Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 28, 2020 | Jun. 28, 2019 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Vectrus, Inc. | ||
Entity Central Index Key | 0001601548 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 11,523,691 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 457,575,369 | ||
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 | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Revenue | $ 1,382,642 | $ 1,279,304 | $ 1,114,788 |
Cost of revenue | 1,252,711 | 1,164,609 | 1,012,840 |
Selling, general and administrative expenses | 78,316 | 66,372 | 60,728 |
Operating income | 51,615 | 48,323 | 41,220 |
Interest expense, net | (6,470) | (5,071) | (4,640) |
Income from operations before income taxes | 45,145 | 43,252 | 36,580 |
Income tax expense (benefit) | 10,429 | 7,956 | (22,917) |
Net income | $ 34,716 | $ 35,296 | $ 59,497 |
Earnings Per Share | |||
Basic (in dollars per share) | $ 3.03 | $ 3.14 | $ 5.40 |
Diluted (in dollars per share) | $ 2.99 | $ 3.10 | $ 5.31 |
Weighted average common shares outstanding - basic (in shares) | 11,444 | 11,224 | 11,021 |
Weighted average common shares outstanding - diluted (in shares) | 11,612 | 11,378 | 11,209 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net income | $ 34,716 | $ 35,296 | $ 59,497 |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Tax benefit | 230 | ||
Tax benefit | 14 | 86 | |
Net change in derivative instruments | (831) | ||
Net change in derivative instruments | (52) | (155) | |
Foreign currency translation adjustments | (834) | (1,426) | 3,052 |
Accounting Standards Update (ASU) 2018-02 reclassification of certain tax effects to retained earnings | (259) | 0 | 0 |
Other comprehensive (loss) income, net of tax | (1,924) | (1,478) | 2,897 |
Total comprehensive income | 32,792 | 33,818 | 62,394 |
Interest rate swaps | |||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Net change in fair value of derivative instrument | (1,234) | ||
Net change in fair value of derivative instrument | 292 | (240) | |
Foreign currency forwards | |||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Net change in fair value of derivative instrument | $ 173 | ||
Net change in fair value of derivative instrument | $ (358) | $ (1) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash | $ 35,318 | $ 66,145 |
Receivables | 269,239 | 232,119 |
Other current assets | 16,154 | 15,063 |
Total current assets | 320,711 | 313,327 |
Property, plant, and equipment, net | 19,144 | 13,419 |
Goodwill | 261,983 | 233,619 |
Intangible assets, net | 14,926 | 8,630 |
Right-of-use assets | 14,654 | |
Other non-current assets | 5,066 | 3,248 |
Total non-current assets | 315,773 | 258,916 |
Total Assets | 636,484 | 572,243 |
Current liabilities | ||
Accounts payable | 148,015 | 156,393 |
Compensation and other employee benefits | 53,155 | 41,790 |
Short-term debt | 6,500 | 4,500 |
Other accrued liabilities | 34,587 | 22,303 |
Total current liabilities | 242,257 | 224,986 |
Non-current liabilities | ||
Long-term debt, net | 63,041 | 69,137 |
Deferred tax liability | 49,808 | 55,358 |
Other non-current liabilities | 19,997 | 1,462 |
Total non-current liabilities | 132,846 | 125,957 |
Total liabilities | 375,103 | 350,943 |
Commitments and contingencies (Note 18) | ||
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; 11,523,691 and 11,266,906 shares issued and outstanding as of December 31, 2019 and 2018, respectively | 115 | 113 |
Additional paid in capital | 78,757 | 71,729 |
Retained earnings | 187,591 | 152,616 |
Accumulated other comprehensive loss | (5,082) | (3,158) |
Total shareholders' equity | 261,381 | 221,300 |
Total Liabilities and Shareholders' Equity | $ 636,484 | $ 572,243 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
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) | 11,523,691 | 11,266,906 |
Common stock, shares outstanding (in shares) | 11,523,691 | 11,266,906 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | |||
Net income | $ 34,716 | $ 35,296 | $ 59,497 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation expense | 3,379 | 1,798 | 1,686 |
Amortization of intangible assets | 3,111 | 1,999 | 0 |
Loss on disposal of property, plant, and equipment | 62 | 348 | 0 |
Stock-based compensation | 8,262 | 4,096 | 4,467 |
Amortization of debt issuance costs | 404 | 426 | 1,464 |
Changes in assets and liabilities: | |||
Receivables | (21,148) | (24,646) | 178 |
Other assets | 1,537 | (8,193) | 3,455 |
Accounts payable | (11,733) | 29,960 | (4,346) |
Billings in excess of costs | 2,345 | ||
Deferred taxes | (6,772) | 475 | (35,321) |
Compensation and other employee benefits | 9,652 | 178 | 3,256 |
Other liabilities | 6,087 | (1,681) | (1,271) |
Net cash provided by operating activities | 27,557 | 40,056 | 35,410 |
Investing activities | |||
Purchases of capital assets | (16,151) | (10,025) | (2,344) |
Proceeds from the disposition of assets | 5,400 | 33 | 0 |
Acquisition of business, net of cash acquired | (45,074) | (36,855) | 0 |
Net cash (used in) investing activities | (55,825) | (46,847) | (2,344) |
Financing activities | |||
Proceeds from issuance of long-term debt | 0 | 0 | 80,000 |
Repayments of long-term debt | (4,500) | (4,000) | (86,000) |
Proceeds from revolver | 333,500 | 207,000 | 42,500 |
Repayments of revolver | (333,500) | (207,000) | (42,500) |
Proceeds from exercise of stock options | 3,672 | 1,595 | 2,031 |
Payment of debt issuance costs | 0 | 0 | (1,844) |
Payments of employee withholding taxes on share-based compensation | (1,068) | (880) | (1,317) |
Net cash (used in) financing activities | (1,896) | (3,285) | (7,130) |
Exchange rate effect on cash | (663) | (1,232) | 3,866 |
Net change in cash | (30,827) | (11,308) | 29,802 |
Cash-beginning of year | 66,145 | 77,453 | 47,651 |
Cash-end of year | 35,318 | 66,145 | 77,453 |
Supplemental Disclosure of Cash Flow Information: | |||
Interest paid | 6,229 | 4,973 | 5,886 |
Income taxes paid | 4,511 | 11,588 | 4,802 |
Purchase of capital assets on account | $ 556 | $ 1,128 | $ 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, 2016 | 10,895 | ||||
Balance at Dec. 31, 2016 | $ 117,401 | $ 109 | $ 63,910 | $ 57,959 | $ (4,577) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
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] | |||||
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) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 34,716 | 34,716 | |||
Foreign currency translation adjustments | (834) | (834) | |||
Unrealized gain (loss) on cash flow hedge | (831) | (831) | |||
Employee stock awards and stock options (in shares) | 257 | ||||
Employee stock awards and stock options | 2,604 | $ 2 | 2,602 | ||
Stock-based compensation | 4,426 | 4,426 | |||
Balance (in shares) at Dec. 31, 2019 | 11,524 | ||||
Balance at Dec. 31, 2019 | $ 261,381 | $ 115 | $ 78,757 | $ 187,591 | $ (5,082) |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
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. The Company operates as one segment and provides the following services and offerings: facility and logistics services, information technology and network communications services, and operational technologies and converged solutions. Unless the context otherwise requires, references in these notes to "Vectrus", "we," "us," "our," "the Company" and "our Company" refer to Vectrus, Inc. Vectrus was incorporated in the State of Indiana in February 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. 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 selling, general and administrative expenses 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, 2019 and December 31, 2018, our investment balance in HDSS was $1.4 million and $2.4 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. 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, substantially all of our revenue for the years ended December 31, 2019 , 2018 and 2017 was from the U.S. government. Revenue Recognition 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 Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (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 performance obligations 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 negotiations with the customer on contract modifications. 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 18, "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. Our contract modifications, except for those to exercise option years, have not been distinct from the existing contract and have been accounted for as if they were part of that existing contract. 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 years ended December 31, 2019 , 2018 and 2017, we had total revenue of $1.4 billion , $1.3 billion , and $1.1 billion , respectively, substantially all of which was derived from U.S. government customers. For the years ended December 31, 2019 , 2018 and 2017 , we generated approximately 69% , 73% and 82% , respectively, of our total revenue from the U.S. Army. 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. 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. Stock-Based Compensation We recognize stock-based compensation expense based on the grant date fair values of the equity instruments issued or on the fair values of the liabilities incurred. The expense is recognized primarily within selling, general and administrative expenses over the requisite service periods of the awards, which are generally equivalent to the vesting terms. 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 are generally computed using either an accelerated or straight-line method and is based on estimated useful lives or lease terms as follows: Years Building improvements 3 – 10 Machinery, equipment and vehicles 3 – 12 Furniture, fixtures, and office equipment 3 – 7 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. When carrying value exceeds the undiscounted future cash flow, an impairment is recorded when the carrying value of the asset exceeds its estimated fair value based on a discounted cash flow approach or, when available and appropriate, comparable market values. 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 Advantor Systems Corporation and Advantor Systems, LLC (collectively, Advantor) in 2019. See Note 5, "Acquisitions" for further discussion of goodwill recognized in the Advantor 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. Finite lived 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. Leases On January 1, 2019, the Company adopted the new lease accounting standard ASC Topic 842, Leases (ASC Topic 842). Operating leases are included on our Consolidated Balance Sheets as right-of-use (ROU) assets, other accrued liabilities and other non-current liabilities. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Because most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate as of January 1, 2019 was applied to operating leases in effect as of that date. The lease ROU assets also include any prepaid lease payments and exclude lease incentives. Many of our leases include one or more options to renew or terminate the lease, solely at our discretion. Such options are factored into the lease term when it is reasonably certain that we will exercise the option. Lease expense for lease payments is recognized on a straight-line basis over the term of the lease. As allowed under ASC Topic 842, the Company elected the package of practical expedients permitted under the transition guidance which allowed the Company to carry forward the historical lease classification, assessment of whether a contract was or contained a lease and assessment of initial direct costs. In addition, we have made policy elections to apply the short-term leases practical expedient, whereby leases with a term of 12 months or less are not recorded on our balance sheet, and the practical expedient to not separate lease components from non-lease components. The latter expedient is applied to all of our leases. We did not elect to apply the hindsight practical expedient in determining lease terms and assessing impairment of ROU assets. See Note 2, "Recent Accounting Pronouncements" and Note 13, "Leases" for further information. 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. 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. 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 10, "Derivative Instruments," for additional information regarding our derivative activities. 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. 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. 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 expenses and have historically been immaterial. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS Accounting Standards Issued but Not Effective in 2019 In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2018-15 to provide guidance on accounting for implementation costs incurred in a cloud computing arrangement (CCA) hosted by the vendor - that is a service contract. Under the new guidance, a customer will apply the same criteria for capitalizing implementation costs of a CCA as it would for an on-premises internal-use software license. Presentation of such costs, however, will vary from those required for licensed internal-use software. ASU 2018-15 is effective January 1, 2020 and can be adopted prospectively or retrospectively. Vectrus has elected to adopt the ASU on a prospective basis. The standard is not expected to have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued 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, in instances where the carrying amount exceeds the fair value, recognizing an impairment charge for the amount by which the carrying amount exceeds fair value. ASU 2017-04 is to be applied on a prospective basis and is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The standard is not expected to have a material impact on our consolidated financial statements. ASU 2016-13 was issued in June 2016 with the intent of providing financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Current treatment uses the incurred loss methodology for recognizing credit losses that delays the recognition until it is probable a loss has been incurred. The accounting update adds a new impairment model, known as the current expected credit loss model, which is based on expected losses rather than incurred losses. Under the new guidance, an entity will recognize as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. ASU 2016-13 is effective January 1, 2020. The standard is not expected to have a material impact on our consolidated financial statements. Other new pronouncements issued but not effective until after December 31, 2019 are not expected to have a material impact on our financial position, results of operations or cash flows. Accounting Standards That Were Adopted In February 2016, the FASB issued ASU 2016-02. The objective of ASU 2016-02, and its subsequent amendments, is to recognize lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. The standard requires lessees to recognize most leases on their balance sheets but does not change the manner in which expenses are recorded in the income statement. We adopted the standard during the first quarter of 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting comparative periods presented. See Note 1, "Description of Business and Summary of Significant Accounting Policies" and Note 13, "Leases" for further information. In 2017, the FASB issued ASU 2017-12, which provided guidance to amend and simplify the application of hedge accounting guidance to better portray the economic results of risk management activities in the financial statements. The guidance expands the ability to hedge nonfinancial and financial risk components, eliminates the requirements to separately measure and report hedge ineffectiveness, as well as eases certain hedge effectiveness assessment requirements. We adopted the provisions of ASU 2017-12 during the first quarter of 2019. Adoption of this guidance did not have a material impact on our financial statements or disclosures. In February 2018, the FASB issued ASU 2018-02, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (Tax Act). The Company adopted the provisions of ASU 2018-02 during the first quarter of 2019 and recorded a $0.3 million decrease to accumulated other comprehensive income and a corresponding increase to beginning retained earnings to reflect the changes in the U.S. federal corporate income tax rate as a result of the Tax Act. As a result of the adoption of ASU 2018-02, the Company's policy to release income tax effects in accumulated other comprehensive income (loss) is consistent with the underlying book method. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2019 | |
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 performance obligations 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. Modifications to exercise option years create new enforceable rights and obligations and therefore are treated as separate performance obligations. The Company's 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. The Company's 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 decreased by $8.5 million to $849 million as of December 31, 2019 as compared to $858 million as of December 31, 2018 . We expect to recognize approximately 86% of the remaining performance obligations as of December 31, 2019 as revenue in 2020. Remaining performance obligations as of December 31, 2019 and December 31, 2018 are presented in the following table: Year Ended December 31, (In millions) 2019 2018 Performance Obligations $ 849 $ 858 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 for the years ended December 31, 2019 , 2018 , and 2017 were favorable by $3.1 million , $1.6 million , and $11.6 million , respectively. For the years ended December 31, 2019 , 2018 , and 2017 , the net favorable adjustments to operating income increased revenue by $4.4 million, $0.8 million and $9.7 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 2019 , 2018 and 2017 are as follows: Year Ended December 31, (In thousands) 2019 2018 2017 Cost-plus and cost-reimbursable ¹ $ 1,046,982 $ 995,415 $ 818,908 Firm-fixed-price 335,660 283,889 295,880 Total revenue $ 1,382,642 $ 1,279,304 $ 1,114,788 ¹ Includes time and material contracts Revenue by geographic region in which the contract is performed for the years 2019 , 2018 and 2017 are as follows: Year Ended December 31, (In thousands) 2019 2018 2017 Middle East $ 939,685 $ 889,620 $ 871,821 United States 304,947 269,750 168,003 Europe 138,010 119,934 74,964 Total revenue $ 1,382,642 $ 1,279,304 $ 1,114,788 Revenue by contract relationship for the years 2019 , 2018 and 2017 are as follows: Year Ended December 31, (In thousands) 2019 2018 2017 Prime contractor $ 1,296,015 $ 1,200,726 $ 1,083,485 Subcontractor 86,627 78,578 31,303 Total revenue $ 1,382,642 $ 1,279,304 $ 1,114,788 Revenue by customer for the years 2019 , 2018 and 2017 are as follows: Year Ended December 31, (In thousands) 2019 2018 2017 Army $ 948,235 $ 934,427 $ 915,554 Air Force 317,701 259,511 177,338 Navy 56,241 38,802 21,896 Other 60,465 46,564 — Total revenue $ 1,382,642 $ 1,279,304 $ 1,114,788 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. As of December 31, 2019 , we had contract assets of $186.5 million . Refer to Note 8, "Receivables," for additional information regarding the composition of our receivables balances. As of December 31, 2019 , our contract liabilities were insignificant. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 , 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, 2019 , 2018 and 2017 , respectively, are as follows: (in thousands) 2019 2018 2017 Income Components United States $ 39,487 $ 41,449 $ 34,386 Foreign 5,658 1,803 2,194 Total pre-tax income from continuing operations $ 45,145 $ 43,252 $ 36,580 Income tax expense components Current income tax provision United States-Federal $ 12,442 $ 6,305 $ 11,952 United States-State and local 866 653 206 Foreign 3,883 515 758 Total current income tax provision 17,191 7,473 12,916 Deferred income tax provision (benefit) United States-Federal (6,688 ) (79 ) (35,486 ) United States-State and local (387 ) 52 (260 ) Foreign 313 510 (87 ) Total deferred income tax provision (benefit) (6,762 ) 483 (35,833 ) Total income tax expense (benefit) $ 10,429 $ 7,956 $ (22,917 ) Effective income tax rate 23.1 % 18.4 % (62.6 )% A reconciliation of the income tax provision at the U.S. statutory rate to the effective income tax rate as reported is as follows: 2019 2018 2017 Tax provision at U.S. statutory rate 21.0 % 21.0 % 35.0 % State and local income tax, net of federal benefit 0.8 % 1.3 % (0.1 )% Foreign taxes 0.5 % 0.3 % (2.5 )% Uncertain tax positions 8.0 % 3.4 % — % Prior year true-ups 0.4 % 0.4 % 0.3 % Foreign derived intangible income deduction (8.0 )% (2.9 )% — % Credits (1.3 )% (0.8 )% — % Other 1.7 % 0.4 % 1.7 % Impact of federal rate change — % (4.7 )% (97.0 )% Effective income tax rate 23.1 % 18.4 % (62.6 )% 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) 2019 2018 Deferred Tax Assets Compensation and benefits $ 5,647 $ 4,444 Reserves 4,012 3,028 Lease liability 3,403 — Other 1,049 802 Net operating losses 1,675 295 Total deferred tax assets $ 15,786 $ 8,569 Deferred Tax Liabilities Goodwill and intangibles $ (46,604 ) $ (46,832 ) Unbilled receivables (10,064 ) (15,112 ) Property, plant and equipment, net (1,381 ) (709 ) Right-of-use assets (3,208 ) — Other liabilities (2,673 ) (1,192 ) Total deferred tax liabilities (63,930 ) (63,845 ) Net deferred tax liabilities $ (48,144 ) $ (55,276 ) Uncertain Tax Positions A reconciliation of the beginning and ending amount of unrecognized tax benefits as of December 31, 2019 , 2018 and 2017 is as follows: (in thousands) 2019 2018 2017 Unrecognized tax benefits-January 1, $ 1,755 $ — $ 429 Additions for: Current year tax positions 3,613 1,275 — Prior year tax positions 2,577 480 — Reductions for: Settlements with tax authorities — — (429 ) Prior year tax positions — — — Unrecognized tax benefits-December 31, $ 7,945 $ 1,755 $ — As of December 31, 2019 , 2018 and 2017 , unrecognized tax benefits from uncertain tax positions were $7.9 million , $1.8 million and $0.0 million , respectively. We generated $3.6 million of unrecognized benefits during the year ended December 31, 2019 related to a current year foreign derived intangible deduction (FDII) position. We generated $2.6 million of unrecognized tax benefits during the year ended December 31, 2019 related to a prior year FDII deduction position. We are awaiting further guidance on the FDII deduction. During the year ended December 31, 2018, we generated $1.3 million of unrecognized benefits related to a current year FDII position and we generated $0.5 million of unrecognized tax benefits during the year related to prior year positions as a result of timing differences that were included on our 2017 income tax return. 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 2019 , the Company recognized $0.2 million of interest expense related to tax matters. No interest expense related to tax matters was recognized during 2018 and 2017. The Company's earliest open tax year in the U.S. is 2016. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS Advantor On July 8, 2019, we acquired Advantor from Infrasafe Holding, Inc. and Infrasafe, LLC (collectively, Infrasafe). Advantor is a leading provider of integrated electronic security systems to the U.S. government. 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 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 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 $45.1 million , consisting of the purchase price of $44.0 million , net of cash acquired, and $1.1 million for working capital in excess of the working capital requirement agreed upon in the stock purchase agreement. The acquisition was funded by utilizing cash on hand and available capacity from our Amended Revolver (as defined in Note 9, “Debt”). A breakdown of the preliminary purchase price allocation, net of cash acquired, is as follows: (In thousands) Allocation of Purchase Price Receivables $ 11,535 Other current assets 2,719 Property, plant and equipment 155 Goodwill 28,364 Intangible assets 8,300 Other non-current assets 1,868 Accounts payable (4,223 ) Other current liabilities (1,519 ) Accrued compensation (907 ) Other non-current liabilities (1,218 ) Purchase price, net of cash acquired $ 45,074 Adjustments, if any, to the initial purchase accounting for the acquired net assets will be completed, as needed, up to one year from the acquisition date as we obtain additional information regarding facts and circumstances that existed as of the acquisition date. The Company recognized two intangible assets related to customer contracts (backlog) and the Advantor trade name arising from the acquisition. The fair value of the customer contracts was $7.2 million , and the fair value of the Advantor trade name was $1.1 million with amortization periods of 5.0 years and 4.5 years , respectively. As of December 31, 2019, the weighted-average amortization period for these intangible assets was 4.5 years . The Company recorded amortization expense of $0.8 million during 2019. The amortization expense is included in cost of revenue in our Consolidated Statements of Income. Additionally, the Company recognized goodwill of $28.4 million arising from the acquisition, which relates primarily to acquired product and services strengthening our advance into a higher value, technology-enabled and differentiated platform, as well as extending our facilities and logistics services to include the electronic protection and security of facilities. Goodwill also includes other intangibles that do not qualify for separate recognition. The goodwill recognized for the Advantor acquisition is fully deductible for income tax purposes. Through December 31, 2019, the Company recorded acquisition-related costs of $1.0 million . These costs are included in selling, general and administrative expenses in our Consolidated Statements of Income and do not reflect any other one-time internal non-recurring integration costs. Advantor's results of operations have been included in our Consolidated Statements of Income for the period subsequent to acquisition on July 8, 2019. For the year ended December 31, 2019, Advantor contributed $22.7 million of revenue and an insignificant amount of income from operations before income taxes to the Company's Statement of Income for the year ended December 31, 2019. For the year ended December 31, 2018, on a pro forma basis, the acquired business would have recognized revenue of $35.5 million and an insignificant amount of income from operations before income taxes to the Company's Statement of Income for the year ended December 31, 2018. SENTEL On January 23, 2018, the Company acquired 100% of the outstanding common stock of SENTEL Corporation (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 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 Vectrus Systems Corporation (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 9, "Debt"). A breakdown of the purchase price allocation, net of cash acquired, is as follows: (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 With the acquisition of SENTEL, the Company recognized two intangible assets relating to customer contracts, backlog and contract re-competes. 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. Additionally, the Company 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. SENTEL's results of operations have been included in our Consolidated Statements of Income for the period subsequent to 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 $107.0 million of revenue. Income from operations before income taxes for SENTEL was insignificant in both 2018 and 2017. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure | GOODWILL AND INTANGIBLE ASSETS The Company tests goodwill for impairment as of October 1 each year, or more frequently should circumstances change or events occur that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The annual tests performed in the three years ended December 31, 2019 resulted in no impairment of goodwill. The change in the net carrying amount of goodwill for 2018 and 2019 is as follows (in thousands): Balance at December 31, 2017 $ 216,930 Acquisition of SENTEL 16,689 Balance at December 31, 2018 $ 233,619 Acquisition of Advantor 28,364 Balance at December 31, 2019 $ 261,983 Other identifiable intangible assets consist of the following: December 31, 2019 December 31, 2018 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Contract backlogs and recompetes $ 11,600 $ (4,300 ) $ 7,300 $ 10,500 $ (1,999 ) $ 8,501 Customer contracts 7,200 (692 ) 6,508 $ — — — Trade names and other 1,236 (118 ) 1,118 129 — 129 Total intangible assets $ 20,036 $ (5,110 ) $ 14,926 $ 10,629 $ (1,999 ) $ 8,630 The increase during 2019 was due to $8.3 million from the acquisition of Advantor and $1.1 million of amortizable intangible assets purchased during the first quarter of 2019. This increase was partially offset by intangible amortization expense of approximately $3.1 million and $2.0 million for years ended 2019 and 2018, respectively. As of December 31, 2019, the weighted-average intangible asset amortization period was 4.2 years . The estimated amortization expense for intangible assets for the next five years is as follows (in thousands): Period Amortization 2020 $ 4,029 2021 $ 4,029 2022 $ 2,501 2023 $ 2,404 2024 $ 1,297 After 2024 $ 530 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
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) 2019 2018 2017 Net Income $ 34,716 $ 35,296 $ 59,497 Weighted average common shares outstanding 11,444 11,224 11,021 Add: Dilutive impact of stock options 47 63 67 Add: Dilutive impact of restricted stock units 121 91 121 Diluted weighted average common shares outstanding 11,612 11,378 11,209 Earnings per share Basic $ 3.03 $ 3.14 $ 5.40 Diluted $ 2.99 $ 3.10 $ 5.31 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) 2019 2018 2017 Anti-dilutive stock options — 3 8 Anti-dilutive restricted stock units 4 — — Total 4 3 8 |
Receivables
Receivables | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Receivables | RECEIVABLES Receivables were comprised of the following: December 31, (In thousands) 2019 2018 Billed receivables $ 71,068 $ 44,868 Unbilled receivables (contract assets) 186,460 181,009 Other 11,711 6,242 Receivables $ 269,239 $ 232,119 As of December 31, 2019 and 2018 , substantially 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 $6.6 million of our unbilled receivables as of December 31, 2019 may not be collected within the next 12 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. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
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). Additionally, the Amendment Agreement includes an accordion feature that allows the Company to draw up to an additional $100.0 million subject to the lender's consent on the same terms and conditions as the existing commitments. The Amendment Agreement also permits the Company to borrow up to $75.0 million in unsecured debt as long as the aggregated sum of both the unsecured debt and the accordion does not exceed $100.0 million . 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 , $0.4 million and $ 1.4 million , which included $0.8 million of unamortized debt issuance costs as of the date of the Amendment Agreement, for the years ended December 31, 2019, 2018 and 2017, respectively. 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, 2019 , the balance outstanding under the Amended Term Loan was $70.5 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, 2019. Up to $25.0 million of the Amended Revolver is available for the issuance of letters of credit. As of December 31, 2019 , there were four letters of credit outstanding in the aggregate amount of $3.0 million , which reduced our borrowing availability under the Amended Revolver to $117.0 million . The Company's aggregate scheduled maturities of the Amended Term Loan as of December 31, 2019 , are as follows: (In thousands) Payments due 2020 $ 6,500 2021 8,600 2022 55,400 Total $ 70,500 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. 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, 2019 , we had a ratio of total consolidated indebtedness to EBITDA of 0.97 to 1.00 and a ratio of consolidated EBITDA to consolidated interest expense of 11.82 to 1.00 . We were in compliance with all covenants related to the Amended Credit Facilities as of December 31, 2019 . 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, 2019 was 3.80% . 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, 2019 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, 2019 were as follows: December 31, 2019 (In thousands) Carrying Amount Fair Value Short-term debt $ 6,500 $ 6,500 Long-term debt 64,000 64,000 Total debt 70,500 $ 70,500 Debt financing fees (959 ) Total debt with debt financing fees $ 69,541 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 |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS Interest Rate Derivative Instruments The Company is exposed to the risk that our earnings and cash flows could be adversely impacted due to fluctuations in interest rates. To manage this risk, the Company periodically enters into interest rate swaps 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. 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. Our interest rate swaps are designated and qualify as effective cash flow hedges. The contracts, with a notional amount totaling $53.0 million at December 31, 2019 and expiration dates through November 2022, are recorded at fair value. The following table summarizes the amount at fair value and location of the derivative instruments in the Consolidated Balance Sheet as of December 31, 2019 : Fair Value (In thousands) Balance sheet caption Amount Interest rate swap designated as cash flow hedge Other accrued liabilities $ 323 Interest rate swap designated as cash flow hedge Other non-current liabilities $ 686 The following table summarizes the amount at fair value and location of the derivative instruments 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 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, 2019 , 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. Net interest rate derivative losses of less than $0.1 million and approximately $0.2 million were reclassified from accumulated other comprehensive loss to interest expense in our Consolidated Statements of Income during 2019 and 2018, respectively. A gain of $0.4 million from our interest rate swaps was recognized in interest expense for the year ended December 31, 2017. We expect $0.3 million of existing interest rate swap losses reported in accumulated other comprehensive loss as of December 31, 2019 to be reclassified into earnings within the next 12 months. 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, 2019, we had economically hedged certain portions of our foreign currency risk in anticipated transactions using derivative instruments with expiration dates through December 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, 2019. 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. Net foreign currency derivative losses of $0.6 million and less than $0.1 million were recognized in selling, general and administrative expense, during 2019 and 2018, respectively. The 2018 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. We expect $0.2 million of existing foreign currency forward contract losses reported in accumulated other comprehensive loss as of December 31, 2019 are to be reclassified into earnings within the next 12 months. 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, 2019. Fair Value (In thousands) Balance sheet caption Amount Foreign currency forward contracts designated as cash flow hedge Other accrued liabilities $ 185 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, 2019, 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 $7.7 million . |
Composition of Certain Financia
Composition of Certain Financial Statement Captions | 12 Months Ended |
Dec. 31, 2019 | |
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) 2019 2018 Accrued salaries and wages $ 32,854 $ 20,435 Accrued bonus 6,165 7,261 Accrued employee benefits 14,136 14,094 Total $ 53,155 $ 41,790 Other accrued liabilities Other accrued liabilities were comprised of the following at December 31: (In thousands) 2019 2018 Workers' compensation, auto and general liability reserve $ 4,264 $ 5,369 Current operating lease liabilities 5,743 — Contract related reserves 14,057 7,133 Other accrued liabilities 10,523 9,801 Total $ 34,587 $ 22,303 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
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) 2019 2018 Buildings and improvements $ 1,830 $ 1,168 Machinery and equipment 15,052 14,242 Office furniture and equipment, computers and software 13,298 5,877 Property, plant and equipment, gross 30,180 21,287 Less: accumulated depreciation and amortization (11,036 ) (7,868 ) Property, plant and equipment, net $ 19,144 $ 13,419 Depreciation expense of property, plant and equipment was $3.4 million , $1.8 million and $1.7 million in 2019 , 2018 , and 2017 , respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases and Rentals | LEASES We determine whether an arrangement contains a lease at inception. We have operating leases for office space, apartments, vehicles, and machinery and equipment. Our operating leases have lease terms of less than one year to ten years. We do not separate lease components from non-lease components (e.g., common area maintenance, property taxes, and insurance) but account for both components in a contract as a single lease component. The components of lease expense are as follows: Year Ended (In thousands) December 31, 2019 Operating lease expense $ 14,747 Variable lease expense 713 Short-term lease expense 46,060 Total lease expense $ 61,520 Supplemental balance sheet information related to our operating leases is as follows: Year Ended (In thousands) December 31, 2019 Right-of-use assets $ 14,654 Current lease liabilities (recorded in other accrued liabilities) $ 5,743 Long-term lease liabilities (recorded in other non-current liabilities) 9,811 Total operating lease liabilities $ 15,554 Initial ROU assets of $19.2 million were recognized as non-cash asset additions when the new lease accounting standard was adopted on January 1, 2019. Additional ROU assets from operating lease arrangements of $7.2 million were recognized as non-cash asset additions during the year ended December 31, 2019, and; ROU assets of $1.9 million were recognized with the Advantor acquisition. The weighted average remaining lease term and discount rate for our operating leases at December 31, 2019 were 4.5 years and 6.2% , respectively. Maturities of lease liabilities at December 31, 2019 were as follows: (In thousands) Payments due 2020 $ 6,474 2021 3,343 2022 2,612 2023 1,426 2024 1,030 2024 and later 3,507 Total minimum lease payments $ 18,392 |
Post Employment Benefit Plans
Post Employment Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Post Employment Benefit Plans | POST EMPLOYMENT BENEFIT PLANS We sponsor two defined contribution savings plans, with the addition of Advantor, 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 eligible employee contributions up to certain limits of employee base pay. Our portion of the matching contributions charged to income amounted to $6.8 million and $5.2 million for the years ended December 31, 2019 and 2018 , 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, 2019 and December 31, 2018, we had accrued $0.1 million of contributions under the Excess Savings Plan. The Company has an amended and restated Senior Executive Severance Pay Plan (the Amended Plan) that has been effective since 2016. Termination benefits offered under the 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, 2019 | |
Share-based Payment Arrangement [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, 2019 , there were 1.0 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) 2019 2018 Compensation costs for equity-based awards $ 4,426 $ 3,490 Compensation costs for liability-based awards 3,836 606 Total compensation costs, pre-tax $ 8,262 $ 4,096 Future tax benefit $ 1,792 $ 888 Liability-based awards are revalued at the end of each reporting period to reflect changes in fair value. The Company paid $0.8 million and $1.0 million related to liability-based compensation awards during the years ended December 31, 2019 and 2018 , respectively. At December 31, 2019 , total unrecognized compensation costs related to equity-based awards and liability-based awards were $4.6 million and $3.7 million , respectively, which are expected to be recognized ratably over a weighted average period of 1.68 years and 1.79 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, 2019 , 2018 and 2017 and changes during the years then ended is presented below: Year Ended December 31, 2019 2018 2017 (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, 251 $23.00 325 $22.74 384 $21.47 Granted — $0.00 — $0.00 75 $22.82 Exercised (161 ) $22.74 (73 ) $21.87 (110 ) $18.41 Forfeited, canceled or expired (13 ) $24.47 (1 ) $20.62 (24 ) $22.61 Outstanding at December 31, 77 $23.30 251 $23.00 325 $22.74 Options exercisable 59 $23.35 184 $23.35 201 $22.57 The following table summarizes information about NQOs outstanding and exercisable as of December 31, 2019 : (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 $20.06 - $21.98 58 6.67 $ 21.49 $ 1,720 43 6.49 $ 21.34 $ 1,291 $24.61 - $32.49 19 6.18 29.21 434 16 5.91 29.24 361 Total options and aggregate intrinsic value 77 6.52 $ 23.30 $ 2,154 59 6.30 $ 23.35 $ 1,652 The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on our closing stock price of $51.26 per share on December 31, 2019 , which would have been received by the option holders if all option holders had exercised their options as of that date. There were no exercisable options "out of the money" as of December 31, 2019 . The aggregate intrinsic value of options exercised during the years ended December 31, 2019 , 2018 and 2017 was $2.1 million , $0.1 million and $1.4 million , respectively. As of December 31, 2019 , the total number of stock options expected to vest (including those that have already vested) was 0.1 million . These stock options have a weighted-average exercise price of $23.30 per share, an aggregate intrinsic value of $2.2 million and a weighted average remaining contractual life of 6.5 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 2019 or 2018. The following weighted-average assumptions were utilized in deriving the fair value for NQOs: Year Ended December 31, 2017 Expected volatility 30.8 % Expected life (in years) 7 Risk-free rates 2.30 % Weighted-average grant date fair value per share $ 8.48 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, 2019, 2018, and 2017. Year Ended December 31, 2019 2018 2017 (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, 257 $ 28.90 221 $ 23.58 285 $23.01 Granted 206 $ 30.03 163 $ 33.08 144 $23.74 Vested (138 ) $ 31.92 (110 ) $ 24.93 (171 ) $23.18 Forfeited or canceled (24 ) $ 35.57 (17 ) $ 25.54 (37 ) $21.69 Outstanding at December 31, 301 $ 30.30 257 $ 28.90 221 $23.58 The total grant date fair value of RSUs that vested during the years ended December 31, 2019 , 2018 and 2017 was $4.1 million , $3.3 million and $4.5 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, 2019 , 2018 , and 2017 , we granted TSR awards with aggregate target TSR values of $2.5 million , $2.2 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, 2019 , 2018, and 2017, we recorded $2.9 million , $0.3 million and $1.0 million , respectively, in compensation expense related to TSR awards. Payments of $1.6 million were made in January 2020 for the 2017 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 2018 and 2019 TSR awards are expected to be made in January 2021 and January 2022, respectively. As of December 31, 2019 and 2018 , we had $4.0 million and $1.5 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, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | SHAREHOLDERS' EQUITY As of December 31, 2019 , our authorized capital was comprised of 100.0 million shares of common stock and 10.0 million shares of preferred stock. At December 31, 2019 , there were 11.5 million shares of common stock issued and outstanding. No preferred stock was issued and outstanding at December 31, 2019 and 2018 . 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, 2019 , we had a remaining balance of 1.0 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, 2019 | |
Related Party Transactions [Abstract] | |
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, and Technology License Agreement. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
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 $12.1 million and $7.8 million as of December 31, 2019 and 2018 , 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 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. 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 September 2014. We have recently been in discussions with our Former Parent regarding the negotiated adjustments for 2007-2014 and believe that our potential cumulative liability for these years is insignificant. In June 2019, the U.S. government provided us with the Contracting Officer’s Final Decision (COFD) for the years 2007-2010 related to Former Parent costs. In August 2019, we filed an appeal of the COFD with the Armed Services Board of Contract Appeals (ASBCA). In December 2019, the ASBCA extended the jointly requested stay of the proceedings through March 30, 2020 to enable ongoing discussions regarding the matter between Vectrus and our Former Parent. We believe we are fully indemnified under our Distribution Agreement with our Former Parent and have notified our Former Parent of our appeal of the U.S. government's decision in this matter. We believe the amount of indemnity required is insignificant. Although the ultimate outcome of any legal matter 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 claims or proceedings, individually or in the aggregate, will have a material adverse effect on our cash flow, results of operations or financial condition. 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. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 and 2018 : 2019 QUARTERS 2018 QUARTERS (In thousands, except per share data) 1st 2nd 3rd 4th 1st 2nd 3rd 4th Total revenue $ 325,928 $ 331,589 $ 359,854 $ 365,271 $ 320,516 $ 321,132 $ 308,095 $ 329,561 Gross Profit 30,332 31,036 34,317 34,246 26,466 29,068 29,131 30,030 Operating income 10,413 11,193 14,383 15,626 8,671 12,998 14,006 12,648 Net income 7,091 7,617 9,382 10,626 6,111 9,195 9,866 10,124 Basic earnings per share $ 0.63 $ 0.66 $ 0.82 $ 0.92 $ 0.55 $ 0.82 $ 0.88 $ 0.90 Diluted earnings per share $ 0.62 $ 0.66 $ 0.80 $ 0.91 $ 0.54 $ 0.81 $ 0.86 $ 0.89 Weighted average number of shares outstanding Basic 11,292 11,455 11,506 11,515 11,146 11,235 11,248 11,262 Diluted 11,399 11,605 11,678 11,728 11,338 11,383 11,406 11,369 |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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. The Company operates as one segment and provides the following services and offerings: facility and logistics services, information technology and network communications services, and operational technologies and converged solutions. Unless the context otherwise requires, references in these notes to "Vectrus", "we," "us," "our," "the Company" and "our Company" refer to Vectrus, Inc. Vectrus was incorporated in the State of Indiana in February 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. 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 selling, general and administrative expenses 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. |
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, substantially all of our revenue for the years ended December 31, 2019 , 2018 and 2017 was from the U.S. government. |
Revenue Recognition | Revenue Recognition 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 Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (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 performance obligations 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 negotiations with the customer on contract modifications. 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 18, "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. Our contract modifications, except for those to exercise option years, have not been distinct from the existing contract and have been accounted for as if they were part of that existing contract. 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 years ended December 31, 2019 , 2018 and 2017, we had total revenue of $1.4 billion , $1.3 billion , and $1.1 billion , respectively, substantially all of which was derived from U.S. government customers. For the years ended December 31, 2019 , 2018 and 2017 , we generated approximately 69% , 73% and 82% , respectively, of our total revenue from the U.S. Army. |
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. |
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. |
Share-Based Compensation | Stock-Based Compensation We recognize stock-based compensation expense based on the grant date fair values of the equity instruments issued or on the fair values of the liabilities incurred. The expense is recognized primarily within selling, general and administrative expenses over the requisite service periods of the awards, which are generally equivalent to the vesting terms. |
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 are generally computed using either an accelerated or straight-line method and is based on estimated useful lives or lease terms as follows: Years Building improvements 3 – 10 Machinery, equipment and vehicles 3 – 12 Furniture, fixtures, and office equipment 3 – 7 |
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. When carrying value exceeds the undiscounted future cash flow, an impairment is recorded when the carrying value of the asset exceeds its estimated fair value based on a discounted cash flow approach or, when available and appropriate, comparable market values. |
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 Advantor Systems Corporation and Advantor Systems, LLC (collectively, Advantor) in 2019. See Note 5, "Acquisitions" for further discussion of goodwill recognized in the Advantor 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. Finite lived 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. |
Leases | Leases On January 1, 2019, the Company adopted the new lease accounting standard ASC Topic 842, Leases (ASC Topic 842). Operating leases are included on our Consolidated Balance Sheets as right-of-use (ROU) assets, other accrued liabilities and other non-current liabilities. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Because most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate as of January 1, 2019 was applied to operating leases in effect as of that date. The lease ROU assets also include any prepaid lease payments and exclude lease incentives. Many of our leases include one or more options to renew or terminate the lease, solely at our discretion. Such options are factored into the lease term when it is reasonably certain that we will exercise the option. Lease expense for lease payments is recognized on a straight-line basis over the term of the lease. As allowed under ASC Topic 842, the Company elected the package of practical expedients permitted under the transition guidance which allowed the Company to carry forward the historical lease classification, assessment of whether a contract was or contained a lease and assessment of initial direct costs. In addition, we have made policy elections to apply the short-term leases practical expedient, whereby leases with a term of 12 months or less are not recorded on our balance sheet, and the practical expedient to not separate lease components from non-lease components. The latter expedient is applied to all of our leases. We did not elect to apply the hindsight practical expedient in determining lease terms and assessing impairment of ROU assets. See Note 2, "Recent Accounting Pronouncements" and Note 13, "Leases" for further information. |
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. |
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. |
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. Refer to Note 10, "Derivative Instruments," for additional information regarding our derivative activities. |
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. |
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. |
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 expenses and have historically been immaterial. |
Recent Accounting Pronouncements | Accounting Standards Issued but Not Effective in 2019 In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2018-15 to provide guidance on accounting for implementation costs incurred in a cloud computing arrangement (CCA) hosted by the vendor - that is a service contract. Under the new guidance, a customer will apply the same criteria for capitalizing implementation costs of a CCA as it would for an on-premises internal-use software license. Presentation of such costs, however, will vary from those required for licensed internal-use software. ASU 2018-15 is effective January 1, 2020 and can be adopted prospectively or retrospectively. Vectrus has elected to adopt the ASU on a prospective basis. The standard is not expected to have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued 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, in instances where the carrying amount exceeds the fair value, recognizing an impairment charge for the amount by which the carrying amount exceeds fair value. ASU 2017-04 is to be applied on a prospective basis and is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The standard is not expected to have a material impact on our consolidated financial statements. ASU 2016-13 was issued in June 2016 with the intent of providing financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Current treatment uses the incurred loss methodology for recognizing credit losses that delays the recognition until it is probable a loss has been incurred. The accounting update adds a new impairment model, known as the current expected credit loss model, which is based on expected losses rather than incurred losses. Under the new guidance, an entity will recognize as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. ASU 2016-13 is effective January 1, 2020. The standard is not expected to have a material impact on our consolidated financial statements. Other new pronouncements issued but not effective until after December 31, 2019 are not expected to have a material impact on our financial position, results of operations or cash flows. Accounting Standards That Were Adopted In February 2016, the FASB issued ASU 2016-02. The objective of ASU 2016-02, and its subsequent amendments, is to recognize lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. The standard requires lessees to recognize most leases on their balance sheets but does not change the manner in which expenses are recorded in the income statement. We adopted the standard during the first quarter of 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting comparative periods presented. See Note 1, "Description of Business and Summary of Significant Accounting Policies" and Note 13, "Leases" for further information. In 2017, the FASB issued ASU 2017-12, which provided guidance to amend and simplify the application of hedge accounting guidance to better portray the economic results of risk management activities in the financial statements. The guidance expands the ability to hedge nonfinancial and financial risk components, eliminates the requirements to separately measure and report hedge ineffectiveness, as well as eases certain hedge effectiveness assessment requirements. We adopted the provisions of ASU 2017-12 during the first quarter of 2019. Adoption of this guidance did not have a material impact on our financial statements or disclosures. In February 2018, the FASB issued ASU 2018-02, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (Tax Act). The Company adopted the provisions of ASU 2018-02 during the first quarter of 2019 and recorded a $0.3 million decrease to accumulated other comprehensive income and a corresponding increase to beginning retained earnings to reflect the changes in the U.S. federal corporate income tax rate as a result of the Tax Act. As a result of the adoption of ASU 2018-02, the Company's policy to release income tax effects in accumulated other comprehensive income (loss) is consistent with the underlying book method. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Useful Lives | Depreciation and amortization are generally computed using either an accelerated or straight-line method and is based on estimated useful lives or lease terms 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) 2019 2018 Buildings and improvements $ 1,830 $ 1,168 Machinery and equipment 15,052 14,242 Office furniture and equipment, computers and software 13,298 5,877 Property, plant and equipment, gross 30,180 21,287 Less: accumulated depreciation and amortization (11,036 ) (7,868 ) Property, plant and equipment, net $ 19,144 $ 13,419 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation | Remaining performance obligations as of December 31, 2019 and December 31, 2018 are presented in the following table: Year Ended December 31, (In millions) 2019 2018 Performance Obligations $ 849 $ 858 |
Disaggregation of Revenue | The following tables present our revenue disaggregated by different categories. Revenue by contract type for the years 2019 , 2018 and 2017 are as follows: Year Ended December 31, (In thousands) 2019 2018 2017 Cost-plus and cost-reimbursable ¹ $ 1,046,982 $ 995,415 $ 818,908 Firm-fixed-price 335,660 283,889 295,880 Total revenue $ 1,382,642 $ 1,279,304 $ 1,114,788 ¹ Includes time and material contracts Revenue by geographic region in which the contract is performed for the years 2019 , 2018 and 2017 are as follows: Year Ended December 31, (In thousands) 2019 2018 2017 Middle East $ 939,685 $ 889,620 $ 871,821 United States 304,947 269,750 168,003 Europe 138,010 119,934 74,964 Total revenue $ 1,382,642 $ 1,279,304 $ 1,114,788 Revenue by contract relationship for the years 2019 , 2018 and 2017 are as follows: Year Ended December 31, (In thousands) 2019 2018 2017 Prime contractor $ 1,296,015 $ 1,200,726 $ 1,083,485 Subcontractor 86,627 78,578 31,303 Total revenue $ 1,382,642 $ 1,279,304 $ 1,114,788 Revenue by customer for the years 2019 , 2018 and 2017 are as follows: Year Ended December 31, (In thousands) 2019 2018 2017 Army $ 948,235 $ 934,427 $ 915,554 Air Force 317,701 259,511 177,338 Navy 56,241 38,802 21,896 Other 60,465 46,564 — Total revenue $ 1,382,642 $ 1,279,304 $ 1,114,788 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 , 2018 and 2017 , respectively, are as follows: (in thousands) 2019 2018 2017 Income Components United States $ 39,487 $ 41,449 $ 34,386 Foreign 5,658 1,803 2,194 Total pre-tax income from continuing operations $ 45,145 $ 43,252 $ 36,580 Income tax expense components Current income tax provision United States-Federal $ 12,442 $ 6,305 $ 11,952 United States-State and local 866 653 206 Foreign 3,883 515 758 Total current income tax provision 17,191 7,473 12,916 Deferred income tax provision (benefit) United States-Federal (6,688 ) (79 ) (35,486 ) United States-State and local (387 ) 52 (260 ) Foreign 313 510 (87 ) Total deferred income tax provision (benefit) (6,762 ) 483 (35,833 ) Total income tax expense (benefit) $ 10,429 $ 7,956 $ (22,917 ) Effective income tax rate 23.1 % 18.4 % (62.6 )% |
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: 2019 2018 2017 Tax provision at U.S. statutory rate 21.0 % 21.0 % 35.0 % State and local income tax, net of federal benefit 0.8 % 1.3 % (0.1 )% Foreign taxes 0.5 % 0.3 % (2.5 )% Uncertain tax positions 8.0 % 3.4 % — % Prior year true-ups 0.4 % 0.4 % 0.3 % Foreign derived intangible income deduction (8.0 )% (2.9 )% — % Credits (1.3 )% (0.8 )% — % Other 1.7 % 0.4 % 1.7 % Impact of federal rate change — % (4.7 )% (97.0 )% Effective income tax rate 23.1 % 18.4 % (62.6 )% |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities include the following: (in thousands) 2019 2018 Deferred Tax Assets Compensation and benefits $ 5,647 $ 4,444 Reserves 4,012 3,028 Lease liability 3,403 — Other 1,049 802 Net operating losses 1,675 295 Total deferred tax assets $ 15,786 $ 8,569 Deferred Tax Liabilities Goodwill and intangibles $ (46,604 ) $ (46,832 ) Unbilled receivables (10,064 ) (15,112 ) Property, plant and equipment, net (1,381 ) (709 ) Right-of-use assets (3,208 ) — Other liabilities (2,673 ) (1,192 ) Total deferred tax liabilities (63,930 ) (63,845 ) Net deferred tax liabilities $ (48,144 ) $ (55,276 ) |
Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits as of December 31, 2019 , 2018 and 2017 is as follows: (in thousands) 2019 2018 2017 Unrecognized tax benefits-January 1, $ 1,755 $ — $ 429 Additions for: Current year tax positions 3,613 1,275 — Prior year tax positions 2,577 480 — Reductions for: Settlements with tax authorities — — (429 ) Prior year tax positions — — — Unrecognized tax benefits-December 31, $ 7,945 $ 1,755 $ — |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Purchase Price Allocation | A breakdown of the preliminary purchase price allocation, net of cash acquired, is as follows: (In thousands) Allocation of Purchase Price Receivables $ 11,535 Other current assets 2,719 Property, plant and equipment 155 Goodwill 28,364 Intangible assets 8,300 Other non-current assets 1,868 Accounts payable (4,223 ) Other current liabilities (1,519 ) Accrued compensation (907 ) Other non-current liabilities (1,218 ) Purchase price, net of cash acquired $ 45,074 A breakdown of the purchase price allocation, net of cash acquired, is as follows: (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 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of Goodwill | The change in the net carrying amount of goodwill for 2018 and 2019 is as follows (in thousands): Balance at December 31, 2017 $ 216,930 Acquisition of SENTEL 16,689 Balance at December 31, 2018 $ 233,619 Acquisition of Advantor 28,364 Balance at December 31, 2019 $ 261,983 | |
Schedule of Finite-Lived Intangible Assets | Other identifiable intangible assets consist of the following: December 31, 2019 December 31, 2018 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Contract backlogs and recompetes $ 11,600 $ (4,300 ) $ 7,300 $ 10,500 $ (1,999 ) $ 8,501 Customer contracts 7,200 (692 ) 6,508 $ — — — Trade names and other 1,236 (118 ) 1,118 129 — 129 Total intangible assets $ 20,036 $ (5,110 ) $ 14,926 $ 10,629 $ (1,999 ) $ 8,630 | |
Gross Carrying Amount | $ 20,036 | $ 10,629 |
Schedule of Future Amortization Expense Finite Lived Intangible Assets | The estimated amortization expense for intangible assets for the next five years is as follows (in thousands): Period Amortization 2020 $ 4,029 2021 $ 4,029 2022 $ 2,501 2023 $ 2,404 2024 $ 1,297 After 2024 $ 530 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic and Diluted Weighted Average Shares Outstanding | Year Ended December 31, (In thousands, except per share data) 2019 2018 2017 Net Income $ 34,716 $ 35,296 $ 59,497 Weighted average common shares outstanding 11,444 11,224 11,021 Add: Dilutive impact of stock options 47 63 67 Add: Dilutive impact of restricted stock units 121 91 121 Diluted weighted average common shares outstanding 11,612 11,378 11,209 Earnings per share Basic $ 3.03 $ 3.14 $ 5.40 Diluted $ 2.99 $ 3.10 $ 5.31 |
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) 2019 2018 2017 Anti-dilutive stock options — 3 8 Anti-dilutive restricted stock units 4 — — Total 4 3 8 |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Receivables | Receivables were comprised of the following: December 31, (In thousands) 2019 2018 Billed receivables $ 71,068 $ 44,868 Unbilled receivables (contract assets) 186,460 181,009 Other 11,711 6,242 Receivables $ 269,239 $ 232,119 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Term Facility | The Company's aggregate scheduled maturities of the Amended Term Loan as of December 31, 2019 , are as follows: (In thousands) Payments due 2020 $ 6,500 2021 8,600 2022 55,400 Total $ 70,500 |
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, 2019 were as follows: December 31, 2019 (In thousands) Carrying Amount Fair Value Short-term debt $ 6,500 $ 6,500 Long-term debt 64,000 64,000 Total debt 70,500 $ 70,500 Debt financing fees (959 ) Total debt with debt financing fees $ 69,541 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 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 instruments in the Consolidated Balance Sheet as of December 31, 2019 : Fair Value (In thousands) Balance sheet caption Amount Interest rate swap designated as cash flow hedge Other accrued liabilities $ 323 Interest rate swap designated as cash flow hedge Other non-current liabilities $ 686 The following table summarizes the amount at fair value and location of the derivative instruments 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 |
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, 2019. Fair Value (In thousands) Balance sheet caption Amount Foreign currency forward contracts designated as cash flow hedge Other accrued liabilities $ 185 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, 2019 | |
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) 2019 2018 Accrued salaries and wages $ 32,854 $ 20,435 Accrued bonus 6,165 7,261 Accrued employee benefits 14,136 14,094 Total $ 53,155 $ 41,790 |
Schedule of Other Accrued Liabilities | Other accrued liabilities were comprised of the following at December 31: (In thousands) 2019 2018 Workers' compensation, auto and general liability reserve $ 4,264 $ 5,369 Current operating lease liabilities 5,743 — Contract related reserves 14,057 7,133 Other accrued liabilities 10,523 9,801 Total $ 34,587 $ 22,303 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Depreciation and amortization are generally computed using either an accelerated or straight-line method and is based on estimated useful lives or lease terms 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) 2019 2018 Buildings and improvements $ 1,830 $ 1,168 Machinery and equipment 15,052 14,242 Office furniture and equipment, computers and software 13,298 5,877 Property, plant and equipment, gross 30,180 21,287 Less: accumulated depreciation and amortization (11,036 ) (7,868 ) Property, plant and equipment, net $ 19,144 $ 13,419 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense are as follows: Year Ended (In thousands) December 31, 2019 Operating lease expense $ 14,747 Variable lease expense 713 Short-term lease expense 46,060 Total lease expense $ 61,520 |
Assets And Liabilities, Lessee | Supplemental balance sheet information related to our operating leases is as follows: Year Ended (In thousands) December 31, 2019 Right-of-use assets $ 14,654 Current lease liabilities (recorded in other accrued liabilities) $ 5,743 Long-term lease liabilities (recorded in other non-current liabilities) 9,811 Total operating lease liabilities $ 15,554 |
Schedule of Future Operating Lease Payments Under Non-Cancellable Operating Leases | (In thousands) Payments due 2020 $ 6,474 2021 3,343 2022 2,612 2023 1,426 2024 1,030 2024 and later 3,507 Total minimum lease payments $ 18,392 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [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) 2019 2018 Compensation costs for equity-based awards $ 4,426 $ 3,490 Compensation costs for liability-based awards 3,836 606 Total compensation costs, pre-tax $ 8,262 $ 4,096 Future tax benefit $ 1,792 $ 888 |
Schedule of Non-Qualified Stock Options, Activity | A summary of the status of our NQOs as of December 31, 2019 , 2018 and 2017 and changes during the years then ended is presented below: Year Ended December 31, 2019 2018 2017 (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, 251 $23.00 325 $22.74 384 $21.47 Granted — $0.00 — $0.00 75 $22.82 Exercised (161 ) $22.74 (73 ) $21.87 (110 ) $18.41 Forfeited, canceled or expired (13 ) $24.47 (1 ) $20.62 (24 ) $22.61 Outstanding at December 31, 77 $23.30 251 $23.00 325 $22.74 Options exercisable 59 $23.35 184 $23.35 201 $22.57 |
Schedule of Non-Qualified Stock Options Outstanding and Exercisable | The following table summarizes information about NQOs outstanding and exercisable as of December 31, 2019 : (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 $20.06 - $21.98 58 6.67 $ 21.49 $ 1,720 43 6.49 $ 21.34 $ 1,291 $24.61 - $32.49 19 6.18 29.21 434 16 5.91 29.24 361 Total options and aggregate intrinsic value 77 6.52 $ 23.30 $ 2,154 59 6.30 $ 23.35 $ 1,652 |
Schedule of Weighted Average Assumptions | The following weighted-average assumptions were utilized in deriving the fair value for NQOs: Year Ended December 31, 2017 Expected volatility 30.8 % Expected life (in years) 7 Risk-free rates 2.30 % Weighted-average grant date fair value per share $ 8.48 |
Schedule of Restricted Stock Units, Activity | The table below provides a roll-forward of outstanding RSUs for the years ended December 31, 2019, 2018, and 2017. Year Ended December 31, 2019 2018 2017 (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, 257 $ 28.90 221 $ 23.58 285 $23.01 Granted 206 $ 30.03 163 $ 33.08 144 $23.74 Vested (138 ) $ 31.92 (110 ) $ 24.93 (171 ) $23.18 Forfeited or canceled (24 ) $ 35.57 (17 ) $ 25.54 (37 ) $21.69 Outstanding at December 31, 301 $ 30.30 257 $ 28.90 221 $23.58 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following table comprises selected financial data for the years ended December 31, 2019 and 2018 : 2019 QUARTERS 2018 QUARTERS (In thousands, except per share data) 1st 2nd 3rd 4th 1st 2nd 3rd 4th Total revenue $ 325,928 $ 331,589 $ 359,854 $ 365,271 $ 320,516 $ 321,132 $ 308,095 $ 329,561 Gross Profit 30,332 31,036 34,317 34,246 26,466 29,068 29,131 30,030 Operating income 10,413 11,193 14,383 15,626 8,671 12,998 14,006 12,648 Net income 7,091 7,617 9,382 10,626 6,111 9,195 9,866 10,124 Basic earnings per share $ 0.63 $ 0.66 $ 0.82 $ 0.92 $ 0.55 $ 0.82 $ 0.88 $ 0.90 Diluted earnings per share $ 0.62 $ 0.66 $ 0.80 $ 0.91 $ 0.54 $ 0.81 $ 0.86 $ 0.89 Weighted average number of shares outstanding Basic 11,292 11,455 11,506 11,515 11,146 11,235 11,248 11,262 Diluted 11,399 11,605 11,678 11,728 11,338 11,383 11,406 11,369 |
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, 2019USD ($) | Sep. 27, 2019USD ($) | Jun. 28, 2019USD ($) | Mar. 29, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 28, 2018USD ($) | Jun. 29, 2018USD ($) | Mar. 30, 2018USD ($) | Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Accounting Policies [Line Items] | |||||||||||
Number of reportable segments | segment | 1 | ||||||||||
Revenue | $ 365,271 | $ 359,854 | $ 331,589 | $ 325,928 | $ 329,561 | $ 308,095 | $ 321,132 | $ 320,516 | $ 1,382,642 | $ 1,279,304 | $ 1,114,788 |
Minimum | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Amortization period | 4 years | ||||||||||
Maximum | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Amortization period | 8 years | ||||||||||
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 | $ 1,400,000 | $ 1,300,000 | $ 1,100,000 | ||||||||
Total Revenue | Credit Risk | U.S. Army | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Concentration risk, percentage | 69.00% | 73.00% | 82.00% | ||||||||
High Desert Support Services (HDSS) | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Ownership percentage | 40.00% | 40.00% | |||||||||
Equity investment balance | $ 1,400 | $ 2,400 | $ 1,400 | $ 2,400 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 29, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||||
Reclassification from accumulated other comprehensive income to retained earning due to Tax Act | $ 300 | $ 259 | $ 0 | $ 0 |
Revenue - Performance Obligatio
Revenue - Performance Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Performance obligation timing | The Company's contracts are multi-year contracts and typically include an initial period of one year or less with annual one-year (or less) option periods. | |
(Decrease) increase in remaining performance obligations | $ (8.5) | |
Performance Obligations | $ 849 | $ 858 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | |
Remaining performance obligation, percentage | 86.00% |
Revenue - Contract Estimates (D
Revenue - Contract Estimates (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue from Contract with Customer [Abstract] | |||
Gross favorable adjustment to operating income | $ 3.1 | $ 1.6 | $ 11.6 |
Net favorable adjustment to operating income | $ (4.4) | $ (0.8) | $ (9.7) |
Revenue - Revenue by Contract T
Revenue - Revenue by Contract Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 27, 2019 | Jun. 28, 2019 | Mar. 29, 2019 | Dec. 31, 2018 | Sep. 28, 2018 | Jun. 29, 2018 | Mar. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | $ 365,271 | $ 359,854 | $ 331,589 | $ 325,928 | $ 329,561 | $ 308,095 | $ 321,132 | $ 320,516 | $ 1,382,642 | $ 1,279,304 | $ 1,114,788 |
Cost-plus and cost-reimbursable | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 1,046,982 | 995,415 | 818,908 | ||||||||
Firm-fixed-price | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | $ 335,660 | $ 283,889 | $ 295,880 |
Revenue - Revenue by Geographic
Revenue - Revenue by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 27, 2019 | Jun. 28, 2019 | Mar. 29, 2019 | Dec. 31, 2018 | Sep. 28, 2018 | Jun. 29, 2018 | Mar. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | $ 365,271 | $ 359,854 | $ 331,589 | $ 325,928 | $ 329,561 | $ 308,095 | $ 321,132 | $ 320,516 | $ 1,382,642 | $ 1,279,304 | $ 1,114,788 |
Middle East | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 939,685 | 889,620 | 871,821 | ||||||||
United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 304,947 | 269,750 | 168,003 | ||||||||
Europe | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | $ 138,010 | $ 119,934 | $ 74,964 |
Revenue - Revenue by Contract R
Revenue - Revenue by Contract Relationship (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 27, 2019 | Jun. 28, 2019 | Mar. 29, 2019 | Dec. 31, 2018 | Sep. 28, 2018 | Jun. 29, 2018 | Mar. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | $ 365,271 | $ 359,854 | $ 331,589 | $ 325,928 | $ 329,561 | $ 308,095 | $ 321,132 | $ 320,516 | $ 1,382,642 | $ 1,279,304 | $ 1,114,788 |
Prime contractor | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 1,296,015 | 1,200,726 | 1,083,485 | ||||||||
Subcontractor | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | $ 86,627 | $ 78,578 | $ 31,303 |
Revenue - Revenue by Customer (
Revenue - Revenue by Customer (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 27, 2019 | Jun. 28, 2019 | Mar. 29, 2019 | Dec. 31, 2018 | Sep. 28, 2018 | Jun. 29, 2018 | Mar. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | $ 365,271 | $ 359,854 | $ 331,589 | $ 325,928 | $ 329,561 | $ 308,095 | $ 321,132 | $ 320,516 | $ 1,382,642 | $ 1,279,304 | $ 1,114,788 |
Army | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 948,235 | 934,427 | 915,554 | ||||||||
Air Force | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 317,701 | 259,511 | 177,338 | ||||||||
Navy | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 56,241 | 38,802 | 21,896 | ||||||||
Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | $ 60,465 | $ 46,564 | $ 0 |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) $ in Millions | Dec. 31, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Contract assets | $ 186.5 |
Contract liability | $ 0 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Components | |||
United States | $ 39,487 | $ 41,449 | $ 34,386 |
Foreign | 5,658 | 1,803 | 2,194 |
Income from operations before income taxes | 45,145 | 43,252 | 36,580 |
Current income tax provision | |||
United States-Federal | 12,442 | 6,305 | 11,952 |
United States-State and local | 866 | 653 | 206 |
Foreign | 3,883 | 515 | 758 |
Total current income tax provision | 17,191 | 7,473 | 12,916 |
Deferred income tax provision (benefit) | |||
United States-Federal | (6,688) | (79) | (35,486) |
United States-State and local | (387) | 52 | (260) |
Foreign | 313 | 510 | (87) |
Total deferred income tax provision (benefit) | (6,762) | 483 | (35,833) |
Total income tax expense (benefit) | $ 10,429 | $ 7,956 | $ (22,917) |
Effective income tax rate | 23.10% | 18.40% | (62.60%) |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Tax provision at U.S. statutory rate | 21.00% | 21.00% | 35.00% |
State and local income tax, net of federal benefit | 0.80% | 1.30% | (0.10%) |
Foreign taxes | 0.50% | 0.30% | (2.50%) |
Uncertain tax positions | 8.00% | 3.40% | 0.00% |
Prior year true-ups | 0.40% | 0.40% | 0.30% |
Foreign derived intangible income deduction | (8.00%) | (2.90%) | (0.00%) |
Credits | (1.30%) | (0.80%) | (0.00%) |
Other | 1.70% | 0.40% | 1.70% |
Impact of federal rate change | 0 | (0.047) | (0.970) |
Effective income tax rate | 23.10% | 18.40% | (62.60%) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Tax Assets | ||
Compensation and benefits | $ 5,647 | $ 4,444 |
Reserves | 4,012 | 3,028 |
Lease liability | 3,403 | |
Other | 1,049 | 802 |
Net operating losses | 1,675 | 295 |
Total deferred tax assets | 15,786 | 8,569 |
Deferred Tax Liabilities | ||
Goodwill and intangibles | (46,604) | (46,832) |
Unbilled receivables | (10,064) | (15,112) |
Property, plant and equipment, net | (1,381) | (709) |
Right-of-use assets | (3,208) | |
Other liabilities | (2,673) | (1,192) |
Total deferred tax liabilities | (63,930) | (63,845) |
Net deferred tax liabilities | $ (48,144) | $ (55,276) |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits-January 1, | $ 1,755 | $ 0 | $ 429 |
Additions for: | |||
Current year tax positions | 3,613 | 1,275 | 0 |
Prior year tax positions | 2,577 | 480 | 0 |
Reductions for: | |||
Settlements with tax authorities | 0 | 0 | (429) |
Prior year tax positions | 0 | 0 | 0 |
Unrecognized tax benefits-December 31, | $ 7,945 | $ 1,755 | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Unrecognized tax benefits | $ 7,945,000 | $ 1,755,000 | $ 0 | $ 429,000 |
Current year tax positions | 3,613,000 | 1,275,000 | 0 | |
Prior year tax positions | 2,577,000 | 480,000 | 0 | |
Interest expense related to tax matters | $ 200,000 | $ 0 | $ 0 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) $ in Thousands | Jul. 08, 2019USD ($)intangible_assets | Jan. 23, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Purchase price, net of cash acquired | $ 45,074 | $ 36,855 | $ 0 | ||
Weighted average remaining useful life | 4 years 2 months 12 days | ||||
Amortization of intangible assets | $ 3,111 | 1,999 | 0 | ||
Goodwill | $ 261,983 | 233,619 | 216,930 | ||
SENTEL | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Consideration transferred | $ 36,900 | ||||
Purchase price, net of cash acquired | 36,000 | ||||
Working capital adjustment | 900 | ||||
Goodwill | $ 16,689 | ||||
Revenue of acquiree since acquisition date | 112,300 | $ 107,000 | |||
Percentage of outstanding common stock acquired | 100.00% | ||||
Advantor Systems Corporation | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Consideration transferred | $ 45,100 | ||||
Purchase price, net of cash acquired | 44,000 | ||||
Working capital adjustment | $ 1,100 | ||||
Number of intangible assets recognized | intangible_assets | 2 | ||||
Weighted average remaining useful life | 4 years 6 months | ||||
Amortization of intangible assets | $ 800 | ||||
Goodwill | $ 28,364 | ||||
Acquisition related costs | 1,000 | ||||
Revenue of acquiree since acquisition date | $ 22,700 | $ 35,500 | |||
Customer contracts | Advantor Systems Corporation | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 7,200 | ||||
Amortization period | 5 years | ||||
Order or Production Backlog | SENTEL | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 6,500 | ||||
Amortization period | 4 years | ||||
Trade names and other | Advantor Systems Corporation | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 1,100 | ||||
Amortization period | 4 years 6 months | ||||
Contract Re-competes | SENTEL | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 4,000 | ||||
Amortization period | 8 years |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jul. 08, 2019 | Dec. 31, 2018 | Jan. 23, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 261,983 | $ 233,619 | $ 216,930 | ||
Advantor Systems Corporation | |||||
Business Acquisition [Line Items] | |||||
Receivables | $ 11,535 | ||||
Other current assets | 2,719 | ||||
Property, plant and equipment | 155 | ||||
Goodwill | 28,364 | ||||
Intangible assets | 8,300 | ||||
Other non-current assets | 1,868 | ||||
Accounts payable | (4,223) | ||||
Other current liabilities | (1,519) | ||||
Accrued compensation | (907) | ||||
Other non-current liabilities | (1,218) | ||||
Purchase price, net of cash acquired | $ 45,074 | ||||
SENTEL | |||||
Business Acquisition [Line Items] | |||||
Receivables | $ 23,339 | ||||
Other current assets | 975 | ||||
Property, plant and equipment | 810 | ||||
Goodwill | 16,689 | ||||
Intangible assets | 10,500 | ||||
Accounts payable | (10,012) | ||||
Other current liabilities | (5,446) | ||||
Purchase price, net of cash acquired | $ 36,855 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | Jul. 08, 2019 | Mar. 29, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment | $ 0 | $ 0 | $ 0 | ||
Intangible assets acquired | $ 1,100,000 | ||||
Amortization of intangible assets | $ 3,111,000 | $ 1,999,000 | $ 0 | ||
Weighted average remaining useful life | 4 years 2 months 12 days | ||||
Advantor Systems Corporation | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets acquired | $ 8,300,000 | ||||
Amortization of intangible assets | $ 800,000 | ||||
Weighted average remaining useful life | 4 years 6 months |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Goodwill Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 233,619 | $ 216,930 |
Acquisition | 28,364 | 16,689 |
Ending balance | $ 261,983 | $ 233,619 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Other Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 20,036 | $ 10,629 |
Accumulated Amortization | (5,110) | (1,999) |
Net Carrying Amount | 14,926 | 8,630 |
Contract backlogs and recompetes | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 11,600 | 10,500 |
Accumulated Amortization | (4,300) | (1,999) |
Net Carrying Amount | 7,300 | 8,501 |
Customer contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 7,200 | 0 |
Accumulated Amortization | (692) | 0 |
Net Carrying Amount | 6,508 | 0 |
Trade names and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,236 | 129 |
Accumulated Amortization | (118) | 0 |
Net Carrying Amount | $ 1,118 | $ 129 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Future Amortization Expense (Details) | Dec. 31, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 4,029 |
2021 | 4,029 |
2022 | 2,501 |
2023 | 2,404 |
2024 | 1,297 |
After 2024 | $ 530 |
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, 2019 | Sep. 27, 2019 | Jun. 28, 2019 | Mar. 29, 2019 | Dec. 31, 2018 | Sep. 28, 2018 | Jun. 29, 2018 | Mar. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Net income | $ 10,626 | $ 9,382 | $ 7,617 | $ 7,091 | $ 10,124 | $ 9,866 | $ 9,195 | $ 6,111 | $ 34,716 | $ 35,296 | $ 59,497 |
Weighted average common shares outstanding - basic (in shares) | 11,515 | 11,506 | 11,455 | 11,292 | 11,262 | 11,248 | 11,235 | 11,146 | 11,444 | 11,224 | 11,021 |
Add: Dilutive impact of stock options (in shares) | 47 | 63 | 67 | ||||||||
Weighted average number of shares outstanding - diluted (in shares) | 11,728 | 11,678 | 11,605 | 11,399 | 11,369 | 11,406 | 11,383 | 11,338 | 11,612 | 11,378 | 11,209 |
Basic earnings per share (in dollars per share) | $ 0.92 | $ 0.82 | $ 0.66 | $ 0.63 | $ 0.90 | $ 0.88 | $ 0.82 | $ 0.55 | $ 3.03 | $ 3.14 | $ 5.40 |
Diluted earnings per share (in dollars per share) | $ 0.91 | $ 0.80 | $ 0.66 | $ 0.62 | $ 0.89 | $ 0.86 | $ 0.81 | $ 0.54 | $ 2.99 | $ 3.10 | $ 5.31 |
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) | 121 | 91 | 121 |
Earnings Per Share Earnings Per
Earnings Per Share Earnings Per Share - Anti-dilutive Options (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive stock options (in shares) | 4 | 3 | 8 |
Anti-dilutive stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive stock options (in shares) | 0 | 3 | 8 |
Anti-dilutive restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive stock options (in shares) | 4 | 0 | 0 |
Receivables - Schedule of Recei
Receivables - Schedule of Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Billed receivables | $ 71,068 | $ 44,868 |
Unbilled receivables (contract assets) | 186,460 | 181,009 |
Other | 11,711 | 6,242 |
Receivables | 269,239 | $ 232,119 |
Estimated contract receivables | $ 6,600 |
Debt - Additional Information (
Debt - Additional Information (Details) | Nov. 15, 2017USD ($) | Dec. 31, 2019USD ($)letters_of_credit | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | ||||
Credit facility, additional available borrowings | $ 100,000,000 | |||
Accordion feature additional amount | 100,000,000 | |||
Payments of debt issuance costs | $ 0 | $ 0 | $ 1,844,000 | |
Amortization expense | $ 404,000 | 426,000 | 1,464,000 | |
Letters of credit | ||||
Debt Instrument [Line Items] | ||||
Credit facility, additional available borrowings | 25,000,000 | |||
Number of letters of credit outstanding | letters_of_credit | 4 | |||
Letters of credit outstanding | $ 3,000,000 | |||
Senior secured credit facilities | ||||
Debt Instrument [Line Items] | ||||
Credit facility, additional available borrowings | 200,000,000 | |||
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 | 0.97 | |||
Ratio of combined EBITDA to combined interest expense | 11.82 | |||
Interest rate | 3.80% | |||
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] | ||||
Unamortized debt issuance costs | 800,000 | |||
Term facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit | $ 70,500,000 | |||
Term facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Credit facility, additional available borrowings | $ 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 | $ 400,000 | $ 1,400,000 | |
Revolver | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Credit facility, additional available borrowings | $ 120,000,000 | |||
Debt instrument, term | 5 years | |||
Available borrowing capacity | 117,000,000 | |||
Unsecured Debt | ||||
Debt Instrument [Line Items] | ||||
Credit facility, additional available borrowings | $ 75,000,000 | |||
Quarterly Through September 30, 2019 | Term facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit | 1,000,000 | |||
Quarterly Fiscal Quarters December 31, 2019 through September 30, 2020 | 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 Fiscal Quarters 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, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Total | $ 69,541 | $ 73,637 |
Term facility | ||
Debt Instrument [Line Items] | ||
2020 | 6,500 | |
2021 | 8,600 | |
2022 | 55,400 | |
Total | $ 70,500 |
Debt - Schedule of Carrying Val
Debt - Schedule of Carrying Values and Fair Values of Term Facility (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt financing fees | $ (959) | $ (1,363) |
Total | 69,541 | 73,637 |
Carrying Amount | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | 70,500 | 75,000 |
Carrying Amount | Short-term debt | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | 6,500 | 4,500 |
Carrying Amount | Long-term debt | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | 64,000 | 70,500 |
Fair Value | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | 70,500 | 75,000 |
Fair Value | Short-term debt | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | 6,500 | 4,500 |
Fair Value | Long-term debt | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | $ 64,000 | $ 70,500 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Interest rate swaps | Cash flow hedging | Designated as hedging instrument | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 53,000,000 | ||
Gain (loss) on derivative instruments | (100,000) | $ (200,000) | $ 400,000 |
Losses to be reclassified within twelve months | 300,000 | ||
Foreign currency forwards | |||
Derivative [Line Items] | |||
Gain (loss) on derivative instruments | (600,000) | $ (100,000) | $ 0 |
Foreign currency forwards | Cash flow hedging | Designated as hedging instrument | |||
Derivative [Line Items] | |||
Derivative, notional amount | 7,700,000 | ||
Losses to be reclassified within twelve months | $ 200,000 |
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 swaps - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other accrued liabilities | ||
Derivative [Line Items] | ||
Interest rate swap liabilities designated as cash flow hedge | $ 323 | |
Other non-current liabilities | ||
Derivative [Line Items] | ||
Interest rate swap liabilities designated as cash flow hedge | $ 686 | |
Other current assets | ||
Derivative [Line Items] | ||
Interest rate swap assets designated as cash flow hedge | $ 121 | |
Other non-current assets | ||
Derivative [Line Items] | ||
Interest rate swap assets designated as cash flow hedge | $ 104 |
Derivative Instruments Deriva_2
Derivative Instruments Derivative instruments - Forward Contract Hedges in the Consolidated Balance Sheets (Details) - Foreign currency forwards - Designated as hedging instrument - Cash flow hedging - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other accrued liabilities | ||
Derivative [Line Items] | ||
Foreign currency forward contracts designated as cash flow hedge | $ 185 | $ 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, 2019 | Dec. 31, 2018 |
Compensation and Other Employee Benefits | ||
Accrued salaries and wages | $ 32,854 | $ 20,435 |
Accrued bonus | 6,165 | 7,261 |
Accrued employee benefits | 14,136 | 14,094 |
Total | $ 53,155 | $ 41,790 |
Composition of Certain Financ_4
Composition of Certain Financial Statement Captions - Schedule of Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other Accrued Liabilities | ||
Workers' compensation, auto and general liability reserve | $ 4,264 | $ 5,369 |
Current operating lease liabilities | 5,743 | |
Contract related reserves | 14,057 | 7,133 |
Other accrued liabilities | 10,523 | 9,801 |
Total | $ 34,587 | $ 22,303 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net - Plant, Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 30,180 | $ 21,287 |
Less: accumulated depreciation and amortization | (11,036) | (7,868) |
Property, plant and equipment, net | 19,144 | 13,419 |
Buildings improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,830 | 1,168 |
Machinery, equipment and vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 15,052 | 14,242 |
Furniture, fixtures, and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 13,298 | $ 5,877 |
Property, Plant and Equipment_4
Property, Plant and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 3,379 | $ 1,798 | $ 1,686 |
Leases Additional Information (
Leases Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Jul. 08, 2019 | Jan. 01, 2019 | |
Lessee, Lease, Description [Line Items] | |||
Right-of-use assets | $ 14,654 | $ 19,200 | |
Additional ROU assets from operating lease arrangements | $ 7,200 | ||
Weighted average remaining lease term | 4 years 6 months | ||
Weighted average discount rate, percent | 6.20% | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease terms | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease terms | 10 years | ||
Advantor Systems Corporation | |||
Lessee, Lease, Description [Line Items] | |||
ROU assets from acquisition | $ 1,900 |
Leases Components of Lease Expe
Leases Components of Lease Expenses (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease expense | $ 14,747 |
Variable lease expense | 713 |
Short-term lease expense | 46,060 |
Total lease expense | $ 61,520 |
Leases Balance Sheet Informatio
Leases Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Right-of-use assets | $ 14,654 | $ 19,200 |
Current lease liabilities (recorded in other accrued liabilities) | 5,743 | |
Long-term lease liabilities (recorded in other non-current liabilities) | 9,811 | |
Total operating lease liabilities | $ 15,554 |
Leases and Rentals - Schedule o
Leases and Rentals - Schedule of Future Operating Lease Payments Under Non-Cancellable Operating Leases (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 6,474 |
2021 | 3,343 |
2022 | 2,612 |
2023 | 1,426 |
2024 | 1,030 |
2024 and later | 3,507 |
Total minimum lease payments | $ 18,392 |
Post Employment Benefit Plans (
Post Employment Benefit Plans (Details) $ in Millions | Sep. 11, 2014 | Dec. 31, 2019USD ($)plan | Dec. 31, 2018USD ($) |
Retirement Benefits [Abstract] | |||
Number of defined contribution savings plans | plan | 2 | ||
Portion of contributions charged to income | $ 6.8 | $ 5.2 | |
Benefits plan vesting percentage | 100.00% | ||
Benefit contributions accrued | $ 0.1 | $ 0.1 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Jan. 31, 2020 | Jan. 31, 2019 | Jan. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vested or expected to vest (in shares) | 100,000 | |||||
Vested or expected to vest, weighted average exercise price (in dollars per share) | $ 23.30 | |||||
Vested or expected to vest, aggregate intrinsic value | $ 2,200 | |||||
Vested or expected to vest, weighted average remaining contractual life | 6 years 6 months 7 days | |||||
Expected life | 7 years | |||||
Compensation cost for awards | $ 8,262 | $ 4,096 | ||||
Liability Based Awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based liabilities paid | 800 | 1,000 | ||||
Unrecognized compensation costs | $ 3,700 | |||||
Unrecognized compensation costs, period for recognition | 1 year 9 months 14 days | |||||
Compensation cost for awards | $ 3,836 | 606 | ||||
Equity Based Awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation costs | $ 4,600 | |||||
Unrecognized compensation costs, period for recognition | 1 year 8 months 5 days | |||||
Compensation cost for awards | $ 4,426 | 3,490 | ||||
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) | $ 51.26 | |||||
Options exercised in period, intrinsic value | $ 2,100 | $ 100 | $ 1,400 | |||
Granted (in shares) | 0 | 0 | 75,000 | |||
Expected life | 7 years | |||||
Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | 206,000 | 163,000 | 144,000 | |||
RSU's vested in period, fair value | $ 4,100 | $ 3,300 | $ 4,500 | |||
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 | $ 2,500 | 2,200 | 1,500 | |||
Compensation cost for awards | 2,900 | 300 | $ 1,000 | |||
Cash paid to settle awards | $ 500 | $ 600 | ||||
Compensation and other employee benefits non-current | $ 4,000 | $ 1,500 | ||||
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) | 2,600,000 | |||||
Shares available (in shares) | 1,000,000 | |||||
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 | Maximum | Non-Qualified Stock Options (NQO) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting increments | 33.33% | |||||
Share-based Payment Arrangement, Tranche Two | Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting increments | 33.33% | |||||
Share-based Payment Arrangement, Tranche Two | Maximum | Non-Qualified Stock Options (NQO) | ||||||
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 | Maximum | Non-Qualified Stock Options (NQO) | ||||||
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 | $ 1,600 |
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, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Compensation cost for awards | $ 8,262 | $ 4,096 |
Future tax benefit | 1,792 | 888 |
Compensation costs for equity-based awards | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Compensation cost for awards | 4,426 | 3,490 |
Compensation costs for liability-based awards | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Compensation cost for awards | $ 3,836 | $ 606 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Non-Qualified Stock Options, Activity (Details) - Non-Qualified Stock Options (NQO) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Shares | |||
Outstanding at beginning of year (in shares) | 251,000 | 325,000 | 384,000 |
Granted (in shares) | 0 | 0 | 75,000 |
Exercised (in shares) | (161,000) | (73,000) | (110,000) |
Forfeited, canceled or expired (in shares) | (13,000) | (1,000) | (24,000) |
Outstanding at end of year (in shares) | 77,000 | 251,000 | 325,000 |
Options exercisable (in shares) | 59,000 | 184,000 | 201,000 |
Weighted Average Exercise Price Per Share | |||
Outstanding at beginning of year (in dollars per share) | $ 23 | $ 22.74 | $ 21.47 |
Granted (in dollars per share) | 0 | 0 | 22.82 |
Exercised (in dollars per share) | 22.74 | 21.87 | 18.41 |
Forfeited, canceled or expired (in dollars per share) | 24.47 | 20.62 | 22.61 |
Outstanding at end of year (in dollars per share) | 23.30 | 23 | 22.74 |
Options exercisable (in dollars per share) | $ 23.35 | $ 23.35 | $ 22.57 |
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Options outstanding (in shares) | 77 | 251 | 325 | 384 |
Options outstanding, weighted average remaining contractual life | 6 years 6 months 7 days | |||
Options outstanding, weighted average price per share (in dollars per share) | $ 23.30 | $ 23 | $ 22.74 | $ 21.47 |
Options outstanding, aggregate intrinsic value | $ 2,154 | |||
Options exercisable (in shares) | 59 | 184 | 201 | |
Options exercisable, weighted average remaining contractual life | 6 years 3 months 20 days | |||
Options exercisable, weighted average exercise price per share (in dollars per share) | $ 23.35 | $ 23.35 | $ 22.57 | |
Options exercisable, aggregate intrinsic value | $ 1,652 | |||
Range of exercise prices one | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Options outstanding (in shares) | 58 | |||
Options outstanding, weighted average remaining contractual life | 6 years 8 months 3 days | |||
Options outstanding, weighted average price per share (in dollars per share) | $ 21.49 | |||
Options outstanding, aggregate intrinsic value | $ 1,720 | |||
Options exercisable (in shares) | 43 | |||
Options exercisable, weighted average remaining contractual life | 6 years 5 months 27 days | |||
Options exercisable, weighted average exercise price per share (in dollars per share) | $ 21.34 | |||
Options exercisable, aggregate intrinsic value | $ 1,291 | |||
Exercise price per share, lower range (in dollars per share) | $ 20.06 | |||
Exercise price per share, upper range (in dollars per share) | $ 21.98 | |||
Range of exercise prices two | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Options outstanding (in shares) | 19 | |||
Options outstanding, weighted average remaining contractual life | 6 years 2 months 5 days | |||
Options outstanding, weighted average price per share (in dollars per share) | $ 29.21 | |||
Options outstanding, aggregate intrinsic value | $ 434 | |||
Options exercisable (in shares) | 16 | |||
Options exercisable, weighted average remaining contractual life | 5 years 10 months 27 days | |||
Options exercisable, weighted average exercise price per share (in dollars per share) | $ 29.24 | |||
Options exercisable, aggregate intrinsic value | $ 361 | |||
Exercise price per share, lower range (in dollars per share) | $ 24.61 | |||
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) | 12 Months Ended |
Dec. 31, 2017$ / shares | |
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% |
Expected life (in years) | 7 years |
Risk-free rates | 2.30% |
Weighted-average grant date fair value per share (in dollars per share) | $ 8.48 |
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Shares | |||
Outstanding at beginning of year (in shares) | 257 | 221 | 285 |
Granted (in shares) | 206 | 163 | 144 |
Vested (in shares) | (138) | (110) | (171) |
Forfeited or canceled (in shares) | (24) | (17) | (37) |
Outstanding at end of year (in shares) | 301 | 257 | 221 |
Weighted Average Exercise Price Per Share | |||
Outstanding at beginning of year (in dollars per share) | $ 28.90 | $ 23.58 | $ 23.01 |
Granted (in dollars per share) | 30.03 | 33.08 | 23.74 |
Vested (in dollars per share) | 31.92 | 24.93 | 23.18 |
Forfeited or canceled (in dollars per share) | 35.57 | 25.54 | 21.69 |
Outstanding at end of year (in dollars per share) | $ 30.30 | $ 28.90 | $ 23.58 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - shares | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | ||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, shares issued (in shares) | 11,523,691 | 11,266,906 |
Common stock, shares outstanding (in shares) | 11,523,691 | 11,266,906 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
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) | 1,000,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Contract compliance | ||
Loss Contingencies [Line Items] | ||
Contracts loss contingency accrual | $ 12.1 | $ 7.8 |
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, 2019 | Sep. 27, 2019 | Jun. 28, 2019 | Mar. 29, 2019 | Dec. 31, 2018 | Sep. 28, 2018 | Jun. 29, 2018 | Mar. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenue | $ 365,271 | $ 359,854 | $ 331,589 | $ 325,928 | $ 329,561 | $ 308,095 | $ 321,132 | $ 320,516 | $ 1,382,642 | $ 1,279,304 | $ 1,114,788 |
Gross profit | 34,246 | 34,317 | 31,036 | 30,332 | 30,030 | 29,131 | 29,068 | 26,466 | |||
Operating income | 15,626 | 14,383 | 11,193 | 10,413 | 12,648 | 14,006 | 12,998 | 8,671 | 51,615 | 48,323 | 41,220 |
Net income | $ 10,626 | $ 9,382 | $ 7,617 | $ 7,091 | $ 10,124 | $ 9,866 | $ 9,195 | $ 6,111 | $ 34,716 | $ 35,296 | $ 59,497 |
Basic earnings per share (in dollars per share) | $ 0.92 | $ 0.82 | $ 0.66 | $ 0.63 | $ 0.90 | $ 0.88 | $ 0.82 | $ 0.55 | $ 3.03 | $ 3.14 | $ 5.40 |
Diluted earnings per share (in dollars per share) | $ 0.91 | $ 0.80 | $ 0.66 | $ 0.62 | $ 0.89 | $ 0.86 | $ 0.81 | $ 0.54 | $ 2.99 | $ 3.10 | $ 5.31 |
Weighted average number of shares outstanding - basic (in shares) | 11,515 | 11,506 | 11,455 | 11,292 | 11,262 | 11,248 | 11,235 | 11,146 | 11,444 | 11,224 | 11,021 |
Weighted average number of shares outstanding - diluted (in shares) | 11,728 | 11,678 | 11,605 | 11,399 | 11,369 | 11,406 | 11,383 | 11,338 | 11,612 | 11,378 | 11,209 |
Uncategorized Items - vec-20191
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (95,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (41,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (95,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 259,000 |
AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (259,000) |
Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 41,000 |