
Weighted Average Exercise Price Per Share | |||
Outstanding at beginning of year (in dollars per share) | $ 23.58 | $ 23.01 | $ 22.47 |
Granted (in dollars per share) | 33.08 | 23.74 | 21.25 |
Vested (in dollars per share) | 24.93 | 23.18 | 20.56 |
Forfeited or canceled (in dollars per share) | 25.54 | 21.69 | 22.68 |
Outstanding at end of year (in dollars per share) | $ 28.90 | $ 23.58 | $ 23.01 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) | Dec. 31, 2018shares | Dec. 31, 2017shares | Sep. 18, 2014 |
Class of Stock [Line Items] | |||
Common stock, shares issued (in shares) | 11,266,906 | 11,120,528 | |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 | |
Vectrus, Inc. | |||
Class of Stock [Line Items] | |||
Common stock, distribution basis for issued and outstanding shares | 0.0556 | ||
Former parent | |||
Class of Stock [Line Items] | |||
Common stock, shares issued (in shares) | 10,474,268 | ||
2014 Omnibus Plan | |||
Class of Stock [Line Items] | |||
Maximum number of shares of Company's common stock authorized for issuance (in shares) | 2,600,000 | ||
Shares available (in shares) | 1,100,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Feb. 01, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Contract compliance | |||
Loss Contingencies [Line Items] | |||
Contracts loss contingency accrual | $ 7,800 | $ 5,800 | |
Subsequent event | |||
Loss Contingencies [Line Items] | |||
Payments for legal settlements | $ 3,750 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) - Schedule of Quarterly Financial Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 28, 2018 | Jun. 29, 2018 | Mar. 30, 2018 | Dec. 31, 2017 | Sep. 29, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 329,561 | $ 308,095 | $ 321,132 | $ 320,516 | $ 295,782 | $ 269,625 | $ 259,318 | $ 290,063 | |||
Gross Profit | 30,030 | 29,131 | 29,068 | 26,466 | 26,445 | 24,406 | 25,735 | 25,362 | |||
Operating income | 12,648 | 14,006 | 12,998 | 8,671 | 10,277 | 10,090 | 9,204 | 11,649 | $ 48,323 | $ 41,220 | $ 42,826 |
Net income | $ 10,124 | $ 9,866 | $ 9,195 | $ 6,111 | $ 41,568 | $ 5,800 | $ 5,461 | $ 6,668 | $ 35,296 | $ 59,497 | $ 23,655 |
Basic earnings per share (in dollars per share) | $ 0.90 | $ 0.88 | $ 0.82 | $ 0.55 | $ 3.77 | $ 0.52 | $ 0.50 | $ 0.61 | $ 3.14 | $ 5.40 | $ 2.21 |
Diluted earnings per share (in dollars per share) | $ 0.89 | $ 0.86 | $ 0.81 | $ 0.54 | $ 3.70 | $ 0.51 | $ 0.49 | $ 0.60 | $ 3.10 | $ 5.31 | $ 2.16 |
Weighted average number of shares outstanding - basic (in shares) | 11,262 | 11,248 | 11,235 | 11,146 | 11,026 | 11,075 | 10,987 | 10,909 | 11,224 | 11,021 | 10,714 |
Weighted average number of shares outstanding - diluted (in shares) | 11,369 | 11,406 | 11,383 | 11,338 | 11,234 | 11,272 | 11,191 | 11,075 | 11,378 | 11,209 | 10,974 |